Exhibit 10.7
SECURITIES PURCHASE AGREEMENT
AMONG
LBI HOLDINGS I, INC.
AND
THE SEVERAL PURCHASERS NAMED IN SCHEDULE 2.1
Dated as of March 20, 2001
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
ARTICLE II
SALE AND PURCHASE OF PURCHASED SECURITIES
Section 2.1. Sale and Purchase of Purchased Securities .................................................. 7
Section 2.2. Closing .................................................................................... 7
Section 2.3. Use of Proceeds ............................................................................ 7
Section 2.4. The Notes .................................................................................. 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1. Incorporation and Restatement of Representations and Warranties ............................ 10
Section 3.2. Consents ................................................................................... 10
Section 3.3. Registration Rights ........................................................................ 10
Section 3.4. Capitalization ............................................................................. 10
Section 3.5. Subsidiaries ............................................................................... 11
Section 3.6. Subchapter S Status ........................................................................ 11
Section 3.7. Transactions with Affiliates ............................................................... 11
Section 3.8. Disclosure ................................................................................. 11
ARTICLE IV
PURCHASERS' REPRESENTATIONS
Section 4.1. Investment Intent .......................................................................... 12
Section 4.2. Authorization, etc. ........................................................................ 12
Section 4.3. Enforceability ............................................................................. 12
Section 4.4. Certain Other Matters ...................................................................... 12
Section 4.5. S Corporation Status ....................................................................... 12
ARTICLE V
CONDITIONS TO EACH PURCHASER'S OBLIGATIONS TO PURCHASE AT THE CLOSING
Section 5.1. Related Agreements ......................................................................... 13
Section 5.2. Charter Documents; Good Standing Certificates .............................................. 13
Section 5.3. Proof of Corporate Action .................................................................. 13
Section 5.4. Incumbency Certificate ..................................................................... 14
Section 5.5. Legal Opinion .............................................................................. 14
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TABLE OF CONTENTS
(continued)
Page
Section 5.6. Representations and Warranties; Officer's Certificate ...................................... 14
Section 5.7. Legality; Governmental and Other Authorizations ............................................ 14
Section 5.8. Payment of Certain Fees and Disbursements .................................................. 14
Section 5.9. Intercreditor Agreements ................................................................... 14
Section 5.10. Other Indebtedness ......................................................................... 15
Section 5.11. Solvency Assurances ........................................................................ 15
Section 5.12. Legal Opinions ............................................................................. 15
Section 5.13. General .................................................................................... 15
ARTICLE VI
CONDITIONS TO THE COMPANY'S OBLIGATIONS
Section 6.1. Representations ............................................................................ 15
Section 6.2. Related Agreements ......................................................................... 15
ARTICLE VII
AFFIRMATIVE AND NEGATIVE COVENANTS
Section 7.1. Corporate Existence; Subsidiaries; Maintenance of Properties ............................... 16
Section 7.2. Insurance .................................................................................. 16
Section 7.3. Taxes ...................................................................................... 16
Section 7.4. Compliance with Laws, Contracts, Licenses and Permits ...................................... 17
Section 7.5. Distributions .............................................................................. 17
Section 7.6. Transactions with Affiliates ............................................................... 17
Section 7.7. Undertakings of Lenard Liberman and Jose Liberman .......................................... 18
ARTICLE VIII
COVENANTS APPLICABLE TO DELIVERY OF INFORMATION
Section 8.1. Annual Statements .......................................................................... 18
Section 8.2. Monthly and Quarterly Statements ........................................................... 18
Section 8.3. Officer's Certificate ...................................................................... 19
Section 8.4. Operating Budgets .......................................................................... 19
Section 8.5. Other Information; Confidentiality ......................................................... 19
Section 8.6. Meetings with Management of the Company .................................................... 19
Section 8.7. Notice of Event of Default ................................................................. 19
Section 8.8. Board of Directors ......................................................................... 20
ARTICLE IX
DEFAULTS
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TABLE OF CONTENTS
(continued)
Page
ARTICLE X
REMEDIES ON DEFAULT, ETC.
ARTICLE XI
SUBSEQUENT HOLDERS OF PURCHASED SECURITIES OR REGISTRABLE
SECURITIES
ARTICLE XII
EXPENSES; INDEMNITY
Section 12.1. Expenses ................................................................................... 25
Section 12.2. Indemnification ............................................................................ 25
Section 12.3. Brokers' Fees .............................................................................. 26
Section 12.4. Survival of Obligations .................................................................... 26
ARTICLE XIII
NOTICES
ARTICLE XIV
SURVIVAL AND TERMINATION OF COVENANTS, AGREEMENTS,
REPRESENTATIONS AND WARRANTIES
ARTICLE XV
AMENDMENTS AND WAIVERS
ARTICLE XVI
CHOICE OF LAW; SUBMISSION TO JURISDICTION AND WAIVER OF JURY
TRIAL; DISPUTE RESOLUTION
Section 16.1. Governing Law ............................................................................... 28
Section 16.2. Consent To the Exclusive Jurisdiction Of the Courts Of The Commonwealth of Massachusetts .... 28
Section 16.3. Waiver Of Jury Trial ........................................................................ 28
Section 16.4. Equitable Remedies .......................................................................... 29
Section 16.5. Intercreditor Agreements 29
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TABLE OF CONTENTS
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Page
ARTICLE XVII
RIGHT TO PUBLICIZE
ARTICLE XVIII
ENTIRE AGREEMENT; COUNTERPARTS; SECTION HEADINGS
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TABLE OF CONTENTS
LIST OF EXHIBITS
EXHIBIT A Form of Junior Subordinated Note
EXHIBIT B Form of Warrant Agreement
EXHIBIT C Form of Voting and Co-Sale Agreement
EXHIBIT D Form of Company Counsel Opinion
SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (the "Agreement") dated as of March 20,
2001 among LBI Holdings I, Inc., a California corporation (the "Company"), and
the several purchasers named in the attached Schedule 2.1 (individually a
"Purchaser" and collectively the "Purchasers").
WHEREAS, the Company wishes to issue and sell to the Purchasers (i) the
Company's Junior Subordinated Notes in an original aggregate principal amount of
$30,000,000 (in the form attached hereto as Exhibit A, the "Notes"), and (ii)
Warrants to purchase 14.02 shares of the Company's Common Stock (in the form
attached to the Warrant Agreement, the "Warrants") (the Notes and the Warrants
are collectively referred to herein as the "Purchased Securities"); and
WHEREAS, the Purchasers, severally, wish to purchase such securities on the
terms and subject to the conditions set forth in this Agreement;
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement, the parties agree as follows:
ARTICLE I
DEFINITIONS
For all purposes of this Agreement the following terms shall have the
meanings set forth in this Article I:
"Affidavit of Loss" has the meaning specified in Section 2.4(g) of this
Agreement.
"Affiliate" as applied to the Company or any other specified Person, any
Person directly or indirectly controlling, controlled by or under direct or
indirect common control with the Company (or other specified Person) and shall
also include (a) any Person who is a director or beneficial owner of at least 5%
of the Company's then outstanding Capital Securities (or other specified Person)
and Family Members of any such Person, (b) any Person of which the Company (or
other specified Person) or an Affiliate (as defined in clause (a) above) of the
Company (or other specified Person) shall, directly or indirectly, either
beneficially own at least 5% of the Company's then outstanding Capital
Securities or constitute at least a 5% equity participant, and (c) in the case
of a specified Person who is an individual, any Family Member of such Person. As
used in this definition, control means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract or
otherwise.
"Articles of Incorporation" means the Articles of Incorporation of the
Company, as filed with the California Secretary of State.
"Business Day" means any day other than a Saturday, Sunday or a legal
holiday in Boston, Massachusetts, Los Angeles, California or New York, New York,
or any other day on which commercial banks in such States are authorized by law
or government decree to close.
"Buy-Sell Agreement" means that certain Stock Purchase Agreement dated as
of January 6, 1998 by and among Jose Liberman, Esther Liberman, Lenard Liberman
and the Company, as may be amended from time to time.
"Capital Securities" means, as to any Person that is a corporation, the
authorized shares of such Person's capital stock, including all classes of
common, preferred, voting and nonvoting capital stock, and, as to any Person
that is not a corporation or an individual, the ownership interests in such
Person, including, without limitation, the right to share in profits and losses,
the right to receive distributions of cash and property, and the right to
receive allocations of items of income, gain, loss, deduction and credit and
similar items from such Person, whether or not such interests include voting or
similar rights entitling the holder thereof to exercise control over such
Person.
"Charter" means the articles or certificate of incorporation, statute,
constitution, joint venture or partnership agreement or articles or other
organizational document of any Person other than an individual, each as from
time to time amended or modified.
"Closing" has the meaning given such term in Section 2.2 of this Agreement.
"Closing Date" has the meaning specified in Section 2.2 of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the Common Stock of the Company as set forth in the
Articles of Incorporation.
"Company" has the meaning specified in the introduction to this Agreement.
"Company's knowledge" means, the actual knowledge of Jose or Lenard
Liberman, after reasonable good faith inquiry made to ascertain the accuracy of
the representation or warranty.
"Competitor" means, as of any date, a Person (other than a Purchaser or any
of its Affiliates or beneficial owners) that operates an Hispanic language
format radio or television broadcast station in a market in which the Company or
a Subsidiary has an Hispanic language format radio or television broadcast
station as of such date or any officer, director, employee or Affiliate of such
Person (other than a Purchaser or any of its Affiliates or beneficial owners).
For purposes of Section 8.6 and Section 8.8 hereof only, however, the term
Competitor shall also include a Purchaser or any of its Affiliates or beneficial
owners.
"Consolidated" or "consolidated" means, with reference to any term defined
herein, that term as applied to the Company's accounts and all of its
Subsidiaries' accounts, that may in accordance with GAAP, be consolidated with
the Company.
"Convertible Securities" shall mean securities or obligations that are
exercisable for, convertible into or exchangeable for shares of Common Stock.
The term includes options, warrants or other rights to subscribe for or purchase
Common Stock or to subscribe for or purchase other securities that are
convertible into or exchangeable for Common Stock.
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"Damages" has the meaning specified in Section 12.2 of this Agreement.
"Disabled" means, with respect to any individual, if such individual is
unable to perform the duties assigned to him as an employee of the Company or
one of its Subsidiaries due to physical or mental illness, and such inability
exists for one-hundred and eighty (180) days (including a period of ninety (90)
consecutive days) in any twelve (12) consecutive month period.
"Distribution" means (a) the declaration or payment of any dividend of cash
or property in respect of any shares of any class of the Company's or any of its
Subsidiaries' Capital Securities or other equity securities; (b) the purchase,
redemption or other retirement of any shares of any class of the Company's or
any of its Subsidiaries' Capital Securities or other equity securities, directly
or indirectly or otherwise; or (c) any other distribution on or in respect of
any shares of any class of the Company's or any of its Subsidiaries' Capital
Securities or other equity securities.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"Event of Default" has the meaning specified in Article IX of this
Agreement.
"Existing Grants" means those certain rights in the agreements set forth in
Paragraphs 2, 3 and 4 of Schedule 3.4(b) hereto.
"Family Member" means, as applied to any individual, such individual's
spouse, child (including a stepchild or an adopted child) grandchild, parent,
brother or sister thereof or any spouse of any of the foregoing, and each trust
created for the exclusive benefit of one or more of them.
"Fully-Diluted Outstanding Equity" has the meaning set forth in the Warrant
Agreement.
"Generally accepted accounting principles" or "GAAP" means generally
accepted accounting principles in the United States in effect from time to time.
"Indebtedness" means all obligations, contingent and otherwise, which in
accordance with GAAP should be classified on the obligor's balance sheet as
liabilities, or to which reference should be made by footnotes thereto,
including without limitation, in any event and whether or not so classified: (i)
all debt and similar monetary obligations, whether direct or indirect; (ii) all
liabilities secured by any mortgage, pledge, security interest, lien, charge or
other encumbrance existing on property owned or acquired subject thereto,
whether or not the liability secured thereby shall have been assumed; (iii) all
guaranties, endorsements and other contingent obligations whether direct or
indirect in respect of Indebtedness or performance of others, including any
obligation to supply funds to or in any manner to invest in, directly or
indirectly, the debtor, to purchase Indebtedness, or to assure the owner of
Indebtedness against loss, through an agreement to purchase goods, supplies or
services for the purpose of enabling the debtor to make payment of the
Indebtedness held by such owner or otherwise, and (iv) obligations to reimburse
issuers of any letters of credit.
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"Intercreditor Agreements" means the Senior Lenders Intercreditor Agreement
and the Senior Subordinated Lenders Intercreditor Agreement.
"Licenses" means those licenses, permits, consents, concessions and other
authorizations of governmental, regulatory or administrative agencies or
authorities, whether foreign, federal, state, or local, required of the Company
to own and lease its properties and assets and to conduct its business as now
and proposed to be conducted.
"Lien" means (a) any encumbrance, mortgage, pledge, lien, charge or other
security interest of any kind upon any property or assets of any character, or
upon the income or profits therefrom; (b) any acquisition of or agreement to
have an option to acquire any property or assets upon conditional sale or other
title retention agreement, device or arrangement (including a capitalized
lease); or (c) any sale, assignment, pledge or other transfer for security of
any accounts, general intangibles or chattel paper, with or without recourse.
"Loan Documents" means the Senior Loan Agreement, Senior Lenders
Intercreditor Agreement, Senior Subordinated Loan Agreement and Senior
Subordinated Lenders Intercreditor Agreement.
"Majority Purchasers" means the Noteholders holding Notes in an aggregate
outstanding principal amount equal to more than 50% of the aggregate outstanding
principal amount of all of the Notes or if the Notes are no longer outstanding
but the Warrants remain outstanding, the holders of more than 50% of the
Warrants, subject to the proxy granted to Alta Communications VIII, L.P. or its
successor pursuant to Section 3.5 of the Voting and Co-Sale Agreement.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations or financial condition of the Company and its
Subsidiaries, taken as a whole, (b) the ability of the Company and its
Subsidiaries, taken as a whole, to perform their material obligations under this
Agreement and the Related Agreements or (c) the validity or enforceability of
the Company's obligations taken as a whole under this Agreement and the Related
Agreements.
"Material Event of Default" has the meaning specified in Article IX of this
Agreement.
"Maturity Date" means the earlier to occur of (i) September 20, 2009, (ii)
the acceleration of the obligations of the Company to the Purchasers under the
Notes in accordance with Article IX following the occurrence and continuance of
a Material Event of Default, (iii) a Sale of the Company, (iv) March 20, 2006,
in the event that (and only in the event that) on or prior to such date the
Senior Lenders and Senior Subordinated Lenders have granted the necessary
consents and waivers under the Loan Documents so as to permit the repayment of
the Notes and the repurchase of the Warrants pursuant to Section 5.1 of the
Warrant Agreement and the Warrants are so repurchased, or (v) the date on which
the Company repurchases the Warrants pursuant to Section 5.2 of the Warrant
Agreement.
"Noteholders" means the holders of the Notes.
"Notes" has the meaning specified in the Recitals to this Agreement.
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"Other Distributions" has the meaning set forth in Section 7.5.
"Permitted Holder" is defined as Article XI of this Agreement.
"Permitted Lines of Business" means the television and radio broadcast
business, television and radio program production, rental of television, radio
and related facilities and properties, outdoor advertising, the leasing of
property, and general business services related to any of the foregoing and any
business incident thereto.
"Person" means an individual, partnership, corporation, association, trust,
joint venture, unincorporated organization, and any government, governmental
department or agency or political subdivision thereof.
"Phantom Stock" has the meaning set forth in Section 3.4(b).
"Purchased Securities" has the meaning specified in the Recitals to this
Agreement.
"Purchasers" means the purchasers set forth on Schedule 2.1.
"Registrable Securities" means those shares of Common Stock issuable upon
exercise of the Warrants.
"Related Agreements" means the Notes, the Warrant Agreement, the Warrants,
the Voting and Co-Sale Agreement and the Articles of Incorporation.
"Sale of the Company" has the meaning set forth in the Warrant Agreement.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Securities and
Exchange Commission thereunder, all as the same shall be in effect at the time.
"Senior Lenders" means the lenders from to time party to the Senior Loan
Agreement.
"Senior Lenders Intercreditor Agreement" means that certain Subordination
and Intercreditor Agreement of even date herewith by and among the Company,
Purchasers and Fleet National Bank as Administrative Agent for the Senior
Lenders, as such agreement may be amended from time to time.
"Senior Loan Agreement" means the Credit Agreement, dated as of March 20,
2001, among LBI Holdings II, Inc., as the borrower, the guarantors party thereto
and Fleet National Bank, as administrative agent, Union Bank of California, N.A.
as syndication agent, and CIT Lending Services Corporation and General Electric
Capital Corporation as co-documentation agents, and the other lenders party
thereto from time to time, and any other replacement or successor agreement
governing Indebtedness incurred to refund or refinance the borrowings and
commitments then outstanding or permitted to be outstanding under the Credit
Agreement, in whole or in part, in each case together with any related notes,
guarantees, and collateral documents executed from time to time in connection
therewith, and in each case as amended, modified, supplemented, extended,
restated, renewed, refunded, restructured, replaced or
5
refinanced (in whole or in part), including any of the foregoing which increases
the amount of Indebtedness thereunder, from time to time, whether by the same or
any other agent, lender or group of lenders.
"Senior Subordinated Lenders" means the lenders from time to time party to
the Senior Subordinated Loan Agreement.
"Senior Subordinated Lenders Intercreditor Agreement" means that certain
Senior Subordination and Intercreditor Agreement of even date herewith by and
among the Company, the Purchasers, Oaktree Capital Management, LLC, individually
and as agent for the Senior Subordinated Lenders and, for purposes of Section 16
only, Fleet National Bank, as agent for the Senior Lenders, as such agreement
may be amended from time to time.
"Senior Subordinated Loan Agreement" means the Notes Purchase Agreement,
dated as of March 20, 2001, among LBI Intermediate Holdings, Inc., as the
borrower, and the purchasers party thereto from time to time, and Oaktree
Capital Management, LLC, as agent for such purchasers, and any other agreement
governing Indebtedness incurred to refund or refinance the borrowings and
commitments then outstanding or permitted to be outstanding under the Notes
Purchase Agreement, in whole or in part, in each case together with any related
notes, guarantees, and collateral documents executed from time to time in
connection therewith, and in each case as amended, modified, supplemented,
extended, restated, renewed, refunded, restructured, replaced or refinanced (in
whole or in part), including any increase in the amount of Indebtedness
thereunder, from time to time, whether by the same or any other agent, purchaser
or group of purchasers.
"Significant Subsidiary" has the meaning ascribed to such term in the Code
of Federal Regulations, Title 17, Part 210, as in effect on the date hereof.
"Subsidiary" means any Person which the Company now or hereafter shall at
the time own and control, directly or indirectly through another Person, at
least a majority of the outstanding Capital Securities entitled to vote
generally; and the term "Subsidiaries" means all of such Persons collectively.
"Taxes" or "Tax" means (A) all net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license, withholding,
payroll, employment, excise, severance, stamp, occupation, premium, property or
windfall profits taxes, or other taxes of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts imposed by
any taxing authority (domestic or foreign) upon the Company with respect to all
periods or portions thereof ending on or before the date hereof and/or (B) any
liability of the Company for the payment of any amounts of the type described in
the immediately preceding clause (A) as a result of being a member of an
affiliated or combined group.
"Third Party Claims" has the meaning specified in Section 12.2 of this
Agreement.
"Transaction Costs" means any and all costs, fees and expenses of any
broker, finder or placement agent incurred by the Company in connection with the
transactions contemplated herein.
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"Voting and Co-Sale Agreement" means the Voting and Co-Sale Agreement dated
as of the date hereof among the Company, the Purchasers and each of the parties
named therein as "Holders", in the form of Exhibit C hereto, as such agreement
may be amended from time to time.
"Warrant Agreement" means the Warrant Agreement dated as of the date hereof
among the Company and the Purchasers, in the form of Exhibit B hereto, as such
agreement may be amended from time to time.
"Warrant Purchase Price" has the meaning specified in the Warrant
Agreement.
"Warrants" has the meaning specified in the Recitals to this Agreement.
ARTICLE II
SALE AND PURCHASE OF PURCHASED SECURITIES
Section 2.1. Sale and Purchase of Purchased Securities. Subject to all of
the terms and conditions hereof and in reliance on the representations and
warranties set forth herein, including, without limitation, the satisfaction by
the Company of the conditions set forth in Article V hereof, the Company shall
issue and sell to each Purchaser, and each Purchaser, severally, and not
jointly, agrees to purchase from the Company, (a) the Notes in the aggregate
principal amount of $30,000,000 for an aggregate purchase price of $29,500,000
and (b) Warrants in the form attached to the Warrant Agreement to purchase
shares of the Company's Common Stock for an aggregate purchase price of
$500,000, all as set forth opposite the name of such Purchaser on Schedule 2.1.
The Purchasers acknowledge that there are restrictions on transfer of the
Purchased Securities set forth herein, in the Notes, in the Warrant Agreement
and in each Warrant. The sale of the Purchased Securities to each Purchaser at
the Closing shall constitute a separate sale hereunder.
Section 2.2. Closing. Subject to satisfaction by the Company of the
conditions set forth in Article V hereof, the closing of the purchase and sale
of the Purchased Securities (the "Closing") will take place at the offices of
O'Melveny & Myers LLP, 400 South Hope Street, Los Angeles, California, on the
date hereof (the "Closing Date"). At the Closing, the Company will issue, sell
and deliver to each Purchaser, and each Purchaser shall purchase or acquire from
the Company: (i) the Notes in an aggregate principal amount and for an aggregate
purchase price equal to the amounts as set forth opposite the name of such
Purchaser on Schedule 2.1 under the headings "Principal Amount of Notes
Purchased" and "Purchase Price of Notes Purchased", respectively, and (ii) the
Warrants in the amounts and for the purchase price set forth opposite the name
of such Purchaser on Schedule 2.1 under the headings "Number of Warrants
Purchased" and "Purchase Price of Warrants Purchased", respectively, by wire
transfer in immediately available funds on or before the Closing Date. The
Purchased Securities will be issued on or before the Closing Date, and
registered to each such Purchaser in the Company's records, in the amounts
designated on Schedule 2.1 hereto.
Section 2.3. Use of Proceeds. Proceeds from the sale of the Purchased
Securities hereunder shall be used by the Company to fund the acquisition of
certain radio and television stations in Texas, to pay Transaction Costs, to
repay certain existing Indebtedness of Company
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and its Subsidiaries and for working and growth capital and general corporate
purposes of Company and its Subsidiaries as determined from time to time by the
Company.
Section 2.4. The Notes.
(a) Interest; Payment.
(i) The outstanding principal amount of the Notes shall bear interest
at the rate of 9% per annum compounded annually in arrears on each
anniversary of the date hereof. Interest shall be calculated on the basis
of the actual number of days elapsed over a year of 365 days. All accrued
and unpaid interest on the outstanding principal amount of the Notes
(including the amounts accrued pursuant to clause (ii) below) shall only be
due and payable in full and in cash without setoff, deduction or
counterclaim on the Maturity Date. The Company shall have the option,
subject to and to the extent permitted by the Loan Documents, but shall not
be required, to pay accrued and unpaid interest on the outstanding
principal amount of the Notes in cash without setoff, deduction or
counterclaim on an annual basis.
(ii) During the occurrence and continuation of an Event of Default and
from and after the date of written notice from Majority Purchasers
declaring that default interest rate will be charged as a result of such
Event of Default (a "Default Notice"), unless until the same shall be cured
or waived in writing, the outstanding principal balance of the Notes shall
accrue at the rate of 4% per annum in excess of the then-applicable
interest rate, compounded annually in arrears (calculated on the basis of
the actual number of days elapsed over a 365-day year); provided that such
rate shall increase by an additional 2% from and after September 20, 2009
(the "Adjustment Date") and on each six (6) month anniversary of the
Adjustment Date, so long as the Company has not repaid the Notes in full,
subject to a maximum rate of 21% per annum, in each case compounded
annually.
(b) Mandatory Redemption. On the Maturity Date, subject to and to the
extent permitted by the Loan Documents, the Company shall redeem the Notes in
the amount of the then outstanding principal plus all accrued and unpaid
interest thereon.
(c) Prepayment. The Company may prepay the Notes in whole or in part at any
time prior to the Maturity Date without penalty or premium, provided such
prepayment shall not reduce the amount of shares issuable under the Warrants.
(d) Subordination. The Company's obligations under the Purchased Securities
shall be subject to certain subordination terms as set forth in the
Intercreditor Agreements.
(e) Pro Rata Treatment. Except to the extent otherwise provided herein: (i)
each payment of principal of the Notes shall be made to the Noteholders pro rata
in accordance with the respective unpaid principal amounts of the Noteholders'
respective Notes; (ii) each payment of interest on the Notes shall be made to
the Noteholders pro rata in accordance with the amounts of interest due and
payable to the Noteholders under the Noteholders' respective Notes; and (iii)
each distribution of cash, property, securities or other value received by the
Noteholders in respect of the indebtedness outstanding under the Notes, whether
pursuant to any attachment,
8
garnishment, execution or other proceedings for the collection thereof or
pursuant to any bankruptcy, reorganization, liquidation or other similar
proceeding or otherwise in respect of the Company or the Subsidiaries, or the
indebtedness under the Notes, after payment of collection and other expenses as
provided herein, shall be apportioned to the Noteholders pro rata in accordance
with the respective unpaid principal amounts of and interest on the Noteholders'
respective Notes, provided that if any of the Noteholders (a "Recovering Party")
shall receive any such payment or distribution disproportionately (a "Recovery")
in respect thereof, such Recovering Party shall pay to the other Noteholders
their respective pro rata shares of such Recovery, unless the Recovering Party
is legally required to return any Recovery, in which case each party receiving a
portion of such Recovery shall return to the Recovering Party its pro rata share
of the sum required to be returned without interest unless that party is
required to pay interest. For purposes of this Agreement, calculations of the
amount of the pro rata share of any Noteholder shall be rounded to the nearest
whole dollar. The Company acknowledges and agrees that if any Recovering Party
shall be obligated to pay to the other Noteholders a portion of any Recovery
pursuant to the foregoing provisions of this subsection (e), the Company shall
be deemed to have satisfied the obligations in respect of indebtedness held by
such Recovering Party only to the extent of the Recovery retained by such
Recovering Party after giving effect to the pro rata payments by such Recovering
Party to the other Noteholders contemplated by the foregoing provisions of this
subsection (e). The obligations of the Company in respect of indebtedness held
by each other Noteholder shall be deemed to have been satisfied to the extent of
the amount of the Recovery required to be distributed to each such other
Investor by the Recovering Party as contemplated above, whether or not any such
Recovery is actually distributed.
(f) Place of Payments. All payments of principal, interest, fees and other
amounts to be made by the Company under this Agreement and the Notes shall be
made in immediately available funds to the Noteholders, not later than 2:00 P.M.
(Eastern Time) on the date on which such payment shall become due, at the
address of each Noteholder provided Schedule 2.1 hereto. If any payment
hereunder or under the Notes shall be due and payable on a day which is not a
Business Day, the due date thereof shall be extended to the next Business Day,
and interest shall be payable at the applicable rate specified herein through
such extension period.
(g) Replacement of Notes. Upon receipt of a Noteholders' affidavit or other
evidence reasonably satisfactory to the Company of the loss theft, destruction
or mutilation of any Note and, in the case of any such loss, theft or
destruction, upon delivery of an indemnity agreement reasonably satisfactory to
the Company (which in any event shall not require the posting of a bond or other
security therefor) (an "Affidavit of Loss"), and, in the case of any such
mutilation, upon the surrender of such Note for cancellation, the Company, at
its expense, shall execute and deliver, in lieu of such lost, stolen, destroyed,
or mutilated Note, a new Note of like tenor.
(h) Original Issue Discount. Together, the Purchased Securities issued in
accordance with this Section constitute an "investment unit" for the purposes of
Section 1273(c)(2)(A) of the Code. In accordance with Sections 1273(c)(2)(A) and
1273(b)(2) of the Code, the issue price of the investment unit is the original
principal amount of the Notes. The parties agree that the issue price of the
Notes is $29,500,000 and the issue price of the Warrants is $500,000. None of
the parties will take any position in its tax returns or otherwise that is
inconsistent with the foregoing.
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(i) Legend. Each new and replacement Note shall contain the legend set
forth in the form of Note attached as Exhibit A hereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
In order to induce each of the Purchasers to enter into this Agreement and
to purchase the Purchased Securities, the Company hereby represents and warrants
as follows:
Section 3.1. Incorporation and Restatement of Representations and
Warranties. The representations and warranties of the Company and its
Subsidiaries made in the Senior Subordinated Loan Agreement as of the date
hereof (which representations and warranties are subject to all of the
qualifications, limitations and restrictions contained in the Senior
Subordinated Loan Agreement) and the representations and warranties of the
Company and its Subsidiaries made in Section 4.15 of the Senior Loan Agreement
(which representations and warranties are subject to all of the qualifications,
limitations and restrictions contained in the Senior Loan Agreement) are hereby
incorporated herein by reference and each such representation and warranty is
restated and re-made by the Company to the Purchasers as of the date hereof and
will be deemed to be representations and warranties made by the Company to the
Purchasers under this Agreement and relied upon by the Purchasers in entering
into this Agreement and agreeing to purchase the Purchased Securities.
Section 3.2. Consents. Based in part on the representations by Purchasers
in Section 4.1, the execution, delivery and performance by the Company of this
Agreement and of each Related Agreement, and the issuance and sale of the
Purchased Securities hereunder, and the issuance of any Common Stock upon
exercise of the Warrants, do not and will not require the approval or consent
of, or any filing with, any governmental authority or agency or any other Person
other than (a) those set forth in Schedule 3.2, (b) those the failure of which
to obtain would not have a Material Adverse Effect, and (c) any required state
securities law filings relating to the issuance and sale of the Purchased
Securities which have been filed or are permitted to be filed after the date of
such issuance and sale (the "Blue Sky Filings").
Section 3.3. Registration Rights. Except for the rights granted to the
Purchasers pursuant to the Warrant Agreement of even date herewith, no Person
has demand or other registration rights to cause the Company to file any
registration statement under the Securities Act relating to the securities of
the Company or any right to participate in any such registration statement.
Section 3.4. Capitalization.
(a) The Company's Capitalization. The Company's authorized Capital
Securities consists solely of 1,000 shares of Common Stock, par value $.01 per
share (collectively, the "Shares"). Of such authorized Shares, and after giving
effect to the transactions contemplated by this Agreement, 200 of such Shares
are issued and outstanding. All of the issued Shares are owned by the Persons
listed on Schedule 3.4(a) and have been duly authorized, validly issued and
outstanding and are fully paid and non-assessable.
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(b) Convertible Securities; Preemptive Rights. Except for the Warrants and
as set forth on Schedule 3.4(b), there are no outstanding rights (either
preemptive or other), or options to subscribe for or purchase from the Company,
or any warrants or other agreements providing for or requiring the issuance or
purchase by the Company of, or any Liens on, any Capital Securities of the
Company or any securities convertible into or exchangeable, for, or exercisable
into, its Capital Securities, or stock appreciation rights, phantom stock rights
or other equity-like instruments (collectively, "Phantom Stock"). No holder of
any security of the Company is entitled to any preemptive or similar rights to
purchase securities from the Company except as otherwise contemplated by this
Agreement or the Related Agreements, except as set forth on Schedule 3.4(b).
(c) Voting Trust. There are no voting trusts, proxies or agreements
relating to the voting of the Company's Capital Securities, except as set forth
in this Agreement and the Related Agreements and the Buy-Sell Agreement.
(d) Restrictions on Transfer. There are no restrictions on transfer of the
Warrants or the Shares issuable upon the exercise thereof other than those set
forth in this Agreement and the Related Agreements and those imposed by
applicable securities laws.
Section 3.5. Subsidiaries. Except as set forth on Schedule 3.5 hereto, the
Company does not have any Subsidiaries and does not own or hold of record and/or
beneficially own or hold, directly or through a Subsidiary, any shares of any
class of the Capital Securities of any corporation or any legal or beneficial
ownership interest in any general or limited partnership, limited liability
company, business trust or joint venture or in any other unincorporated trade or
business enterprise. Except as set forth on Schedule 3.5 hereto, all outstanding
Capital Securities or interests of each such Subsidiary and such other business
enterprises is owned by the Company or another wholly-owned Subsidiary of the
Company as set forth on such Schedule 3.5, free and clear of any Lien (other
than Liens created pursuant to the Senior Loan Agreement and the collateral
documents related thereto), is validly issued and outstanding, and is fully paid
and non-assessable, and there are no commitments for the purchase or sale of,
and no options, warrants or other rights to subscribe for or purchase, any
securities of any such Subsidiary.
Section 3.6. Subchapter S Status. The Company made a timely and valid
election to be treated as an S corporation (as defined in Section 1361(a) of the
Code) from the date of its formation, and such status has continued without
interruption to the date hereof.
Section 3.7. Transactions with Affiliates. Except as set forth on Schedule
3.7, no Affiliate of the Company or any Subsidiary other than a wholly-owned
Subsidiary of the Company, is party to an agreement or transaction with the
Company or Subsidiary.
Section 3.8. Disclosure. No representation, warranty or statement made in
this Agreement, any Related Agreement, or any agreement, certificate, statement
or document furnished by or on behalf of the Company or any of its Subsidiaries
in connection with the purchase of the Purchased Securities, when taken as a
whole, contains or will contain any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements contained
herein or therein, in light of the circumstances in which they were made, not
misleading in any material respect at the time made.
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ARTICLE IV
PURCHASERS' REPRESENTATIONS
Section 4.1. Investment Intent. Each of the Purchasers hereby, severally
and not jointly, represents and warrants to the Company that it, he or she is
(i) an "accredited investor" as defined in Regulation D of the Securities Act
and has such knowledge and experience in financial and business matters that it
or he is capable of evaluating the merits and risks of the prospective
investment in the Company, (ii) acquiring the Purchased Securities to be
purchased by it, him or her pursuant to Section 2 hereof for investment and not
with a view to the distribution thereof, (iii) a lender actively and regularly
engaged in the business of making loans and (iv) has no present intent to
separate ownership of the Notes from ownership of the Warrants. Each of the
Purchasers hereby, severally and not jointly, represents and warrants to the
Company that no commissions, broker fees, finders fees or similar fees are being
paid by the Purchasers in connection with the sale of the Notes or the Warrants.
Section 4.2. Authorization, etc. Each of the non-individual Purchasers
hereby represents, severally and not jointly, that this Agreement, the
Intercreditor Agreements and the Related Agreements to which it is a party have
been executed by a duly authorized Person on its behalf; and the execution,
delivery and performance hereof and thereof have been duly authorized by all
appropriate action. Each Purchaser hereby represents, severally and not jointly,
that it has the power and authority, and the legal right, to make, deliver and
perform this Agreement, the Intercreditor Agreements and the Related Agreements
to which it is a party, and consummate the transactions contemplated hereby and
thereby. Each Purchaser that is a natural person represents, severally and not
jointly, that each of this Agreement, the Intercreditor Agreements and the
Related Agreements to which he or she is a party has been duly executed and
delivered by such Purchaser.
Section 4.3. Enforceability. Each of the Purchasers hereby, severally and
not jointly, represents that the execution and delivery by such Purchaser of
this Agreement, the Intercreditor Agreements and each of the Related Agreements
to which it is a party will result in legally binding obligations of such
Purchaser enforceable against it or him in accordance with the respective terms
and provisions hereof and thereof.
Section 4.4. Certain Other Matters. Each Purchaser hereby, severally and
not jointly, represents that (a) it acknowledges that the Purchased Securities
and the Registrable Securities have not been registered under the Securities Act
and understands that the Purchased Securities and the Registrable Securities
must be held indefinitely unless they are subsequently registered under the
Securities Act or such sale is permitted pursuant to an available exemption from
such registration requirement and (b) if the purchase of the Purchased
Securities and the Registrable Securities were to occur on the date hereof, its
acquisition of the Purchased Securities and the Registrable Securities
contemplated herein would constitute a legal investment as of the date hereof
under the laws and regulations and orders of each jurisdiction to which it may
be subject. Section 4.5. S Corporation Status. Each Purchaser hereby, severally
and not jointly, acknowledges that Company is classified as an "S Corporation"
under Section 1361(a) of the Code and agrees that such Purchaser shall not
(whether pursuant to this Agreement, the Related Agreements or otherwise) take
any action or make any election (or fail to take any action or
12
make any election if requested by Company) which would result in a termination
of such classification including, without limitation, (i) transferring all or
any portion of the Purchased Securities or Registrable Securities to any Person
other than a Permitted Holder or (ii) exercising the Warrants while the Company
is an S corporation, provided that (A) the Purchasers may exercise the Warrants
at any time on or after the conditions permitting the Board Change Date (as
defined in the Voting and Co-Sale Agreement) have occurred, and (B) the
Purchasers may take any action or make any election or fail to take any action
or make any election if the Company receives an opinion of tax counsel
reasonably acceptable to the Company in form and substance reasonably acceptable
to the Company to the effect that such action or election (or failure to take
such action or make such election) will not result in a termination of the
Company's classification as an S corporation. Any transfer of or exercise of
Warrants or Registrable Securities in violation of this Section 4.5 will be void
and ineffective.
ARTICLE V
CONDITIONS TO EACH PURCHASER'S OBLIGATIONS
TO PURCHASE AT THE CLOSING
Each Purchaser's obligation to purchase the Purchased Securities at the
Closing pursuant to Section 2.2 of this Agreement is subject to compliance by
the Company with its agreements and representations herein contained, and to the
satisfaction, on or prior to the Closing Date, of the following conditions:
Section 5.1. Related Agreements. Each of the Related Agreements (other than
the Company's Articles of Incorporation) shall have been executed and delivered
in a form provided for herein, and each of the Related Agreements shall be in
full force and effect and no term or condition thereof shall have been amended,
modified or waived except with the prior written consent of such Purchaser. All
covenants, agreements and conditions contained in the Related Agreements which
are to be performed or complied with by Company or any of its Affiliates which
is party thereto on or prior to the Closing Date shall have been performed or
complied with in all material respects.
Section 5.2. Charter Documents; Good Standing Certificates. Such Purchaser
shall have received from the Company (a) a copy of the Company's Charter and the
Charter of each of LBI Intermediate Holdings, Inc. and LBI Holdings II, Inc.
(the "Top Tier Subsidiaries"), in each case certified by the California
Secretary of State to be true and complete as of a date no more than 30 days
prior to the Closing Date, (b) a copy, certified by the Secretary of the Company
and the Top Tier Subsidiaries to be true and complete as of the Closing Date, of
the by-laws thereof; and (c) a certificate, dated not more than 30 days prior to
the Closing Date, of the relevant governmental authority or other appropriate
official of each state in which each of the Company and its Top Tier
Subsidiaries is incorporated or qualified to do business, as to the Company's
and each Top Tier Subsidiary's corporate good standing in such state or
qualification to do business, as the case may be.
Section 5.3. Proof of Corporate Action. Such Purchaser shall have received
from the Company, as necessary, copies certified by the Secretary thereof to be
true and complete as of the Closing Date, of the records of all corporate action
taken to authorize the execution, delivery
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and performance of this Agreement and each of the Related Agreements to which
the Company is a party.
Section 5.4. Incumbency Certificate. Such Purchaser shall have received
from the Company an incumbency certificate, dated the Closing Date, signed by a
duly authorized officer thereof and giving the name and bearing a specimen
signature of each individual who shall be authorized to sign, in the name and on
behalf of the Company, this Agreement and each of the Related Agreements to
which the Company is or is to become a party, and to give notices and to take
other action on behalf of the Company under each of such documents.
Section 5.5. Legal Opinion. The Purchasers shall have received from
O'Melveny & Myers LLP, counsel to the Company, an opinion reasonably
satisfactory to the Purchasers and counsel to the Purchasers substantially in
the form set forth as Exhibit D hereto.
Section 5.6. Representations and Warranties; Officer's Certificate. The
representations and warranties contained or incorporated by reference herein
shall be true and correct in all material respects on and as of the Closing Date
with the same force and effect as though made on and as of the Closing Date
except for those representations and warranties which relate specifically to an
earlier date, provided that such representations and warranties were true and
correct in all material respects as of such earlier date; and the Company shall
have performed and complied in all material respects with all material
conditions and agreements required to be performed or complied with by it prior
to the Closing; and such Purchaser shall have received on the Closing Date a
certificate to these effects signed by an authorized officer of the Company.
Section 5.7. Legality; Governmental and Other Authorizations. The purchase
of the Purchased Securities by such Purchaser shall not be prohibited by any law
or governmental order or regulation. All necessary consents, approvals,
licenses, permits, orders and authorizations of, or registrations, declarations
and filings with, any governmental or administrative agency or with any other
Person, with respect to any of the transactions contemplated by this Agreement
or any of the Related Agreements, shall have been duly obtained or made and
shall be in full force and effect other than the Blue Sky Filings and those
described on Schedule 5.7 and other than those required to be obtained by the
Purchasers.
Section 5.8. Payment of Certain Fees and Disbursements. The Purchasers
shall have been reimbursed, subject to and in accordance with Article XII
hereof, for all out of pocket reasonable costs and expenses (including, but not
limited to, reasonable legal and accounting expenses) incurred by it through the
Closing Date in connection with the transactions contemplated by this Agreement
(provided that the Company shall be required to reimburse only the reasonable
legal fees and expenses of Edwards & Angell, LLP, Latham & Watkins, FCC counsel,
and Pillsbury Winthrop LLP, California counsel) and the Company shall have paid
the reasonable legal fees and expenses of Edwards & Angell, LLP, Latham &
Watkins, and Pillsbury Winthrop LLP through the Closing Date in connection with
the transactions contemplated by this Agreement.
Section 5.9. Intercreditor Agreements. The Intercreditor Agreements shall
have been executed and delivered by the parties other than Purchasers, and the
Intercreditor Agreements shall be in full force and effect and no term or
condition thereof shall have been amended,
14
modified or waived except with the prior written consent of the Purchasers. All
covenants, agreements and conditions contained in the Intercreditor Agreements
which are to be performed or complied with on or prior to the Closing Date by
other parties thereto shall have been performed or complied with in all material
respects.
Section 5.10. Other Indebtedness. The Senior Loan Agreement and the Senior
Subordinated Loan Agreement shall have closed and the initial loans shall be
simultaneously funded thereunder.
Section 5.11. Solvency Assurances. The Purchasers shall have received the
solvency certificates delivered pursuant to the Senior Loan Agreement.
Section 5.12. Legal Opinions. Each of the legal opinions (including
opinions covering FCC issues) delivered in connection with the acquisition of a
television station closing on the date hereof, together with the FCC opinions of
O'Melveny & Myers LLP delivered pursuant to the Senior Loan Agreement and Senior
Subordinated Loan Agreement, shall be addressed to the Purchasers, or the
Purchasers shall receive letters indicating that they may rely on such opinions
as if they were addressed to them.
Section 5.13. General. All instruments and legal, governmental,
administrative, corporate and partnership proceedings in connection with the
transactions contemplated by this Agreement and the Related Agreements shall be
reasonably satisfactory in form and substance to the Purchasers in all material
respects. The Purchasers shall have received copies of all material documents,
including, without limitation, records of corporate or other proceedings, the
opinion of counsel contemplated in Section 5.5 hereof, and any material
consents, licenses, approvals, permits and orders required to be secured by the
Company in connection with the transactions contemplated herein or which any
Purchaser may have requested in connection therewith.
ARTICLE VI
CONDITIONS TO THE COMPANY'S OBLIGATIONS
The Company's obligation to sell and issue the Purchased Securities
pursuant to this Agreement is subject to compliance by each of the Purchasers
with the agreements herein contained, and to the satisfaction on or prior to the
Closing Date, of the following conditions:
Section 6.1. Representations. The representations made by each Purchaser
in Article IV hereof shall be true and correct in all material respects when
made and shall be true and correct in all material respects as of the Closing
Date.
Section 6.2. Related Agreements. Each of the Related Agreements to which
such Purchaser is a party shall have been executed and delivered by such
Purchaser. All covenants, agreements and conditions contained in this Agreement
and the Related Agreements which are to be performed or complied with by such
Purchaser on or prior to the Closing Date shall have been performed or complied
with by such Purchaser in all material respects.
15
ARTICLE VII
AFFIRMATIVE AND NEGATIVE COVENANTS
The Company covenants that, while any of the Purchased Securities remain
outstanding, the Company will comply, and will cause each of its Subsidiaries to
comply, with the following provisions:
Section 7.1. Corporate Existence; Subsidiaries; Maintenance of Properties.
Except to the extent permitted under Sections 7.4, 7.16 and Article 8 of the
Senior Subordinated Loan Agreement, as such sections exist on the date hereof,
each of the Company and its Subsidiaries will preserve and keep in full force
and effect its corporate existence and its material rights and material
franchises except for any Subsidiary of the Company which is combined or merged
with and into the Company. Except to the extent permitted under Sections 7.4,
7.16 and Article 8 of the Senior Subordinated Loan Agreement, as such sections
exist on the date hereof, the Company shall at all times own, directly or
indirectly, one hundred percent (100%) of the equity interests in each
Subsidiary, except for any Subsidiary of the Company which is combined or merged
with and into the Company or another Subsidiary. The Company and its
Subsidiaries will not engage in any business other than the Permitted Lines of
Business. Each of the Company and its Subsidiaries will maintain all of its
properties used or useful in the conduct of its business in good condition,
repair and working order (normal wear and tear excepted) and cause to be made
all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary to conduct the
business of the Company. Notwithstanding the foregoing, nothing in this Section
7.1 shall prevent the loss of the corporate existence of any Subsidiary or any
such right or franchise if the preservation is, in the judgment of the Board of
Directors of the Company, no longer desirable in the conduct of the business of
the Company and its Subsidiaries, taken as a whole, and would not have a
Material Adverse Effect.
Section 7.2. Insurance. Each of the Company and its Subsidiaries will
maintain with financially sound and reputable insurance companies, funds or
underwriters, insurance of the kinds, covering the risks and in the relative
proportionate amounts usually carried by reasonable and prudent companies
conducting businesses similar to that of the Company and its Subsidiaries except
as otherwise determined by the Board. Notwithstanding the foregoing, compliance
with the requirements of Section 6.5 of the Senior Loan Agreement, as such
section exists as of the date hereof, shall constitute compliance with this
Section 7.2.
Section 7.3. Taxes. Each of the Company and its Subsidiaries will pay and
discharge, or cause to be paid and discharged, before the same shall become
overdue, all Taxes, assessments and other governmental charges imposed upon the
Company and its Subsidiaries and their respective real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies, which if unpaid might by
law become a Lien or charge upon any of their properties, in each case
non-payment of which would have a Material Adverse Effect; provided, however,
that any such Tax, assessment, charge, levy or claim need not be paid if the
validity or amount thereof shall currently be contested in good faith by
appropriate proceedings and if the Company or any of its Subsidiaries shall have
set aside on its books adequate reserves with respect thereto.
16
Section 7.4. Compliance with Laws, Contracts, Licenses and Permits. Each of
the Company and its Subsidiaries will (a) comply in all material respects with
all applicable laws and regulations wherever its business is conducted, (b)
comply with the provisions of its Charter and by-laws, (c) comply in all
respects with this Agreement and the Related Agreements, (d) comply with all
applicable decrees, orders, and judgments and (e) comply in all material
respects with all Licenses, in each case other than clause (c) above, where
non-compliance with which or the failure to obtain which would have a Material
Adverse Effect. If at any time while any Purchased Security is outstanding, any
material authorization, consent, approval, permit or license from any officer,
agency or instrumentality of any government shall become necessary or required
in order that any of the Company or its Subsidiaries may fulfill any of its
obligations hereunder, each of the Company and its Subsidiaries will promptly
take or cause to be taken reasonable steps to obtain such material
authorization, consent, approval, permit or License and furnish the Purchasers
with evidence thereof.
Section 7.5. Distributions. Neither the Company nor any Subsidiary shall
make any Distribution, other than (i) Distributions between the Company and its
wholly-owned Subsidiaries, or among such wholly-owned Subsidiaries or from any
Subsidiary to any Credit Party (as defined in the Senior Loan Agreement) as
permitted under the Senior Loan Agreement, as such Senior Loan Agreement exists
on the date hereof, (ii) those Distributions necessary to enable the
stockholders of the Company to pay those income taxes (including estimated and
final income taxes) arising from all income of the Company and its Subsidiaries
(including without limitation, income from operations and sales of assets,
whether or not extraordinary) while the Company is an S corporation, (iii)
Distributions in the nature of a stock dividend or stock split, and (iv)
Distributions other than those set forth in clause (i), (ii) and (iii) above
("Other Distributions") in an aggregate amount, when combined with all Other
Distributions from and after the date hereof, not exceeding $10,000,000, except
that the Company may repurchase, pay dividends and pay redemption amounts on the
Purchased Securities and Registrable Securities in accordance with and pursuant
to the terms of this Agreement or any of the Related Agreements.
Section 7.6. Transactions with Affiliates. Neither the Company nor any of
its Subsidiaries will (i) hire any relative of any of the Company's shareholders
or senior management as an employee or consultant or (ii) engage in any
transaction or enter into any agreement with any Affiliate thereof, except (a)
those between the Company and any wholly-owned Subsidiary or by and among
wholly-owned Subsidiaries of the Company, (b) those set forth on Schedule 7.6,
(c) those permitted pursuant to Section 7.5 hereof, and (d) those on at least as
favorable terms as the terms which could be obtained by the Company or a
Subsidiary, as the case may be, in a comparable transaction made on an arm's
length basis with Persons who are not Affiliates of the Company or any of its
Subsidiaries. Notwithstanding the foregoing, the Company shall not, without the
prior written consent of the Majority Purchasers, (A) issue any Capital
Securities, Convertible Securities or Phantom Stock to an employee, consultant
or Affiliate of the Company or a Subsidiary, except issuances of Capital
Securities, Convertible Securities and Phantom Stock to employees, consultants
and Affiliates of the Company and its Subsidiaries in an aggregate amount
including amounts under the Existing Grants, not exceeding 2.5% of the
Fully-Diluted Outstanding Equity, (B) grant registration rights to any Affiliate
of the Company or a Subsidiary, or (C) effect a Sale of the Company to any
Affiliate of the Company or a Subsidiary other than as permitted by Section 3.2
of the Voting and Co-Sale Agreement.
17
Section 7.7. Undertakings of Lenard Liberman and Jose Liberman. Except as
permitted under Section 7.6, Lenard Liberman and Jose Liberman agree that they
will not engage in any Permitted Lines of Business other than through the
Company or a Subsidiary. Further, if requested by the Majority Purchasers after
the Closing, Lenard Liberman shall enter into a subordination agreement with the
Purchasers subordinating his loans to Liberman Broadcasting, Inc. on terms
reasonably acceptable to the Purchasers, Senior Lenders and Lenard Liberman, so
long as the provisions of such subordination agreement do not restrict any
payment to Lenard Liberman that would otherwise be permitted under the Senior
Subordinated Loan Agreement and the intercreditor agreement dated the date
hereof between the Senior Subordinated Lenders and Lenard Liberman. The parties
agree that in the event of a Sale of the Company, unless the amount
distributable to the holders of Warrants is determined as provided in the
definition of Fair Market Value in the Warrant Agreement, then the amount
distributable to the holders of Warrants and stockholders of the Company shall
be reduced to reflect an allowance of 2.5% of the distributable sale proceeds
for those Capital Securities, Convertible Securities and Phantom Stock permitted
by Section 7.6(A) of this Agreement.
ARTICLE VIII
COVENANTS APPLICABLE TO DELIVERY OF INFORMATION
The Company hereby agrees that so long as any Purchased Securities are
outstanding it will comply with, and it will cause its Subsidiaries to comply
with, the following provisions:
Section 8.1. Annual Statements. Within 120 days after the close of each
fiscal year of the Company, commencing with the fiscal year ending on December
31, 2000, the Company will deliver to each Purchaser (a) audited consolidated
balance sheet and statement of income and retained earnings and of cash flows of
the Company and its Subsidiaries audited by Ernst & Young or any other so-called
"Big-5" accounting firm or any other accounting firm reasonably acceptable to
the Majority Purchasers, which annual financial statements shall show the
financial condition of the Company as of the close of such fiscal year and the
results of the Company's operations during such fiscal year, to be accompanied
by a true copy of said auditors' management letter, if one was provided to the
Company and (b) a comparison of such financial information to the budget for
such year, as well as a comparison of that year's performance to the performance
in the prior year, all on a consolidated basis. Each of the audited financial
statements delivered under Section 8.1(a) shall be certified without a "going
concern" or like qualification by such accounting firm.
Section 8.2. Monthly and Quarterly Statements. Within 45 days after the end
of each calendar month, the Company will deliver to each of the Purchasers a
consolidated unaudited statement of cash flows of the Company and its
Subsidiaries as of the end of such month and a comparison of that month's cash
flow to the cash flow in the same month of the prior year. Within 60 days after
the end of each fiscal quarter the Company will deliver to each of the
Purchasers consolidated and consolidating unaudited balance sheets and
statements of income and retained earnings and of cash flows for the Company and
its Subsidiaries all as of the end of such fiscal quarter and a comparison of
such cash flow results to the performance in the same quarter of the prior year.
18
Section 8.3. Officer's Certificate. In addition to the delivery of
financial statements of the Company and its Subsidiaries pursuant to Sections
8.1 above, in connection with the Company's annual financial statements the
Company shall deliver to each Purchaser a certificate of the President,
Executive Vice President or Chief Financial Officer of the Company, (a) that,
except as may otherwise be indicated therein or provided for in this Agreement,
to the best of his or her knowledge, such statements have been prepared in
accordance with GAAP consistently applied and fairly present, in all material
respects, the consolidated financial condition of the Company and its
Subsidiaries as of the dates specified and the results of their respective
operations and changes in financial position with respect to the periods
specified and (b) to the effect that such officer has caused the provisions of
this Agreement and the Related Agreements to be reviewed and such officer has no
knowledge of the breach of Section 7.5 or 7.6 of this Agreement.
Section 8.4. Operating Budgets. Each calendar year the Company shall
deliver to each of the Purchasers an operating budget for such calendar year
which shall have been approved by the Company's Board of Directors no later than
30 days before the first month of such calendar year.
Section 8.5. Other Information; Confidentiality. From time to time, upon
the request of any Purchaser, the Company will furnish such information
regarding the business, affairs, prospects and financial condition of the
Company and its Subsidiaries as such Purchaser may reasonably request. Each
Purchaser may examine the books and records of the Company and its Subsidiaries
and, may, at reasonable times and on reasonable notice and under the supervision
of the Company, inspect its or their respective facilities and may request
information at reasonable times and intervals concerning the general status of
the Company's and the Subsidiaries' financial condition and operations. All
information provided by Company to Purchasers, or any of them, hereunder or
under any of the Related Agreements shall be treated as confidential by the
recipient thereof regardless of whether it is specifically designated as such
and shall not be disclosed to any third parties except in accordance with
Article XVII or be used for any purpose other than analyzing the Company's
performance for purposes of monitoring the Purchaser's investment therein.
Section 8.6. Meetings with Management of the Company. A representative of
the Purchasers (other than a person acting as a director or in a comparable
position with, or a consultant to, a Competitor or a person having board
visitation rights with a Competitor) shall be entitled to consult with and
advise management of the Company on significant business issues, including
management's proposed annual operating plans. Management will meet with any such
representative as is mutually convenient on a regular basis during each year at
the Company's facilities at mutually agreeable times for such consultation and
advice and to review progress in achieving said plans. The Company has no
obligation to follow any advice rendered by any Purchaser or representative of
Purchasers.
Section 8.7. Notice of Event of Default. Upon knowledge by the President or
Executive Vice President of the Company of the existence of a condition which
has resulted in an Event of Default, such condition shall be disclosed
immediately to the Purchasers. If a condition which may reasonably lead to an
Event of Default exists and the Company is required
19
to give notice of such event under either the Senior Loan Agreement or the
Senior Subordinated Loan Agreement, then the Purchasers shall simultaneously
receive a copy of such notice.
Section 8.8. Board of Directors. The Majority Purchasers may designate one
person (other than a person acting as a director or in a comparable position
with, or a consultant to, a Competitor or a person having board visitation
rights with a Competitor) as an observer to attend meetings of the Boards of
Directors of the Company and its Subsidiaries (each a "Board") and committees
thereof, and such person and each Purchaser shall receive all information
provided to such Board and committee members at the same time as it is provided
to such members, including all notices of meetings.
ARTICLE IX
DEFAULTS
In each case of the happening and during the continuance of any of the
following events (each of which is herein sometimes called an "Event of Default"
and any of those set forth in subsections (b), (c), (d), (e) or (h) through (l),
subject to the proviso in subsection (e), being sometimes called a "Material
Event of Default"):
(a) any material representation or warranty made by or on behalf of the
Company in this Agreement or any of the Related Agreements, shall prove to be
false or misleading in any material respect when made or reconfirmed;
(b) the Company's default in the due observance or performance of, or
compliance with, any covenant contained in Section 7.5 or 7.6, which default or
defaults, individually or in the aggregate have a Material Adverse Effect or a
material adverse effect on the Purchasers, and such default has not been cured
or waived pursuant to a written agreement satisfactory to the Majority
Purchasers within 60 days after written notice thereof from the Majority
Purchasers;
(c) default in the payment of the principal of any Note, when the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment or by acceleration in accordance with this Article IX or
otherwise and such default continues through the close of business on the
Business Day following the due date;
(d) default in the payment of interest on any Note, and such default
continues for a period of 60 days;
(e) default in the due observance or performance of, or compliance with,
any covenant contained in Article 8, and such default has not been cured or
waived pursuant to a written agreement satisfactory to the Majority Purchasers
within 90 days after written notice thereof from the Majority Purchasers;
provided that in the event the Company is in breach of any of the provisions of
Sections 8.1 through 8.7 of this Agreement, such default shall not be considered
a Material Event of Default so long as the Company is in compliance with the
covenants set forth in Sections 6.1, 6.2 and 6.6 of the Senior Loan Agreement,
as such provisions are in effect on the date hereof, and is providing all such
information and access to the Purchasers and their representatives at the same
time as and on the same terms as it is being provided to the lenders or their
agent.
20
(f) except as otherwise provided in subsection (b) or (e) of this Article
IX, default or defaults in the due observance or performance of, or compliance
with, any covenant, condition or agreement contained herein or in any of the
Related Agreements by any person other than the Purchasers, which default or
defaults, individually or in the aggregate, have a Material Adverse Effect or a
material adverse effect on the Purchasers, and such default has not been cured
or waived pursuant to a written agreement satisfactory to the Majority
Purchasers within 60 days after written notice thereof from the Majority
Purchasers;
(g) for any reason any Related Agreement shall not be in full force and
effect in all material respects or shall not be enforceable in all material
respects in accordance with its terms, or any party thereto shall disaffirm its
obligations thereunder in writing, and such default has not been cured or waived
pursuant to a written agreement satisfactory to the Majority Purchasers within
30 days after written notice thereof from the Majority Purchasers;
(h) the Company or any of its Significant Subsidiaries pursuant to or
within the meaning of Title 11 of the United States Code or any similar Federal
or state law for the relief of debtors or affecting creditors' rights
(collectively, "Bankruptcy Law"):
(i) commences a voluntary case or any other action or proceeding with
respect to itself;
(ii) consents by answer or otherwise to the commencement against it of
an involuntary case or any other action or proceeding;
(iii) seeks or consents to the appointment of a receiver, trustee,
assignee, liquidator, custodian or similar official under any Bankruptcy
Law (collectively, a "Custodian") of it or for all or substantially all of
its property;
(iv) makes a general assignment for the benefit of its creditors; or
(v) admits in writing its inability to pay its debts generally as the
same become due;
(or takes any comparable action under any foreign laws relating to
insolvency);
(i) A court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Company or any of its Significant
Subsidiaries in an involuntary case in bankruptcy or any other action or
proceeding for any other relief;
(ii) appoints a Custodian of the Company or any of its Significant
Subsidiaries or for all or substantially all of the property of the Company
or any of its Significant Subsidiaries; or
(iii) orders the winding up or liquidation of the Company or any of
its Significant Subsidiaries;
21
(or any similar relief is granted under any foreign laws) and in each case
the order or decree remains unstayed and in effect for sixty (60) days, or any
dismissal, stay, rescission or termination ceases to remain in effect for sixty
(60) days;
(j) the holders of Indebtedness under the Senior Loan Agreement or the
Senior Subordinated Loan Agreement accelerate payment of such Indebtedness in
accordance with the respective terms thereof prior to its final scheduled
maturity;
(k) Lenard Liberman dies, becomes Disabled or ceases to be actively
involved on a full-time basis in the management and operations of the Company
and its Subsidiaries and the Company has not hired another individual of
comparable qualifications and abilities or a person otherwise having reasonable
qualifications and abilities in the broadcast radio and television industries
within 180 days of such occurrence, or Lenard Liberman (together with his
spouse, ancestors, lineal descendents, or heirs and devises and any trusts
controlled by them) is no longer a majority shareholder of the Company (defined
for the purposes of this subsection only as holding greater than 25% of the
Company's Fully-Diluted Outstanding Equity);
(l) neither Lenard Liberman nor Jose Liberman are actively involved on a
full-time basis in the management and operations of the Company and its
Subsidiaries (whether due to death, Disability or otherwise) and the Company has
not hired as their replacement another individual(s) of comparable
qualifications and abilities or a person otherwise having reasonable
qualifications and abilities in the broadcast radio and television industries,
in each case reasonably acceptable to the Majority Purchasers and Requisite
Holders (as defined in the Senior Subordinated Loan Agreement), within 180 days
of such occurrence, or Jose Liberman and Lenard Liberman collectively (together
with their spouses, ancestors, lineal descendents, or heirs and devises and any
trusts controlled by them) are no longer majority shareholders of the Company
(defined for the purposes of this subsection only as collectively holding
greater than 50% of the Company's Fully-Diluted Outstanding Equity);
Then and upon every such Event of Default and at any time thereafter during
the continuance of such Event of Default, upon written notice from the Majority
Purchasers declaring that the default rate will be charged, the Interest Rate
shall immediately increase to 13% pursuant to Section 2.4(a)(ii) until such time
as the Company has cured such Event of Default or such Event of Default shall
have been waived by the Majority Purchasers. Upon the occurrence of an Event of
Default under subsection (h) or (i), the Company shall have an immediate
obligation to (i) repay the Notes and any and all other amounts owing by the
Company to the Noteholders hereunder and (ii) purchase the Warrants at the
Warrant Purchase Price, subject to and to the extent permitted by the Loan
Documents. Upon the consummation of a Sale of the Company, the Company shall
have an immediate obligation to repay the Notes and any and all other amounts
owing by the Company to the Noteholders hereunder, subject to and to the extent
permitted by the Loan Documents. In addition, subject to and to the extent
permitted by the Loan Documents, upon the occurrence of a Material Event of
Default, the Majority Purchasers may give written notice of such Material Event
of Default to the Company, and the Company shall have 180 days from receipt of
such notice of Material Event of Default to (i) repay the Notes and any and all
other amounts owing by the Company to the Noteholders hereunder and (ii)
purchase the Warrants at the Warrant Purchase Price. If, at the end of such 180
day period (A) such Material Event of Default shall be continuing and shall not
have been
22
waived by the Majority Purchasers, and (B) the Company has failed to so repay
the Notes and such other amounts and to so repurchase the Warrants, then,
subject to and to the extent permitted by the Loan Documents, the Majority
Purchasers may declare the Notes and any and all other amounts owing by the
Company hereunder to the Noteholders to be immediately due and payable and
require the Company to purchase the Warrants at the Warrant Purchase Price.
If (1) such Material Event of Default shall be continuing and shall not
have been waived by the Majority Purchasers, (2) the Majority Purchasers declare
the Notes and all other amounts owing by the Company hereunder to the
Noteholders to be immediately due and payable and require the Company to
purchase the Warrants at the Warrant Purchase Price in accordance with the
immediately preceding sentence, (3) the parties hereto have obtained the consent
of the FCC and any material consent of a state public utilities commission or
comparable state authority, if reasonably deemed by the Company or its counsel
to be necessary, and (4) any applicable waiting periods under Hart-Scott-Rodino
Antitrust Improvement Act of 1976, as amended, shall have terminated, then,
subject to and to the extent permitted by the Loan Documents, the Purchasers
shall have the right to take control of the Board of Directors pursuant to
Section 2.1 of the Voting and Co-Sale Agreement until such obligation to repay
the Notes and such other amounts and to so repurchase the Warrants is honored.
The Purchasers agree that so long as the Company is an S corporation,
except in the case of a Sale of the Company or at any time on or after the
conditions permitting the Board Change Date have occurred, they shall not
require the Company to pay the principal and interest outstanding under the
Notes without simultaneously requiring the purchase of all of the Warrants for
the Warrant Purchase Price, and vice versa.
It is understood by the parties hereto that where the phrase "subject to
and to the extent permitted by the Loan Documents" or a similar phrase is used
in this Agreement or in any of the Related Agreements, and where such phrase
qualifies the obligation of the Company to pay any amounts owing to the
Purchasers hereunder or thereunder and/or to purchase or redeem any securities,
such phrase shall be deemed to mean the following: "subject to and to the extent
permitted by the Loan Documents (and to the extent, but only to the extent, that
the Company's Subsidiaries at such time are permitted under the Loan Documents
to pay dividends or other distributions that would enable the Company to make
such payments or to so purchase or redeem such securities, as the case may be)".
ARTICLE X
REMEDIES ON DEFAULT, ETC.
In case any one or more Material Events of Default shall occur and be
continuing, the Purchasers may, subject to the terms of the Intercreditor
Agreements and subject to obtaining any FCC consents or approvals or other
material consents or approvals required in connection therewith, proceed to
protect and enforce the rights of the Purchasers by an action at law, suit in
equity or other appropriate proceeding, whether for the specific performance of
any agreement contained in this Agreement or the Notes, or for an injunction
against a violation of any of the terms hereof or thereof or in and of the
exercise of any power granted hereby or thereby or by law. No right conferred
upon the Noteholders hereby or by the Notes shall be exclusive of any
23
other right referred to herein or therein or now or hereafter available at law,
in equity, by statute or otherwise.
ARTICLE XI
SUBSEQUENT HOLDERS OF PURCHASED SECURITIES
OR REGISTRABLE SECURITIES
The provisions of this Agreement that are for the benefit of each Purchaser
as the holder of any Purchased Securities or Registrable Securities are also for
the benefit of, and enforceable by, all subsequent Permitted Holders of such
Purchased Securities or Registrable Securities, and the provisions of this
Agreement that subject the Purchasers to obligations as the holder of any
Purchased Securities or Registrable Securities also shall subject all subsequent
holders of Purchased Securities and Registrable Securities thereto. Any
transfer, sale, pledge or hypothecation (collectively, "transfer") of any
Purchased Securities or Registrable Securities other than to a Permitted Holder
shall be void and ineffective. As used herein "Permitted Holder" means, any
subsequent transferee (including the initial Purchasers on the date hereof) of
Purchased Securities or Registrable Securities that became such a transferee
pursuant to a transfer that met each of the following conditions: (i) in
connection with such transfer, such transferee shall have executed a counterpart
to the Intercreditor Agreements and an agreement in form and substance
satisfactory to the Company to the effect that such transferee makes each of the
representations set forth herein (subject to the proviso at the end of this
sentence) and in the Related Agreements made by each initial Purchaser on the
date hereof and that such transferee agrees to be bound by the terms of this
Agreement and each of the Related Agreements as if it were the initial Purchaser
on the date hereof, (ii) in connection with any such transfer of all or any
portion of the Warrants, the transferor can and does transfer to the same
transferee a pro rata portion of the original portion of the Notes (and in
connection with any such transfer of all or any portion of the Notes, the
transferor can and does transfer to the same transferee a pro rata portion of
the Warrants), (iii) in connection with any such transfer of any Purchased
Securities or Registrable Securities, the Company shall have received an opinion
of tax counsel reasonably acceptable to the Company in form and substance
reasonably acceptable to the Company to the effect that such transfer will not
terminate the Company's classification as an S corporation, and (iv) such
transferee shall not be a Competitor; provided that a transferee shall not be
required to make the representation contained in Section 4.1(iii) herein if,
notwithstanding the failure to make such representation, the condition in clause
(iii) of this Article IX above shall have been otherwise satisfied. Each holder
of Purchased Securities or Registrable Securities shall give the Company notice
of any transfer by it of any Purchased Securities or Registrable Securities and
comply with each of the requirements set forth in this Article XI prior to such
transfer. Notwithstanding the foregoing, the provisions of Section 4.5 and this
Article XI shall not restrict the transfer of Purchased Securities or
Registrable Securities made pursuant to (a) Section 2.1(b), 3.1 or 3.3 of the
Voting and Co-Sale Agreement, subject to the provisions of Section 3.5 and 4.1
of the Voting and Co-Sale Agreement, or (b) pursuant to Section 5 or 6 of the
Warrant Agreement.
24
ARTICLE XII
EXPENSES; INDEMNITY
Section 12.1. Expenses. In the event the transactions contemplated by this
Agreement and the Related Agreements shall be consummated or if the transactions
contemplated by this Agreement and the Related Agreements are not consummated by
reason of the failure by the Company to so consummate when legally obligated to
do so hereunder, the Company hereby agrees to pay all reasonable out of pocket
fees, costs and expenses incurred by each Purchaser (such as travel, photocopy
and telephone expenses and including the fees and expenses of one counsel for
the Purchasers and audit and due diligence fees). From and after the Closing,
the Company hereby agrees to pay on demand all reasonable fees, costs and
expenses (including attorneys' fees for one general counsel for the Purchasers
(including, if reasonably necessary, California counsel) and one FCC counsel for
the Purchasers) incurred by each Purchaser in connection with any enforcement,
amendment, modification, approval, consent or waiver with respect to this
Agreement or any Related Agreement, all taxes (other than taxes determined with
respect to income and taxes relating to any transfer of the Purchased Securities
or Registrable Securities other than to the Company) resulting from the sale of
Purchased Securities or Registrable Securities as provided herein, including any
recording fees and filing fees and documentary stamp and similar taxes at any
time payable in respect of this Agreement or the issuance of any of the
Purchased Securities or Registrable Securities, all reasonable out-of-pocket
expenses associated with the Company's or a Subsidiary's Board of Directors or
Board of Directors committee attendance (including as an observer), including
travel and lodging expenses related thereto, and all due diligence and legal
costs related to potential acquisitions and future financings.
Section 12.2. Indemnification. The Company hereby agrees to indemnify and
hold each of the Purchasers and their (if applicable) general and limited
partners and their respective shareholders, officers, directors, employees and
agents (each an "Indemnitee") harmless from and against any and all actions,
causes of action, or suits brought against them by third parties ("Third Party
Claims") or brought by any Purchaser against the Company ("Purchaser Claims")
and any and all losses, liabilities, damages and expenses, including, without
limitation, reasonable attorneys' fees and disbursements (provided that with
regard to outside counsel to the Indemnitees, the Company shall be liable for
fees or disbursements to one set of attorneys for such parties (and separate FCC
counsel, if reasonably necessary) in any single action unless a potential
conflict of interest under the applicable code of professional responsibility
exists and provided further that Indemnitees shall not be entitled to
reimbursement of such attorneys' fees and disbursements incurred in connection
with a Purchaser Claim in the event such Indemnitees are not the prevailing
party in such Purchaser Claim) (collectively, "Damages") arising from any such
Third Party Claims or Purchaser Claims incurred by any of the Indemnitees as a
result of or relating to (i) any transaction by the Company financed or to be
financed in whole or in part, directly or indirectly, with proceeds from the
sale of any of the Purchased Securities, or (ii) the execution, delivery,
performance or enforcement of this Agreement, the Related Agreements or any
other agreement contemplated hereby or thereby (including, without limitation,
any failure by the Company or any of its Subsidiaries to comply with any of its
covenants or any breach of its representations and warranties in this Agreement,
the Related Agreements or any other agreement contemplated hereby or thereby),
in each case except where such Damages are caused directly by the actions of the
Indemnitee in violation of its obligations under such agreements or
25
by the gross negligence or willful misconduct of any Indemnitee or their agents
or attorneys-in-fact.
Section 12.3. Brokers' Fees. The Company hereby agrees to indemnify each of
the Purchasers against and agrees that it will hold each of them harmless from
any claim, demand or liability for any Transaction Costs alleged to have been
incurred by the Company or any Subsidiary or Affiliate in connection with the
transactions contemplated by this Agreement or the Related Agreements.
Section 12.4. Survival of Obligations. The obligations of the Company and
each of the Purchasers under this Article XII shall survive the transfer of the
Purchased Securities or Registrable Securities and the termination of this
Agreement.
ARTICLE XIII
NOTICES
All demands, notices, requests, consents and other communications required
or permitted under this Agreement, any Related Agreement or the Purchased
Securities shall be in writing and shall be personally delivered or sent by
facsimile machine (with a confirmation copy sent by one of the other methods
authorized in this Section), commercial (including FedEx) or U.S. Postal Service
overnight delivery service, or, deposited with the U.S. Postal Service mailed
first class, registered or certified mail, postage prepaid, as set forth below:
If to the Company, addressed to:
LBI Holdings I, Inc.
c/o Liberman Broadcasting, Inc.
1813 Victory Place
Burbank, CA 91504
Attention: Executive Vice President
Facsimile: (818) 558-4244
Telephone: (818) 563-5722
with a copy to:
O'Melveny & Myers LLP
400 South Hope Street
Los Angeles, CA 90071
Attention: Joseph K. Kim, Esq.
Facsimile: (213) 430-6407
Telephone: (213) 430-6511
If to any Purchaser, to such Purchaser's address as set forth on Schedule 2.1
hereto.
26
with a copy to:
Richard G. Small, Esq.
Edwards & Angell, LLP
2800 Financial Plaza
Providence, RI 02903
Facsimile: (401) 276-6611
Telephone: (401) 276-6582
Notices shall be deemed given upon the earlier to occur of (i) receipt by the
party to whom such notice is directed; (ii) if sent by facsimile machine, on the
day (other than a Saturday, Sunday or legal holiday in the jurisdiction to which
such notice is directed) such notice is sent if sent (as evidenced by the
facsimile confirmed receipt) prior to 5:00 p.m. Eastern Standard Time and, if
sent after 5:00 p.m. Eastern Standard Time, on the day (other than a Saturday,
Sunday or legal holiday in the jurisdiction to which such notice is directed)
after which such notice is sent; (iii) on the first business day (other than a
Saturday, Sunday or legal holiday in the jurisdiction to which such notice is
directed) following the day the same is deposited with the commercial carrier if
sent by commercial overnight delivery service; or (iv) the fifth day (other than
a Saturday, Sunday or legal holiday in the jurisdiction to which such notice is
directed) following deposit thereof with the U.S. Postal Service as aforesaid.
Each party, by notice duly given in accordance therewith may specify a different
address for the giving of any notice hereunder.
ARTICLE XIV
SURVIVAL AND TERMINATION OF COVENANTS, AGREEMENTS,
REPRESENTATIONS AND WARRANTIES
All covenants, agreements, representations and warranties made herein or in
any other document referred to herein or delivered to any party pursuant hereto
shall be deemed to have been relied on by each such party, notwithstanding any
investigation made by such party or on its behalf. All representations and
warranties made herein or in any of the Related Agreements shall survive the
execution and delivery of this Agreement and of the Purchased Securities.
ARTICLE XV
AMENDMENTS AND WAIVERS
Except as otherwise expressly provided herein, any term of this Agreement
may be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the Company and the Majority
Purchasers. Any amendment or waiver effected in accordance with this Article XV
shall be binding upon the Company and each holder of any Purchased Securities
sold pursuant to this Agreement and any holder of the Registrable Securities,
whether or not such holder expressly consented thereto.
27
ARTICLE XVI
CHOICE OF LAW; SUBMISSION TO JURISDICTION
AND WAIVER OF JURY TRIAL; DISPUTE RESOLUTION
Section 16.1. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (WITHOUT GIVING EFFECT TO ANY
CONFLICTS OR CHOICE OF LAWS PROVISIONS WHICH WOULD CAUSE THE APPLICATIONS OF THE
DOMESTIC SUBSTANTIVE LAWS OF ANY OTHER JURISDICTION).
Section 16.2. Consent To the Exclusive Jurisdiction Of the Courts Of The
Commonwealth of Massachusetts.
EACH OF THE PARTIES HERETO HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF
THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS AND THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF THE COMMONWEALTH OF MASSACHUSETTS, AS WELL AS TO THE
JURISDICTION OF ALL COURTS TO WHICH AN APPEAL MAY BE TAKEN FROM SUCH COURTS, FOR
THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF, OR IN
CONNECTION WITH, THIS AGREEMENT INCLUDING, WITHOUT LIMITATION, ANY PROCEEDING
RELATING TO ANCILLARY MEASURES IN AID OF ARBITRATION, PROVISIONAL REMEDIES AND
INTERIM RELIEF, OR ANY PROCEEDING TO ENFORCE ANY ARBITRAL DECISION OR AWARD.
EACH PARTY HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS TO BRING ANY SUIT,
ACTION OR OTHER PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
IN OR BEFORE ANY COURT OR TRIBUNAL OTHER THAN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS AND COVENANTS THAT IT SHALL NOT SEEK IN ANY MANNER TO RESOLVE ANY
DISPUTE OTHER THAN AS SET FORTH IN THIS ARTICLE XVI OR TO CHALLENGE OR SET ASIDE
ANY DECISION, AWARD OR JUDGMENT OBTAINED IN ACCORDANCE WITH THE PROVISIONS
HEREOF.
EACH OF THE PARTIES HERETO HEREBY EXPRESSLY WAIVES ANY AND ALL OBJECTIONS
IT MAY HAVE TO VENUE, INCLUDING, WITHOUT LIMITATION, THE INCONVENIENCE OF SUCH
FORUM, IN ANY OF SUCH COURTS. IN ADDITION, EACH OF THE PARTIES CONSENTS TO THE
SERVICE OF PROCESS BY PERSONAL SERVICE OR ANY MANNER IN WHICH NOTICES MAY BE
DELIVERED HEREUNDER IN ACCORDANCE WITH ARTICLE XIII.
Section 16.3. Waiver Of Jury Trial.
EACH OF THE PARTIES HERETO HEREBY VOLUNTARILY AND IRREVOCABLY WAIVES TRIAL
BY JURY IN ANY ACTION OR OTHER PROCEEDING BROUGHT IN CONNECTION WITH THIS
AGREEMENT, ANY OF THE OTHER
28
TRANSACTION DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 16.4. Equitable Remedies. The parties hereto agree that irreparable
harm would occur in the event that any of the agreements and provisions of this
Agreement were not performed fully by the parties hereto in accordance with
their specific terms or conditions or were otherwise breached, and that money
damages are an inadequate remedy for breach of this Agreement because of the
difficulty of ascertaining and quantifying the amount of damage that will be
suffered by the parties hereto in the event that this Agreement is not performed
in accordance with its terms or conditions or is otherwise breached. It is
accordingly hereby agreed that the parties hereto shall be entitled to an
injunction or injunctions to restrain, enjoin and prevent breaches of this
Agreement by the other parties and to enforce specifically such terms and
provisions of such Articles in any court of the United States or any state
having jurisdiction, such remedy being in addition to and not in lieu of, any
other rights and remedies to which the other parties are entitled to at law or
in equity.
Section 16.5. Intercreditor Agreements. This Agreement and the Related
Agreements are subject in all respects to the Intercreditor Agreements. The
parties agree that all Sections of this Agreement and the Related Agreements are
preempted to the extent in conflict with any provision of either of the
Intercreditor Agreements, unless and until all Senior Indebtedness (as defined
in the Senior Lenders Intercreditor Agreement) and all Senior Indebtedness (as
defined in the Senior Subordinated Lenders Intercreditor Agreement) are paid in
full and discharged and each such Intercreditor Agreement has terminated in
accordance with its terms.
ARTICLE XVII
RIGHT TO PUBLICIZE
Each of the parties hereto hereby agrees that it will not, except as
required by law, issue a press release or make any public statement regarding
the transactions contemplated hereby without the prior approval of the Company
and the Majority Purchasers, provided, however, that following the Closing, the
Majority Purchasers will have the right to publicize their investment in the
Company as contemplated hereby by means of a tombstone advertisement or other
customary advertisement in newspapers and other periodicals which advertisement
shall require the prior approval of and be reasonably acceptable to the Company.
The Company will have the right to inform actual or prospective customers and
lenders of such investment.
Notwithstanding the foregoing, the Purchasers and any future holders and
transferees of any Purchased Securities or Registrable Securities shall take
normal and reasonable precautions to maintain the confidentiality of all
non-public information obtained pursuant to the requirements of this Agreement
or under any Related Agreement but may, in any event, make disclosures (a)
reasonably required by any bona fide transferee, assignee or participant, in
connection with the contemplated transfer or assignment of the Purchased
Securities or participation therein, (b) as required or requested by any
governmental agency or representative thereof or as required pursuant to legal
process, (c) to its attorneys, accountants and other professional advisers with
an obligation of confidentiality, and to its beneficial holders and current and
prospective investors in funds managed by the Purchasers and/or their
Affiliates, (d) as required by law or (e) in connection with litigation
involving any Purchaser; provided that
29
(i) such transferee or assignee pursuant to clause (a) agrees in writing to
comply with the provisions of this Article XVII unless specifically prohibited
by applicable law or court order and (ii) in no event shall the Purchasers or
any future holders or transferees be obligated or required to return any
materials furnished by the Company, its Subsidiaries, or any of their respective
representatives.
ARTICLE XVIII
ENTIRE AGREEMENT; COUNTERPARTS; SECTION HEADINGS
This Agreement, the Related Agreements and the other writings referred to
herein or delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties hereto with respect to its subject matter. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to its subject matter. Notwithstanding the foregoing, the
provisions of the Intercreditor Agreements shall control with respect to
subordination and exercise of remedies.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. Signatures by telecopy shall constitute originals.
The descriptive headings of sections and paragraphs of this Agreement are
inserted for convenience only, and do not constitute a part of this Agreement
and shall not affect in any way the meaning or interpretation of this Agreement.
[The rest of this page is left blank intentionally.]
30
IN WITNESS WHEREOF, the Company and the Purchasers have executed this Securities
Purchase Agreement as of the day and year first above written.
COMPANY:
LBI HOLDINGS I, INC.
By: /s/ Lenard Liberman
-----------------------------------------
Name: Lenard Liberman
Title: Executive Vice President
/s/ Lenard Liberman
--------------------------------------------
Lenard Liberman, solely for purposes of
Section 7.7
/s/ Jose Liberman
--------------------------------------------
Jose Liberman, solely for purposes of
Section 7.7
PURCHASERS:
ALTA COMMUNICATIONS VIII, L.P.
By: Alta Communications VIII Managers, LLC,
its General Partner
By: /s/ Eileen McCarthy
-----------------------------------------
Name:_______________________________________
Title:______________________________________
ALTA-COMM VIII S BY S, LLC
By: /s/ Eileen McCarthy
-----------------------------------------
Name:_______________________________________
Title:______________________________________
31
ALTA COMMUNICATIONS VIII-B, L.P.
By: Alta Communications VIII Managers, LLC,
its General Partner
By: /s/ Eileen McCarthy
-----------------------------------------------
Name:_____________________________________________
Title:____________________________________________
ALTA VIII ASSOCIATES, LLC
By: Alta Communications, Inc.
By: /s/ Eileen McCarthy
-----------------------------------------------
Name:_____________________________________________
Title:____________________________________________
CALIFORNIA STATE TEACHERS'
RETIREMENT SYSTEM
By: /s/ Christopher J. Ailman
-----------------------------------------------
Name: Christopher J. Ailman
---------------------------------------------
Title: Chief Investment Officer
--------------------------------------------
BANCBOSTON INVESTMENTS INC.
By: /s/ Lars A. Swanson
-----------------------------------------------
Name: Lars A. Swanson
---------------------------------------------
Title: Director
--------------------------------------------
UNIONBANCALEQUITIES, INC.
By: /s/ J. Kevin Sampson /s/ David Bonrouhi
-----------------------------------------------
Name: J. Kevin Sampson David Bonrouhi
---------------------------------------------
Title: Vice President Vice President
--------------------------------------------
32
SCHEDULE 2.1
- ----------------------------------------------------------------------------------------------------------------------
Number of
Purchaser's Name and Principal Amount Purchase Price of Warrants Purchase Price of
Address of Notes Purchased Notes Purchased Purchased Warrants Purchased
- ----------------------------------------------------------------------------------------------------------------------
Alta Communications VIII, L.P. $15,831,793.00 $15,567,929.79 7.398725 $ 263,863.21
200 Clarendon Street
Boston, MA 02109
Attn: Bob Emmert
- ----------------------------------------------------------------------------------------------------------------------
Alta-Comm VIII S By S, LLC
200 Clarendon Street $ 261,783.00 $ 257,419.95 0.122340 $ 4,363.05
Boston, MA 02109
Attn: Bob Emmert
- ----------------------------------------------------------------------------------------------------------------------
Alta Communications VIII-B, L.P.
200 Clarendon Street $ 881,424.00 $ 866,733.60 0.411919 $ 14,690.40
Boston, MA 02109
Attn: Bob Emmert
- ----------------------------------------------------------------------------------------------------------------------
Alta VIII Associates, LLC
200 Clarendon Street $ 25,000.00 $ 24,583.33 0.011683 $ 416.67
Boston, MA 02109
Attn: Bob Emmert
- ----------------------------------------------------------------------------------------------------------------------
California State Teachers'
Retirement System $ 5,000,000.00 $ 4,916,666.67 2.336667 $ 83,333.33
Mail Station #4
Investments Office
7667 Folsom Boulevard
P.O. Box 163749, MS4
Sacramento, CA 95816-3749
Attn: Deanna Winter
- ----------------------------------------------------------------------------------------------------------------------
BancBoston Investments Inc.
175 Federal Street $ 6,000,000.00 $ 5,900,000.00 2.804000 $ 100,000.00
10/th/ Floor
- ----------------------------------------------------------------------------------------------------------------------
1
- ----------------------------------------------------------------------------------------------------------------------
Boston, MA 02110
Attn: Lars Swanson
- ----------------------------------------------------------------------------------------------------------------------
UnionBanCal Equities, Inc.
445 South Figueroa St. $ 2,000,000.00 $ 1,966,666.67 0.934667 $ 33,333.33
21/st/ Floor
Los Angeles, CA 90071
Attn: Kevin Sampson
- ----------------------------------------------------------------------------------------------------------------------
Totals: $30,000,000.00 $ 29,500,000.00 14.02 $ 500,000.00
- ----------------------------------------------------------------------------------------------------------------------
EXHIBIT A
THIS INSTRUMENT IS SUBJECT TO A SUBORDINATION AND INTERCREDITOR AGREEMENT
DATED AS OF MARCH 20, 2001 BY AND AMONG LBI HOLDINGS I, INC., A CALIFORNIA
CORPORATION, THE PURCHASERS PARTY TO THE SECURITIES PURCHASE AGREEMENT DESCRIBED
BELOW, AND FLEET NATIONAL BANK, INDIVIDUALLY AND AS ADMINISTRATIVE AGENT (THE
"ADMINISTRATIVE AGENT") FOR THE LENDERS UNDER THE CREDIT AGREEMENT BY AND AMONG
LBI HOLDINGS II, INC. (THE "BORROWER"), THE DIRECT AND INDIRECT SUBSIDIARIES OF
THE BORROWER WHICH ARE CREDIT PARTIES THEREUNDER, THE LENDERS PARTY THERETO AND
THE ADMINISTRATIVE AGENT AND UNION BANK OF CALIFORNIA, N.A. AS SYNDICATION
AGENT, AND CIT LENDING SERVICES CORPORATION AND GENERAL ELECTRIC CAPITAL
CORPORATION, AS CO-DOCUMENTATION AGENTS. BY ITS ACCEPTANCE OF THIS INSTRUMENT,
THE HOLDER HEREOF AGREES TO BE BOUND BY THE PROVISIONS OF SUCH SUBORDINATION AND
INTERCREDITOR AGREEMENT TO THE SAME EXTENT THAT THE SUBORDINATED CREDITORS (AS
DEFINED THEREIN) ARE BOUND.
THIS INSTRUMENT IS SUBJECT TO A SUBORDINATION AND INTERCREDITOR AGREEMENT,
DATED AS OF MARCH 20, 2001, AMONG LBI HOLDINGS I, INC., THE PURCHASERS PARTY TO
THE SECURITIES PURCHASE AGREEMENT DESCRIBED BELOW, OAKTREE CAPITAL MANAGEMENT,
LLC, INDIVIDUALLY AND AS AGENT FOR CERTAIN HOLDERS, AND OTHERS. BY ITS
ACCEPTANCE OF THIS INSTRUMENT, THE HOLDER HEREOF AGREES TO BE BOUND BY THE
PROVISIONS OF SUCH SUBORDINATION AND INTERCREDITOR AGREEMENT TO THE SAME EXTENT
THAT THE SUBORDINATED CREDITORS (AS DEFINED THEREIN) ARE BOUND.
THE SECURITIES REPRESENTED BY THIS NOTE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR APPLICABLE
STATE LAWS. THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS THE REGISTRATION PROVISIONS OF SAID ACT AND LAWS HAVE BEEN
COMPLIED WITH OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. FURTHERMORE,
THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS
THE COMPANY HAS RECEIVED AN OPINION OF TAX COUNSEL REASONABLY ACCEPTABLE TO THE
COMPANY IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE COMPANY TO THE EFFECT
THAT SUCH SALE, TRANSFER, PLEDGE OR HYPOTHECATION WILL NOT TERMINATE THE
COMPANY'S CLASSIFICATION AS AN S CORPORATION.
A-1
JUNIOR SUBORDINATED PROMISSORY NOTE
[$___________] March ___, 2001
FOR VALUE RECEIVED, the undersigned LBI HOLDINGS I, INC., a California
corporation (the "Borrower"), hereby unconditionally promises to pay to the
order of [________________] (hereinafter with any subsequent holder referred to
as "Lender"), having its principal place of business at [________________], on
the Maturity Date (as hereinafter defined), the principal amount of [_________
Dollars ($_________)] together with interest thereon, at the rates provided for
in the Securities Purchase Agreement (hereafter described).
This Note is one of the "Notes" referred to in, and is entitled to all the
benefits of that certain Securities Purchase Agreement dated as of the date
hereof, by and among Borrower, Lender and the other parties signatories thereto
(as may be amended from time to time, the "Securities Purchase Agreement"). All
capitalized terms used herein and not otherwise defined shall have the meanings
given to such terms in the Securities Purchase Agreement.
Interest on the principal amount outstanding hereunder shall accrue and
shall be paid as provided in the Securities Purchase Agreement.
The outstanding principal amount of this Note, together with all accrued
interest thereon, shall be due and payable, without setoff, deduction or
counterclaim, on September 20, 2009, or on such earlier date as provided in the
Securities Purchase Agreement (the "Maturity Date").
Borrower may prepay the outstanding principal amount and accrued interest
hereunder, in full or in part, upon the terms and conditions set forth in the
Securities Purchase Agreement.
Payments of principal and interest due hereunder shall be made by Borrower
in lawful money of the United States of America and immediately available funds
to Lender at its address set forth in the first paragraph of this Note, or at
such other place as Lender may designate to the Borrower in writing, in
accordance with the Securities Purchase Agreement. All payments hereunder,
unless otherwise determined by Lender, shall be applied first to interest, fees
and expenses then due and the balance, if any, to principal.
In no event shall the undersigned be required to pay any interest or other
fees or charges in excess of the maximum permitted by applicable law. If, for
any circumstances whatsoever, fulfillment of any provisions hereof or of the
Securities Purchase Agreement, at the time performance of such provision shall
be due, shall involve exceeding such amount, then the obligation to be fulfilled
shall automatically be reduced to the limit of such validity, and if from any
circumstance Lender should ever receive as interest an amount which would exceed
such maximum amount, such amount which would be excessive interest shall be
applied to the reduction of the principal balance evidenced hereby and not to
the payment of interest. As used herein, the term "applicable law" shall mean
the law in effect as of the date hereof; provided, however, that in the event
there is a change in the law which results in a higher permissible rate of
interest, then this Note shall be governed by such new law as of its effective
date. This provision shall control every other provision of all agreements
between Borrower and Lender.
A-2
Borrower agrees to pay all costs and expenses (including reasonable
attorneys' fees) incurred by Lender in the collection of this Note and the
enforcement of any agreement or instrument securing this Note.
Any and all sums at any time due from Lender to Borrower shall at all times
constitute security for this Note and any other obligations of Borrower to
Lender and may be applied or set off by Lender against such obligations whether
or not other collateral is available to Lender.
Borrower, for itself and its legal representatives, successors and assigns,
hereby expressly waives presentment, dishonor, protest and demand, diligence,
notice of protest of demand and of dishonor, and any other notice otherwise
required to be given under the law in connection with the delivery, acceptance,
performance, default, enforcement or collection of this Note, and expressly
agrees that this Note, or any payment hereunder, may be extended or subordinated
(by forbearance or otherwise) as set forth in the Securities Purchase Agreement.
No delay or omission on the part of Lender in exercising any right
hereunder shall operate as a waiver of such right or of any other right of
Lender nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or waiver of the same or any other right on any future occasion. No
consent or waiver by Lender with respect to any action or failure to act which,
without such consent or waiver, would constitute a breach of any provision of
this Note shall be valid and binding unless in writing and signed by Borrower
and Lender.
Transfer of this Note is registrable on the Note register of Borrower upon
presentation at the principal office of Borrower accompanies by a written
instrument of transfer in form reasonably satisfactory to Borrower duly executed
by, or on behalf of, the holder hereof; provided any such transferee is also a
Permitted Holder. This Note may also be exchanged at such office for one or more
Notes in any authorized denominations, as requested by the holder, of a like
aggregate unpaid principal amount. Any transfer of this Note shall be subject to
the terms of the Securities Purchase Agreement and any such transferee's
agreement to be bound to the terms of the Securities Purchase Agreement, the
Related Agreements and the Intercreditor Agreements, and by acceptance of this
Note the holder agrees to be bound by the terms of the Securities Purchase
Agreement, the Related Agreements and the Intercreditor Agreements.
Prior to due presentment for registration of transfer, Borrower and any
agent of Borrower may treat the person in whose name this Note is registered as
the owner hereof for the purpose of receiving payment of principal and interest
as herein provided and for all other purposes.
This Note shall be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts without giving effect to any choice or
conflict of law provision or rule that would cause the application of the
domestic substantive laws of any other jurisdiction.
This Note is subject to certain subordination provisions as set forth in
the Intercreditor Agreements.
BORROWER HEREBY WAIVES TRIAL BY JURY IN ANY ACTION PERTAINING TO THE
ENFORCEMENT OF THIS NOTE OR ANY AGREEMENT OR INSTRUMENT SECURING THIS NOTE.
A-3
This Note is executed as of the date first set forth above as a sealed
instrument, shall be binding upon the undersigned and its successors and
assigns, and shall inure to the benefit of Lender and its successors and
assigns.
LBI HOLDINGS I, INC.
Witness:
By:_________________________________________
Name:_______________________________________
Title:______________________________________
A-4