HEMISPHERE MEDIA GROUP, INC. (Form: 8-K, Received: 09/07/2016 08:31:38)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 7, 2016 (September 6, 2016)

HEMISPHERE MEDIA GROUP, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware
(State or other jurisdiction of
Incorporation)

001-35886
(Commission File Number)

80-0885255
(I.R.S. Employer
Identification Number)

4000 Ponce de Leon Boulevard

Suite 650

Coral Gables, FL 33146

(Address of principal executive offices) (Zip Code)

(305) 421-6364

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Background

InterMedia Partners VII, L.P. (“ IMP ”), the controlling stockholder of Hemisphere Media Group, Inc. (the “ Company ”), is nearing the end of its term. In order to provide liquidity options to its limited partners, IMP will offer its limited partners several alternatives with respect to the equity securities of the Company owned by IMP, and its wholly-owned subsidiary, InterMedia Cine Latino, LLC (“ IMCL ” and together with IMCL, “ IM ”) (collectively, the “ HMG Equity ”) as more fully described herein. As of the date of this Current Report on Form 8-K (“ Current Report ”), IM holds 26,402,043 shares of Class B common stock of the Company (certain of which are subject to forfeiture, as more particularly described below (the “ Forfeiture Shares ”)) and 1,866,812 warrants to purchase 933,406 shares of Class A common stock of the Company. Shares of the Company’s Class B common stock vote on a 10 to 1 basis with shares of the Company’s Class A common stock. The transactions described in this Current Report on Form 8-K are collectively referred to as the “ Liquidity Transactions ” and the consummation of the Liquidity Transactions is referred to as the “ Closing .” Upon Closing, Peter M. Kern (“ Kern ”), a current control person of IM, will control the entity which will act as the general partner of, and manage, operate and control the business and affairs of, two newly established special purpose vehicles (Investor (as defined below) and the Rollover SPV (as defined below), collectively the “ SPVs ”). Kern will have the sole voting and dispositive rights with respect to the shares of Class B common stock that will be held by the SPVs. The Closing is expected to occur in October 2016.

IMP will offer each of its limited partners the opportunity to elect one of the liquidity options (the “ Liquidity Options ”) described below:

Option 1: The right to receive an in-kind pro rata distribution of the HMG Equity (the “ Distribution Option ”). At the Closing, each limited partner electing this option will receive its pro rata distribution of the HMG Equity other than the Forfeiture Shares. Immediately prior to the distribution, each applicable share of Class B common stock will be automatically converted into shares of Class A common stock pursuant to the Company’s amended and restated certificate of incorporation (the “ Charter ”), except for any securities to be distributed to any limited partner that is a Class B Permitted Transferee (as defined in the Charter). The Forfeiture Shares will be retained by IM and will be distributed to each limited partner electing the Distribution Option if such shares are no longer subject to forfeiture as described below;

Option 2: The right to re-invest its pro rata portion of the HMG Equity (the “ Rollover Option ”) into InterMedia Hemisphere Roll-Over L.P., a Delaware limited partnership (the “ Rollover SPV ”) formed for the purpose of holding the re-invested HMG Equity, as further described below. The general partner of the Rollover SPV will be Gemini Latin Holdings, LLC, a Delaware limited liability company (the “ General Partner ”). The General Partner will be controlled by Kern, a current control person of IM;

Option 3: The right to receive a cash payment for its pro rata portion of the HMG Equity at a purchase price of $9.75 per Security (as defined below) (the “ Cash Option ”) from Gato Investments L.P., a Delaware limited partnership (the “ Investor ”) formed for the purpose of purchasing the HMG Equity from limited partners electing the Cash Option. The general partner of the Investor will be the General Partner and the sole limited partner of the Investor at the Closing will be Searchlight II HMT, L.P., a Delaware limited partnership (“ Searchlight ”), an affiliate of Searchlight Capital Partners LLC .

Certain limited partners of IMP include officers and directors of the Company, including the Company’s Chief Executive Officer and President, the Chief Financial Officer, Kern (the Chairman of the board of directors of the Company (the “ Board ”)) and Leo J. Hindery, Jr., a member of the Board.

The elections of each limited partner will be effected as more fully described under Item 8.01 (Other Events).

On June 9, 2015, the Board established a special committee of independent directors (the “ Special Committee ”) to review and consider the terms of the proposed Liquidity Transactions. The Special Committee engaged its own legal counsel and financial advisor to assist it with its review and consideration of the proposed Liquidity Transactions and alternatives thereto. The Special Committee met on 35 occasions during the period from June 10, 2015 to September 6, 2016 to consider the terms of the proposed Liquidity Transactions. On September 6, 2016, the Special Committee made a recommendation to the Board to approve the Company’s entry into the Stockholders Agreement (as defined below) in connection with the proposed Liquidity Transactions.

On September 6, 2016, the Board reviewed and considered the terms of and approved the Company’s entry into the Stockholders Agreement (as defined below).

Item 1.01 Entry into a Material Definitive Agreement.

Stockholders Agreement

In connection with the proposed Liquidity Transactions, on September 6, 2016, the Company entered into a stockholders’ agreement (the “ Stockholders Agreement ”), by and among the Company, the Investor, Rollover SPV, IMP, the General Partner, Kern and Searchlight. The Stockholders Agreement became effective upon signing, except that the provisions relating to stockholder voting, the composition of the Board and the committees of the Board will not become effective until the Closing. The Stockholders Agreement terminates if the Stock Purchase Agreement (as defined below) is terminated prior to Closing.

Director Appointment and Committee Membership Rights

Upon the Closing, Searchlight II HMT GP, LLC, the general partner of Searchlight (“ Searchlight GP ”) will have the right to nominate two directors to the Board (one being a Class III director and one being a Class II director). From and after the Closing, if Searchlight’s, the Investor’s or any of Searchlight’s controlled affiliates’ aggregate percentage of beneficial ownership of the outstanding voting stock of the Company represents aggregate voting power (as a percentage of the total voting power of all of the Company’s outstanding voting stock) (the “ Investor Percentage Interest ”) (a) greater than or equal to 30%, then Searchlight GP may designate for nomination one Class II director and one Class III director; (b) less than 30% but greater than or equal to 10%, then Searchlight GP may designate for nomination one Class III director; or (c) less than 10%, then Searchlight GP will not have any contractual right to designate for nomination any directors, subject, in each case, to protection of Searchlight’s proportional representation on the Board in the event of an increase or decrease in the number of seats for directors on the Board after the date hereof. The Searchlight designees must be reasonably acceptable to the Board; provided , that any investment professional employed by Searchlight or any of its affiliated investment funds will be deemed to be reasonably acceptable to the Board.

Until the earlier of the date that (i) the Investor Percentage Interest is less than 10%, (ii) the Stockholders Agreement is terminated and (iii) Searchlight’s delivery of a notice terminating its right to nominate directors when permitted by the Stockholders Agreement (the “ Board Designation Expiration Date ”), the Company and the Board will cause (A) each Searchlight director designee to be included in management’s slate of nominees for the election of Directors at each annual or special meeting of stockholders of the Company at which Class II or Class III directors are to be elected (together with any written consent of the stockholders of the Company pursuant to which Class II or Class III Directors are to be elected, an “ Election Meeting ”) occurring after the Closing and (B) at least two (2) Independent Directors (as defined below) to serve on the Board at all times. To qualify as an Independent Director, an individual must (i) qualify as an “Independent Director” for purposes of the NASDAQ Marketplace Rules and (ii) not be an affiliate of, employed by, or otherwise lacking in independence from, Searchlight, IMP, the General Partner, Kern, the Investor and the Rollover SPV. The Company has agreed to use its reasonable best efforts to, and to use its reasonable best efforts to cause the Board to, cause the election of each applicable Searchlight designee to the Board, including (to the extent permitted by law) by recommending that the Company’s stockholders vote in favor of the election of each such Searchlight designee, soliciting proxies in respect thereof and otherwise supporting each such Searchlight designee.

Promptly after the Closing, and subsequently in connection with each Election Meeting, the Company and the Board have agreed to cause the appointment of one Searchlight designee to each of the Audit Committee, the Executive Committee and any other committee or subcommittee of the Board formed after the date hereof (other than any committee formed for the purpose of investigating, making determinations with respect to, or otherwise addressing any potential or actual conflicts of interest between the Investor, Searchlight and any of its affiliates or any Searchlight designee, on the one hand, and the Company, on the other hand).

The right of Searchlight to nominate any member of the Board (or any committee thereof) is subject to compliance with applicable law, stock exchange rules, generally applicable corporate governance policies and procedures of the Company and, in the case of Board committees, applicable independence requirements.

Voting Agreements

From and after the date of the Stockholders Agreement, subject to the terms of the limited partnership agreement of the Investor (the “ LPA ”), until the earlier of the Board Designation Expiration Date and five years from Closing (as such date may be extended pursuant to the LPA), Searchlight, IMP, the General Partner, Kern, the Investor and the Rollover SPV have agreed to (i) cause all voting securities held by such person, or over which such person otherwise has voting discretion or

control, to be present at each Election Meeting, or any annual or special meeting at which (or any written consent pursuant to which) directors are to be elected or appointed, either in person or by proxy, and (ii) vote all such voting securities in favor of any Searchlight designee. From and after the date of the Stockholders Agreement, until the earlier of five years from Closing (as such date may be extended pursuant to the LPA) or the termination of the Stockholders Agreement, Searchlight, IMP, the General Partner, Kern, the Investor and the Rollover SPV have further agreed to vote for any nominee that would qualify as an Independent Director if the Board would have fewer than two Independent Directors if such nominees were not elected to the Board. The obligations of Searchlight described in this paragraph will not be in effect if Searchlight does not have voting power over any voting securities of the Company or the Searchlight GP no longer has a right to designate directors to the Board.

Following a termination of the Investor (other than such a termination resulting from the bankruptcy, insolvency or reorganization of the General Partner), for so long as Searchlight has voting power over any voting securities of the Company and the Searchlight GP has a right to designate one or more directors to the Board, Searchlight has additionally agreed that, with respect to all nominees included in the Company’s slate of nominees (other than Searchlight designees and Independent Directors for whom Searchlight must vote in favor as described in the preceding paragraph), it will vote all such voting securities in favor of such nominees in the same proportion as the vote of the holders of the Class A Shares (other than Searchlight and its affiliates). Searchlight may elect to terminate the voting obligation described in the immediately preceding sentence; however, it Searchlight so elects, any Searchlight nominees then on the Board must resign from the Board and the Searchlight GP no longer will have the right to designate Searchlight designees to the Board.

Registration Rights

If, after the Closing, (i) the Investor distributes securities of the Company to its limited partners (which would include Searchlight), (ii) the general partner of the Investor is replaced, or (iii) Searchlight becomes by any other means the registered and beneficial owner of equity securities of the Company purchased pursuant to the Stock Purchase Agreement or in another private placement transaction, then the Company will enter into an amendment to the existing registration rights agreement of the Company (or enter into a substantially similar agreement with Searchlight) providing Searchlight with the rights of certain stockholders party thereto.

Take-Private Limitations

For five years following the Closing, Searchlight, IMP, the General Partner, Kern, the Investor and the Rollover SPV have agreed not to, and to cause each of their respective affiliates not to, undertake any transaction that has a reasonable likelihood or a purpose of resulting in, directly or indirectly, the Company’s equity securities being de-listed from a national securities exchange or de-registered under the Securities Exchange Act of 1934, as amended (“ Exchange Act ”) unless such transaction is approved by a special committee of independent directors of the Company.

Termination

The Stockholders Agreement will terminate upon the occurrence of any of the following: (i) upon the mutual written agreement of the parties thereto; (ii) by Searchlight upon a material breach by the Company, Kern, the General Partner, the Investor, the Rollover SPV or IMP of any of their respective representations, warranties, covenants or agreements contained therein if such breach has not been cured within ten business days after written notice thereof is received by such party; provided that such termination shall only be with respect to the rights and obligations of the breaching party; (iii) by the Company, upon a material breach by Searchlight, Kern, the General Partner, the Investor, the Rollover SPV or IMP of any of its representations, warranties, covenants or agreements contained therein and such breach has not been cured within ten business days after written notice thereof is received by such party; provided that such termination shall only be with respect to the rights and obligations of the breaching party; (iv) by Kern, upon a material breach by the Company, Searchlight or, solely if the General Partner is no longer the general partner of the Investor, the Investor of any of their respective representations, warranties, covenants or agreements contained therein if such breach has not been cured within ten business days after written notice thereof is received by such party; provided that such termination shall only be with respect to the rights and obligations of the breaching party; or (v) upon termination of the Stock Purchase Agreement prior to Closing.

Other Provisions of the Stockholders Agreement

The Company will, at Investor’s sole expense for any out-of-pocket costs, use commercially reasonable efforts to obtain regulatory approvals, including, but not limited to, under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, the Communications Act of 1934, as amended, and the rules and regulations and published policies of the

Federal Communications Commission (the “ FCC ” and such Act, rules, regulations and policies, the “ Communications Laws ”) if, in each case, required in connection with a distribution of the HMG Equity pursuant to the LPA, the replacement of the general partner of the Investor, or any other event or circumstance pursuant to the LPA that requires such approval. The Company will have no obligation to seek regulatory approval for any action that would violate Communications Laws.

Additionally, the Company has agreed not to, and cause the Board not to, (i) take any action that would prevent or delay the Liquidity Transactions or other transactions contemplated by the Stockholders Agreement or frustrate the purposes thereof, (ii) enter into any shareholder rights plan, moratorium, control share, fair price, takeover or interested stockholder provision or any similar plan that would cause Searchlight or its affiliates to incur or suffer any dilution relative to the other holders of voting securities or warrants following Closing or that would have an adverse effect on the Board representation of Searchlight (excluding any shareholder rights plan that applies to the acquisition of any additional Class A Shares by Searchlight or any of its affiliates beyond the HMG Equity purchased by the Investor in the Liquidity Transactions and equity or equity-based compensation in connection with such affiliate’s service as a member of the Board or any committee thereof or exercising any rights or options in connection with such equity or equity-based compensation) or (iii) amend the Charter or the amended and restated bylaws of the Company to change the quorum requirement for Company stockholder meetings. The obligations set forth in subsection (i) and (iii) of the immediately preceding sentence will not apply to the extent the Board determines in good faith that such action would reasonably be expected to be inconsistent with its fiduciary duties to the Company’s stockholders and the obligation set forth in subsection (ii) of the immediately preceding sentence will not apply from and after the date that the Investor Percentage Interest is less than 10%.

For the duration of the Stockholders Agreement, any approval by the Board of a business combination or a person acquiring greater than 15% of the outstanding voting power of the Company, in each case for purposes of the Delaware corporation law’s anti-takeover statute, shall require the prior written consent of a special committee of independent directors, provided that the Board has previously approved for the purposes of such statute the transactions contemplated by the Stock Purchase Agreement (as defined below), the Distribution Option and any distribution in kind of the HMG Equity by the Investor, the Rollover SPV, or any replacement of the general partner of the Investor. In addition, each of Searchlight, IMP, the General Partner, Kern, the Investor and the Rollover SPV has agreed that, from signing of the Stockholders Agreement until the earlier of the termination of the Stockholders Agreement and termination of the Investor, it will not acquire or offer to acquire any securities, assets or indebtedness of the Company without the prior written consent of a special committee of independent directors; provided that such “standstill” obligations are suspended while the Company has a shareholder rights plan in effect.

The Investor has agreed, subsequent to the Closing but no later than the 2017 annual meeting of stockholders of the Company, to vote in favor of an amendment to the Charter requiring that, in any change of control transaction, holders of the Class A common stock and Class B common stock will be offered the same per share consideration, without regard to the different voting power of the shares of such classes of stock.

IMP and Searchlight have agreed, in connection with Closing, to reimburse the Company its reasonable and documented out-of-pocket fees, costs and expenses incurred by the Special Committee, capped at $250,000, in connection with their review and negotiation of the Liquidity Transactions described in this Current Report.

Kern has agreed in the Stockholders Agreement to elect the Distribution Option with respect to his allocable share of the HMG Equity. Until the occurrence of a termination event of the Investor, Kern has agreed to (i) vote all securities of the Company beneficially owned by Kern or his family members in the same manner as the securities of the Company beneficially owned by the General Partner following the Closing, (ii) not dispose of (and otherwise treat) the securities of the Company beneficially owned by Kern (other than the Investor and Rollover SPV) or his family members without the prior written consent of Searchlight and (iii) dispose of (and otherwise treat) all securities of the Company held of record by the Investor and Rollover SPV in the same manner. In addition, from and after the Closing, until the earliest of a change of control transaction, the date on which Searchlight and its affiliates and the Investor, collectively, no longer hold more than 29% of the outstanding voting power of the Company (assuming for this purpose that all shares of Class B common stock have automatically converted to shares of Class A common stock), and a dissolution of the Investor if certain requirements are satisfied, Kern has agreed not to take any action that would reasonably be expected to cause the shares of Class B common stock beneficially owned by Kern or any of his family members, other than shares of Class B common stock held by the Investor or the Rollover SPV or the Forfeiture Shares to convert to shares of Class A common stock.

The foregoing description of the Stockholders Agreement is only a summary, does not purport to be complete and its qualified in its entirety by reference to the full text of the Stockholders Agreement, which is filed herewith as Exhibit 10.1 and is incorporated herein by reference.

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Named Executive Officer Acknowledgement Agreements

In connection with the proposed Liquidity Transactions, the Company has entered into acknowledgement letter agreements (each, an “ Acknowledgement Agreement ” and together, the “ Acknowledgement Agreements ”) with each of Alan J. Sokol, Craig D. Fischer, Alex J. Tolston, and Vicky Bathija (each, an “ NEO ” and together, the “ NEOs ”). Pursuant to the Acknowledgement Agreements, each NEO has acknowledged that the Liquidity Transactions do not and will not constitute a “change in control” pursuant to his employment agreement with the Company and has further agreed to waive his right to enhanced severance benefits provided in such employment agreement that may have otherwise become payable upon his termination without “cause,” for “good reason,” or by reason of the Company’s election not to renew his employment agreement, in each case in connection with the Liquidity Transactions or any distribution of securities to Searchlight upon a liquidation or dissolution of the Investor, if such transactions were deemed to be a “change in control” under such employment agreement.

The Acknowledgement Agreements do not affect any of the NEOs’ severance rights provided in their employment agreements that apply absent a “change in control” (as defined in each employment agreement) of the Company, nor do they operate to waive any enhanced severance benefits that may become payable as a result of qualifying terminations that occur in connection with a “change in control” that follows the completion of the Liquidity Transactions or any distribution of securities to Searchlight upon a liquidation or dissolution of the Investor.

For a description of the severance provisions in Messrs. Sokol’s, Fischer’s, and Tolston’s, Bathija’s employment agreement, refer to the discussion of “Potential Payments Upon Termination or Change in Control – Severance Payments and Benefits under Employment Agreements” contained in the Company’s definitive proxy statement for its Annual Meeting of Stockholders held on May 16, 2016, filed with the Securities and Exchange Commission on April 6, 2016, which is hereby incorporated by reference.

The foregoing summary of the Acknowledgement Agreements is qualified in its entirety by reference to the Form of Named Executive Officer Acknowledgement Agreement, attached as Exhibit 10.2 hereto.

Item 5.03

Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On September 6, 2016, the Board amended the Amended and Restated Bylaws (the “ Bylaws ”) of the Company by adding a new Section 6.9 containing a forum selection provision (the “ Amendment ”). The Amendment provides that, unless the Company consents in writing to the selection of an alternative forum, the state courts located within the State of Delaware (or, if no such state court has jurisdiction, the federal district court for the District of Delaware) will be the exclusive forum for certain legal actions.

The foregoing summary of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Bylaws, as amended by the Amendment. The Bylaws, as amended by the Amendment, are filed with this Current Report on Form 8-K as Exhibit 3.1 and are incorporated by reference herein.

Item 7.01.

Regulation FD Disclosure.

On September 7, 2016, the Company issued a press release announcing the Liquidity Transactions. A copy of this press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information included in this Item 7.01, including Exhibit 99.1 attached hereto, is furnished solely pursuant to Item 7.01 of this Form 8-K. Consequently, it is not deemed filed for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section. It may only be incorporated by reference in another filing under the Exchange Act or Securities Act of 1933, as amended if such subsequent filing specifically references this Form 8-K.

Item 8.01.

Other Events.

Pursuant to a stock purchase agreement dated as of September 6, 2016, by and among the Investor and IM (the “ Stock Purchase Agreement ”), as soon as practicable following the date hereof, IMP will distribute to each of its limited partners a disclosure statement (the “ Disclosure Statement ”) which will describe the material terms of the proposed Liquidity

Transactions and the Liquidity Options available to each IMP limited partner. The Disclosure Statement will contain an election form pursuant to which each limited partner will be able to irrevocably elect one of the Liquidity Options with respect to its allocable HMG Equity. As used herein, “Security” means (A) one share of Class B common stock of the Company that is not subject to any type of forfeiture, (B) 0.047619 shares of Class B common stock of the Company subject to forfeiture if the closing sales price of the Class A common stock does not equal or exceed $15.00 per share for any 20 trading days within at least one 30-trading day period within 60 months of April 4, 2013 (the “ Vesting Condition ”) and (C) 0.074074 warrants to purchase 0.037037 shares of Class A common stock of the Company. The limited partners shall have 20 business days to make such election from the date of the mailing of the Disclosure Statement.

For limited partners electing the Distribution Option, upon the Closing, IM will distribute the allocable HMG Equity (other than the Forfeiture Shares) to each applicable limited partner. The Forfeiture Shares are subject to forfeiture unless the Vesting Condition is satisfied . Upon the closing of the Liquidity Transactions, the Forfeiture Shares subject to a Distribution Option election will be converted into shares of Class A common stock and will be held by IMP, who will vote such shares in the same proportion as the vote all holders of the Class A common stock. If the Vesting Condition is satisfied, the Forfeiture Shares will be distributed by IMP to the limited partners who elected the Distribution Option. If the Vesting Condition is not satisfied, IM will forfeit the Forfeiture Shares to the Company.

For limited partners electing the Rollover Option, upon the Closing, IM will distribute the allocable HMG Equity of each applicable limited partner to the Rollover SPV and each applicable limited partner will enter into a limited partnership agreement with the Rollover SPV (the “ SPV LPA ”). The Disclosure Statement will describe the material terms of the SPV LPA and the form SPV LPA will be attached thereto.

The Investor will purchase the allocable HMG Equity of limited partners that elect the Cash Option at a price of $9.75 per Security. Certain affiliates of Searchlight have agreed pursuant to an equity commitment letter to capitalize the Investor with an amount in cash sufficient to finance the purchase of the HMG Equity of the limited partners that elect the Cash Option, subject to the terms and conditions set forth therein. The equity commitment letter includes customary conditions to funding, including (i) the satisfaction or waiver of the Closing conditions set forth in the Stock Purchase Agreement and (ii) the substantially concurrent consummation of the transactions contemplated by the Stock Purchase Agreement. Certain affiliates of Searchlight have also agreed to capitalize the Investor to the extent required to satisfy any liabilities of the Investor arising from a material breach by the Investor of its covenants under the Stock Purchase Agreement, subject to the terms and conditions set forth in the equity commitment letter.

A condition to the Closing will be that the limited partners of IMP elect the Cash Option with respect to a sufficient amount of HMG Equity such that the aggregate purchase price paid to such limited partners at the Closing by the Investor is no less than $162.5 million (the “ Minimum Condition ”). The Closing will be subject to other customary closing conditions, including receipt of any required antitrust approvals and receipt of any required consent of the FCC without the imposition of any Regulatory Adverse Condition (as defined in the Stock Purchase Agreement). The Minimum Condition may be waived by Searchlight; provided , that the consent of Kern and IMP is required in connection with any waiver of the Minimum Condition that would result in an aggregate purchase price of all HMG Equity in connection with the Cash Option being less than $100.0 million. The Stock Purchase Agreement may be terminated if, among other things, (i) the Closing has not occurred before December 31, 2016 (subject to extension by the Investor if all but certain of the conditions to Closing relating to regulatory approvals have been satisfied or waived); (ii) there has been a material breach of the representations, warranties, covenants or agreements contained in the Stock Purchase Agreement by any party and such breach has not been cured within ten (10) business days after written notice thereof is received by the counterparty; or (iii) the Minimum Condition is not satisfied after the IMP limited partner election process described above has been completed. The Stock Purchase Agreement also contains customary survival and indemnification provisions. There can be no assurance as to when the closing conditions will be satisfied, if at all.

The General Partner of the Investor may be replaced and/or the Investor may be liquidated upon the occurrence of certain events as described in the LPA. These events include (a) the 120 day trailing volume weighted average price per share of Class A common stock is less than $6.83, (b) Kern ceasing to control the General Partner or the General Partner ceasing to be the general partner of the Investor, (c) the occurrence of certain related party transactions, (d) the occurrence of an event of default under the Company’s credit agreement or other event that gives rise to an acceleration of payment obligations, in each case, involving indebtedness with a principal amount of $50 million or more, (e) the conversion of the shares of Class B common stock beneficially owned by Kern to Class A common stock in certain circumstances, (f) the General Partner or Searchlight desiring to pursue a change of control transaction which the other party does not wish to pursue in certain circumstances, (g) Searchlights designees not being elected to and seated on the Company board of directors in accordance with the Stockholders Agreement, (h) a material breach by the General Partner, Kern or the Company of their respective obligations under the agreements entered into in connection with the proposed transaction and such breach is

incapable of being cured or is not cured within 10 business days, (i) Kern breaching certain restrictive covenants, (j) the General Partner, Kern or any of their affiliates being convicted of, or entering a plea of guilty or nolo contendere for certain crimes, (k) the sale or transfer of the limited partnership interests in Investor, the HMG Equity or any portion thereof, without Searchlight’s prior approval, (l) the death or mental incapacitation of Kern or (m) the five year anniversary of the Closing. The General Partner may be entitled to certain distributions of the HMG Equity in connection with the replacement of the General Partner of the Investor and/or the liquidation of the Investor.

The Closing of the Liquidity Transactions will not result in the conversion of the Class B common stock of the Company held by IM that is transferred to Investor or the Rollover SPV into Class A common stock of the Company as the Investor and the Rollover SPV are “Class B Permitted Transferees” as defined in the Charter.

Assuming IMP limited partners equal to the number required to satisfy the Minimum Condition select the Cash Option, that the Investor neither buys nor sells any equity in the Company, and that the General Partner is not entitled to the distribution of any HMG Equity in connection with the liquidation of the Investor, in the event of such liquidation, Searchlight would become the beneficial owner of approximately 18,077,602 shares of Class A common stock of the Company on a fully diluted basis (after conversion of the Class B common stock of the Company held by the Investor into shares of Class A common stock of the Company as a result of Searchlight not being a “Class B Permitted Transferee” as defined in the Charter), which as of the date hereof would represent approximately 24.6% of the total voting power of the Company on a fully diluted basis.

Assuming all IMP limited partners select the Cash Option, the Investor neither buys nor sells any equity in the Company, and that the General Partner is not entitled to the distribution of any HMG Equity in connection with the liquidation of the Investor, in the event of such liquidation, Searchlight would become the beneficial owner of approximately 26,682,047 shares of Class A common stock of the Company on a fully diluted basis, which as of the date hereof would represent approximately 36.4% of the total voting power of the Company on a fully diluted basis.

For purposes of Section 203 of the Delaware General Corporation Law, the Board, also on September 6, 2016, approved the Liquidity Transactions and the agreements and transactions relating thereto, including, if applicable, any future replacement of the General Partner of the Investor and any future distribution of equity securities of the Company pursuant to the LPA or SPV LPA, as applicable.

The Company is a third party beneficiary of certain provisions of the Stock Purchase Agreement and the LPA.

Statements in this Current Report, may contain certain statements about the Company that are “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These include, but are not limited to, statements relating to the Company’s future financial and operating results (including growth and earnings), plans, objectives, expectations and intentions and other statements that are not historical facts. These statements are based on the current expectations of the management of the Company and are subject to uncertainty and changes in circumstance, which may cause actual results to differ materially from those expressed or implied in such forward-looking statements. Without limitation, any statements preceded or followed by or that include the words “targets,” “plans,” “believes,” “expects,” “intends,” “will,” “likely,” “may,” “anticipates,” “estimates,” “projects,” “should,” “would,” “expect,” “positioned,” “strategy,” “future,” or words, phrases or terms of similar substance or the negative thereof, are forward-looking statements. In addition, these statements are based on a number of assumptions that are subject to change. Factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements are discussed under the heading “Risk Factors” and “Forward-Looking Statements” in the Company’s most recent Annual Report on Form 10-K, filed with the SEC, as they may be updated in any future reports filed with the Securities and Exchange Commission. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, the Company’s actual results, performance, or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements included herein are made as of the date hereof, and the Company undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances.

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.		Description of Exhibit
3.1		Amended and Restated Bylaws of Hemisphere Media Group, Inc.
10.1		Stockholders Agreement, dated as of September 6, 2016, by and among Hemisphere Media Group, Inc., Gato Investments LP, InterMedia Hemisphere Roll-Over, L.P., InterMedia Partners VII, L.P., Gemini Latin Holdings, LLC, Peter M. Kern and Searchlight II HMT, L.P.
10.2		Form of Named Executive Officer Acknowledgement Agreement.
99.1		Press Release issued by the Company on September 7, 2016.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Company Name

	By:	/s/ Alex J. Tolston
Date: September 7, 2016		Name:	Alex J. Tolston
		Title:	General Counsel and Corporate Secretary

EXHIBIT INDEX

Exhibit No.		Description of Exhibit
3.1		Amended and Restated Bylaws of Hemisphere Media Group, Inc.
10.1		Stockholders Agreement, dated as of September 6, 2016, by and among Hemisphere Media Group, Inc., Gato Investments LP, InterMedia Hemisphere Roll-Over, L.P., InterMedia Partners VII, L.P., Gemini Latin Holdings, LLC, Peter M. Kern and Searchlight II HMT, L.P.
10.2		Form of Named Executive Officer Acknowledgement Agreement.
99.1		Press Release issued by the Company on September 7, 2016.

Exhibit 3.1

AMENDED AND RESTATED BY-LAWS

HEMISPHERE MEDIA GROUP, INC.

(A Delaware Corporation)

TABLE OF CONTENTS

	Page

ARTICLE 1 DEFINITIONS	1

ARTICLE 2 STOCKHOLDERS	2

ARTICLE 3 DIRECTORS	10

ARTICLE 4 COMMITTEES OF THE BOARD	15

ARTICLE 5 OFFICERS	16

ARTICLE 6 GENERAL PROVISIONS	18

ARTICLE 1

DEFINITIONS

As used in these By-laws, unless the context otherwise requires, the term:

1.1 “Assistant Secretary” means an Assistant Secretary of the Corporation.

1.2 “Assistant Treasurer” means an Assistant Treasurer of the Corporation.

1.3 “Board” means the Board of Directors of the Corporation.

1.4 “By-laws” means the By-laws of the Corporation, as amended.

1.5 “Certificate of Incorporation” means the Certificate of Incorporation of the Corporation, as amended.

1.6 “Chief Executive Officer” means the Chief Executive Officer of the Corporation.

1.7 “Chief Financial Officer” means the Chief Financial Officer of the Corporation.

1.8 “Corporation” means Hemisphere Media Group, Inc.

1.9 “DGCL” means the General Corporation Law of the State of Delaware, as amended.

1.10 “Directors” means the directors of the Corporation.

1.11 “Chairman” means the Chairman of the Board of Directors of the Corporation. The initial Chairman of the Corporation shall be Peter Kern.

1.12 “law” means any U.S. or non-U.S., federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a governmental authority (including any department, court, agency or official, or non-governmental self-regulatory organization, agency or authority and any political subdivision or instrumentality thereof).

1.13 “Office of the Corporation” means the executive office of the Corporation, anything in Section 131 of the DGCL to the contrary notwithstanding.

1.14 “Secretary” means the Secretary of the Corporation.

1.15 “Stockholders” means the stockholders of the Corporation.

1.16 “Treasurer” means the Treasurer of the Corporation.

1.17 “Vice President” means a Vice President of the Corporation.

ARTICLE 2

STOCKHOLDERS

2.1 Place of Meetings . Meetings of Stockholders may be held at such place or solely by means of remote communication or otherwise, as may be designated by the Board from time to time.

2.2 Annual Meetings; Stockholder Proposals . (A) A meeting of Stockholders for the election of Directors and other business shall be held annually at such date and time as may be designated by the Board from time to time.

(B) At an annual meeting of the Stockholders, only business (other than business relating to the nomination or election of Directors which is governed by Section 3.3) that has been properly brought before the Stockholder meeting in accordance with the procedures set forth in this Section 2.2 shall be conducted. To be properly brought before a meeting of Stockholders, such business must be brought before the meeting (i) by or at the direction of the Board or any committee thereof or (ii) by a Stockholder who (a) was a Stockholder of record of the Corporation when the notice required by this Section 2.2 is delivered to the Secretary of the Corporation and at the time of the meeting, (b) is entitled to vote at the meeting and (c) complies with the notice and other provisions of this Section 2.2. Subject to Section 2.2(L), and except with respect to nominations or elections of Directors, which are governed by Section 3.3, Section 2.2(B)(ii) is the exclusive means by which a Stockholder may bring business before a meeting of Stockholders. Any business brought before a meeting in accordance with Section 2.2(B)(ii) is referred to as “ Stockholder Business ”.

(C) Subject to Section 2.2(L), at any annual meeting of Stockholders, all proposals of Stockholder Business must be made by timely written notice given by or on behalf of a Stockholder of record of the Corporation (the “ Notice of Business ”) and must otherwise be a proper matter for Stockholder action. To be timely, the Notice of Business must be delivered personally or mailed to, and received at the Office of the Corporation, addressed to the Secretary of the Corporation, by no earlier than 120 days and no later than 90 days before the first anniversary of the date of the prior year’s annual meeting of Stockholders; provided , however , that if (i) the annual meeting of Stockholders is advanced by more than 30 days, or delayed by more than 60 days, from the first anniversary of the prior year’s annual meeting of Stockholders, (ii) no annual meeting was held during the prior year or (iii) in the case of the Corporation’s first annual meeting of Stockholders as a corporation with a class of equity security registered under the Exchange Act, the notice by the Stockholder to be timely must be received (a) no

earlier than 120 days before such annual meeting and (b) no later than the later of 90 days before such annual meeting and the tenth day after the day on which the notice of such annual meeting was made by mail or Public Disclosure. In no event shall an adjournment, postponement or deferral, or Public Disclosure of an adjournment, postponement or deferral, of a Stockholder meeting commence a new time period (or extend any time period) for the giving of the Notice of Business.

(D) The Notice of Business must set forth:

(i) the name and record address of each Stockholder proposing Stockholder Business (the “ Proponent ”), as they appear on the Corporation’s books;

(ii) the name and address of any Stockholder Associated Person;

(iii) as to each Proponent and any Stockholder Associated Person, (a) the class or series and number of shares of stock directly or indirectly held of record and beneficially by the Proponent or Stockholder Associated Person, (b) the date such shares of stock were acquired, (c) a description of any agreement, arrangement or understanding, direct or indirect, with respect to such Stockholder Business between or among the Proponent, any Stockholder Associated Person or any others (including their names) acting in concert with any of the foregoing, (d) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, hedging transactions and borrowed or loaned shares) that has been entered into, directly or indirectly, as of the date of the Proponent’s notice by, or on behalf of, the Proponent or any Stockholder Associated Person, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of the Proponent or any Stockholder Associated Person with respect to shares of stock of the Corporation (a “ Derivative ”), (e) a description in reasonable detail of any proxy (including revocable proxies), contract, arrangement, understanding or other relationship pursuant to which the Proponent or Stockholder Associated Person has a right to vote any shares of stock of the Corporation, (f) any rights to dividends on the stock of the Corporation owned beneficially by the Proponent or Stockholder Associated Person that are separated or separable from the underlying stock of the Corporation, (g) any proportionate interest in stock of the Corporation or Derivatives held, directly or indirectly, by a general or limited partnership in which the Proponent or Stockholder Associated Person is a general partner or, directly or indirectly, beneficially owns an interest in a general partner and (h) any performance-related fees (other than an asset-based fee) that the Proponent or Stockholder Associated Person is entitled to based on any increase or decrease in the value of stock of the Corporation or Derivatives thereof, if any, as of the date of such notice. The information specified in Section 2.2(D)(i) to (iii) is referred to herein as “ Stockholder Information ”;

(iv) a representation that each Proponent is a holder of record of stock of the Corporation entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to propose such Stockholder Business;

(v) a brief description of the Stockholder Business desired to be brought before the annual meeting, the text of the proposal (including the text of any resolutions proposed for consideration and, if such business includes a proposal to amend the bylaws, the language of the proposed amendment) and the reasons for conducting such Stockholder Business at the meeting;

(vi) any material interest of each Proponent and any Stockholder Associated Person in such Stockholder Business;

(vii) a representation as to whether the Proponent intends (a) to deliver a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt such Shareholder Business or (b) otherwise to solicit proxies from stockholders in support of such Stockholder Business;

(viii) all other information that would be required to be filed with the Securities and Exchange Commission (“ SEC ”) if the Proponents or Stockholder Associated Persons were participants in a solicitation subject to Section 14 of the Exchange Act; and

(ix) a representation that the Proponents shall provide any other information reasonably requested by the Corporation.

(E) The Proponents shall also provide any other information reasonably requested by the Corporation within ten business days after such request.

(F) In addition, the Proponent shall further update and supplement the information provided to the Corporation in the Notice of Business or upon the Corporation’s request pursuant to Section 2.2(E) as needed, so that such information shall be true and correct as of the record date for the meeting and as of the date that is the later of ten business days before the meeting or any adjournment or postponement thereof. Such update and supplement must be delivered personally or mailed to, and received at the Office of the Corporation, addressed to the Secretary of the Corporation, by no later than five business days after the record date for the meeting (in the case of the update and supplement required to be made as of the record date), and not later than seven business days before the date for the meeting (in the case of the update and supplement required to be made as of ten business days before the meeting or any adjournment or postponement thereof).

(G) The person presiding over the meeting shall, if the facts warrant, determine and declare to the meeting, that business was not properly brought before the meeting in accordance with the procedures set forth in this Section 2.2, and, if he or she should so determine, he or she shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.

(H) If the Proponent (or a qualified representative of the Proponent) does not appear at the meeting of Stockholders to present the Stockholder Business such

business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 2.2, to be considered a qualified representative of the Stockholder, a person must be a duly authorized officer, manager or partner of such Stockholder or must be authorized by a writing executed by such Stockholder or an electronic transmission delivered by such Stockholder to act for such Stockholder as proxy at the meeting of Stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of Stockholders.

(I) “ Public Disclosure ” of any date or other information means disclosure thereof by a press release reported by the Dow Jones News Services, Associated Press or comparable U.S. national news service or in a document publicly filed by the Corporation with the SEC pursuant to Sections 13, 14 or 15(d) of the Exchange Act.

(J) “ Stockholder Associated Person ” means with respect to any Stockholder, (i) any other beneficial owner of stock of the Corporation that are owned by such Stockholder and (ii) any person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Stockholder or such beneficial owner.

(K) “ Control ” (including the terms “controlling,” “controlled by” and “under common control with”) means the possession, direct or indirect, 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.

(L) The notice requirements of this Section 2.2 shall be deemed satisfied with respect to Stockholder proposals that have been properly brought under Rule 14a-8 of the Securities Exchange Act of 1934 (the “ Exchange Act ”) and that are included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting. Further, nothing in this Section 2.2 shall be deemed to affect any rights of the holders of any series of preferred stock of the Corporation pursuant to any applicable provision of the Certificate of Incorporation.

2.3 Special Meetings . Special meetings of Stockholders may be called at any time by the Board and may not be called by any other person or persons. Business transacted at any special meeting of Stockholders shall be limited to the purposes stated in the notice.

2.4 Record Date .

(A) For the purpose of determining the Stockholders entitled to notice of any meeting of Stockholders or any adjournment thereof, unless otherwise required by the Certificate of Incorporation or applicable law, the Board may fix a record date (the “ Notice Record Date ”), which record date shall not precede the date on which the resolution fixing the record date was adopted by the Board and shall not be more than 60 or less than ten days before the date of such meeting. The Notice Record Date shall also

be the record date for determining the Stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such Notice Record Date, that a later date on or before the date of the meeting shall be the date for making such determination (the “ Voting Record Date ”). For the purposes of determining the Stockholders entitled to express consent to corporate action in writing without a meeting, unless otherwise required by the Certificate of Incorporation or applicable law, the Board may fix a record date, which record date shall not precede the date on which the resolution fixing the record date was adopted by the Board and shall not be more than ten days after the date on which the record date was fixed by the Board. For the purposes of determining the Stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, exercise any rights in respect of any change, conversion or exchange of stock or take any other lawful action, unless otherwise required by the Certificate of Incorporation or applicable law, the Board may fix a record date, which record date shall not precede the date on which the resolution fixing the record date was adopted by the Board and shall not be more than 60 days prior to such action.

(B) If no such record date is fixed:

(i) The record date for determining Stockholders entitled to notice of and to vote at a meeting of Stockholders shall be at the close of business on the day next preceding the day on which notice is given or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held;

(ii) The record date for determining Stockholders entitled to express consent to corporate action in writing without a meeting (unless otherwise provided in the Certificate of Incorporation), when no prior action by the Board is required by applicable law, shall be the first day on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with applicable law; and when prior action by the Board is required by applicable law, the record date for determining Stockholders entitled to express consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board takes such prior action; and

(iii) When a determination of Stockholders of record entitled to notice of or to vote at any meeting of Stockholders has been made as provided in this Section 2.4, such determination shall apply to any adjournment thereof, unless the Board fixes a new Voting Record Date for the adjourned meeting, in which case the Board shall also fix such Voting Record Date or a date earlier than such date as the new Notice Record Date for the adjourned meeting.

2.5 Notice of Meetings of Stockholders . Whenever under the provisions of applicable law, the Certificate of Incorporation or these By-laws, Stockholders are required or permitted to take any action at a meeting, notice shall be given stating the place, if any, date and hour of the meeting, the means of remote communication, if any, by which Stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the Voting Record Date, if such date is different from the Notice Record Date, and, in the case of a special meeting, the purposes

for which the meeting is called. Unless otherwise provided by these By-laws or applicable law, notice of any meeting shall be given, not less than ten nor more than 60 days before the date of the meeting, to each Stockholder entitled to vote at such meeting as of the Notice Record Date. If mailed, such notice shall be deemed to be given when deposited in the U.S. mail, with postage prepaid, directed to the Stockholder at his or her address as it appears on the records of the Corporation. An affidavit of the Secretary, an Assistant Secretary or the transfer agent of the Corporation that the notice required by this Section 2.5 has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. If a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. Any business that might have been transacted at the meeting as originally called may be transacted at the adjourned meeting. If, however, the adjournment is for more than 30 days, a notice of the adjourned meeting shall be given to each Stockholder of record entitled to vote at the meeting. If, after the adjournment, a new Voting Record Date is fixed for the adjourned meeting, the Board shall fix a new Notice Record Date in accordance with Section 2.4(B)(iii) hereof and shall give notice of such adjourned meeting to each Stockholder entitled to vote at such meeting as of the Notice Record Date.

2.6 Waivers of Notice . Whenever the giving of any notice to Stockholders is required by applicable law, the Certificate of Incorporation or these By-laws, a waiver thereof, given by the person entitled to said notice, whether before or after the event as to which such notice is required, shall be deemed equivalent to notice. Attendance by a Stockholder at a meeting shall constitute a waiver of notice of such meeting except when the Stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting has not been lawfully called or convened. Neither the business to be transacted at, nor the purposes of, any regular or special meeting of the Stockholders need be specified in any waiver of notice.

2.7 List of Stockholders . The Secretary shall prepare and make, at least ten days before every meeting of Stockholders, a complete, alphabetical list of the Stockholders entitled to vote at the meeting, and showing the address of each Stockholder and the number of shares registered in the name of each Stockholder. Such list may be examined by any Stockholder, at the Stockholder’s expense, for any purpose germane to the meeting, for a period of at least ten days prior to the meeting, during ordinary business hours at the principal place of business of the Corporation or on a reasonably accessible electronic network as provided by applicable law. If the meeting is to be held at a place, the list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any Stockholder who is present. If the meeting is held solely by means of remote communication, the list shall also be open for inspection as provided by applicable law. Except as provided by applicable law, the stock ledger shall be the only evidence as to who are the Stockholders entitled to examine the list of Stockholders or to vote in person or by proxy at any meeting of Stockholders.

2.8 Quorum of Stockholders; Adjournment . Except as otherwise provided by these By-laws, at each meeting of Stockholders, the presence in person or by proxy of the holders of a majority of the voting power of all outstanding shares of stock entitled to vote at the meeting of Stockholders, shall constitute a quorum for the transaction of any business at such meeting. In the absence of a quorum, the holders of a majority in voting power of the shares of stock present in person or represented by proxy at any meeting of Stockholders, including an adjourned meeting, may adjourn such meeting to another time and place. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of Directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided , however , that the foregoing shall not limit the right of the Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.

2.9 Voting; Proxies . At any meeting of Stockholders, all matters other than the election of directors, except as otherwise provided by the Certificate of Incorporation, these By-laws or any applicable law, shall be decided by the affirmative vote of a majority in voting power of shares of stock present in person or represented by proxy and entitled to vote thereon. At all meetings of Stockholders for the election of Directors, a plurality of the votes cast shall be sufficient to elect. Each Stockholder entitled to vote at a meeting of Stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such Stockholder by proxy but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only so long as, it is coupled with an interest sufficient in law to support an irrevocable power. A Stockholder may revoke any proxy that is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary a revocation of the proxy or by delivering a new proxy bearing a later date.

2.10 Voting Procedures and Inspectors at Meetings of Stockholders . The Board, in advance of any meeting of Stockholders, may appoint one or more inspectors, who may be employees of the Corporation, to act at the meeting and make a written report thereof. The Board may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting, the person presiding at the meeting may appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall (A) ascertain the number of shares outstanding and the voting power of each, (B) determine the shares represented at the meeting and the validity of proxies and ballots, (C) count all votes and ballots, (D) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors and (E) certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of their duties. Unless otherwise

provided by the Board, the date and time of the opening and the closing of the polls for each matter upon which the Stockholders will vote at a meeting shall be determined by the person presiding at the meeting and shall be announced at the meeting. No ballot, proxies, votes or any revocation thereof or change thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery of the State of Delaware upon application by a Stockholder shall determine otherwise. In determining the validity and counting of proxies and ballots cast at any meeting of Stockholders, the inspectors may consider such information as is permitted by applicable law. No person who is a candidate for office at an election may serve as an inspector at such election.

2.11 Conduct of Meetings; Adjournment . The Board may adopt such rules and procedures for the conduct of Stockholder meetings as it deems appropriate. At each meeting of Stockholders, the Chief Executive Officer or, in the absence of the Chief Executive Officer, the Chairman or, if there is no Chairman or if there be one and the Chairman is absent, a Vice President and, in case more than one Vice President shall be present, that Vice President designated by the Board (or in the absence of any such designation, the most senior Vice President present), shall preside over the meeting. Except to the extent inconsistent with the rules and procedures as adopted by the Board, the person presiding over the meeting of Stockholders shall have the right and authority to convene, adjourn and reconvene the meeting from time to time, to prescribe such additional rules and procedures and to do all such acts as, in the judgment of such person, are appropriate for the proper conduct of the meeting. Such rules and procedures, whether adopted by the Board or prescribed by the person presiding over the meeting, may include, (A) the establishment of an agenda or order of business for the meeting, (B) rules and procedures for maintaining order at the meeting and the safety of those present, (C) limitations on attendance at or participation in the meeting to Stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the person presiding over the meeting shall determine, (D) restrictions on entry to the meeting after the time fixed for the commencement thereof and (E) limitations on the time allotted to questions or comments by participants. The person presiding over any meeting of Stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, may determine and declare to the meeting that a matter or business was not properly brought before the meeting and if such presiding person should so determine, he or she shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board or the person presiding over the meeting, meetings of Stockholders shall not be required to be held in accordance with the rules of parliamentary procedure. The Secretary or, in his or her absence, one of the Assistant Secretaries, shall act as secretary of the meeting. If none of the officers above designated to act as the person presiding over the meeting or as secretary of the meeting shall be present, a person presiding over the meeting or a secretary of the meeting, as the case may be, shall be designated by the Board and, if the Board has not so acted, in the case of the designation of a person to act as secretary of the meeting, designated by the person presiding over the meeting.

2.12 Order of Business . The order of business at all meetings of Stockholders shall be as determined by the person presiding over the meeting.

2.13 Written Consent of Stockholders Without a Meeting . Any action to be taken at any annual or special meeting of Stockholders may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action to be so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered (by hand or by certified or registered mail, return receipt requested) to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of Stockholders are recorded. Every written consent shall bear the date of signature of each Stockholder who signs the consent, and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent delivered in the manner required by this Section 2.13, written consents signed by a sufficient number of holders to take action are delivered to the Corporation as aforesaid. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall, to the extent required by applicable law, be given to those Stockholders who have not consented in writing, and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Corporation.

ARTICLE 3

DIRECTORS

3.1 General Powers . The business and affairs of the Corporation shall be managed by or under the direction of the Board. The Board may adopt such rules and procedures, not inconsistent with the Certificate of Incorporation, these By-laws or applicable law, as it may deem proper for the conduct of its meetings and the management of the Corporation.

3.2 Number; Term of Office . The Board shall consist of one or more members, the number thereof to be determined from time to time by the Board in accordance with the Certificate of Incorporation. Except as provided in Section 3.4, each Director shall be elected by the vote of the majority of the votes cast with respect to the Director at any meeting for the election of Directors at which a quorum is present; provided that if as of a date that is 14 days in advance of the date the corporation files its definitive proxy statement (regardless of whether or not thereafter revised or supplemented) with the SEC the number of nominees exceeds the number of Directors to be elected, the Directors shall be elected by the vote of a plurality of the shares represented in person or by proxy at any such meeting and entitled to vote on the election

of Directors. For purposes of this Section 3.2, a majority of the votes cast means that (i) the number of shares voted “for” a Director must exceed the number of votes cast against that Director and (ii) abstentions and broker non-votes are not counted as votes cast.

3.3 Nominations of Directors . (A) Subject to Section 3.3(K), only persons who are nominated in accordance with the procedures set forth in this Section 3.3 are eligible for election as Directors.

(B) Nominations of persons for election to the Board may only be made at a meeting properly called for the election of Directors and only (i) by or at the direction of the Board or any committee thereof or (ii) by a Stockholder who (a) was a Stockholder of record of the Corporation when the notice required by this Section 3.3 is delivered to the Secretary of the Corporation and at the time of the meeting, (b) is entitled to vote for the election of Directors at the meeting and (c) complies with the notice and other provisions of this Section 3.3. Subject to Section 3.3(K), Section 3.3(B)(ii) is the exclusive means by which a Stockholder may nominate a person for election to the Board. Persons nominated in accordance with Section 3.3(B)(ii) are referred to as “ Stockholder Nominees ”. A Stockholder nominating persons for election to the Board is referred to as the “ Nominating Stockholder ”.

(C) Subject to Section 3.3(K), all nominations of Stockholder Nominees must be made by timely written notice given by or on behalf of a Stockholder of record of the Corporation (the “ Notice of Nomination ”). To be timely, the Notice of Nomination must be delivered personally or mailed to and received at the Office of the Corporation, addressed to the attention of the Secretary of the Corporation, by the following dates:

(i) in the case of the nomination of a Stockholder Nominee for election to the Board at an annual meeting of Stockholders, no earlier than 120 days and no later than 90 days before the first anniversary of the date of the prior year’s annual meeting of Stockholders; provided , however , that if (a) the annual meeting of Stockholders is advanced by more than 30 days, or delayed by more than 60 days, from the first anniversary of the prior year’s annual meeting of Stockholders, (b) no annual meeting was held during the prior year or (c) in the case of the Corporation’s first annual meeting of Stockholders as a corporation with a class of equity security registered under the Exchange Act, the notice by the Stockholder to be timely must be received (1) no earlier than 120 days before such annual meeting and (2) no later than the later of 90 days before such annual meeting and the tenth day after the day on which the notice of such annual meeting was made by mail or Public Disclosure and

(ii) in the case of the nomination of a Stockholder Nominee for election to the Board at a special meeting of Stockholders, no earlier than 120 days before and no later than the later of 90 days before such special meeting and the tenth day after the day on which the notice of such special meeting was made by mail or Public Disclosure.

(D) Notwithstanding anything to the contrary, if the number of Directors to be elected to the Board at a meeting of Stockholders is increased and there is no Public Disclosure by the Corporation naming the nominees for the additional directorships at least 100 days before the first anniversary of the preceding year’s annual meeting, a Notice of Nomination shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered personally and received at the Office of the Corporation, addressed to the attention of the Secretary of the Corporation, no later than the close of business on the tenth day following the day on which such Public Disclosure is first made by the Corporation.

(E) In no event shall an adjournment, postponement or deferral, or Public Disclosure of an adjournment, postponement or deferral, of an annual or special meeting commence a new time period (or extend any time period) for the giving of the Notice of Nomination.

(F) The Notice of Nomination shall set forth:

(i) the Stockholder Information with respect to each Nominating Stockholder and Stockholder Associated Person;

(ii) a representation that each Stockholder nominating a Stockholder Nominee is a holder of record of stock of the Corporation entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to propose such nomination;

(iii) all information regarding each Stockholder Nominee and Stockholder Associated Person that would be required to be disclosed in a solicitation of proxies subject to Section 14 of the Exchange Act and the written consent of each Stockholder Nominee to being named in a proxy statement as a nominee and to serve if elected;

(iv) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among a Nominating Stockholder, Stockholder Associated Person or their respective associates, or others acting in concert therewith, including all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the Nominating Stockholder, Stockholder Associated Person or any person acting in concert therewith, were the “registrant” for purposes of such rule and the Stockholder Nominee were a director or executive of such registrant;

(v) a representation as to whether the Nominating Stockholders intends (a) to deliver a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve the nomination or (b) otherwise to solicit proxies from stockholders in support of such nomination;

(vi) all other information that would be required to be filed with the SEC if the Nominating Stockholders and Stockholder Associated Person were participants in a solicitation subject to Section 14 of the Exchange Act; and

(vii) a representation that the Nominating Stockholders shall provide any other information reasonably requested by the Corporation.

(G) The Nominating Stockholders shall also provide any other information reasonably requested by the Corporation within ten business days after such request.

(H) In addition, the Nominating Stockholder shall further update and supplement the information provided to the Corporation in the Notice of Nomination or upon the Corporation’s request pursuant to Section 3.3(G) as needed, so that such information shall be true and correct as of the record date for the meeting and as of the date that is ten business days before the meeting or any adjournment or postponement thereof. Such update and supplement must be delivered personally or mailed to, and received at the Office of the Corporation, addressed to the Secretary of the Corporation, by no later than five business days after the record date for the meeting (in the case of the update and supplement required to be made as of the record date), and not later than seven business days before the date for the meeting (in the case of the update and supplement required to be made as of ten business days before the meeting or any adjournment or postponement thereof).

(I) The person presiding over the meeting shall, if the facts warrant, determine and declare to the meeting, that the nomination was not made in accordance with the procedures set forth in this Section 3.3, and, if he or she should so determine, he or she shall so declare to the meeting and the defective nomination shall be disregarded.

(J) If the Stockholder (or a qualified representative of the Stockholder) does not appear at the applicable Stockholder meeting to nominate the Stockholder Nominees, such nomination shall be disregarded and such business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 3.3, to be considered a qualified representative of the Stockholder, a person must be a duly authorized officer, manager or partner of such Stockholder or must be authorized by a writing executed by such Stockholder or an electronic transmission delivered by such Stockholder to act for such Stockholder as proxy at the meeting of Stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of Stockholders.

(K) Nothing in this Section 3.3 shall be deemed to affect any rights of the holders of any series of preferred stock of the Corporation pursuant to any applicable provision of the Certificate of Incorporation.

3.4 Resignation . Any Director may resign at any time by notice given in writing or by electronic transmission to the Corporation.

3.5 Regular Meetings . Regular meetings of the Board may be held without notice at such times and at such places as may be determined from time to time by the Board or its Chairman.

3.6 Special Meetings . Special meetings of the Board may be held at such times and at such places as may be determined by the Chairman or the Chief Executive Officer on at least 24 hours’ notice to each Director given by one of the means specified in Section 3.9 hereof other than by mail or on at least three days’ notice if given by mail. Special meetings shall be called by the Chairman, Chief Executive Officer or Secretary in like manner and on like notice on the written request of any two or more Directors.

3.7 Telephone Meetings . Board or Board committee meetings may be held by means of telephone conference or other communications equipment by means of which all persons participating in the meeting can hear each other. Participation by a Director in a meeting pursuant to this Section 3.7 shall constitute presence in person at such meeting.

3.8 Adjourned Meetings . A majority of the Directors present at any meeting of the Board, including an adjourned meeting, whether or not a quorum is present, may adjourn and reconvene such meeting to another time and place. At least 24 hours’ notice of any adjourned meeting of the Board shall be given to each Director whether or not present at the time of the adjournment, if such notice shall be given by one of the means specified in Section 3.9 hereof other than by mail, or at least three days’ notice if by mail. Any business may be transacted at an adjourned meeting that might have been transacted at the meeting as originally called.

3.9 Notice Procedure . Subject to Sections 3.6 and 3.10 hereof, whenever notice is required to be given to any Director by applicable law, the Certificate of Incorporation or these By-laws, such notice shall be deemed given effectively if given in person or by telephone, mail addressed to such Director at such Director’s address as it appears on the records of the Corporation, telecopy or by other means of electronic transmission.

3.10 Waiver of Notice . Whenever the giving of any notice to Directors is required by applicable law, the Certificate of Incorporation or these By-laws, a waiver thereof, given by the Director entitled to the notice, whether before or after such notice is required, shall be deemed equivalent to notice. Attendance by a Director at a meeting shall constitute a waiver of notice of such meeting except when the Director attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting was not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special Board or committee meeting need be specified in any waiver of notice.

3.11 Organization . At each meeting of the Board, the Chairman or, in his or her absence, another Director selected by the Board shall preside. The Secretary shall act as secretary at each meeting of the Board. If the Secretary is absent from any

meeting of the Board, an Assistant Secretary shall perform the duties of secretary at such meeting; and in the absence from any such meeting of the Secretary and all Assistant Secretaries, the person presiding at the meeting may appoint any person to act as secretary of the meeting.

3.12 Quorum of Directors . The presence of a majority of the Board shall be necessary and sufficient to constitute a quorum for the transaction of business at any meeting of the Board.

3.13 Action by Majority Vote . Except as otherwise expressly required by these By-laws or the Certificate of Incorporation, the vote of a majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board.

3.14 Action Without Meeting . Unless otherwise restricted by these By-laws, any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if all Directors or members of such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writings or electronic transmissions are filed with the minutes of proceedings of the Board or committee.

ARTICLE 4

COMMITTEES OF THE BOARD

The Board may designate one or more committees, each committee to consist of one or more of the Directors of the Corporation. The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. If a member of a committee shall be absent from any meeting, or disqualified from voting thereat, the remaining member or members present at the meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may, by a unanimous vote, appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent permitted by applicable law, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed to all papers that may require it to the extent so authorized by the Board. Unless the Board provides otherwise, at all meetings of such committee, a majority of the then authorized members of the committee shall constitute a quorum for the transaction of business, and the vote of a majority of the members of the committee present at any meeting at which there is a quorum shall be the act of the committee. Each committee shall keep regular minutes of its meetings. Unless the Board provides otherwise, each committee designated by the Board may make, alter and repeal rules and procedures for the conduct of its business. In the absence of such rules and procedures each committee shall conduct its business in the same manner as the Board conducts its business pursuant to ARTICLE 3.

ARTICLE 5

OFFICERS

5.1 Positions; Election . The officers of the Corporation shall be an Chairman, Chief Executive Officer, a Secretary, a Treasurer and any other officers as the Board may elect from time to time, who shall exercise such powers and perform such duties as shall be determined by the Board from time to time. Any number of offices may be held by the same person.

5.2 Term of Office . Each officer of the Corporation shall hold office until such officer’s successor is elected and qualifies or until such officer’s earlier death, resignation or removal. Any officer may resign at any time upon written notice to the Corporation. Such resignation shall take effect at the date of receipt of such notice or at such later time as is therein specified. The resignation of an officer shall be without prejudice to the contract rights of the Corporation, if any. Any officer may be removed at any time with or without cause by the Board. Any vacancy occurring in any office of the Corporation may be filled by the Board. The election or appointment of an officer shall not of itself create contract rights.

5.3 Chairman . The Chairman of the Board shall have the responsibility for carrying out the policies of the Board. He shall have general supervision over the risk management and control functions (including, but not limited to, compliance and internal audit) of the Corporation, subject to the direction of the Board. He shall preside at all meetings of the stockholders and of the Board at which he is present. The Chairman of the Board shall have other powers and perform such other duties as the Board may designate. The performance of any such duty by the Chairman of the Board shall be conclusive evidence of his power to act.

5.4 Chief Executive Officer . The Chief Executive Officer shall have general supervision over the business of the Corporation and other duties incident to the office of Chief Executive Officer, and any other duties as may from time to time be assigned to the Chief Executive Officer by the Board and subject to the control of the Board in each case. The Chief Executive Officer may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts and other instruments, except in cases in which the signing and execution thereof shall be expressly delegated by the Board or by these By-laws to some other officer or agent of the Corporation, or shall be required by applicable law otherwise to be signed or executed.

5.5 Vice Presidents . Vice Presidents shall have the duties incident to the office of Vice President and any other duties that may from time to time be assigned to the Vice President by the President or the Board. Any Vice President may sign and execute in the name of the Corporation deeds, mortgages, bonds, contracts or other instruments, except in cases in which the signing and execution thereof shall be expressly delegated by the Board or by these By-laws to some other officer or agent of the Corporation, or shall be required by applicable law otherwise to be signed or executed.

5.6 Secretary . The Secretary shall attend all meetings of the Board and of the Stockholders, record all the proceedings of the meetings of the Board and of the Stockholders in a book to be kept for that purpose and perform like duties for committees of the Board, when required. The Secretary shall give, or cause to be given, notice of all special meetings of the Board and of the Stockholders and perform such other duties as may be prescribed by the Board or by the Chief Executive Officer. The Secretary shall have custody of the corporate seal of the Corporation, and the Secretary or an Assistant Secretary, shall have authority to affix the same on any instrument that may require it, and when so affixed, the seal may be attested by the signature of the Secretary or by the signature of such Assistant Secretary. The Board may give general authority to any other officer to affix the seal of the Corporation and to attest the same by such officer’s signature. The Secretary or an Assistant Secretary may also attest all instruments signed by the Chief Executive Officer or any Vice President. The Secretary shall have charge of all the books, records and papers of the Corporation relating to its organization and management, see that the reports, statements and other documents required by applicable law are properly kept and filed and, in general, perform all duties incident to the office of secretary of a corporation and such other duties as may from time to time be assigned to the Secretary by the Board or the Chief Executive Officer.

5.7 Treasurer . The Treasurer shall have charge and custody of, and be responsible for, all funds, securities and notes of the Corporation, receive and give receipts for moneys due and payable to the Corporation from any sources whatsoever; deposit all such moneys and valuable effects in the name and to the credit of the Corporation in such depositaries as may be designated by the Board, against proper vouchers, cause such funds to be disbursed by checks or drafts on the authorized depositaries of the Corporation signed in such manner as shall be determined by the Board and be responsible for the accuracy of the amounts of all moneys so disbursed, regularly enter or cause to be entered in books or other records maintained for the purpose full and adequate account of all moneys received or paid for the account of the Corporation, have the right to require from time to time reports or statements giving such information as the Treasurer may desire with respect to any and all financial transactions of the Corporation from the officers or agents transacting the same, render to the Chief Executive Officer or the Board, whenever the Chief Executive Officer or the Board shall require the Treasurer so to do, an account of the financial condition of the Corporation and of all financial transactions of the Corporation, disburse the funds of the Corporation as ordered by the Board and, in general, perform all duties incident to the office of Treasurer of a corporation and such other duties as may from time to time be assigned to the Treasurer by the Board or the Chief Executive Officer.

5.8 Assistant Secretaries and Assistant Treasurers . Assistant Secretaries and Assistant Treasurers shall perform such duties as shall be assigned to them by the Secretary or by the Treasurer, respectively, or by the Board or the Chief Executive Officer.

ARTICLE 6

GENERAL PROVISIONS

6.1 Certificates Representing Shares . The shares of stock of the Corporation shall be represented by certificates or all of such shares shall be uncertificated shares that may be evidenced by a book-entry system maintained by the registrar of such stock, or a combination of both. If shares are represented by certificates (if any) such certificates shall be in the form approved by the Board. The certificates representing shares of stock of each class shall be signed by, or in the name of, the Corporation by the Chairman, the Chief Executive Officer or any Vice President, and by the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer. Any or all such signatures may be facsimiles. Although any officer, transfer agent or registrar whose manual or facsimile signature is affixed to such a certificate ceases to be such officer, transfer agent or registrar before such certificate has been issued, it may nevertheless be issued by the Corporation with the same effect as if such officer, transfer agent or registrar were still such at the date of its issue.

6.2 Transfer and Registry Agents . The Corporation may from time to time maintain one or more transfer offices or agents and registry offices or agents at such place or places as may be determined from time to time by the Board.

6.3 Lost, Stolen or Destroyed Certificates . The Corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate or his legal representative to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

6.4 Form of Records . Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account and minute books, may be maintained on any information storage device or method; provided that the records so kept can be converted into clearly legible paper form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect such records pursuant to applicable law.

6.5 Seal . The corporate seal shall have the name of the Corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced.

6.6 Fiscal Year . The fiscal year of the Corporation shall be determined by the Board.

6.7 Amendments . These By-laws may be amended or repealed and new By-laws may be adopted by the Board, but the Stockholders may make additional By-laws and may alter and repeal any By-laws whether such By-laws were originally adopted by them or otherwise.

6.8 Conflict with Applicable Law or Certificate of Incorporation . These By-laws are adopted subject to any applicable law and the Certificate of Incorporation. Whenever these By-laws may conflict with any applicable law or the Certificate of Incorporation, such conflict shall be resolved in favor of such law or the Certificate of Incorporation.

6.9 Forum . Unless the Corporation consents in writing to the selection of an alternative forum, the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee, or stockholder of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation, its directors, officers or other employees, or stockholders arising pursuant to any provision of the DGCL or the Corporation’s Certificate of Incorporation or By-laws, or (iv) any action asserting a claim against the Corporation, its directors, officers or other employees, or stockholders governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware (or, if such court does not have jurisdiction, the Superior Court of the State of Delaware, or, if such other court does not have jurisdiction, the United States District Court for the District of Delaware).

STOCKHOLDERS AGREEMENT

This STOCKHOLDERS AGREEMENT, dated as of September 6, 2016 (this “ Agreement ”), is entered into by and among Hemisphere Media Group, Inc., a Delaware corporation (the “ Company ”), Gato Investments LP, a Delaware limited partnership (the “ Investor ”), InterMedia Hemisphere Roll-Over L.P., a Delaware limited partnership (the “ Rollover SPV ”), InterMedia Partners VII, L.P., a Delaware limited partnership (“ IMPVII ”), Gemini Latin Holdings, LLC, a Delaware limited liability company (the “ General Partner ”), Peter M. Kern, an individual (“ Kern ”), and Searchlight II HMT, L.P., a Delaware limited partnership (“ Searchlight ”).

RECITALS

WHEREAS, substantially simultaneously with the execution hereof, the Investor, IMPVII and InterMedia Cine Latino, LLC, a Delaware limited liability company (together with IMPVII, the “ Sellers ”), are entering into that certain Stock Purchase Agreement, dated as of the date hereof (the “ Purchase Agreement ”), pursuant to which, subject to the terms and conditions thereof, the Investor will purchase shares of Class B common stock, par value $0.0001 per share (the “ Class B Shares ”), of the Company, and warrants to purchase shares of Class A common stock, par value $0.0001 per share (the “ Class A Shares ”), of the Company (the “ Warrants ” and, together with the Class B Shares, the “ Interests ”) held by the Sellers;

WHEREAS, in connection with the transactions contemplated by the Purchase Agreement, the General Partner, Kern and Searchlight have agreed, prior to the Closing, to enter into an Amended and Restated Agreement of Limited Partnership of the Investor, in the form attached to the Purchase Agreement (as amended from time to time, the “ SPV LPA ”), pursuant to which Searchlight has agreed, subject to the terms and conditions thereof, to contribute funds to the Investor necessary to pay the purchase price pursuant to the Purchase Agreement; and

WHEREAS, in connection with the transactions contemplated by the Purchase Agreement, (A) the Investor, Searchlight and Searchlight II HMT GP, LLC, a Delaware limited liability company (“ Searchlight GP ”), have requested, among other things, that the Company (i) appoint the Searchlight Designees as Directors of the Company and nominate or re-nominate the Searchlight Designees or other Persons as Directors and (ii) agree to certain other matters in connection with the investment by Searchlight in the Investor and the transactions contemplated by the Purchase Agreement and (B) the Company has requested that the Investor, Searchlight, the General Partner and Kern agree to certain matters in connection with the investment by Searchlight in the Investor and the transactions contemplated by the Purchase Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, intending to be legally bound, the parties hereto agree as follows:

ARTICLE I
DEFINITIONS

Section 1.1 Definitions . The following terms shall have the meanings ascribed to them below:

“ Affiliate ” means, with respect to any Person, a Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person. Notwithstanding anything to the contrary in this Agreement, for purposes of this Agreement, (i) the Company and its Affiliates (other than the Investor Parties and their respective Affiliates) shall not be deemed to be Affiliates of any of the Investor Parties or any of their respective Affiliates and (ii) neither Leo J. Hindery, Jr. nor any of his Affiliates, family members, management companies or investment vehicles (other than IMPVII) shall be deemed to be Affiliates of the Peter M. Kern or the General Partner or any of their respective Affiliates solely by reason of Mr. Hindery’s employment by, or management or ownership of, any management company or investment vehicle under common control with IMPVII.

“ Beneficially Own ” with respect to any securities means having “beneficial ownership” of such securities as determined pursuant to Rule 13d-3 under the Exchange Act. The terms “ Beneficial Ownership ” and “ Beneficial Owner ” have correlative meanings.

“ Benefit Plan ” has the meaning set forth in Section 4.1(e)(ii) .

“ Board ” or “ Board of Directors ” means the Board of Directors of the Company.

“ Board Designation Expiration Date ” means the earlier to occur of (i) the date on which the Investor Percentage Interest is less than 10%, (ii) the date on which this Agreement is validly terminated pursuant to Article V and (iii) the date on which Searchlight delivers a notice to the Company to terminate its right to nominate Searchlight Designees pursuant to Section 2.1(k) .

“ Business Day ” means any day other than a Saturday, Sunday or day on which banking institutions in New York, New York are authorized or obligated by law or executive order to be closed.

“ Capitalization Date ” has the meaning set forth in Section 4.1(e)(i) .

“ Certificate of Incorporation ” means the Amended and Restated Certificate of Incorporation of the Company, filed with the SEC as of April 4, 2013, as the same may, from time to time, be amended, restated, modified or supplemented.

“ Change of Control Transaction ” has the meaning set forth in the SPV LPA.

“ Class A Shares ” has the meaning set forth in the recitals of this Agreement.

“ Class B Shares ” has the meaning set forth in the recitals of this Agreement.

“ Class I ” has the meaning set forth in the Certificate of Incorporation.

“ Class II ” has the meaning set forth in the Certificate of Incorporation.

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“ Class III ” has the meaning set forth in the Certificate of Incorporation.

“ Closing ” has the meaning set forth in the Purchase Agreement.

“ Closing Date ” means the date on which the Closing occurs.

“ Communications Laws ” has the meaning set forth in Section 3.2 .

“ Company ” has the meaning set forth in the preamble of this Agreement.

“ Company Options ” has the meaning set forth in Section 4.1(e)(iii) .

“ Company Policies ” means the generally applicable internal policies and procedures of the Company as in effect from time to time, but excluding any such policy or procedure that is intended or designed to exclude any Searchlight Designee from serving as a Director or has the effect of imposing disproportionate burdens on any Searchlight Director relative to the Other Directors.

“ DGCL ” means the General Corporation Law of the State of Delaware, 8 Del. C § 101 et . seq .

“ Director ” means a director of the Company.

“ Director Equity ” has the meaning set forth in Section 3.9(e) .

“ Election Meeting ” has the meaning set forth in Section 2.1(b) .

“ Equity Interests ” has the meaning set forth in Section 4.1(e)(iv) .

“ ERISA ” has the meaning set forth in Section 4.1(e)(ii) .

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder.

“ Governmental Entity ” means any United States or foreign (a) federal, state, local, municipal or other government, (b) governmental or quasi-governmental entity of any nature (including any governmental agency, branch, department, official or entity and any court or other tribunal) or (c) body exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power of any nature, including any arbitral tribunal.

“ Independent Committee ” means (i) the special committee of the Board established in connection with the transactions contemplated by the Purchase Agreement, (ii) if at any time such committee is not in existence, all of the Independent Directors on the Board as of the relevant time or (iii) if there are an inadequate number of Independent Directors, a special committee of the Board comprising at least two (2) directors who qualify as an “Independent Director” as defined in the NASDAQ Marketplace Rules or who qualifies as “independent” under the applicable rules and regulations of any other national securities exchange on which the equity securities of the Company are publicly traded after the date hereof.

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“ Independent Director ” means a Director who (i) qualifies as an “Independent Director” as defined in the NASDAQ Marketplace Rules or who qualifies as “independent” under the applicable rules and regulations of any other national securities exchange on which the equity securities of the Company are publicly traded after the date hereof, (ii) is not an Affiliate of, employed by, or otherwise lacking in independence (as determined in good faith by the Board) from, any of the Investor Parties or any of their respective Affiliates and (iii) is not a Searchlight Designee.

“ In-Kind Electors ” means those certain Persons who (i) as of the date hereof are limited partners in IMPVII, and (ii) as of the time immediately following the Closing Date, have elected, pursuant to Section 2.1(a)(ii) of the Purchase Agreement, to directly hold Class A Shares.

“ Investor ” has the meaning set forth in the preamble of this Agreement.

“ Investor Parties ” means, collectively, Searchlight, IMPVII, the General Partner, Kern, the Investor and the Rollover SPV.

“ Investor Percentage Interest ” means, as of any date of determination, the percentage represented by the quotient of (i) the number of Voting Securities that are Beneficially Owned by the Investor, Searchlight or any of Searchlight’s controlled Affiliates, multiplying each Class B Share by ten (10) for such purposes and (ii) the number of all outstanding Voting Securities, multiplying each Class B Share by ten (10) for such purposes.

“ Law ” means any applicable federal, state, local or foreign law, statute, ordinance, rule, guideline, regulation, order, writ, decree, agency requirement, license or permit of any Governmental Entity.

“ Other Director ” means any Director who is not a Searchlight Director.

“ Participant ” has the meaning set forth in Section 4.1(e)(ii) .

“ Person ” means any natural person, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or other agency or political subdivision thereof.

“ Preferred Stock ” has the meaning set forth in Section 4.1(e)(i) .

“ Purchase Agreement ” has the meaning set forth in the recitals of this Agreement.

“ Purchased Interests ” has the meaning set forth in the Purchase Agreement.

“ Registration Rights Agreement ” means the Registration Rights Agreement, dated as of January 22, 2013, by and among the Sellers, the Company and the other parties named therein.

“ Regulatory Approvals ” has the meaning set forth in Section 3.2 .

“ Replacement ” has the meaning set forth in Section 2.1(d) .

“ Requisite Percentage ” has the meaning set forth in the SPV LPA.

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“ Searchlight Affiliate ” shall mean Searchlight, any controlled Affiliates of Searchlight, any of Searchlight’s or its controlled Affiliates’ general or managing partners or members, and any Person controlled by one or more general or managing partners or members of Searchlight or its controlled Affiliates.

“ Searchlight Designees ” means those individuals selected by Searchlight GP for nomination as Directors in accordance with Section 2.1 .

“ Searchlight Director ” means a Director named by Searchlight GP pursuant to Section 2.1(a) or any other Director designated for nomination by Searchlight GP and elected or appointed pursuant to the provisions of Section 2.1 .

“ SEC ” means the U.S. Securities and Exchange Commission.

“ Section 3.4(c) End Date ” means the date that is the earlier of (i) the occurrence of a Change of Control Transaction, (ii) the date on which the Searchlight Affiliates and the Investor no longer collectively hold more than 29% of the voting power represented by the Voting Securities assuming for purposes of such determination, that all Class B Shares have automatically converted to Class A Shares, (iii) the occurrence of a Termination Event (as defined in the SPV LPA) under clause (f) of the term “Restructuring Event” (as defined in the SPV LPA) as a result of Kern, in his capacity as a director of the Company, voting in support of a Change of Control Transaction and a majority of the directors of the Company oppose pursuing such Change of Control Transaction and (iv) the date on which a meeting of the Company’s stockholders is held to approve a Change of Control Transaction which triggered the occurrence of Termination Event (as defined in the SPV LPA) under clause (f) of the term “Restructuring Event” (as defined in the SPV LPA), Kern voted in support of such Change of Control Transaction at such stockholder meeting, and such Change of Control Transaction was not adopted by stockholders at such stockholder meeting.

“ Securities Act ” means the Securities Act of 1933, as amended, including the rules and regulations promulgated thereunder.

“ Sellers ” has the meaning set forth in the recitals of this Agreement.

“ SPV LPA ” has the meaning set forth in the recitals of this Agreement.

“ Subsidiary ” means, as to any Person, any other Person more than 50% of the shares of the voting stock or other voting interests of which are owned or controlled, or the ability to select or elect more than 50% of the directors or similar managers is held, directly or indirectly, by such first Person or one or more of its Subsidiaries or by such first Person and one or more of its Subsidiaries.

“ Voting Securities ” means the Class A Shares, the Class B Shares and any other securities of the Company entitled to vote generally for the election of Directors.

“ Warrants ” has the meaning set forth in the recitals of the Agreement.

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“ Willful Breach ” means with respect to any breaches or failures to perform any of the covenants or other agreements contained in this Agreement, a material breach that is a consequence of an act or failure to act undertaken by the breaching Person with actual or constructive knowledge (which shall be deemed to include knowledge of facts that a Person acting reasonably should have, based on reasonable due inquiry) that such Person’s act or failure to act would, or would reasonably be expected to, result in or constitute a breach of this Agreement.

Section 1.2 General Interpretive Principles . Whenever used in this Agreement, except as otherwise expressly provided or unless the context otherwise requires, any noun or pronoun shall be deemed to include the plural as well as the singular and to cover all genders. The name assigned to this Agreement and the Section captions used herein are for convenience of reference only and shall not be construed to affect the meaning, construction or effect hereof. Unless otherwise specified, the terms “hereof,” “herein” and similar terms refer to this Agreement as a whole (including the schedules and exhibits hereto), and references herein to Sections refer to Sections of this Agreement. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”

ARTICLE II
GOVERNANCE

Section 2.1 Election and Appointment .

(a) The Company shall cause the Board of Directors to appoint two (2) Searchlight Designees as Directors immediately following the Closing, with one such Searchlight Designee selected by Searchlight GP to be appointed to Class III and the other Searchlight Designee to be appointed to Class II.

(b) From and after the Closing until the Board Designation Expiration Date, the manner of selecting nominees for election to the Board of Directors will be as follows:

(i) In connection with each annual or special meeting of stockholders of the Company at which Class II or Class III Directors are to be elected, or any written consent of the stockholders of the Company pursuant to which Class II or Class III Directors are to be elected (each such meeting or consent, an “ Election Meeting ”), Searchlight GP shall have the right to designate for nomination a number of Searchlight Designees as follows: (A) if the Investor Percentage Interest is greater than or equal to 30%, one (1) Searchlight Designee to each of Class II and Class III; (B) if the Investor Percentage Interest is less than 30% but greater than or equal to 10%, one (1) Searchlight Designee to Class III (but no Searchlight Designee to Class II); and (C) if the Investor Percentage Interest is less than 10%, no Searchlight Designees. If the number of seats for Directors on the Board is increased to more or decreased to less than nine seats prior to the Closing, or eleven seats (inclusive of the two Searchlight Designees) following the Closing, then the number of Searchlight Designees that Searchlight GP can designate for nomination by the Board shall be adjusted upward or downward (rounded to the

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nearest whole number), as the case may be, such that the proportional representation of the Searchlight Designees on the Board (assuming all Searchlight Designees are elected or re-elected to the Board) would be as similar as possible to the proportional representation of the Searchlight Designees on the Board if the number of seats for Directors on the Board had remained the same. If, at any time after the Closing, the Certificate of Incorporation is amended to declassify the Board or otherwise modify the classification of Directors, then the Company and Searchlight shall cooperate in good faith to modify this Agreement such that Searchlight GP is entitled at all times following such amendment to such representation on the Board as would be consistent with its Board representation assuming such amendment did not occur.

(ii) In the case of any Election Meeting that is an annual meeting of the stockholders of the Company, Searchlight shall give written notice to the Board of the applicable Searchlight Designee no later than the date that is ninety (90) days prior to the first anniversary of the prior year’s annual meeting of stockholders of the Company. In the case of any Election Meeting that is a special meeting of the stockholders of the Company or in connection with any proposed written consent of the stockholders of the Company pursuant to which Class II or Class III Directors are to be elected or appointed, Searchlight shall give written notice to the Board of the applicable Searchlight Designee no later than the later of ninety (90) days before such special meeting and the tenth day after the day on which the notice of such special meeting was made by mail or public disclosure to the stockholders of the Company. In the case of any Replacement, Searchlight shall give written notice to the Board of each such Replacement as promptly as practicable following the event giving rise to such replacement as set forth in Section 2.1(d) . Any written notice delivered by Searchlight pursuant to this Section 2.1(b)(ii) is referred to herein as a “ Designation Notice .”

(iii) Each Searchlight Designee (or any Replacement thereof) must be an individual who is reasonably acceptable to the Board to serve in such capacity; provided that, for the avoidance of doubt, any investment professional employed by Searchlight or any of its respective Affiliated investment funds shall be deemed to be reasonably acceptable to the Board. Searchlight shall provide any information reasonably requested by the Board in order for the Board to make the determination contemplated by the immediately preceding sentence. If the Board does not object in writing to any Searchlight Designee named in a Designation Notice within twenty (20) days of receipt thereof (or, if later, within twenty (20) days after receipt of any information reasonably requested by the Board pursuant to the immediately preceding sentence), then such Searchlight Designee shall be deemed to be reasonably acceptable to the Board. If, within twenty (20) days of the Board’s receipt of any Designation Notice, the Board determines that any Searchlight Designee

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named therein is not reasonably acceptable to the Board, then the Board shall promptly provide Searchlight with written notice of the reasons for such determination. Thereafter, the Board and Searchlight shall cooperate in good faith so that Searchlight GP may designate one or more replacement Searchlight Designees until one such individual is deemed reasonably acceptable to the Board. The Company shall take all actions reasonably necessary or appropriate (including delaying for a reasonable period of time any applicable Election Meeting) to ensure that Searchlight GP may designate any designee to which it is entitled under Section 2.1(b)(i) and each such Searchlight Designee is presented for nomination or appointment at each applicable Election Meeting.

(iv) If Searchlight fails to give proper notice of any nomination for any Searchlight Designee in a timely manner for any Election Meeting, then Searchlight GP shall be deemed to have nominated the incumbent Searchlight Director in a timely manner; provided , that if there is no incumbent Searchlight Director for the applicable seat on the Board to which Searchlight GP is entitled to designate a Director pursuant to Section 2.1(b)(i) , then the Company and Searchlight shall use their respective commercially reasonable efforts to mutually agree on a designee such that a Searchlight Designee is appointed to any seat to which a Searchlight Designee may be nominated under Section 2.1(b)(i) .

(c) Until the Board Designation Expiration Date, the Company and the Board of Directors shall cause (i) each Searchlight Designee designated in accordance with Section 2.1(b) to be included in management’s slate of nominees for the election of Directors at each applicable Election Meeting occurring after the Closing and (ii) at least two (2) Independent Directors to serve on the Board at all times. The Company agrees to use its reasonable best efforts to, and to use reasonable best efforts to cause the Board of Directors to, cause the election of each applicable Searchlight Designee to the Board of Directors at each Election Meeting, including by, to the extent permitted by applicable law, recommending that the Company’s stockholders vote in favor of the election of each such Searchlight Designee, soliciting proxies in respect thereof and otherwise supporting each such Searchlight Designee for election in a manner no less rigorous and favorable than the manner in which the Company supports its other nominees.

(d) If any Searchlight Designee (i) dies, is incapacitated or is otherwise unable to serve as a nominee for appointment on the Closing Date or for election as a Director or to serve as a Director, for any reason, (ii) is removed (upon death, resignation or otherwise) or fails to be elected at an Election Meeting as a result of such Searchlight Designee failing to receive a plurality of the votes cast, or (iii) is to be substituted by Searchlight GP (with the relevant Searchlight Designee’s consent and resignation) for election at an Election Meeting, then, in each such case, Searchlight shall have the right to submit the name of a replacement for each such Searchlight Designee (each, a “ Replacement ”) to the Board for its reasonable approval (subject to the same terms and procedures set forth in Section 2.1(b)(iii) ), and who shall, if so approved, serve as a nominee for appointment upon the Closing Date or election as Director or serve as Director in accordance with the terms of this Section 2.1 as if such Replacement was the

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initial Searchlight Designee. In the case of any such Replacement of a Director who was already serving on the Board immediately prior to such Director’s death, resignation or removal, then the Company shall cause the Directors remaining in office at such time to appoint any such Replacement of such Director to the Board as promptly as practicable following Searchlight’s delivery of a Designation Notice with respect thereto and compliance with the terms and procedures set forth in Section 2.1(b)(iii) . For each proposed Replacement that is not approved by the Board in accordance with Section 2.1(b)(iii) , Searchlight shall have the right to submit another proposed Replacement to the Board for its approval on the same basis as set forth in the immediately preceding sentence. Searchlight shall have the right to continue submitting the name of proposed Replacement(s) to the Board for its approval until the Board approves a Replacement to serve as a nominee for appointment upon the Closing Date or for election as Director or to serve as a Director, as applicable, whereupon such person will be appointed as the Replacement.

(e) As a condition to each Searchlight Designee’s appointment to the Board in accordance with Section 2.1(a) and nomination for election as a Director at any Election Meeting thereafter, or appointment as a Replacement, such Searchlight Designee shall have provided to the Company completed director and officer questionnaires in the form customarily used by the Company and executed irrevocable resignations as Director in the form attached hereto as Exhibit A (the “ Irrevocable Resignation Letter ”). As soon as practicable, but in no event later than two (2) Business Days, (i) following the date on which the Investor Percentage Interest is less than 30% but greater or equal to 10%, the number of Searchlight Designees serving on the Board shall be reduced from two (2) to one (1) and one (1) of the Searchlight Designees (as determined by Searchlight GP) then serving on the Board shall be deemed to have resigned in accordance with the terms of such Searchlight Designee’s Irrevocable Resignation Letter and (ii) following the Board Designation Expiration Date, any Searchlight Designee or Designees then serving on the Board shall be deemed to have resigned in accordance with the terms of such Searchlight Designee’s Irrevocable Resignation Letter. If any such Irrevocable Resignation Letter is determined to be invalid or is validly revoked, Searchlight shall instruct to resign and cooperate with the Company in its efforts to cause the resignation of (and, if necessary, the Investor Parties shall vote any Voting Securities then held by any of them in favor of removal of) the Searchlight Designee or Designees contemplated to resign by the immediately preceding sentence.

(f) As a further condition to a Searchlight Designee’s nomination for election as a Director at the applicable Election Meeting or appointment as a Replacement, Searchlight shall (or shall cause such Searchlight Designee to), as promptly as practicable upon request of the Company, provide (i) executed consents from any Searchlight Designee to be named as a nominee in the Company’s proxy statement for the applicable Election Meeting and to serve as a Director if so elected, in the form customarily used by the Company, (ii) any information required to be or customarily disclosed for all applicable Directors, candidates for Director, and their affiliates and representatives in a proxy statement or other filings under applicable law or stock exchange rules or listing standards, (iii) information in connection with assessing eligibility, independence and other criteria applicable to all applicable directors or satisfying compliance and legal obligations, (iv) such written consents of such Searchlight Designee as may be necessary for the conduct of the Company’s standard vetting procedures

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applicable to all Directors, and (v) such other information as reasonably requested by the Company from time to time with respect to Searchlight or the Searchlight Designees.

(g) A Searchlight Designee shall, at the time of nomination and at all times thereafter until such individual’s service on the Board of Directors ceases, meet any applicable requirements or qualifications under applicable Law, applicable stock exchange rules or applicable Company Policies (for the avoidance of doubt, other than any such rules related to director independence). Notwithstanding anything to the contrary in this Agreement, neither the Company nor the Board of Directors shall be under any obligation to appoint upon the Closing Date or nominate and recommend a Searchlight Designee to the Board if, as determined in good faith by a majority of the Other Directors, service by such nominee as a Director would reasonably be expected to violate applicable Law, applicable stock exchange rules or applicable Company Policies (for the avoidance of doubt, other than any such rules related to director independence), and in each such case the Company shall provide Searchlight with a reasonable opportunity to designate a Replacement.

(h) Searchlight shall promptly instruct to resign from the Board and cooperate with the Company in its efforts to cause the resignation of, and the Investor Parties shall vote any Voting Securities then held by any of them in favor of removal of, any Searchlight Director if, as determined in good faith by the majority of the Other Directors, service by such Director as a Director would reasonably be expected to violate applicable Law or applicable stock exchange rules (for the avoidance of doubt, other than any such rules related to director independence).

(i) From and after the date of this Agreement, except as otherwise provided in the SPV LPA, until the earlier of (i) the Expiration of Term (as defined in the SPV LPA) and (ii) the Board Designation Expiration Date, each Investor Party agrees, on behalf of itself and, other than with respect to Searchlight, its Affiliates (A) to cause all Voting Securities held by such Investor Party or such Affiliates, or over which such Investor Party or such Affiliates otherwise has voting discretion or control, to be present at each Election Meeting or any annual or special meeting at which (or any written consent pursuant to which) Directors are to be elected or appointed, either in person or by proxy, and (B) to vote all such Voting Securities in favor of any Searchlight Designee; provided , however that this Section 2.1(i) shall apply to Searchlight only to the extent Searchlight has voting power over any Voting Securities and the Searchlight GP has the right to nominate one or more Searchlight Designees pursuant to this Agreement.

(j) From and after the date of this Agreement, until the earlier of (i) the Expiration of Term and (ii) the termination of this Agreement, each Investor Party agrees, on behalf of itself and, other than with respect to Searchlight, its Affiliates (A) to cause all Voting Securities held by such Investor Party or such Affiliates, or over which such Investor Party or such Affiliates otherwise has voting discretion or control, to be present at each Election Meeting or any annual or special meeting at which (or any written consent pursuant to which) Directors are to be elected or appointed, either in person or by proxy, and (B) to vote all such Voting Securities for any nominee that would qualify as an Independent Director if the Board would have fewer than two (2) members who qualify as Independent Directors if such nominee(s) were not elected to the Board; provided , however that this Section 2.1(j) shall apply

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to Searchlight only to the extent Searchlight has voting power over any Voting Securities and the Searchlight GP has the right to nominate one or more Searchlight Designees pursuant to this Agreement.

(k) Following a Restructuring Event (as defined in the SPV LPA), for so long as Searchlight has voting power over any Voting Securities and Searchlight GP has the right to nominate one or more Searchlight Designees pursuant to this Section 2.1 , Searchlight shall, at each annual or special meeting of stockholders of the Company at which directors are to be elected or appointed, or any written consent of the stockholders of the Company pursuant to which directors are to be elected or appointed, vote all such Voting Securities in favor of all nominees included in the Company’s slate of nominees to be elected or appointed at such meeting or by such written consent in the same proportion as the vote of the holders of the Class A Shares (other than Searchlight or its Affiliates if such Persons hold Class A Shares) with respect to each such nominee (other than any Searchlight Designees and any Independent Directors, for which Searchlight shall vote all of its Voting Securities in favor); provided , that Searchlight may, by written notice to the Company, elect at any time after a Restructuring Event (as defined in the SPV LPA) to terminate its right to nominate Searchlight Designees pursuant to this Section 2.1 and, thereafter, Searchlight may vote all of its Voting Securities in its sole discretion and this Section 2.1 (other than Section 2.1(e) ) and Section 2.3 shall terminate and be of no further force and effect.

(l) In any matter submitted to a vote of the Company’s stockholders that is not subject to Section 2.1(i) , (j) or (k) , each Investor Party may vote any or all of its Voting Securities in its sole discretion (subject, in the case of Kern and the Investor, to the terms of the SPV LPA).

Section 2.2 Expenses and Fees; Indemnification . The Company agrees to reimburse each Searchlight Designee elected to the Board for his or her reasonable expenses, consistent with the Company Policy for such reimbursement, incurred attending meetings of the Board and/or any committee of the Board. The Company shall indemnify, or provide for the indemnification of, including, subject to applicable Law, any rights to the advancement of fees and expenses, each Searchlight Designee and provide each Searchlight Designee with director and officer insurance to the same extent it indemnifies and provides insurance for the non-executive members of the Board of Directors.

Section 2.3 Committees .

(a) Promptly after the Closing, and subsequently in connection with each Election Meeting subject to Section 2.1(b) , the Company and the Board of Directors agree to cause the appointment of one Searchlight Director designated by Searchlight GP to each of the Audit Committee, the Executive Committee and any other committee or subcommittee of the Board formed after the date hereof; provided that (x) such Searchlight Director meets the independence (if any) and other requirements under applicable Law, such committee’s charter and applicable stock exchange rules for such committee and (y) such committee was not formed for the purpose of investigating, making determinations with respect to, or otherwise addressing, any potential or actual conflicts of interest between the Investor, Searchlight and any of its Affiliates, or any Searchlight Director, on the one hand, and the Company, on the other hand. If the inability of any such Searchlight Director to serve on the Board as described

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in Section 2.1(d) results in a vacancy on one or more of such committees or subcommittees, Searchlight shall have the right to submit that the Replacement proposed pursuant to Section 2.1(d) be appointed to fill such committee or subcommittee vacancy, subject to the provisions of this Section 2.3 . If such Searchlight Director resigns or is removed by the Board from any committee or subcommittee on which such Searchlight Director served, Searchlight shall be entitled to select another Searchlight Director to fill the committee or subcommittee vacancy as a result of such removal, subject to the provisions of this Section 2.3 .

(b) Searchlight shall promptly take all appropriate action to cause to resign from any committee or subcommittee any Searchlight Director appointed pursuant to Section 2.3(a) if, as determined in good faith by a majority of the Other Directors, service by such Searchlight Director on such committee or subcommittee would reasonably be expected to violate applicable Law or applicable stock exchange rules.

Section 2.4 Provision of Information by Searchlight . Notwithstanding anything herein to the contrary (but subject to the immediately following sentence), the Company acknowledges and agrees that, at any time that a Searchlight Director is serving on the Board, Searchlight Capital Partners LLC, Searchlight and the Searchlight Designees may share information received by any of them in connection with their representation on the Board with their respective equity holders and investors in customary communications with such equity holders and investors, or as required by any applicable agreements governing Searchlight or otherwise obligating Searchlight Capital Partners LLC or any of its Affiliates, in their capacity as general partner, manager or sponsor of Searchlight, to make such disclosure ( provided that such recipients are subject to a duty of confidentiality to keep such information confidential and have agreed pursuant to the limited partnership agreement of an Affiliate of Searchlight not to trade on the basis of material nonpublic information provided to such recipients pursuant to such agreement). Notwithstanding anything herein to the contrary, neither Searchlight Capital Partners LLC, Searchlight nor the Searchlight Designees shall knowingly take any action that would reasonably be expected to cause HMG to violate Regulation FD under the Exchange Act.

Section 2.5 Conditional upon Closing . The effectiveness of the provisions of this Article II shall be subject to the consummation of the Closing.

ARTICLE III
COVENANTS

Section 3.1 Cooperation; Deliverables .

(a) The Company shall, and shall cause the Board to:

(i) not enter into any agreement or understanding or take any other action that would prevent or delay the Closing or otherwise frustrate the purposes of the transactions contemplated by this Agreement, the Purchase Agreement or the SPV LPA, including by (A) preventing or interfering with any of the Investor Parties’ ability to fulfill their obligations under any such Agreement, (B) preventing or interfering with any distribution in kind of securities of the Company

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pursuant to Section 11.2(b) of the SPV LPA or any replacement of the general partner of the Investor pursuant to Section 11.1(b) of the SPV LPA (in the case of this clause (B), so long as a Searchlight Affiliate, Kern or any of their respective controlled Affiliates are the sole Beneficial Owners of the Equity Interests in the Investor at the time of such distribution or replacement), or (C) amending the Certificate of Incorporation or amended and restated bylaws of the Company as in effect on the date hereof to change the quorum requirement for stockholder meetings; provided that this Section 3.1(a)(i) shall not apply to the Company to the extent the Board determines in good faith that such action or inaction, as the case may be, would reasonably be expected to be inconsistent with its fiduciary duties to the Company’s stockholders under applicable Law, as advised by outside counsel;

(ii) until the date on which the Investor Percentage Interest is less than 10%, other than any such provision that is in the Company’s Certificate of Incorporation in effect as of the date hereof, not take any action to adopt, approve or implement, any shareholder rights plan (as such term is commonly understood in connection with corporate transactions), any “moratorium,” “control share,” “fair price,” “takeover” or “interested stockholder” provision or any other similar plan, agreement or provision that would cause Searchlight or any of its Affiliates to incur or suffer any dilution, relative to other holders of Voting Securities or Warrants, of any of Searchlight’s or its Affiliates’ equity or voting power (each of the foregoing, a “ Rights Plan ”) (excluding any Rights Plan that applies to the acquisition of any additional Class A Shares by Searchlight or any of its Affiliates beyond the Purchased Interests and the Director Equity) or that would affect Searchlight’s or any of its Affiliates’ ability to hold or acquire Voting Securities or Warrants following the Closing or that would have an adverse effect on the membership on the Board of Directors by the Searchlight Designees; and

(iii) to cooperate and provide reasonable assistance as requested by Searchlight, at Searchlight’s sole expense, in connection with the Closing.

(b) At the Closing:

(i) the Company shall deliver or cause to be delivered to the Investor a certificate, executed by the Secretary of the Company, certifying that (A) each of the representations and warranties contained in Section 4.1 is or was true and correct in all respects, in each case as of the date hereof and as of the Closing Date, in each case with the same effect as if then made, and (B) the Company has complied to date with its obligations under Section 2.1(a) ;

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(ii) the Company shall deliver or cause to be delivered to the Investor and to IMPVII a duly executed certificate signed by an officer of the Company certifying that no interest in the Company is a “United States real property interest” as that term is defined in Section 897 of the Code, along with evidence that the Company has provided notice of such certification to the IRS in accordance with the provisions of Treasury Regulations Section 1.897-2(h)(2); and

(iii) each Investor Party shall deliver or cause to be delivered to the Company a certificate, executed by such Investor Party or its authorized officer, certifying that each of the representations and warranties contained in Section 4.2 with respect to such Investor Party is or was true and correct in all respects, in each case as of the date hereof and as of the Closing Date, in each case with the same effect as if then made.

Section 3.2 Regulatory Approvals Upon Unwind of the Investor . The Company shall, and shall cause its Subsidiaries to, at Investor’s sole expense for any out-of-pocket costs incurred by the Company or its Subsidiaries thereby, use their respective commercially reasonable efforts to obtain or make, or cause to be obtained or made, all notices, filings, consents, authorizations, orders and approvals required to be obtained or made under (a) the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, (b) the Communications Act of 1934, as amended, the rules and regulations and published policies of the Federal Communications Commission (“ FCC ”) (the “ Communications Laws ”), (c) local or municipal Law and (d) the rules and regulations of any public utility commission, or any other Governmental Entity (collectively, the “ Regulatory Approvals ”), in connection with any distribution in kind of securities of the Company pursuant to Section 11.2(b) of the SPV LPA, the replacement of the general partner of the Investor pursuant to Section 11.1(b) of the SPV LPA, or any other event, circumstance, act or activity arising or undertaken pursuant to the SPV LPA that requires any Regulatory Approvals, in each case, at the reasonable request of Searchlight, and in each case, in such a manner as to ensure that such Regulatory Approvals shall be obtained as promptly as practicable and, with respect to any distribution in kind of securities of the Company pursuant to Section 11.2(b) of the SPV LPA, any replacement of the general partner of the Investor pursuant to Section 11.1(b) of the SPV LPA, or any other event, circumstance, act or activity arising or undertaken pursuant to the SPV LPA that requires any Regulatory Approvals, prior to such in-kind distribution, replacement, event, circumstances, act or activity. The Company shall keep Searchlight reasonably apprised of the status of all matters relating to such Regulatory Approvals and work cooperatively with Searchlight and the other Investor Parties, including as Searchlight may reasonably request, in connection with obtaining all such Regulatory Approvals. Notwithstanding anything in the Agreement to the contrary, the Company shall have no obligation to seek Regulatory Approval for any action that would violate Communications Law.

Section 3.3 Registration Rights and Consent to Assignment .

(a) If there is a distribution in kind of securities of the Company pursuant to Section 11.2(b) of the SPV LPA or any replacement of the general partner of the

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Investor pursuant to Section 11.1(b) of the SPV LPA, or if Searchlight becomes by any other means the registered and Beneficial Owner of the Purchased Interests or any other unregistered Equity Interests of the Company, then the Company shall enter into an amendment to the Registration Rights Agreement (or enter into a substantially similar agreement with Searchlight) such that Searchlight is deemed a “Holder” and “IM Holder” thereunder, and is thereby able to exercise all rights of a Holder and IM Holder thereunder in order to register the Purchased Interests (or any such other Equity Interests) under the Securities Act as promptly as practicable following such distribution in kind of securities of the Company or replacement of the general partner of the Investor pursuant to the SPV LPA. The Company will reasonably cooperate with Searchlight in any such scenario regarding the registration of such securities.

(b) The Company hereby grants its consent, effective as of the Closing, to the assignment of all of the Sellers’ rights and obligations with respect to the Purchased Interests pursuant to the Equity Restructuring and Warrant Purchase Agreement, dated as of January 22, 2013, by and among Azteca Acquisition Corporation, the Company, Azteca Acquisition Holdings, LLC, Brener International Group, LLC, the Sellers, Cinema Aeropuerto, S.A. de C.V. and the other parties identified therein, to the Investor.

Section 3.4 Treatment of Company Securities by Kern, the General Partner, the Investor and the Rollover SPV .

(a) Kern agrees that he shall take all actions that are necessary or appropriate to elect an in-kind distribution of his allocable share of the securities of the Company held by IMPVII as set forth in Section 2.1(a)(ii) of the Purchase Agreement. Kern represents and warrants to Searchlight that none of his Affiliates is a direct or indirect limited partner of IMPVII. Kern agrees not to directly or indirectly transfer all or any portion of his interests in IMPVII prior to the Closing.

(b) From and after the Closing until the occurrence of a Termination Event (as defined in the SPV LPA), Kern agrees to vote all securities of the Company (including all Class A Shares, Class B Shares and Warrants) held of record or Beneficially Owned by Kern or his Immediate Family Members or Permitted Family Trusts (each as defined in the SPV LPA) in the same manner as the securities of the Company Beneficially Owned by the General Partner following the Closing, and none of Kern, the General Partner, the Investor, the Rollover SPV or any of their respective Affiliates will directly or indirectly hedge (via the use of derivatives or in any other manner) the economic risk with respect to any such securities of the Company held of record or Beneficially Owned by any of them. From and after the Closing until the occurrence of a Termination Event (as defined in the SPV LPA), Kern agrees not to dispose of (and otherwise treat) the securities of the Company (including all Class A Shares, Class B Shares and Warrants) held of record or Beneficially Owned by Kern (other than the Investor and the Rollover SPV) or his Immediate Family Members or Permitted Family Trusts (each as defined in the SPV LPA) without the prior written consent of Searchlight. From and after the Closing until the occurrence of a Termination Event (as defined in the SPV LPA), Kern agrees to dispose of (and otherwise treat) all securities of the Company (including all Class A Shares, Class B Shares and Warrants) held of record by the Investor and the Rollover SPV in the same manner.

(c) From and after the Closing until the occurrence of a Section 3.4(c) End Date, except to the extent arising in connection with a (i) Termination Event (as defined in the SPV LPA) or (ii) Final Distribution or GP Departure Distribution (each as defined in

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the SPV LPA), Kern agrees not to take any action that would reasonably be expected to cause the Class B Shares Beneficially Owned by Kern (other than Class B Shares held by the Rollover SPV), his Immediate Family Members or Permitted Family Trusts (each as defined in the SPV LPA) to convert to Class A Shares. For the avoidance of doubt, nothing contained in this Section 3.4(c) , shall be deemed to limit (A) the treatment of the Interests by Investor or (B) the ability of Kern, his Immediate Family Members or Permitted Family Trusts (each as defined in the SPV LPA) to take any action with respect to any (1) Class A Shares owned by such Person, (2) Director Equity and (3) Voting Securities held by the Rollover SPV or which are subject to forfeiture.

(d) The Investor Parties agree that, promptly following the receipt of any requisite Regulatory Approvals for any Final Distribution or GP Departure Distribution (each as defined in the SPV LPA), any Class B Shares held of record or Beneficially Owned by the Investor and the Rollover SPV at such time will be promptly converted into Class A Shares.

Section 3.5 Required Consents of the Independent Committee .

(a) Any approval by the Board of Directors or any committee or subcommittee thereof of a “business combination” (as such term is defined in Section 203 of the DGCL) or of a Person becoming an “interested stockholder” for purposes of Section 203 of the DGCL shall require the prior written consent of the Independent Committee; provided , however , that the Board has previously approved for purposes of Section 203 of the DGCL (via the resolutions attached hereto as Exhibit B ), and no further approval of the Independent Committee or the Board shall be required for, the transactions contemplated by the Purchase Agreement and any distribution in kind of securities of the Company pursuant to Section 11.2(b) of the SPV LPA, or any replacement of the general partner of the Investor pursuant to Section 11.1(b) of the SPV LPA.

(b) Prior to the fifth anniversary of the Closing Date, none of the Investor Parties or any Searchlight Affiliate shall, and they shall cause their respective Affiliates not to, undertake any transaction involving the Company that would qualify as a “Rule 13e-3 transaction” (as defined under the Exchange Act) unless such transaction is approved by the Independent Committee; provided that this (b) shall not apply to any Person constituting a portfolio investment of Searchlight or any of its Affiliates, so long as such Person is not acting at the direction of Searchlight or its Affiliate (other than such portfolio investment).

Section 3.6 Expenses of the Rollover SPV . Kern, the General Partner and IMPVII will pay or otherwise bear, or will cause the limited partners of the Rollover SPV to pay or otherwise bear, all costs and expenses associated with the establishment, formation and ongoing operation of the Rollover SPV and the Rollover SPV’s participation in the transactions contemplated by the Purchase Agreement, including expenses of counsel and other advisors.

Section 3.7 Credit Agreement . In connection with any refinancing of any outstanding indebtedness under, or any other amendment to, the Credit Agreement, dated as of July 30, 2013, by and among Hemisphere Media Holdings, LLC, InterMedia Español, Inc., and the other parties thereto, as amended by Amendment No. 1 to the Credit Agreement, dated as of July 31, 2014 (as amended and as it may be further amended from time to time, the “ Credit Agreement ”), the Company agrees that it shall use commercially reasonable efforts to cause the

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definition of “Change in Control” and any similar definition set forth therein to be amended such that neither the record nor beneficial ownership by Searchlight or its Affiliates, nor the acquisition by any of them of any Equity Interests of the Company (including pursuant to a liquidation of the Investor or change of the general partner of the Investor pursuant to the SPV LPA as such liquidation would occur in the absence of Section 11.3(b) of the SPV LPA), will trigger any Event of Default (as defined in the Credit Agreement) or similar event under the Credit Agreement.

Section 3.8 FCC Compliance . Each Investor Party agrees to provide any information, certification, representation, form or other document reasonably requested by the Company for the purpose of complying with the Communications Laws, including any applications or reporting requirements thereunder and any information in respect of any general or limited partner, limited liability company member, stockholder or other equity holder or Affiliate of such Investor Party who shall have an attributable interest in the Company within the meaning, and for purposes, of the Communications Laws. No Investor Party shall take any action that would cause the Company to be in violation of the Communications Laws.

Section 3.9 Standstill .

(a) Subject to Section 3.9(c) , from and after the date of this Agreement until the earlier of (i) a Termination Event (as defined in the SPV LPA) and (ii) in the event that the transactions contemplated by the Purchase Agreement are not consummated, the termination of the Purchase Agreement in accordance with its terms, none of the Investor Parties nor any of their respective controlled Affiliates or any Searchlight Affiliate shall, directly or indirectly, offer to acquire or acquire (or propose, agree or seek permission, to acquire), of record or beneficially, by purchase, sale or otherwise, any securities, assets or indebtedness of the Company or any of its controlled Affiliates, or rights or options to acquire interests in any securities, assets or indebtedness of the Company or any of its controlled Affiliates, in each case, without the prior written approval of the Independent Directors; provided , however , that for the avoidance of doubt, this Section 3.9(a) shall not apply to the transactions contemplated by the Purchase Agreement and the Investor’s acquisition of the Interests pursuant thereto; and provided , further , that this Section 3.9(a) shall not apply to any Person constituting a portfolio investment of Searchlight or any of its Affiliates, so long as such Person is not acting at the direction of Searchlight or its Affiliate (other than such portfolio investment).

(b) Notwithstanding Section 3.9(a) , nothing in this Section 3.9 shall restrict any of the Investor Parties from making any proposal regarding a possible transaction involving the Company directly to the Board.

(c) Notwithstanding Section 3.9(a) , but subject to Section 3.5(b) , nothing in this Section 3.9 shall restrict any of the Investor Parties from undertaking a transaction or submitting an offer for a transaction involving the Company that would qualify as a “Rule 13e-3” transaction (as defined under the Exchange Act); provided , further , that nothing herein shall prohibit Searchlight or any of its Affiliates from providing financing for or otherwise participating in such a transaction.

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(d) The restrictions set forth in Section 3.9(a) shall not apply if and for so long as any Rights Plan has been adopted by the Company and/or the Board and remains in effect.

(e) Notwithstanding anything to the contrary herein, nothing in this Agreement shall restrict or prevent Kern or any Searchlight Director, from, consistent with the past practices of the Company, (i) receiving from the Company any equity or equity-based compensation in connection with such Person’s service as a member of the Board or any committee(s) thereof, or (ii) exercising any rights or options in connection with such equity or equity-based compensation (collectively, “ Director Equity ”).

Section 3.10 Amendment to Certificate of Incorporation . Subject to the consummation of the Closing and, in no event later than the earlier of (i) a date sufficiently in advance of a Change of Control Transaction to allow the Charter Amendment to be filed with the Office of the Secretary of State of the State of Delaware, (ii) the Final Distribution or the GP Departure Distribution, and (iii) the 2017 annual meeting of stockholders of the Company, the Investor agrees to cause to be present and to vote, at a meeting of the Company’s stockholders, or cause to consent in any action by written consent, all Voting Securities held by the Investor in favor of amending the Certificate of Incorporation (such amendment, the “ Charter Amendment ”) to add the following as a new Section 4.5 to the Certificate of Incorporation:

“Notwithstanding anything herein to the contrary, in the event that the Company shall enter into any consolidation, merger, combination or other transaction in which shares of Common Stock are exchanged for, converted into, or otherwise changed into other stock or securities, or the right to receive cash or any other property, shares of Class A Common Stock and Class B Common Stock shall receive the same consideration, identically and ratably, on a per share basis, with respect to any consideration into which such shares are converted or any consideration paid or otherwise distributed to stockholders of the Company; provided, however , that in the event that the holders of a class of Common Stock are granted rights to elect to receive one of two or more alternative forms of consideration, the foregoing shall be deemed satisfied if holders of each class of Common Stock are granted identical election rights.”

Section 3.11 Investor As Class B Permitted Transferee; No Transfers of General Partner or Advisor Interests . Kern shall not Transfer (as defined in the SPV LPA) or permit the Transfer of any interests in the General Partner or the Advisor (as defined in the SPV LPA) or the Principal’s direct or indirect interest in, or entitlement to, Carried Interest (as defined in the SPV LPA) or the Management Fee (as defined in the SPV LPA) hereunder to any other Person, other than Transfers to (a) estate planning entities Controlled by Kern, or (b) employees of the General Partner or its Affiliates for compensatory purposes, provided that interests in the General Partner Transferred in accordance with this clause (b) shall not constitute at any time more than 35% of the outstanding interests in the General Partner. Subject to the immediately preceding sentence, Kern shall not grant economic interests in the General Partner in an amount which could jeopardize the treatment of the Investor as a “Class B Permitted Transferee” as defined in the Certificate of Incorporation.

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Section 3.12 No Circumvention via Searchlight Portfolio Companies . Searchlight will not, and will cause each other Searchlight Person (as defined in the SPV LPA) not to, exercise Control (as defined in the SPV LPA) over any Person that constitutes a portfolio investment of any Searchlight Person (other than Searchlight itself) in a manner intended to circumvent any of the covenants of Searchlight set forth in this Agreement or the SPV LPA, or to evade any limitations on the occurrence of a Restructuring Event in the SPV LPA (due to the exclusion of such portfolio investments from the definition of “Affiliate” thereunder).

ARTICLE IV
REPRESENTATIONS AND WARRANTIES

Section 4.1 Representations and Warranties of the Company . The Company represents and warrants to each Investor Party as follows:

(a) Organization and Power . The Company is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware and has the corporate power and authority to enter into this Agreement and to carry out its obligations hereunder.

(b) Authorization . Assuming the accuracy of the representation and warranty of the Investor Parties set forth in Section 4.2(g), the execution, delivery and performance of this Agreement by the Company has been duly authorized by all necessary corporate action on the part of the Company and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or the transactions contemplated hereby.

(c) Enforceability . This Agreement has been duly executed and delivered by the Company and, assuming the accuracy of the representation and warranty of the Investor Parties set forth in Section 4.2(g), constitutes a valid and binding obligation of the Company, and, assuming this Agreement constitutes a valid and binding obligation of the other parties hereto and the accuracy of the representation and warranty of the Investor Parties set forth in Section 4.2(g), is enforceable against the Company in accordance with its terms.

(d) No Conflicts . None of the execution, delivery or performance of this Agreement by the Company constitutes a breach or violation of or conflicts with the Company’s Certificate of Incorporation or amended and restated bylaws or any contract or agreement to which the Company is party or by which it is bound.

(e) Capitalization of the Company .

(i) The authorized capital stock of the Company consists of (A) 100,000,000 Class A Shares, of which, as of the close of business on September 2, 2016 (the “ Capitalization Date ”), there were 12,364,416 Class A Shares issued and outstanding (excluding 3,599,626 Class A Shares held in treasury but including Company RSAs), (B) 33,000,000 Class B Shares, of which, as of the close of business on the Capitalization Date, there were 30,027,418 Class B Shares issued and outstanding (with no Class B Shares held in treasury), and (C) 50,000,000 shares of preferred stock, par value $0.0001

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per share, of the Company (“ Preferred Stock ”), of which, as of the Capitalization Date, no shares of Preferred Stock were issued and outstanding.

(ii) As of the close of business on the Capitalization Date, there were 4,005,785 Class A Shares reserved for future issuance under the Benefit Plans (exclusive of Class A Shares subject to Company Options). “ Benefit Plan ” means each (A) ”employee benefit plan” (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder (“ ERISA ”), but whether or not subject to ERISA, and, for the avoidance of doubt, including any such plans referred to as schemes rather than plans in any non-U.S. jurisdiction), (B) bonus, incentive or deferred compensation or equity or equity-based compensation plan, program, policy, agreement, scheme or arrangement, (C) employment, consulting, severance, change in control, retention or termination plan, program, policy, agreement, scheme or arrangement or (D) other compensation or benefit plan, program, policy, agreement, scheme or arrangement, in each case, sponsored, maintained, contributed to or required to be maintained or contributed to by the Company, any Subsidiary of the Company or any of their respective Affiliates for the benefit of any current or former director, officer, employee or independent contractor of the Company or any of its Subsidiaries (each, a “ Participant ”), or between the Company, any of its Subsidiaries or any of their respective Affiliates, on the one hand, and any Participant, on the other hand, or with respect to which any potential liability, whether absolute or contingent, is borne by the Company or any of its Subsidiaries, and in each case whether or not (x) subject to the Laws of the United States, (y) in writing or (z) funded.

(iii) As of the close of business on the Capitalization Date, there were (A) 2,060,000 Class A Shares subject to options to purchase such shares (“ Company Options ”), (B) unvested outstanding awards of restricted stock that correspond to Class A Shares (“ Company RSAs ”) covering 265,549 Class A Shares and (C) 6,137,280 Class A Shares subject to Warrants, all of which are governed by the Warrant Agreement (as defined in the Purchase Agreement). All Class A Shares subject to issuance under the Benefit Plans upon issuance prior to the Closing on the terms and conditions specified in the instruments pursuant to which they are issuable, will be duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights.

(iv) As of the close of business on the Capitalization Date, except as set forth in Sections 4.1(e)(i) , 4.1(e)(ii) or 4.1(e)(iii) , there are no outstanding Equity Interests or other options, warrants or other rights issued by the Company or any of its Subsidiaries, relating to or based on the value of any Equity Interests of the Company or any of its Subsidiaries or obligating the Company or any of its Subsidiaries to issue,

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acquire or sell any Equity Interests of the Company or any of its Subsidiaries. “ Equity Interest ” means any share, capital stock, partnership, limited liability company, member or similar equity interest in any person or entity, and any option, warrant, right or security (including debt securities) convertible, exchangeable or exercisable into or for any such share, capital stock, partnership, limited liability company, member or similar equity interest. Since the close of business on the Capitalization Date, the Company has not issued any Equity Interests other than Class A Shares issued upon the exercise of any Company Options or Company Warrants or settlement of Company RSAs outstanding as of the close of business on the Capitalization Date in accordance with their terms.

(v) Except with respect to the Company Options and Company RSAs pursuant to the Benefit Plans and the related award agreements, there are no outstanding obligations of the Company or any of its Subsidiaries requiring the repurchase of, or containing any right of first refusal with respect to, or granting any preemptive rights with respect to, any Equity Interests of the Company or any of its Subsidiaries.

(vi) The Company does not have any outstanding bonds, debentures, notes or other obligations the holders of which have the right generally to vote (or convertible into or exercisable for securities having the right to vote) with the stockholders of the Company. As of the date of this Agreement, other than the Registration Rights Agreement, neither the Company nor any of its Subsidiaries is party to or bound by any shareholder agreements, voting trusts or other agreements with any third party relating to the voting or registration of any equity securities of the Company or any of its Subsidiaries.

(vii) Since June 30, 2016, the Company has not paid, set aside any amounts with respect to, or set any record date with respect to any cash dividend or any other distribution in respect of any of its Equity Interests.

Section 4.2 Representations and Warranties of the Investor Parties (other than Kern) . Each of Investor Parties (other than Kern) represents and warrants (except that, the representation in Section 4.2(f)(ii) shall be deemed made only by the Rollover SPV), severally and not jointly, to each of the other parties hereto as follows:

(a) Organization and Power . If such Investor Party is an entity, it is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization and has the corporate or similar power and authority to enter into this Agreement and to carry out his or its obligations hereunder.

(b) Authorization . The execution, delivery and performance of this Agreement by such Investor Party and the consummation by such Investor Party of the transactions contemplated hereby have been duly authorized by all necessary action on the part

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of such Investor Party and no other corporate or similar proceedings on the part of such Investor Party are necessary to authorize this Agreement or any of the transactions contemplated hereby.

(c) Enforceability . This Agreement has been duly executed and delivered by such Investor Party and constitutes a valid and binding obligation of such Investor Party, and, assuming this Agreement constitutes a valid and binding obligation of the other parties hereto, is enforceable against such Investor Party in accordance with its terms.

(d) No Conflicts . None of the execution, delivery or performance of this Agreement by such Investor Party constitutes a breach or violation of or conflicts with its organization documents or any contract or agreement to which such Investor Party is a party or by which it is bound.

(e) No Intent to Amend or Waive . As of the date hereof, such Investor Party does not have any current intent to request a waiver of, or amendment to, any of the provisions of this Agreement, the Purchase Agreement or the SPV LPA.

(f) FCC Matters.

(i) Subject to the terms and conditions of the Purchase Agreement, Investor is legally qualified to acquire and hold a controlling interest in the Company under the Communications Laws at the Closing. No waiver of any FCC rule or published policy that would impose any material burden on the Company will be necessary in order to obtain the FCC’s consent to Investor’s acquisition of control of the Company at the Closing. As of the Closing, Investor will not be deemed to have foreign ownership under the Communications Laws with respect to the Company in an amount greater than the Requisite Percentage. As of the Closing, neither Investor nor any person holding an attributable interest (as defined under the Communications Laws) in Investor holds an attributable interest in any television broadcast or radio broadcast station or any daily newspaper in Puerto Rico. The parties acknowledge that persons holding an attributable interest in Investor hold interests in Liberty Cablevision Puerto Rico as of the date hereof. Immediately after the Closing, Peter M. Kern will have ultimate control (as defined under the Communications Laws) of the Company.

(ii) As of the Closing, Rollover SPV will not be deemed to hold Voting Securities giving rise to foreign ownership under the Communications Laws in an amount that, when taken together with the total number of Voting Securities giving rise to foreign ownership interests under the Communications Laws deemed to be held by (i) In-Kind Electors and (ii) Investor, exceeds, in the aggregate, the total number of shares of Voting Securities giving rise to foreign ownership under the Communications Laws held by IMPVII as of the date hereof.

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(g) Ownership . As of the date hereof, none of the Investor Parties (other than IMPVII and Kern) is an “interested stockholder” (as defined in Section 203 of the DGCL) of the Company. Each of IMPVII and Kern has been an “interested stockholder” (as defined in Section 203 of the DGCL) of the Company for at least three years prior to the date hereof.

Section 4.3 Representations and Warranties of Kern . Kern represents and warrants to each of the other parties hereto as follows:

(a) Enforceability . This Agreement has been duly executed and delivered by Kern and constitutes a valid and binding obligation of Kern, and, assuming this Agreement constitutes a valid and binding obligation of the other parties hereto, is enforceable against such Investor Party in accordance with its terms.

(b) No Conflicts . None of the execution, delivery or performance of this Agreement by Kern constitutes a breach or violation of or conflicts with its organization documents or any contract or agreement to which Kern is a party or by which he is bound.

(c) No Intent to Amend or Waive . As of the date hereof, Kern does not have any current intent to request a waiver of, or amendment to, any of the provisions of this Agreement, the Purchase Agreement or the SPV LPA.

ARTICLE V
TERMINATION

Section 5.1 Termination . Except as provided in Section 5.2 , this Agreement shall terminate upon the occurrence of any of the following (subject to the limitations set forth therein):

(a) upon the mutual written agreement of the parties hereto;

(b) by Searchlight, upon a material breach by the Company, Kern, the General Partner, the Investor, the Rollover SPV or IMPVII of any of their respective representations, warranties, covenants or agreements contained herein and such breach shall not have been cured within ten (10) Business Days after written notice thereof shall have been received by such party; provided that Searchlight may terminate pursuant to this clause (b) only with respect to the rights and obligations of such breaching party, and the rest of this Agreement shall continue in full force and effect with respect to Searchlight and all other parties;

(c) by the Company, upon a material breach by Searchlight, Kern, the General Partner, the Investor, the Rollover SPV or IMPVII of any of their respcetive representations, warranties, covenants or agreements contained herein and such breach shall not have been cured within ten (10) Business Days after written notice thereof shall have been received by such party; provided that the Company may terminate pursuant to this clause (c) only with respect to the rights and obligations of such breaching party, and the rest of this Agreement shall continue in full force and effect with respect to the Company and all other parties;

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(d) by Kern, upon a material breach by the Company, Searchlight or, solely if a Replacement GP has been appointed to the Investor, the Investor of any of their respective representations, warranties, covenants or agreements contained herein and such breach shall not have been cured within ten (10) Business Days after written notice thereof shall have been received by such party; provided that Kern may terminate pursuant to this clause (d) only with respect to the rights and obligations of such breaching party, and the rest of this Agreement shall continue in full force and effect with respect to Kern and all other parties; or

(e) upon termination of the Purchase Agreement prior to Closing in accordance with the terms thereof.

Section 5.2 Effect of Termination; Survival . In the event of any termination of this Agreement pursuant to Section 5.1 , there shall be no further liability or obligation hereunder on the part of any party hereto with respect to which this Agreement is terminated; provided , however , that the covenants set forth in Section 2.1(e) , Section 3.1(a)(i) and Section 3.2 shall survive the termination of this Agreement until the Termination (as defined in the SPV LPA) of the Investor pursuant to the SPV LPA; nothing contained in this Agreement (including this Section 5.2 ) shall relieve any party from liability for any Willful Breach of any covenant or agreement contained in this Agreement, in each case, which occurred prior to such termination.

ARTICLE VI
MISCELLANEOUS

Section 6.1 No Survival . The representations and warranties of the parties set forth in this Agreement (or contained in any certificate delivered pursuant to this Agreement), other than those set forth in Section 4.2(f) , shall terminate upon the Closing.

Section 6.2 Amendment and Modification . This Agreement may be amended, modified and supplemented, and any of the provisions contained herein may be waived, only by a written instrument signed by each of the parties hereto with respect to which such amendment, modification or waiver will be effective; provided that any amendment, modification or waiver of any of the provisions hereof by the Company shall require the written consent of the Independent Committee. No course of dealing between or among any Persons having any interest in this Agreement will be deemed effective to modify, amend or discharge any part of this Agreement or any rights or obligations of any Person under or by reason of this Agreement.

Section 6.3 Assignment; No Third-Party Beneficiaries . Except as provided under Article III , neither this Agreement nor any of the rights, interests or obligations under this Agreement will be assigned, in whole or in part, by any party without the prior written consent of each other party with respect to which such assignment will be effective. Any purported assignment without such prior written consent will be void. Subject to the preceding sentences, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns. Except pursuant to Section 2.2 (with respect to the Searchlight Designees) and Section 6.2 (with respect to the Independent Committee), this Agreement shall not confer any rights or remedies upon any Person other than the parties to this Agreement and their respective successors and permitted assigns.

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Section 6.4 Binding Effect; Entire Agreement . This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns and executors, administrators and heirs. This Agreement, together with the SPV LPA and the Purchase Agreement with respect to the relevant parties thereto, embody the complete agreement and understanding among the parties hereto with respect to the subject matter hereof or thereof and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, that may have related to the subject matter hereof in any way.

Section 6.5 Severability . Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

Section 6.6 Notices and Addresses . Any notice, request, claim, demand or other communication under this Agreement shall be in writing, shall be either personally delivered, delivered by electronic transmission, or sent by reputable overnight courier service (charges prepaid) to the address for such party set forth below or such other address as the recipient party has specified by prior written notice to the other parties hereto and shall be deemed to have been given hereunder when receipt is acknowledged for personal delivery or electronic transmission or one day after deposit with a reputable overnight courier service.

	If to the Company:

	Hemisphere Media Group, Inc.
	4000 Ponce de Leon Blvd. Suite 650
	Coral Gables, Florida 33146
	Attention:	Alex J. Tolston, General Counsel and Corporate Secretary
	Telephone:	305-421-6334
	Email:	atolston@hemispheretv.com

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	with a copy (which shall not constitute notice) to:

	Morris, Nichols, Arsht & Tunnell LLP
	1201 North Market Street, P.O. Box 1347
	Wilmington, Delaware 19899-1347
	Attention:	Andrew M. Johnston, Esq.
		Eric S. Klinger-Wilensky, Esq.
	Telephone:	(302) 658-9200
	Email:	ajohnston@mnat.com
		ekwilensky@mnat.com

	If to the Investor, the General Partner or Kern:
	c/o InterMedia Partners, LP
	405 Lexington Avenue
	48th Floor
	New York, New York 10174
	Attention:	Mark Coleman, Esq.
	Telephone:	(212) 503-2855
	Email:	mcoleman@intermediaadvisors.com

	with a copy (which shall not constitute notice) to:

	Paul, Weiss, Rifkind, Wharton & Garrison LLP
	1285 Avenue of the Americas
	New York, New York 10019
	Attention:	Jeffrey D. Marell, Esq.
	Telephone:	(212) 373-3105
	Email:	jmarell@paulweiss.com

	If to IMPVII or the Rollover SPV:

	InterMedia Partners, LP
	405 Lexington Avenue
	48th Floor
	New York, New York 10174
	Attention:	Mark Coleman, Esq.
	Telephone:	(212) 503-2855
	Email:	mcoleman@intermediaadvisors.com

	with a copy (which shall not constitute notice) to:

	Paul, Weiss, Rifkind, Wharton & Garrison LLP
	1285 Avenue of the Americas
	New York, New York 10019
	Attention:	Jeffrey D. Marell, Esq.
	Telephone:	(212) 373-3105
	Email:	jmarell@paulweiss.com

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	If to Searchlight:

	Searchlight Capital Partners, L.P.
	745 Fifth Avenue
	27th Floor
	New York, New York 10151
	Attention:	John Yantsulis
		Nadir Nurmohamed
		Andrew Frey
	Telephone:	(212) 293-3730
	Email:	jyantsulis@searchlightcap.com
		nnurmohamed@searchlightcap.com
		afrey@searchlightcap.com


	with a copy (which shall not constitute notice) to:

	Wachtell, Lipton, Rosen & Katz
	51 West 52nd Street
	New York, New York 10019
	Attention:	Steven A. Cohen, Esq.
		Ronald C. Chen, Esq.
	Telephone:	(212) 403-1000
	Email:	SACohen@wlrk.com
		RCChen@wlrk.com

Section 6.7 Counterparts . This Agreement may be executed via facsimile or pdf and in any number of counterparts, each of which shall be deemed to be an original instrument and all of which together shall constitute one and the same instrument.

Section 6.8 Further Assurances . Each party shall cooperate and take such action as may be reasonably requested by any other party in order to carry out the provisions and purposes of this Agreement and the transactions contemplated hereby; provided , however , that no party shall be obligated to take any actions or omit to take any actions that would be inconsistent with applicable Law.

Section 6.9 Remedies . In the event of a breach or a threatened breach by any party to this Agreement of its obligations under this Agreement, any party injured or to be injured by such breach will be entitled to specific performance of its rights under this Agreement or to injunctive relief, without requirement of posting a bond, in addition to being entitled to exercise all rights provided in this Agreement and granted by Law, it being agreed by the parties that the remedy at Law, including monetary damages, for breach of any such provision will be inadequate compensation for any loss and that any defense or objection in any action for specific performance or injunctive relief for which a remedy at Law would be adequate is waived.

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Section 6.10 Governing Law; Jurisdiction and Venue . This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without giving effect to the principles of conflicts of law. Each of the parties hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Court of Chancery of the State of Delaware or, solely if such Court does not have subject matter jurisdiction, the other courts of the State of Delaware or Federal Courts of the United States of America, in each case, located in the State of Delaware for any claim, action, suit, investigation or proceeding (each, a “ Proceeding ”), arising out of or relating to this Agreement or the transactions contemplated hereby, whether framed in contract, tort or otherwise, and further agrees that service of any process, summons, notice or document by U.S. mail to its respective address set forth in this Agreement shall be effective service of process for any Proceeding brought against it in any such court. Each of the parties hereto hereby irrevocably and unconditionally waives any objection to the laying of venue of any Proceeding arising out of this Agreement or the transactions contemplated hereby in the courts of the State of Delaware, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Proceeding brought in any such court has been brought in an inconvenient forum. EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS TO TRIAL BY JURY IN CONNECTION WITH ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 6.11 Adjustments . References to numbers of shares and to sums of money contained herein will be adjusted to account for any reclassification, exchange, substitution, combination, stock split or reverse stock split of the shares.

Section 6.12 Fees and Expenses of the Independent Committee . Within five (5) Business Days of the Closing, IMPVII and Searchlight shall each pay, by wire transfer of immediately available funds to the following account, $125,000 of the reasonable, documented out-of-pocket fees, costs and expenses incurred by the Independent Committee in connection with the transactions contemplated by this Agreement, the Purchase Agreement or the SPV LPA.

Account Name: Hemisphere Media Holdings, LLC

Bank Name: JPMorgan Chase Bank, NA

ABA: 021000021

Acct #: 486351799

Further credit account: Special Committee Reimbursement

[Remainder of page intentionally left blank.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date and year first above written.

	HEMISPHERE MEDIA GROUP, INC.

	By:	/s/ Alan J. Sokol
		Name: Alan J. Sokol
		Title: President and Chief Executive Officer

	GATO INVESTMENTS LP
	By:	Searchlight II HMT GP, LLC, its General Partner

	By:	/s/ Andrew Frey
		Name: Andrew Frey
		Title: Authorized Person

	INTERMEDIA HEMISPHERE ROLL-OVER L.P.
	By:	Gemini Latin Holdings, LLC, its General Partner

	By:	/s/ Peter M. Kern
		Name: Peter M. Kern
		Title: Managing Member

	GEMINI LATIN HOLDINGS, LLC

	By:	/s/ Peter M. Kern
		Name: Peter M. Kern
		Title: Managing Member

	/s/ Peter M. Kern
	Peter Kern

	INTERMEDIA PARTNERS VII, L.P.
	By:	InterMedia Partners, L.P., its General Partner
	By:	HK Capital Partners, LLC, its General Partner

	By:	/s/ Peter M. Kern
		Name: Peter M. Kern
		Title: Managing Partner

[Signature Page to Stockholders Agreement]

	SEARCHLIGHT II HMT, L.P. By: Searchlight II HMT GP, LLC, its General Partner

	By:	/s/ Andrew Frey
		Name: Andrew Frey
		Title: Authorized Person

[Signature Page to Stockholders Agreement]

EXHIBIT 10.2

[Hemisphere Letterhead]

September [ ], 2016

[Name]

c/o Hemisphere Media Group, Inc.

4000 Ponce de Leon Blvd., Suite 650

Coral Gables, FL 33146

Dear [First Name]:

As you know, Intermedia Partners VII, LP (“ IMPVII ”) and Intermedia Cine Latino, LLC (“ IMCL ” and together with IMPVII, “ Intermedia ”) intend on entering into a transaction with Searchlight Capital II, L.P., Searchlight Capital II PV, L.P. or their respective affiliated funds, vehicles or entities (“ SCP ”) and Peter Kern (“ Kern ” and together with SCP, the “ Investors ”), pursuant to which, among other things, the Investors will provide the limited partners of Intermedia with certain liquidity options with respect to all of the shares of capital stock of Hemisphere Media Group, Inc. (“ HMG ”) and warrants to purchase HMG capital stock owned by Intermedia (such capital stock and warrants, the “ Intermedia Securities ”). The proposed transaction described in the foregoing sentence whereby (i) limited partnerships or other special purpose vehicles, controlled by Kern (and capitalized by SCP, the existing limited partners of Intermedia and/or any other third party participant in the proposed transaction), will acquire all or a portion of the Intermedia Securities and/or (ii) the existing limited partners of Intermedia will, if they so elect, receive a distribution of their allocable share of the Intermedia Securities, is hereinafter referred to as the “ First Transaction ” and the ultimate termination, liquidation or dissolution of such limited partnerships or other special purpose vehicles or entities holding the acquired Intermedia Securities following completion of the First Transaction and distribution of such Intermedia Securities to SCP, the existing limited partners of Intermedia or such other third party participants, is hereinafter referred to as the “ Second Transaction .”

Pursuant to Section 4(c)(ii) of your employment agreement with HMG, dated May 6, 2013, (as amended, modified or restated, the “ Employment Agreement ”), you are entitled to certain enhanced severance benefits if (i) you are terminated by HMG without “Cause” or you resign your employment for “Good Reason” (as such terms are defined in the Employment Agreement) 60 days before, or 12 months following, a “Change in Control” (as defined in the Hemisphere Media Group, Inc. Amended and Restated 2013 Equity Incentive Plan (the “ Equity Plan ”)) or (ii) HMG elects not to extend the “Term” of the Employment Agreement (as such term is defined in the Employment Agreement) at any time following a Change in Control.

By signing this letter, you acknowledge and agree that you are aware of the general framework and objectives of the First Transaction and the Second Transaction and have

reviewed the Employment Agreement and the Equity Plan. In addition, you hereby (i) acknowledge and agree that the consummation of the transactions contemplated by the First Transaction does not constitute a Change in Control, and (ii) waive any right in the future to assert that you were entitled to any enhanced severance benefits described in Section 4(c)(ii) of the Employment Agreement due to (A) your termination by HMG without Cause or your resignation for Good Reason 60 days before, or 12 months following, the consummation of the Second Transaction or (B) HMG’s election not to extend the Term following the consummation of the Second Transaction; provided, that for the avoidance of doubt, your waiver under clauses (A) and (B) shall also apply if SCP acquires Beneficial Ownership (as defined in the Equity Plan) of more than 50% of the combined voting power of the Outstanding Company Voting Securities (as defined in the Equity Plan) as a result of the consummation of the First Transaction and/or the Second Transaction; provided, further, that for the avoidance of doubt, your waiver under clauses (A) and (B) shall not apply to the extent that (x) your termination by HMG without Cause or your resignation for Good Reason occurs within 60 days before or 12 months following a Change in Control that occurs after the consummation of the Second Transaction, or (y) HMG’s election not to extend the Term is made following a Change in Control that occurs after the consummation of the Second Transaction. Furthermore, notwithstanding anything to the contrary in the Equity Plan, if, at any time following the consummation of the Second Transaction, SCP acquires Beneficial Ownership of more than 50% of the combined voting power of the Outstanding Company Voting Securities, such acquisition by SCP shall constitute a Change in Control for purposes of determining whether you are entitled to the enhanced severance benefits under the Employment Agreement described above; provided, however, that if SCP has Beneficial Ownership of more than 50% of the combined voting power of the Outstanding Company Voting Securities immediately following the consummation of the Second Transaction, no subsequent acquisitions of Outstanding Company Common Stock (as defined in the Equity Plan) or Outstanding Company Voting Securities by SCP shall constitute a Change in Control. You further agree that you shall not take a position contrary to those set forth herein.

This letter shall be governed and construed by the laws of the State of Delaware without regard to the conflict of laws principles thereof. This letter may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

[signature page follows]

	Very truly yours,

	Hemisphere Media Group, Inc.


	By:
		Name
		Title

ACKNOWLEDGED AND AGREED:



[NAME]

InterMedia Partners and Hemisphere Media Announce Proposed Liquidity Opportunity for InterMedia’s Limited Partners

NEW YORK, NY – September 7, 2016 –InterMedia Partners, L.P. (“InterMedia”) and Hemisphere Media Group, Inc. (NASDAQ: HMTV)(“Hemisphere”) today announced that they have entered into a stockholders agreement in connection with InterMedia’s proposed plan to provide liquidity options to its limited partners with respect to the securities of Hemisphere.

InterMedia’s fund, InterMedia Partners VII, L.P. (“IPVII”), is nearing the end of its term and InterMedia is providing liquidity options to its Limited Partners, comprised of the following: (1) an in-kind pro rata distribution of Hemisphere securities currently held by InterMedia, including common stock and warrants; (2) the right to re-invest their pro rata securities into a new vehicle (the “Rollover SPV”) managed by an affiliate of InterMedia on behalf of such limited partners; or (3) the right to receive a cash payment from a new vehicle (the “Investor”), managed by an affiliate of InterMedia and funded by Searchlight Capital Partners (“Searchlight”), which will pay the limited partners $9.75 per allocable unit of securities. The cash option is conditional upon sufficient limited partners electing to receive cash. It is expected that the transaction will be completed in October 2016. Upon closing, the stockholders agreement will govern the rights with respect to the securities of Hemisphere owned by the Rollover SPV, the Investor and Searchlight.

Leo Hindery and Peter Kern, co-managing partners of InterMedia will remain on the Board of Directors of Hemisphere and, upon closing, two designees of Searchlight will join Hemisphere’s Board of Directors. Peter Kern, Managing Partner of InterMedia and Chairman of Hemisphere stated, “After an extensive process we believe we have found a series of alternatives that offers our limited partners an attractive set of options. This transaction will transition our significant ownership position in an orderly fashion that will minimize any impact on the company or the trading of its securities. Those limited partners who wish to be long term holders of Hemisphere stock will have the ability to receive Hemisphere stock, while those requiring a cash option can elect to receive cash. We are strong believers in the growth prospects of Hemisphere, and this orderly transition of our ownership position will enable the company and management to stay focused on that agenda.”

Mr. Kern will be the managing partner of the general partner of the investment vehicles for both Searchlight and the Rollover SPV.

Alan Sokol, CEO and President of Hemisphere added, “We are pleased that InterMedia was able to smoothly transition its ownership. This transaction is an affirmation of our strategy, and upon its closing the addition of two experienced media investors from Searchlight to our Board places us in an even stronger position to achieve our strategic objectives.”

The consummation of the transaction is subject to certain regulatory approvals and certain other conditions. An independent committee of the board of directors of Hemisphere reviewed and negotiated the transaction on behalf of Hemisphere with the advice of outside counsel and financial advisors and recommended that the board approve the transaction. The board approved the transaction. The transaction will not constitute a change of control of Hemisphere for FCC or any other purposes as the high vote B shares which remain in the Rollover SPV and the new Searchlight financed vehicle will continue to be managed and voted by Peter Kern.

Morrris, Nichols, Arsht & Tunnell LLP is acting as legal counsel to the independent committee of the board of directors of Hemisphere and Stifel, Nicolaus & Company is acting as its financial advisor. Paul Weiss Rifkind Wharton & Garrison LLP is acting as legal advisor to IPVII and Lazard is acting as IPVII’s financial advisor. Wachtell, Lipton Rosen & Katz is acting as legal advisor to Searchlight and LionTree Advisors is acting as Searchlight’s financial advisor.

Forward-Looking Statements

This press release may contain certain statements about Hemisphere that are "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These include, but are not limited to, statements relating to Hemisphere's future financial and operating results (including growth and earnings), plans, objectives, expectations and intentions and other statements that are not historical facts. These statements are based on the current expectations of the management of Hemisphere and are subject to uncertainty and changes in circumstance, which may cause actual results to differ materially from those expressed or implied in such forward-looking statements. Without limitation, any statements preceded or followed by or that include the words "targets," "plans," "believes," "expects," "intends," "will," "likely," "may," "anticipates," "estimates," "projects," "should," "would," "expect," "positioned," "strategy," "future," or words, phrases or terms of similar substance or the negative thereof, are forward-looking statements. In addition, these statements are based on a number of assumptions that are subject to change. Factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements are discussed under the heading "Risk Factors" and "Forward-Looking Statements" in Hemisphere's most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission ("SEC"), as they may be updated in any future reports filed with the SEC. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, Hemisphere's actual results, performance, or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements included herein are made as of the date hereof, and Hemisphere undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances.

About InterMedia Partners

Founded in 1988 by Leo J. Hindery, Jr., InterMedia is premised on the philosophy that by bringing extensive operating experience to media private equity, the fund could drive superior returns. Over the course of its seven funds, InterMedia has invested in cable television, broadcast television, content and content production, print, programming, and digital opportunities. InterMedia’s Partners have over 50 years of operating experience and, by making control investments, they are able to bring that knowledge base to bear on the acquired assets.

About Hemisphere Media Group, Inc.

Hemisphere Media Group, Inc. (NASDAQ:HMTV) is the only publicly traded pure-play U.S. media company targeting the high growth Spanish-language television and cable networks business in the U.S. and Latin America. Headquartered in Miami, Florida, Hemisphere owns and operates five leading

U.S. Hispanic cable networks, two Latin American cable networks, and the leading broadcast television network in Puerto Rico. Hemisphere's networks consist of:

—

Cinelatino, the leading Spanish-language movie channel with over 17 million subscribers across the U.S., Latin America and Canada, including 4.5 million subscribers in the U.S. and 13 million subscribers in Latin America, featuring the largest selection of contemporary Spanish-language blockbusters and critically-acclaimed titles from Mexico, Latin America, Spain and the Caribbean.

—	WAPA, Puerto Rico's leading broadcast television network with the highest primetime and full day ratings in Puerto Rico. Founded in 1954, WAPA produces more than 75 hours per week of top-rated news and entertainment programming.

—	WAPA America, the leading cable network targeting Puerto Ricans and other Caribbean Hispanics living in the U.S., featuring the highly-rated news and entertainment programming produced by WAPA. WAPA America is distributed in the U.S. to 5.2 million subscribers.

—	Pasiones, dedicated to showcasing the most popular telenovelas and drama series, distributed in the U.S. and Latin America. Pasiones has 4.5 million subscribers in the U.S. and 10.8 million subscribers in Latin America.

—	Centroamerica TV, the leading network targeting Central Americans living in the U.S., the third-largest U.S. Hispanic group, featuring the most popular news, entertainment and soccer programming from Central America. Centroamerica TV is distributed in the U.S. to 4 million subscribers.

—	Television Dominicana, the leading network targeting Dominicans living in the U.S., featuring the most popular news, entertainment and baseball programming from the Dominican Republic. Television Dominicana is distributed in the U.S. to 3.1 million subscribers.

About Searchlight Capital Partners

Searchlight is a global private investment firm with offices in New York, London and Toronto. Searchlight seeks to invest in business where their long-term capital and strategic support accelerate value creation for all shareholders.

Contacts:

For InterMedia

Mark Coleman, 212-503-2855

mcoleman@intermediaadvisors.com

For Hemisphere Media

Sloane & Company

Erica Bartsch, 212-446-1875

ebartsch@sloanepr.com