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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ___________________ TO ____________________
COMMISSION FILE NUMBER 1-14599
INFINITY BROADCASTING CORPORATION
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(Exact name of registrant as specified in its charter)
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DELAWARE 13-4030071
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(State of Incorporation) (I.R.S. Employer Identification No.)
40 WEST 57TH STREET
NEW YORK, NEW YORK 10019 (212) 314-9200
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(Address of Principal Executive Offices) (Telephone No.)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b)
OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
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Class A Common Stock, par value $.01 per Share New York Stock Exchange
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SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
Indicate by checkmark whether the registrant: (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by checkmark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
Infinity Broadcasting Corporation had 392,340,072 shares of Class A common stock
and 700,000,000 shares of Class B common stock outstanding at February 29, 2000.
As of that date, the aggregate market value of common stock held by
non-affiliates was $12,530 million for Class A and $0 million for Class B.
DOCUMENT INCORPORATED BY REFERENCE INTO THE PARTS OF THIS REPORT INDICATED:
1. Portions of Infinity Broadcasting Corporation's Notice of 2000 Annual Meeting
and Proxy Statement to be filed with the Commission pursuant to Regulation
14A of the Securities Exchange Act of 1934 (the Proxy Statement). (Part III)
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The terms "Infinity" and "Company" as used in this Report on Form 10-K refer to
Infinity Broadcasting Corporation and its consolidated subsidiaries unless the
context indicates otherwise.
PART I
ITEM 1. BUSINESS.
GENERAL
Infinity Broadcasting Corporation is one of the largest radio broadcasting and
outdoor advertising companies in the United States, as well as the largest
outdoor advertising company in North America. The Company's operations are
focused on the out-of-home media business and are aligned in two business
segments, Radio and Outdoor. The Company characterizes its radio and outdoor
advertising businesses as out-of-home because a majority of radio listening, and
virtually all viewing of outdoor advertising, takes place in automobiles,
transit systems, on the street and other locations outside the consumer's home.
The Company's strategy is to generally acquire out-of-home media properties in
the largest markets.
The Company was formed in September 1998 to own and operate the radio and
outdoor advertising business of CBS Corporation and its subsidiaries (CBS). In
December 1998, the Company completed an initial public offering of approximately
155 million shares of its Class A common stock (the IPO), resulting in gross
proceeds of approximately $3.2 billion. At December 31, 1999, CBS beneficially
owned 100% of the Company's Class B common stock, representing 64.3% of the
Company's equity ownership and 90.0% of the combined voting power of Infinity's
Class A and Class B common stock, on a fully diluted basis. In December 1996,
CBS acquired Infinity Media Corporation, formerly known as Infinity Broadcasting
Corporation (Old Infinity). On June 4, 1998, CBS acquired the radio broadcasting
operations of American Radio Systems Corporation (American Radio), now known as
CBS Radio Inc. Both Old Infinity and American Radio were publicly traded
companies prior to their respective acquisitions by CBS. Prior to the IPO, CBS
transferred substantially all of its radio, outdoor advertising and related
assets to the Company.
In December 1999, the Company acquired Outdoor Systems, Inc. (Outdoor Systems),
now known as Infinity Outdoor, Inc., for approximately $8.7 billion. The
purchase price included the issuance of approximately 233 million shares of the
Company's Class A common stock, and the assumption of approximately $1.9 billion
in debt, at fair value, and stock options to acquire approximately 28 million
shares of the Company's Class A common stock. Outdoor Systems was a publicly
traded company prior to its acquisition by Infinity.
On March 3, 2000, the Company entered into an Asset Purchase Agreement to
acquire 18 radio stations from Clear Channel Communications, Inc. (Clear
Channel) for approximately $1.4 billion. These stations are located in San
Diego, Phoenix, Denver, Cleveland, Cincinnati, Orlando and
Greensboro--Winston-Salem. The purchase allows Infinity to expand into five new
Top 50 markets, giving the Company 180 radio stations overall. The transaction
is subject to regulatory reviews and approvals, and is expected to close by
year-end 2000.
On March 21, 2000, the Company announced that it had entered into an agreement
to purchase Giraudy, one of France's largest outdoor advertising companies, for
approximately $425 million. This acquisition expands the Company's position in
Europe. Upon the expected mid-year 2000 completion of the Giraudy acquisition,
TDI Europe, the Company's European outdoor advertising subsidiary, will have
rights to approximately 430,000 display faces.
The Company's Radio segment, which consists of 162 radio stations serving 34
markets (prior to the close of the Clear Channel acquisition), collectively
accounted for approximately 12% of total 1999 U.S. radio advertising
expenditures. The Company's stations ranked first or second, in terms of 1999
pro forma radio revenues, in 30 out of the 34 markets in which the Company
operates stations. Approximately 93% of the Company's radio stations are located
in the 50 largest radio markets in the United States, and 67% and 99% of the
Company's pro forma 1999 net radio revenues were generated in the 10 and 50
largest U.S. radio markets, respectively. The Company believes that this focus
on large markets makes it more appealing to advertisers, enables it to attract
more highly skilled management, employees and on-air talent, and enables it to
more efficiently manage its business and generate higher levels of cash flow
than would be the case if it managed a larger number of smaller stations. The
Company owns the CBS Radio Network and also has a minority equity investment in
Westwood One, which it
2 INFINITY BROADCASTING CORPORATION
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manages pursuant to a management agreement between the Company and Westwood One.
Westwood One is a leader in producing and distributing syndicated and network
radio programming, and it manages the CBS Radio Network.
The Company's radio stations serve diverse target demographics through a broad
range of programming formats. The Company believes that this diversity provides
advertisers with the convenience to select stations to reach a targeted
demographic group or to select groups of stations and outdoor advertising
properties to reach broad groups of consumers within and across markets. The
Company believes that this diversity also reduces its dependence on any single
station, local economy, format or advertiser.
The Company's Outdoor segment sells advertising space on various media,
including billboards, bulletins, buses, bus shelters and benches, trains, train
platforms and terminals throughout commuter rail systems, mall posters and on
phone kiosks. The Company is the largest outdoor advertising company in North
America, with operations in more than 90 markets and all 50 of the largest
metropolitan markets in the United States, 14 of the 15 largest metropolitan
markets in Canada and all of the 45 largest metropolitan markets in Mexico.
Additionally, the Company has the exclusive rights to manage advertising space
within the London Underground and on more than 90% of the buses in London and
the United Kingdom, has the exclusive rights to transit advertising in the
Republic of Ireland and parts of Northern Ireland, and has a variety of outdoor
advertising displays in the Netherlands.
The substantial majority of the Company's revenues are generated from the sale
of local, regional and national advertising. The major categories of out-of-home
advertisers include: automotive, retail, Internet, healthcare,
telecommunications, fast food, beverage, movies, entertainment and services.
For information about principal acquisitions and divestitures, see Note 3 to the
consolidated financial statements included in Part II, Item 8 of this report.
Infinity Broadcasting Corporation is a corporation organized under the laws of
Delaware. Its principal executive offices are located at 40 West 57th Street,
New York, New York, 10019, and its telephone number is (212) 314-9200.
PROGRAMMING
The Company seeks to maintain substantial diversity among its stations in many
respects. The geographically wide-ranging stations serve diverse target
demographics through a broad range of programming formats, such as rock, oldies,
news/talk, adult contemporary, sports/talk and country, and the Company has
established leading franchises in news, sports, and personality programming.
This diversity reduces the Company's dependence on any particular station, local
economy, format, on-air personality or advertiser. The overall mix of each radio
station's programming is designed to fit the station's specific format and serve
its local community. The Company's general programming strategy includes
acquiring significant on-air talent and the rights to broadcast sports
franchises and news content for its radio stations. The Company believes that
this strategy, in addition to developing loyal audiences for its radio stations,
creates the opportunity for the Company to obtain additional revenues from
syndicating such programming franchises to other radio stations. Similarly, the
Company's relationship with CBS gives it access to certain CBS programming.
The Company beneficially owns shares and vested warrants representing
approximately 17% of Westwood One's common stock. Westwood One is one of the
leading producers and distributors of syndicated and network radio programming
in the United States and distributes syndicated and network radio programming to
the Company's radio stations as well as to competitors of the Company.
INFINITY BROADCASTING CORPORATION 3
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RADIO STATIONS AND OUTDOOR DISPLAYS
The following table sets forth selected information with regard to the Company's
radio stations and outdoor displays in the Top 50 U.S. markets as of March 6,
2000:
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MARKET
RANK
BY 1999 RADIO(1) OUTDOOR(2)(3)
METRO AREA ------------------------------------------------ --------------------------------
MARKET POPULATION STATIONS AM/FM FORMAT DISPLAY TYPE
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New York, NY 1 WCBS FM Oldies Bus, Bus Shelters, Rail, Kiosks,
WCBS AM News Billboards, Walls, Trestles,
WFAN AM Sports 'Spectacular Signage',
WINS AM News Bulletins, Posters, Mall Posters
WNEW FM Talk
WXRK FM Rock
Los Angeles, CA 2 KCBS FM Classic Rock Bus, Bus Shelters, Kiosks,
KFWB AM News Beach Panels, Bulletins, Walls,
KLSX FM Talk Posters, Mall Posters
KNX AM News
KRLA AM Talk
KROQ FM Alternative Rock
KRTH FM Oldies
KTWV FM Smooth Jazz
Chicago, IL 3 WBBM FM Contemporary Hit, Radio/Dance Bus, Bus Shelters, Rail,
WBBM AM News Bulletins, Posters, Mall Posters
WCKG FM Talk
WJMK FM Oldies
WMAQ AM News/Sports
WSCR AM Sports/Talk
WUSN FM Country
WXRT FM Adult Alternative Rock
San Francisco, CA 4 KCBS AM News Bus, Bus Shelters, Rail, Cable
KFRC FM Oldies Cars, Bulletins, Walls, Posters,
KFRC AM Oldies Mall Posters
KITS FM Alternative Rock
KLLC FM Modern Rock
KYCY AM Talk
KYCY FM Country
Philadelphia, PA 5 KYW AM News Bus Shelters, Rail, Bulletins,
WIP AM Sports Mall Posters
WOGL FM Oldies
WPHT AM Talk
WYSP FM Active Rock
Dallas--Fort Worth, TX 6 KHVN AM Gospel Bus, Bulletins, Mall Posters
KLUV FM Oldies
KLUV AM Oldies
KOAI FM Smooth Jazz
KRBV FM Rhythmic Contemporary Hits
KRLD AM News/Talk
KVIL FM Adult Contemporary
KYNG FM Country
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4 INFINITY BROADCASTING CORPORATION
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MARKET
RANK
BY 1999 RADIO(1) OUTDOOR(2)(3)
METRO AREA ------------------------------------------------ -------------------------------
MARKET POPULATION STATIONS AM/FM FORMAT DISPLAY TYPE
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Detroit, MI 7 WKRK FM Talk Bus, Bus Shelters, Bulletins,
WOMC FM Oldies Posters, Mall Posters
WVMV FM Smooth Jazz
WWJ AM News
WXYT AM Talk/Sports
WYCD FM Country
Boston, MA 8 WBCN FM Modern Rock/Sports Mall Posters
WBMX FM Modern Adult Contemporary
WBZ AM News/Talk/Sports
WODS FM Oldies
WZLX FM Classic Rock
Washington, D.C. 9 WARW FM Classic Rock Bus, Rail, Mall Posters
WHFS FM Alternative Rock
WJFK FM Talk
WPGC FM Contemporary Hit
Radio/Rhythmic
WPGC AM Gospel
Houston, TX 10 KIKK FM Country Bulletins, Mall Posters
KIKK AM Business
KILT FM Country
KILT AM Sports
Atlanta, GA 11 WAOK AM Gospel Bus, Bus Shelters, Rail,
WVEE FM Urban Bulletins, Posters, Mall Posters
WZGC FM Classic Rock
Miami-Ft. Lauderdale, FL 12 -- -- -- Bulletins, Mall Posters
Seattle-Tacoma, WA 14 KBKS FM Modern Adult Contemporary Bus, Bulletins, Mall Posters
KMPS FM Country
KYCW AM Country
KYPT FM Adult Contemporary
KZOK FM Classic Rock
San Diego, CA 15 KPLN(4) FM Classic Rock Bus, Bus Shelters, Bulletins,
KYXY(4) FM Adult Contemporary Posters, Mall Posters
Phoenix, AZ 16 KOOL(4) FM Oldies Bus, Bus Shelters, Bulletins,
KZON(4) FM Alternative Rock Posters, Mall Posters
KMLE(4) FM Country
Minneapolis, MN 17 WCCO AM Full Service Bus, Bulletins, Mall Posters
WLTE FM Soft Adult Contemporary
WXPT FM Modern Adult Contemporary
KSGS AM Urban
Nassau-Suffolk, NY 18 -- -- -- Bulletins
St. Louis, MO 19 KEZK FM Soft Adult Contemporary Bulletins, Posters, Mall Posters
KMOX AM News/Talk/Sports
KYKY FM Adult Contemporary
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INFINITY BROADCASTING CORPORATION 5
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MARKET
RANK
BY 1999 RADIO(1) OUTDOOR(2)(3)
METRO AREA ------------------------------------------------ -------------------------------
MARKET POPULATION STATIONS AM/FM FORMAT DISPLAY TYPE
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Baltimore, MD 20 WBGR AM Gospel Mall Posters
WBMD AM Religion
WJFK AM Talk
WLIF FM Soft Adult Contemporary
WQSR FM Oldies
WWMX FM Hot Adult Contemporary
WXYV FM Contemporary Hit Radio
Tampa-St. Petersburg, FL 21 WLLD FM Contemporary Hit Radio Bulletins, Mall Posters
WQYK FM Country
WQYK AM Sports
WYUU FM Oldies
WRBQ FM Country
WSJT FM Smooth Jazz
Pittsburgh, PA 22 KDKA AM News/Talk Bus, Bulletins, Mall Posters
WBZZ FM Contemporary Hit Radio
WDSY FM Country
WZPT FM Classic Hits
Denver, CO 23 KDJM(4) FM Jammin' Oldies Bus Benches, Bulletins, Posters,
KIMN(4) FM Adult Contemporary Mall Posters
KXKL(4) FM Oldies
Cleveland, OH 24 WNCX FM Classic Rock Bulletins, Mall Posters
WDOK(4) FM Adult Contemporary
WQAL(4) FM Adult Contemporary
WZJM(4) FM Jammin' Oldies
Portland, OR 25 KBBT FM Modern Adult Contemporary Bulletins, Mall Posters
KINK FM Adult Alternative Rock
KKJZ FM Smooth Jazz
KUFO FM Album Oriented Rock
KUPL FM Country
KUPL AM Classic Country
Cincinnati, OH 26 WGRR FM Oldies Bulletins, Mall Posters
WKRQ FM Contemporary Hit Radio
WYLX FM Classic Hits
WUBE(4) FM Country
San Jose, CA 27 KBAY FM Soft Adult Contemporary Bus, Bulletins, Posters, Mall
KEZR FM Hot Adult Contemporary Posters
Riverside, CA 28 KFRG FM Country Bulletins, Posters, Mall Posters
KXFG FM Country
Sacramento, CA 29 KHTK AM Sports Bulletins, Posters, Mall Posters
KNCI FM Country
KRAK AM Gold Country
KXOA FM Classic Hits
KSFM FM Contemporary Hit Radio
KYMX FM Soft Adult Contemporary
KZZO FM Modern Adult Contemporary
Kansas City, MO 30 KBEQ FM Country Bulletins, Posters, Mall Posters
KFKF FM Country
KMXV FM Contemporary Hit Radio
KSRC FM Soft Adult Contemporary
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MARKET
RANK
BY 1999 RADIO(1) OUTDOOR(2)(3)
METRO AREA ------------------------------------------------ -------------------------------
MARKET POPULATION STATIONS AM/FM FORMAT DISPLAY TYPE
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Milwaukee, WI 31 -- -- -- Bulletins, Mall Posters
San Antonio, TX 32 -- -- -- Bus, Bulletins, Mall Posters
Providence, RI 33 -- -- -- Mall Posters
Columbus, OH 34 WAZU FM Album Oriented Rock Bulletins, Mall Posters
WHOK FM Country
WLVQ FM Classic Rock
Salt Lake City, UT 35 -- -- -- Bulletins, Mall Posters
Norfolk, VA 36 -- -- -- Mall Posters
Charlotte, NC 37 WBAV FM Urban Adult Contemporary Bulletins, Mall Posters
WFNZ AM Sports/Talk
WGIV AM Gospel
WNKS FM Contemporary Hit Radio
WPEG FM Urban
WSOC FM Country
WSSS FM Adult Contemporary
Indianapolis, IN 38 -- -- -- Bulletins, Mall Posters
Orlando, FL 39 WJHM(4) FM Urban Contemporary Bulletins, Mall Posters
WOCL(4) FM Jammin' Oldies
WOMX(4) FM Adult Contemporary
Las Vegas, NV 40 KLUC FM Contemporary Hit Radio Bulletins, Mall Posters
KMXB FM Modern Adult Contemporary
KMZQ FM Soft Adult Contemporary
KSFN AM Oldies
KXNT AM News/Talk/Sports
KXTE FM Alternative
New Orleans, LA 41 -- -- -- Bus, Bus Shelters, Bulletins,
Posters, Mall Posters
Greensboro--
Winston-Salem, NC 42 WMFR(4) AM News/Talk Bulletins, Mall Posters
WSJS(4) AM News/Talk
WSML(4) AM News/Talk
Nashville, TN 43 -- -- -- Bulletins, Mall Posters
Hartford, CT 44 WRCH FM Soft Adult Contemporary Bulletins, Posters, Mall Posters
WTIC FM Top 40
WTIC AM News/Talk
WZMX FM Classic Hits
Buffalo, NY 45 WBLK(5)(6) FM Urban Adult Contemporary Bus, Bus Shelters, Rail,
WECK AM Adult Standards Bulletins, Mall Posters
WJYE FM Soft Adult Contemporary
WBUF FM Modern Adult Contemporary
WYRK FM Country
Memphis, TN 46 -- -- -- Bulletins, Mall Posters
Monmouth-Ocean, NJ 47 -- -- -- Bulletins, Posters, Mall Posters
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INFINITY BROADCASTING CORPORATION 7
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<CAPTION>
MARKET
RANK
BY 1999 RADIO(1) OUTDOOR(2)(3)
METRO AREA ------------------------------------------------ -------------------------------
MARKET POPULATION STATIONS AM/FM FORMAT DISPLAY TYPE
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Raleigh-Durham, NC 48 -- -- -- Bulletins, Mall Posters
Austin, TX 49 KAMX FM Modern Adult Contemporary Bulletins, Mall Posters
KJCE AM Urban Adult Contemporary
KKMJ FM Soft Adult Contemporary
KQBT FM Rhythmic Contemporary Hits
West Palm Beach, FL 50 WEAT FM Soft Adult Contemporary Bulletins, Mall Posters
WIRK FM Country
WMBX(6) FM Hot Adult Contemporary
WPBZ(6) FM Alternative
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(1) The Radio segment also has radio stations in the following markets:
Rochester, NY-- WCMF-FM, WPXY-FM, WRMM-FM, WZNE-FM; Fresno, CA-- KMJ-AM,
KMGV-FM, KOOR-AM, KOQO-FM, KRNC-FM, KSKS-FM, KVSR-FM; and Palm Springs,
CA-- KEZN-FM.
(2) The Outdoor segment also has outdoor displays, including bus shelters,
bulletins, posters and mall posters, in the following markets: Jacksonville,
FL; Rochester, NY; Louisville, KY; Oklahoma City, OK; Birmingham, AL;
Dayton, OH; Richmond, VA; Greenville-Spartanburg, SC; Albany, NY; Honolulu,
HI; Tucson, AZ; Tulsa, OK; Scranton, PA; Fresno, CA; Grand Rapids, MI;
Knoxville, TN; El Paso, TX; Ft. Myers, FL; Albuquerque, NM; Omaha, NE;
Syracuse, NY; Harrisburg, PA; Sarasota, FL; Toledo, OH; Little Rock, AR;
Wichita, KS; Stockton, CA; Bakersfield, CA; Charleston, SC; Mobile, AL;
Columbia, SC; Des Moines, IA; Daytona Beach, FL; Colorado Springs, CO; Ft.
Wayne, IN; New Haven, CT; Chattanooga, TN; Roanoke, VA; Jackson, MS; Flint,
MI; Modesto, CA; Beaumont, TX; Reno, NV; Shreveport, LA; Tyler, TX; Eugene,
OR; Palm Springs, CA; Columbus, GA; Midland-Odessa, TX; Green Bay, WI; Rio
Grande, TX.
(3) The Outdoor segment also has outdoor displays, including bus, bus shelters,
rail, bulletins, posters and mall posters, in the following countries:
Canada, Mexico, Great Britain, Ireland and the Netherlands.
(4) Being acquired from Clear Channel Communications Inc. pursuant to an Asset
Purchase Agreement, dated March 3, 2000, and subject to regulatory reviews
and approvals.
(5) Operated by the Company pursuant to a local marketing agreement.
(6) Being acquired from Palm Beach Radio Broadcasting, Inc. pursuant to an Asset
Purchase Agreement, dated February 3, 2000, and subject to Federal
Communications Commission approval.
8 INFINITY BROADCASTING CORPORATION
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COMPETITION
RADIO
The Company's radio business operates in a highly competitive industry. The
Company's radio stations compete for audiences and advertising revenues directly
with other radio stations, as well as with other media, such as broadcast and
satellite-delivered television, outdoor advertising, newspapers, magazines,
cable television, the Internet and direct mail, within their respective markets.
The Company's audience ratings and market shares are subject to change and any
adverse change in a particular market could have a material adverse effect on
the Company's revenues in that market and possibly adversely affect revenues in
other markets.
Radio stations compete for listeners primarily on the basis of program content
that appeals to a particular demographic group. From time to time, other
stations may change their format or programming to compete directly with the
Company's stations for audiences and advertisers, or engage in aggressive
promotional campaigns, which could result in lower ratings and advertising
revenues or increased promotion and other expenses. Audience preferences as to
format or programming may also shift due to demographic or other reasons. Any
failure by the Company to respond, or to respond as quickly as its competitors,
could have a material adverse effect on the Company's position in that market.
The radio broadcasting industry is also subject to competition from new media
technologies that are being developed or introduced, such as the delivery of
audio programming by cable television systems, by satellite and by terrestrial
delivery of digital audio broadcasting. The Federal Communications Commission
(FCC) has recently authorized spectrum for the use of a new technology,
satellite digital audio radio services, to deliver audio programming, has
adopted licensing and operating rules for this service and has awarded two
licenses. The FCC also has pending a proceeding in which it is considering
whether, and under what circumstances, digital technology also may be used in
the future by existing radio broadcast stations either on existing (a so-called
"in-band on-channel" approach) or alternate broadcasting frequencies. The FCC
also recently created a new "low power" FM radio service which could open up
opportunities for low cost neighborhood service, although the FCC's action is
being challenged through judicial and legislative initiatives.
The delivery of information through the presently unregulated Internet could
also create a new form of competition. The radio broadcasting industry
historically has grown despite the introduction of new technologies for the
delivery of entertainment and information. There can be no assurance, however,
that the development or introduction in the future of any new media technology
will not have an adverse effect on the radio broadcasting industry.
OUTDOOR
The Company's outdoor business competes in each of its markets with other
outdoor advertising operations as well as with other media, such as broadcast
and satellite-delivered television, radio, newspapers, magazines, cable
television, the Internet and direct mail, within its respective markets. In
addition, the Company also competes with a wide variety of out-of-home media,
including advertising in shopping centers and malls, airports, stadiums, movie
theaters and supermarkets, as well as on taxis, trains, buses and subways.
Advertisers compare the effectiveness of relative costs of available media and
cost-per-thousand impressions, particularly when delivering a message to
customers with distinct demographic characteristics. In competing with other
media, outdoor advertising relies on its low cost per-thousand impressions and
its ability to reach a broad segment of the population in a specific market or
to target a particular geographic area or population with a particular set of
demographic characteristics within that market.
The outdoor advertising industry consists of several large outdoor advertising
and media companies with operations in multiple markets, as well as numerous
smaller and local companies operating a limited number of structures in a single
or a few local markets. In several of its markets, the Company encounters direct
competition from other major outdoor media companies. The Company believes that
its strong emphasis on sales and customer service and its position as a major
provider of advertising services in each of its markets enable it to compete
effectively with the other outdoor advertising companies, as well as other
media, within those markets.
INFINITY BROADCASTING CORPORATION 9
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SEASONALITY
Seasonal revenue fluctuations are common in the out-of-home media industry and
are primarily the result of fluctuations in advertising expenditures by
retailers. The Company's revenues are typically lowest in the first quarter and
highest in the third and fourth quarters.
EMPLOYEES
As of December 31, 1999, the Company had 8,287 full-time employees and 2,675
part-time employees. Of the Company's full-time employees, 1,679 are represented
by unions. The Company believes that its relations with its employees and their
unions are generally satisfactory.
The Company employs several high-profile on-air personalities with large loyal
audiences in their respective markets. The Company generally enters into
employment agreements with its on-air talent and commissioned sales
representatives to protect its interests in those relationships that it believes
to be valuable.
GOVERNMENT REGULATION
FEDERAL REGULATION OF RADIO BROADCASTING
The ownership, operation and sale of radio stations are subject to the
jurisdiction of the FCC, which acts under authority granted by the
Communications Act of 1934, as amended (the Communications Act). Among other
things, the FCC assigns frequency bands for broadcasting; determines the
particular frequencies, locations and operating power of stations; issues,
renews, revokes and modifies station licenses; determines whether to approve
changes in ownership or control of station licenses; establishes technical
requirements for certain transmitting equipment used by stations; and adopts and
implements regulations and policies that directly or indirectly affect the
ownership, operation and employment practices of stations. The FCC has the power
to impose penalties for violation of its rules or the Communications Act,
including the revocation of operating authority.
The following is a brief summary of certain provisions of the Communications Act
and of specific FCC regulations and policies. Reference should be made to the
Communications Act, FCC rules and the public notices and rulings of the FCC for
further information concerning the nature and extent of federal regulation of
radio stations.
FCC Licenses
FCC licenses are issued for fixed terms of eight years. Generally, the FCC
renews radio broadcast licenses without a hearing upon finding that: (i) the
radio station has served the public interest, convenience and necessity; (ii)
there have been no serious violations by the licensee of the Communications Act
or FCC rules and regulations; and (iii) there have been no other violations by
the licensee of the Communications Act or FCC rules and regulations that, taken
together, indicate a pattern of abuse. After considering these factors, the FCC
may grant the license renewal application with or without conditions, including
renewal for a term lesser than the eight year maximum otherwise permitted, or
hold an evidentiary hearing. In addition, the Communications Act authorizes the
filing of petitions to deny a license renewal during specific periods of time
after a renewal application has been filed. Interested parties, including
members of the public, may use such petitions to raise issues concerning a
renewal applicant's qualifications. If a substantial and material question of
fact concerning a renewal application is raised by the FCC or other interested
parties, or if for any reason the FCC cannot determine that the grant of the
renewal application would serve the public interest, convenience and necessity,
the FCC will hold an evidentiary hearing on the application. If as a result of
an evidentiary hearing the FCC determines that the licensee has failed to meet
the requirements specified above and that no mitigating factors justify the
imposition of a lesser sanction, then the FCC may deny a license renewal
application. Only after a license renewal application is denied will the FCC
accept and consider competing applications for the vacated frequency.
Historically, FCC licenses have generally been renewed. The Company has no
reason to believe that its licenses will not be renewed in the ordinary course,
although there can be no assurance to that effect. The non-renewal of the
Company's licenses could have a material adverse effect on the Company.
10 INFINITY BROADCASTING CORPORATION
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Ownership Matters
The Communications Act prohibits the assignment of a broadcast license or the
transfer of control of a broadcast licensee without the prior approval of the
FCC. In determining whether to grant such approval, the FCC considers a number
of factors pertaining to the proposed assignee or transferee, including
compliance with the various rules limiting common ownership of media properties
in a given market, the "character" of the proposed assignee or transferee and
those persons holding "attributable" interests therein, and compliance with the
Communications Act's limitations on alien ownership and other FCC policies,
including recently adopted equal employment opportunity requirements.
The Telecommunications Act of 1996 (Telecom Act) eliminated national limits on
the ownership of AM and FM stations. Additionally, it established new local
ownership rules that use a sliding scale of permissible ownership, depending on
the number of radio stations in a certain FCC-defined market. The FCC also has
an unpublished policy that involves special review and notice of proposed
transactions if such transactions would enable a single owner or two owners to
attain a high degree of revenue concentration in a market.
CBS has received, in the past, numerous permanent and temporary conditional
waivers to permit ownership of a television station and numerous radio stations
in the same market. The temporary waivers were subject to the outcome of pending
rulemaking proceedings focusing upon the possible relaxation of the FCC rule
restricting common ownership in the same market of radio and television stations
(formerly known as the "one-to-a-market" rule).
In August 1999, the FCC adopted a radio/television cross-ownership rule, which
allows a single party to own in a market: (a) up to two television stations (if
permitted by the FCC's newly promulgated television duopoly rule) and up to six
radio stations; or (b) one television station and seven radio stations, in both
instances if sufficient market "voices" (which include independently owned
television and radio stations as well as daily newspapers and cable television)
exist.
CBS demonstrated compliance with the new rule in all markets other than Los
Angeles, Chicago and Dallas-Fort Worth, in each of which the Company has
attributable interests in eight radio stations and CBS has interests in one
television station, and in Washington, D.C./Baltimore, where CBS has
attributable interests in one television station and the Company has
attributable interests in (depending on how the FCC interprets its new rule)
either eight or eleven radio stations. As to those four markets, the new rule
provides that the FCC would continue the temporary waivers until 2004, at which
time the FCC will review its radio/television cross-ownership rule, and CBS and
the Company would have an opportunity to demonstrate that the continued
ownership of radio stations in these markets in excess of the limits set by the
rules would serve the public interest.
In connection with the merger of Viacom Inc. (Viacom) and CBS, which was
announced in September 1999, FCC approval has been requested for the transfer of
control to Viacom of the television licenses held by CBS and the radio licenses
currently held by the Company. It is likely that the combined company will be
required to divest some of its broadcasting assets in order to obtain such FCC
approval. In particular, the combined company would not be permitted to continue
the temporary conditional waivers of the radio/television cross-ownership rule
until 2004, and the addition of certain Viacom television stations would
obligate the combined company to divest additional radio stations. In total,
subject to clarification of the radio/television cross-ownership rule as it
applies to circumstances in which radio stations are located in a separate
Designated Market Area (DMA) from a commonly-owned television station, which is
the case in Washington, D.C./Baltimore and Sacramento, the combined company may
be required to divest as many as nine radio stations in order to comply with the
radio/television cross-ownership rule.
In order to consummate the Viacom/CBS merger on an orderly and timely basis,
Viacom and CBS have requested a period of six months from consummation of the
merger within which to achieve compliance with the radio/television
cross-ownership rule.
The FCC generally applies its ownership limits to "attributable" interests held
by an individual, corporation, partnership or other association. In the case of
corporations holding, or through subsidiaries controlling, broadcast licenses,
the interests of officers, directors and those who, directly or indirectly, have
the right to vote 5% or more of the corporation's voting stock (or 20% or more
of such stock in the case of insurance companies, investment
INFINITY BROADCASTING CORPORATION 11
<PAGE> 12
companies and bank trust departments that are passive investors) are generally
attributable. If a single individual or entity controls more than 50% of a
corporation's outstanding voting stock, that individual or entity is viewed as a
single majority stockholder; thus, the FCC views CBS as a single majority
stockholder of the Company. In the case of a single majority stockholder, the
interests of other stockholders are not attributable unless the stockholders are
also officers or directors of the corporation or the new "equity/debt plus" rule
applies, under which an otherwise nonattributable debt or equity interest will
be deemed attributable where: (a) the interest holder is also a program supplier
to the licensee in question or is a same market broadcaster or other media
outlet subject to the broadcast cross-ownership rules, including newspaper and
cable operators; and (b) the equity and/or debt holding exceeds 33 percent of
the media outlet's total asset value.
The Communications Act prohibits the issuance of broadcast licenses to, or the
holding of broadcast licenses by, any corporation of which more than 20% of the
capital stock is owned of record or voted by non-U.S. citizens or their
representatives or by a foreign government or a representative thereof, or by
any corporation organized under the laws of a foreign country. The
Communications Act also authorizes the FCC, if the FCC determines that it would
be in the public interest, to prohibit the issuance of a broadcast license to,
or the holding of a broadcast license by, any corporation directly or indirectly
controlled by any other corporation (such as CBS in the case of the Company) of
which more than 25% of the capital stock is owned of record or voted by aliens.
As a result of these provisions, the licenses granted to the Company by the FCC
could be revoked if more than 20% of the Company's stock were directly or
indirectly owned or voted by aliens or if more than 25% of CBS's stock were
directly or indirectly held or voted by aliens. The Company's restated
certificate restricts the ownership, voting and transfer of the Company's
capital stock in accordance with the Communications Act and the rules of the
FCC, and prohibits the issuance of more than 20% of the Company's outstanding
capital stock (or more than 20% of the voting rights it represents) to or for
the account of aliens. The restated certificate authorizes the Company's Board
of Directors to enforce these prohibitions. In addition, the restated
certificate provides that shares of capital stock of the Company determined by
the Company's Board of Directors to be owned beneficially by an alien or an
entity directly or indirectly owned by aliens in whole or in part shall be
subject to redemption by the Company by action of the Board of Directors to the
extent necessary, in the judgment of the Board of Directors, to comply with
these alien ownership restrictions.
Time Brokerage Agreements
Over the past few years, a number of radio stations have entered into what have
commonly been referred to as Time Brokerage Agreements (TBAs). One typical type
of TBA, commonly referred to as a local marketing agreement (LMA), is a
programming agreement between two separately owned radio stations serving a
common service area, whereby the licensee of one station provides substantial
portions of the broadcast programming for airing on the other licensee's
station. The FCC's multiple ownership rules provide that a licensee or a radio
station that brokers more than 15% of the weekly broadcast time on another
station serving the same market will be considered to have an attributable
ownership interest in the brokered station. The Company is party to one LMA,
with a station in Buffalo, New York. The Company has entered into an agreement
to acquire the Buffalo station and an application for FCC consent is pending.
Programming and Operations
The Communications Act requires broadcasters to serve the "public interest." A
licensee is required to present programming that is responsive to significant
issues facing the station's community of license and to maintain certain records
demonstrating such responsiveness. Complaints from listeners concerning a
station's programming often will be considered by the FCC when it evaluates
renewal applications of a licensee; however, the FCC may consider listener
complaints at any time, and such complaints are required to be maintained in the
station's public file. Stations also must pay regulatory and application fees
and follow various rules promulgated under the Communications Act that regulate,
among other things, political advertising, sponsorship identifications, the
advertisement of contests and lotteries, obscene and indecent broadcasts, and
technical operations, including limits on human exposure to radio frequency
radiation. In addition, the FCC engages in random audits to ensure and verify
licensee compliance with various FCC rules and regulations.
12 INFINITY BROADCASTING CORPORATION
<PAGE> 13
Failure to observe these or other rules and policies can result in the
imposition of various sanctions, including monetary forfeitures, the grant of
"short term" (less than the maximum eight-year term) license renewal, the
imposition of a condition on the renewal of a license or, for particularly
egregious violations, the denial of a license renewal application or the
revocation of a license during the license term.
Possible Changes
Congress and the FCC have under consideration, and in the future may consider
and adopt, new laws, regulations and policies regarding a wide variety of
matters that could affect, directly or indirectly, the operation, ownership and
profitability of the Company's radio stations, result in the loss of audience
share and advertising revenues for the Company's radio stations, and affect the
ability of the Company to acquire additional radio stations or to finance those
acquisitions. For example, as required by the Telecom Act, the FCC has
instituted a proceeding to investigate, among other things, the effect of the
revised ownership rules for radio stations adopted in accordance with the
Telecom Act, and the resulting consolidation in the radio industry, on the
diversity of programming and ownership, and on programming and advertising
competition. The FCC may conclude, as a consequence of this review, to modify
the radio ownership rules.
The Company cannot predict what other matters might be considered in the future
by the FCC or Congress, nor can it judge in advance what impact, if any, the
implementation of any of these proposals or changes might have on its business.
OUTDOOR ADVERTISING
The outdoor advertising industry is subject to extensive governmental regulation
in the United States at the federal, state and local levels. These regulations
include restrictions on the construction, repair, upgrading, height, size and
location of and, in some instances, content of advertising copy being displayed
on outdoor advertising structures. There are also significant legal and
regulatory constraints on the use of outdoor advertising to advertise tobacco
products. In addition, the outdoor advertising industry is subject to certain
foreign governmental regulation.
Federal law, principally the Highway Beautification Act of 1965 (Highway
Beautification Act), encourages states, by the threat of withholding 10% of the
federal appropriations for the construction and improvement of highways within
such states, to implement state legislation to prohibit billboards located
within 660 feet of, or visible from, interstate and primary highways, except in
commercial or industrial areas where off-site signage is permitted provided it
meets spacing and size restrictions. All of the states have implemented
regulations at least as restrictive as the Highway Beautification Act. The
Highway Beautification Act, and the various state statutes implementing it,
requires payment of just compensation whenever governmental authorities require
legally erected and maintained billboards to be removed from areas adjacent to
federally-aided highways.
The states and local jurisdictions have, in some cases, passed additional and
more restrictive regulations on the construction, repair, upgrading, height,
size and location of outdoor advertising structures adjacent to federally-aided
highways and other thoroughfares. In some cases, the construction of new
billboards or the relocation or modification of existing billboards is
prohibited. From time to time, governmental authorities order the removal of
billboards by the exercise of eminent domain. Thus far, the Company believes it
has been able to obtain satisfactory compensation for its structures removed at
the direction of governmental authorities, although there is no assurance that
it will be able to continue to do so in the future.
Outdoor advertising in Canada is subject to regulation at the federal,
provincial and municipal levels. These regulations may prohibit advertising of
certain products on outdoor signs in certain locations. For example, in Ontario,
billboards and posters advertising liquor may not be placed within 200 meters of
a primary or secondary school. Additionally, Canadian federal legislation was
enacted in April 1997, which effectively prohibits substantially all outdoor
tobacco brand advertising, other than event sponsorship, which was given a three
year exemption that expires in October 2000. The tobacco industry continues to
challenge this legislation. In addition, the placement of outdoor billboards is
primarily regulated at the provincial and local level. For example, Quebec
regulates the placement of advertising adjacent to highways, as well as the
language used on outdoor signs.
INFINITY BROADCASTING CORPORATION 13
<PAGE> 14
In Mexico, there are no current regulations which limit the advertising of any
product on outdoor signs. While the Company is not aware of any such legislation
being proposed, there can be no assurance that legislation restricting the
advertising of any specific product on outdoor signs will not be enacted in the
future. In addition, the placement of outdoor billboards is primarily regulated
at the local level. For example, Mexico City regulates the placement of
billboards near historical monuments.
To date, regulations in the Company's markets have not materially adversely
affected its operations. However, the outdoor advertising industry is heavily
regulated and at various times and in various markets can be expected to be
subject to varying degrees of regulation affecting the operation of advertising
displays. Accordingly, although the Company's experience to date is that the
regulatory environment is not prohibitive, no assurance can be given that
existing or future laws or regulations will not materially adversely affect the
Company.
ANTITRUST
An element of the Company's growth strategy involves the acquisition of
additional radio stations and outdoor advertising properties, many of which are
likely to require antitrust review by the Federal Trade Commission (FTC) and the
Department of Justice (DOJ) prior to such acquisition. Following passage of the
Telecom Act, the DOJ has become more aggressive in reviewing proposed
acquisitions of radio stations and radio station networks, particularly in
instances where the proposed acquirer already owns one or more radio station
properties in a particular market and the acquisition involves another radio
station in the same market. In connection with certain recent acquisitions, the
DOJ has obtained consent decrees requiring certain radio station divestitures in
a particular market based on allegations that acquisitions would lead to
unacceptable concentration levels. The DOJ has also been active in reviewing
proposed acquisitions of outdoor advertising properties. There can be no
assurance that the DOJ or the FTC will not seek to bar the Company from
acquiring additional radio stations or other media-related and outdoor
advertising properties in any market where the Company already has a significant
position. In addition, to the extent the Company makes acquisitions of
international broadcasting properties or display faces, the Company will also be
subject to the antitrust laws of foreign jurisdictions.
On December 6, 1999, CBS, Infinity and Outdoor Systems (the Parties) entered
into a final judgment with the United States in connection with Infinity's
acquisition of Outdoor Systems. Under the terms of the final judgment, the
Parties must divest certain outdoor advertising properties, principally in the
New York City area, in accordance with the terms and conditions of the final
judgment. The Company does not view these divestitures as material to its
business.
ENVIRONMENTAL
As the owner, lessee or operator of various real properties and facilities, the
Company is subject to various federal, state and local environmental laws and
regulations. Historically, compliance with such laws and regulations has not had
a material adverse effect on the Company's business. There can be no assurance,
however, that compliance with existing or new environmental laws and regulations
will not require the Company to make significant expenditures in the future.
ITEM 2. PROPERTIES.
The Company's corporate headquarters are located in midtown Manhattan and are
leased from third parties. The types of properties required to support each of
the Company's radio stations include offices, studios, transmitter sites and
antenna sites. A station's studios are generally housed with its offices in
downtown or business districts. The transmitter sites and antenna sites are
generally located so as to provide maximum market coverage. The majority of the
Company's advertising display sites are leased. However, the Company owns
parcels of real property that serve as sites for a few of its outdoor displays.
In addition, the Company possesses perpetual easements on parcels of real
property owned by third parties on which it has placed a few of its outdoor
displays. The Company's transit displays are owned by the transit system or
other franchisors and are managed by the Company pursuant to three to five year
agreements.
The Company's leases are for varying terms ranging from monthly or annual
periods to terms of ten years or longer, and many provide for renewal options.
There is no significant concentration of displays under any one lease or subject
to negotiation with any one landlord.
14 INFINITY BROADCASTING CORPORATION
<PAGE> 15
No one property is material to the Company's overall operations. The Company
believes that its properties are in good condition and suitable for its
operations; however, the Company continually looks for opportunities to upgrade
its properties. The Company owns substantially all of the equipment used in its
radio broadcasting business.
ITEM 3. LEGAL PROCEEDINGS.
The Company is party to various legal proceedings arising in the ordinary course
of business. In the opinion of management of the Company, however, there are no
legal proceedings pending against the Company likely to have a material adverse
effect on the Company. For a description of certain matters before the FCC, see
"Government Regulation."
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
In October 1999, Infinity commenced a consent solicitation seeking approval by
written consent of its stockholders to the issuance of shares of its Class A
common stock in connection with the acquisition of Outdoor Systems. The consent
solicitation closed on November 4, 1999 and resulted in 3,607,993,161 votes for;
133,466 votes against; and 51,023 abstentions recorded in connection with the
consent to this proposal.
INFINITY BROADCASTING CORPORATION 15
<PAGE> 16
EXECUTIVE OFFICERS OF THE REGISTRANT
The name, age and positions held during the past five years by each of the
executive officers of the Company as of March 6, 2000 are listed below. Officers
are elected annually by the Board of Directors and hold office until the earlier
of his or her resignation or removal. There are no family relationships among
any of the directors and the executive officers of the Company.
<TABLE>
<CAPTION>
NAME AND POSITIONS AGE
- -----------------------------------------------------------------
<S> <C>
Mel Karmazin--Chairman, President and Chief Executive
Officer 56
Farid Suleman--Executive Vice President, Chief Financial
Officer and Treasurer 48
William M. Apfelbaum--Chairman and Chief Executive Officer,
TDI Worldwide, Inc. (TDI) 53
Louis J. Briskman--Executive Vice President and General
Counsel 51
Daniel R. Mason--President, Infinity Radio Group, and Vice
President of the Company 48
Fredric G. Reynolds--Executive Vice President 49
- -----------------------------------------------------------------
</TABLE>
Messrs. Karmazin and Suleman provide services to the Company pursuant to the
terms of an intercompany agreement between the Company and CBS. Messrs. Karmazin
and Suleman also render services to CBS.
Mr. Karmazin has been Chairman, President and Chief Executive Officer of the
Company since September 1998. He joined CBS (then Westinghouse Electric
Corporation) in December 1996 as Chairman and Chief Executive Officer of CBS
Radio. In May 1997, he also assumed responsibility for CBS's owned and operated
television stations and became Chairman and Chief Executive Officer of the CBS
Station Group. In April 1998, Mr. Karmazin was elected President and Chief
Operating Officer of CBS, and became its Chief Executive Officer in January
1999. Prior to joining CBS, from 1981 until December 1996, Mr. Karmazin served
as President and Chief Executive Officer of Infinity Media Corporation, formerly
known as Infinity Broadcasting Corporation.
Mr. Suleman has been Executive Vice President, Chief Financial Officer and
Treasurer of the Company since September 1998. He joined CBS (then Westinghouse
Electric Corporation) in December 1996 as Senior Vice President and Chief
Financial Officer of CBS Radio. In June 1997, he became Senior Vice President
and Chief Financial Officer of the CBS Station Group. In August 1998, Mr.
Suleman was elected Senior Vice President, Finance of CBS and was elected
Treasurer of CBS in May 1999. Prior to joining CBS, from 1986 until December
1996, Mr. Suleman served as Executive Vice President, Finance and Chief
Financial Officer of Infinity Media Corporation, formerly known as Infinity
Broadcasting Corporation. Mr. Suleman has also been the Executive Vice
President, Chief Financial Officer and Secretary of Westwood One since February
1994.
Mr. Apfelbaum has been Chairman and Chief Executive Officer of TDI since July
1999. Mr. Apfelbaum served as President and Chief Executive Officer of TDI from
August 1989 to July 1999. Mr. Apfelbaum will leave his position, effective April
30, 2000, and will serve as a consultant to the Company.
Mr. Briskman has been Executive Vice President and General Counsel of the
Company since January 2000. He has also served as Executive Vice President and
General Counsel of CBS since April 1998. Mr. Briskman served as Senior Vice
President and General Counsel of CBS from January 1993 to April 1998.
Mr. Mason has been Vice President of the Company since September 1998. He has
been President of the Infinity Radio Group since November 1995. From 1993 to
1995, Mr. Mason served as President of Group W Radio.
Mr. Reynolds has been Executive Vice President of the Company since January
2000. He has also served as Executive Vice President and Chief Financial Officer
of CBS since March 1994.
16 INFINITY BROADCASTING CORPORATION
<PAGE> 17
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The principal markets for the Company's Class A common stock are identified on
page 1 of this report. The remaining information required by this item appears
on pages 37 and 38 of this report and is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA.
The information required by this item appears on page 45 of this report and is
incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The information required by this item appears on pages 18 through 24 of this
report and is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The information required by this item appears on page 23 of this report and is
incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required by this item, together with the report of KPMG LLP
dated January 25, 2000, except as to Note 17, which is as of March 21, 2000,
appears on pages 26 through 44 of this report and is incorporated herein by
reference.
<TABLE>
<CAPTION>
PAGE
- ------------------------------------------------------------------
<S> <C>
Report of Management 25
Independent Auditors' Report 26
Consolidated Statements of Earnings and Comprehensive Income
for the years ended December 31, 1999, 1998 and 1997 27
Consolidated Balance Sheet as of December 31, 1999 and 1998 28
Consolidated Statement of Cash Flows for the years ended
December 31, 1999, 1998 and 1997 29
Consolidated Statement of Changes in Stockholders' Equity
for the years ended December 31, 1999, 1998 and 1997 30
Notes to the Consolidated Financial Statements 31
Quarterly Financial Data (unaudited) 44
Five-Year Summary of Selected Financial and Statistical Data
(unaudited) 45
- ------------------------------------------------------------------
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
There were no reportable events.
INFINITY BROADCASTING CORPORATION 17
<PAGE> 18
MANAGEMENT'S DISCUSSION AND ANALYSIS
GENERAL
Infinity Broadcasting Corporation (Infinity or the Company) is one of the
largest radio broadcasting and outdoor advertising companies in the United
States, as well as the largest outdoor advertising company in North America. The
Company's operations are principally focused on the out-of-home media business
and are aligned in two business segments, Radio and Outdoor. The Company
characterizes its radio and outdoor advertising businesses as out-of-home
because a majority of radio listening, and virtually all viewing of outdoor
advertising, takes place in automobiles, transit systems, on the street and
other locations outside the consumer's home. The Company's strategy is to
generally acquire out-of-home media properties in the largest markets.
Infinity was incorporated in September 1998. The Company was formed to own and
operate CBS Corporation's (CBS) out-of-home media business, consisting of radio
and outdoor advertising. In December 1998, CBS contributed to the Company, at
book value, its radio and outdoor advertising properties. Also in December 1998,
the Company completed an initial public offering of approximately 155 million
shares of its Class A common stock (the IPO).
The consolidated financial statements present Infinity's operations as if the
Company had been a separate entity for all periods presented. In addition, any
acquisitions of radio and outdoor advertising properties by CBS during these
periods are deemed to have been made by Infinity. The consideration to effect
the acquisitions has been treated as a capital contribution by CBS to Infinity.
These acquisitions include: (a) the November 24, 1995 acquisition of the radio
operations of CBS Inc. for approximately $1.2 billion of cash; (b) the December
31, 1996 acquisition of Infinity Media Corporation, formerly known as Infinity
Broadcasting Corporation (Old Infinity), for approximately $4.7 billion,
consisting of approximately $3.8 billion of CBS's common stock and approximately
$0.9 billion of debt that was repaid immediately prior to the acquisition; and
(c) the June 4, 1998 acquisition of the radio operations of American Radio
Systems Corporation (American Radio), now known as CBS Radio Inc., for
approximately $1.4 billion of cash plus the assumption of approximately $1.3
billion of debt. See Note 3 to the consolidated financial statements.
In December 1999, the Company acquired Outdoor Systems, Inc. (Outdoor Systems),
now known as Infinity Outdoor, Inc., making the Company the largest outdoor
advertising company in North America. The total purchase price of approximately
$8.7 billion was financed by the issuance of approximately 233 million shares of
the Company's Class A common stock, and the assumption of approximately $1.9
billion of debt, at fair value, and stock options to acquire approximately 28
million shares of the Company's Class A common stock. Subsequent to the
acquisition of Outdoor Systems, CBS's equity ownership and voting power were
64.3% and 90.0%, respectively, on a fully diluted basis. On December 6, 1999,
CBS, Infinity and Outdoor Systems (the Parties) entered into a final judgment
with the United States in connection with Infinity's acquisition of Outdoor
Systems. Under the terms of the final judgment, the Parties must divest certain
outdoor advertising properties, principally in the New York City area, in
accordance with the terms and conditions of the final judgment. The Company does
not view these divestitures as material to its business.
On March 3, 2000, the Company entered into an Asset Purchase Agreement to
acquire 18 radio stations from Clear Channel Communications, Inc. for
approximately $1.4 billion. These stations are located in San Diego, Phoenix,
Denver, Cleveland, Cincinnati, Orlando and Greensboro--Winston-Salem. The
purchase allows Infinity to expand into five new Top 50 markets, giving the
Company 180 radio stations overall. The transaction is subject to regulatory
reviews and approvals, and is expected to close by year-end 2000.
On March 21, 2000, the Company announced that it had entered into an agreement
to purchase Giraudy, one of France's largest outdoor advertising companies, for
approximately $425 million. This acquisition expands the Company's position in
Europe. Upon the expected mid-year 2000 completion of the Giraudy acquisition,
TDI Europe, the Company's European outdoor advertising subsidiary, will have
rights to approximately 430,000 display faces.
While the Company does not believe that it needs to make acquisitions to grow
its business, it intends to pursue acquisition opportunities that would enable
it to continue to compete effectively for advertising revenues and to increase
its cash flow growth rate. As an experienced operator of out-of-home media
properties, the Company believes that it will have opportuni-
18 INFINITY BROADCASTING CORPORATION
<PAGE> 19
ties to acquire additional properties and to improve its operating performance.
In general, the Company intends to pursue acquisitions of radio stations
primarily in the 50 largest radio markets in the United States. This strategy
may include acquiring radio stations in markets where the Company currently owns
stations, as well as in markets in which the Company does not currently operate.
The Company will also seek to acquire additional outdoor properties both in the
United States and internationally.
The consolidated historical financial information presented in this report is
not necessarily indicative of the results of operations, financial position, and
cash flows that would have resulted had the Company actually operated as a
separate, stand-alone entity since January 1, 1995.
SOURCES OF REVENUE
The Company derives substantially all of its revenues from sales of advertising,
either on its radio stations or on its outdoor advertising displays. The
Company's revenues are affected primarily by the advertising rates the Company
is able to charge. These rates are in large part based on conditions in the
economy, conditions in each market, and on the Company's ability to attract
audiences in the demographic groups targeted by its advertisers. The ability to
attract radio audiences is measured principally by independent national rating
services.
COMPONENTS OF EXPENSES
The primary operating expenses involved in owning and operating radio stations
and outdoor advertising facilities are employee costs, programming, solicitation
of advertising, promotion, franchise payments and lease costs. The Company's net
earnings also reflect substantial amortization of broadcast licenses and
goodwill as well as income taxes. In addition, the Company's effective tax rate
exceeds the federal statutory rate primarily because of the non-deductible
goodwill amortization resulting from recent business acquisitions.
USE OF EBITDA
Management believes that earnings before interest, taxes, minority interest,
depreciation and amortization (EBITDA) is an appropriate measure for evaluating
the operating performance of the Company's business. EBITDA eliminates the
effect of depreciation and amortization of tangible and intangible assets, most
of which were acquired in acquisitions accounted for under the purchase method
of accounting, including CBS Inc.'s radio operations, Old Infinity, American
Radio and Outdoor Systems. The exclusion of amortization expense eliminates
variations in results among stations or other entities caused by the timing of
acquisitions. More recent acquisitions reflect higher amortization expense due
to increasing prices associated with out-of-home properties. However, EBITDA
should be considered in addition to, not as a substitute for, operating
earnings, net earnings, cash flows and other measures of financial performance
reported in accordance with generally accepted accounting principles. As EBITDA
is not a measure of performance calculated in accordance with generally accepted
accounting principles, this measure may not be comparable to similarly titled
measures employed by other companies. EBITDA differs from cash flows from
operating activities primarily because it does not consider changes in assets
and liabilities from period to period, and it does not include cash flows for
interest and taxes.
RESULTS OF OPERATIONS
Where appropriate, the discussion below provides a comparison of actual results
with pro forma results. For the 1999 and 1998 comparisons, pro forma results
exclude the acquisition of Outdoor Systems and were determined as if the
acquisition of American Radio and related divestitures and exchanges had
occurred on January 1, 1998.
YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998
The Company's net revenues for 1999 were $2,449 million compared to $1,893
million for 1998, an increase of 29%. Radio net revenues for 1999 were $1,835
million compared to $1,459 million for 1998, an increase of approximately 26%.
This increase was due to the strong performance of the stations and the
inclusion of the operations of American Radio in the Company's results
subsequent to its June 1998 acquisition. Outdoor net revenues for 1999 were $614
million compared to $434 million for 1998, an increase of approximately 41%.
Driving this increase was the strong performance of the Company's outdoor
advertising business and the acquisition of Outdoor Systems in December 1999. On
a pro forma basis, the Company's net revenues for 1999 compared to 1998
increased approximately 17%.
The Company's operating expenses excluding depreciation and amortization expense
for 1999 were $1,383 million compared to $1,101 million for 1998,
INFINITY BROADCASTING CORPORATION 19
<PAGE> 20
an increase of 26%. Radio operating expenses for 1999 were $917 million compared
to $756 million for 1998, an increase of approximately 21%. Outdoor operating
expenses for 1999 were $454 million compared to $338 million for 1998, an
increase of approximately 34%. These increases were due to the June 1998
acquisition of American Radio, the December 1999 acquisition of Outdoor Systems
and expenses associated with higher revenues. On a pro forma basis, the
Company's operating expenses for 1999 compared to 1998 increased approximately
13%. Operating expenses on a pro forma basis did not increase in the same
proportion as the increase in revenues because a substantial portion of the
Company's costs are fixed. The Company's corporate expenses for 1999 were $12
million compared to $7 million for the prior year, an increase of $5 million,
mainly due to higher compensation expense.
The Company's depreciation and amortization expense for 1999 was $325 million
compared to $250 million for 1998, an increase of 30%. Radio depreciation and
amortization expense for 1999 was $267 million compared to $227 million for
1998, an increase of approximately 18%. The increase primarily represents
additional depreciation and amortization expense resulting from the June 1998
acquisition of American Radio. Outdoor depreciation and amortization expense for
1999 was $58 million compared to $23 million for 1998, an increase of
approximately 157% resulting primarily from the December 1999 acquisition of
Outdoor Systems. These costs will continue to increase due to the recent
acquisition of Outdoor Systems.
The Company's operating earnings for 1999 were $741 million compared to $542
million for 1998, an increase of 37%. Radio operating earnings for 1999 were
$651 million compared to $476 million for 1998, an increase of approximately
37%. Outdoor operating earnings for 1999 were $102 million compared to $73
million for 1998, an increase of approximately 41%. These increases were
primarily attributable to higher revenues at the existing radio and outdoor
operations, as well as the June 1998 acquisition of American Radio and the
December 1999 acquisition of Outdoor Systems. On a pro forma basis, the
Company's operating earnings for 1999 compared to 1998 increased approximately
34%.
The Company's EBITDA for 1999 was $1,067 million compared to $798 million for
1998, an increase of 34%. Radio EBITDA for 1999 was $918 million compared to
$709 million for 1998, an increase of approximately 29%. Outdoor EBITDA for 1999
was $161 million compared to $96 million for 1998, an increase of approximately
67%. On a pro forma basis, the Company's EBITDA for 1999 compared to 1998
increased approximately 23%.
Net interest expense for 1999 was $16 million compared to $64 million for 1998.
The reduction in net interest expense resulted primarily from the December 1998
repayment of the $2.5 billion note due CBS that was created in connection with a
dividend from Old Infinity as well as the reduction in the debt assumed in the
American Radio acquisition in June 1998. The decrease in net interest expense
was offset by additional interest expense associated with debt assumed in the
December 1999 acquisition of Outdoor Systems. As a result of the debt assumed in
connection with the acquisition of Outdoor Systems, the Company expects an
increase in future interest expense. See Note 9 to the consolidated financial
statements.
Income taxes for 1999 were $349 million compared to $249 million for 1998. The
effective tax rate was 48% for 1999 compared to 51% for the prior year.
Net earnings for 1999 totaled $377 million, or $0.44 per basic share, compared
to $235 million, or $0.33 per basic share, for 1998, an increase of $142
million, or $0.11 per basic share.
YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997
The Company's net revenues for 1998 were $1,893 million compared to $1,480
million for 1997, an increase of 28%. Radio net revenues for 1998 were $1,459
million compared to $1,104 million for 1997, an increase of approximately 32%.
Driving this increase was the continued strong performance of the stations and
the inclusion of the operations of American Radio in the Company's results
subsequent to its June 1998 acquisition. Outdoor net revenues for 1998 were $434
million compared to $376 million for 1997, an increase of approximately 15%.
Driving this increase was the strong performance of the Company's outdoor
advertising business. On a pro forma basis, the Company's net revenues for 1998
compared to 1997 increased approximately 12%.
The Company's operating expenses excluding depreciation and amortization expense
for 1998 were $1,101 million compared to $911 million for 1997, an increase of
21%. Radio operating expenses for 1998 were $756 million compared to $600
million for 1997, an increase of approximately 26%. These increases were due to
Radio's June 1998 acquisition of American Radio and expenses associated with
higher
20 INFINITY BROADCASTING CORPORATION
<PAGE> 21
revenues. Outdoor operating expenses for 1998 were $338 million compared to $303
million for 1997, an increase of approximately 12%. The Company's corporate
expenses for 1998 were $7 million compared to $8 million for the prior year, a
decrease of $1 million. This improvement was driven by the efforts to control
overhead costs, including transaction processing and information systems costs.
On a pro forma basis, the Company's operating expenses for 1998 compared to 1997
increased approximately 7%. Operating expenses on a pro forma basis did not
increase in the same proportion as the increase in revenues because a
substantial portion of the Company's costs are fixed.
The Company's depreciation and amortization expense for 1998 was $250 million
compared to $197 million for 1997, an increase of 27%. Radio depreciation and
amortization expense for 1998 was $227 million compared to $176 million for
1997, an increase of approximately 29%. The increase primarily represents
additional depreciation and amortization expense resulting from the June 1998
acquisition of American Radio. Outdoor depreciation and amortization expense for
1998 was $23 million compared to $21 million for 1997, an increase of
approximately 9%.
The Company's operating earnings for 1998 were $542 million compared to $372
million for 1997, an increase of 46%. Radio operating earnings for 1998 were
$476 million compared to $328 million for 1997, an increase of approximately
45%. Outdoor operating earnings for 1998 were $73 million compared to $52
million for 1997, an increase of approximately 39%. These increases were
primarily attributable to higher revenues at the existing radio and outdoor
operations, as well as the June 1998 acquisition of American Radio. On a pro
forma basis, the Company's operating earnings for 1998 compared to 1997
increased approximately 36%.
The Company's EBITDA for 1998 was $798 million compared to $575 million for
1997, an increase of 39%. Radio EBITDA for 1998 was $709 million compared to
$510 million for 1997, an increase of approximately 39%. Outdoor EBITDA for 1998
was $96 million compared to $73 million for 1997, an increase of approximately
31%. On a pro forma basis, the Company's EBITDA for 1998 compared to 1997
increased approximately 21%.
Net interest expense for 1998 was $64 million compared to $4 million for 1997.
Net interest expense for 1998 resulted from debt assumed in the American Radio
acquisition and interest on a $2.5 billion note due CBS that was created in
connection with a dividend from Old Infinity to CBS and repaid in December 1998
with the proceeds from the stock offering (see Note 9 to the consolidated
financial statements). Net interest expense for 1997 primarily represents
interest on $149 million of notes issued by Old Infinity prior to its
acquisition, which were redeemed by the Company in March 1997.
Income taxes for 1998 were $249 million compared to $197 million for 1997. The
effective tax rate was 51% for 1998 compared to 53% for the prior year.
Net earnings for 1998 totaled $235 million, or $0.33 per basic share, compared
to $178 million, or $0.25 per basic share, for 1997, an increase of $57 million,
or $0.08 per basic share.
NEW PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 (SFAS 133), "Accounting for Derivative
Instruments and Hedging Activities." In June 1999, SFAS 133 was amended by SFAS
137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of
Effective Date of FASB Statement No. 133," which delays the effective date for
adoption of SFAS No. 133 for one year, to fiscal years beginning after June 15,
2000. SFAS No. 133 standardizes the accounting for derivative instruments,
including certain derivative instruments embedded in other contracts, by
requiring that an entity recognize those items as assets or liabilities in the
statement of financial position and measure them at fair value. The Company's
derivative and hedging transactions are not material and it is anticipated that
adoption of this standard will not materially impact our financial results when
adopted January 1, 2001.
LIQUIDITY AND CAPITAL RESOURCES
In general, the Company's operations generate cash substantially in excess of
that required for recurring operations and capital expenditures. At December 31,
1999, the Company had approximately $1.9 billion of long-term debt outstanding,
substantially all of which was assumed in the December 1999 acquisition of
Outdoor Systems and the June 1998 acquisition of American Radio. The Company's
equity at year-end 1999 totaled approximately $15.6 billion. As a result,
management expects that the Company will have sufficient liquidity to meet its
future business needs. Sources of liquidity generally available to the Company
include cash from operations, cash and cash equivalents, borrowings, and
issuance of equity securities.
INFINITY BROADCASTING CORPORATION 21
<PAGE> 22
In December 1999, the Company acquired Outdoor Systems for approximately $8.7
billion. The purchase price included the issuance of approximately 233 million
shares of the Company's Class A common stock, and the assumption of
approximately $1.9 billion of debt, at fair value, and stock options to acquire
approximately 28 million shares of the Company's Class A common stock.
In December 1998, the Company completed its IPO, resulting in gross proceeds to
the Company of approximately $3.2 billion. The Company used the proceeds to
prepay a $2.5 billion intercompany note to CBS, to purchase some of its
outstanding debt, and for general corporate purposes.
OPERATING ACTIVITIES
The Company's operating activities provided $652 million of cash in 1999
compared to $442 million in 1998 and $310 million in 1997. The year to year
increases relate to improved operating results and cash provided from the
operations of American Radio, purchased in June 1998, and Outdoor Systems,
purchased in December 1999.
INVESTING ACTIVITIES
The Company's investing activities used $155 million of cash in 1999 as a result
of the net impact of acquisitions, divestitures and capital expenditures. During
1998, the Company's investing activities used approximately $1.4 billion of
cash, primarily for the June 1998 acquisition of American Radio, compared to $22
million of cash provided in 1997.
The Company's capital expenditures totaled $44 million in 1999 compared to $32
million in 1998 and $15 million in 1997. The Company's business does not require
substantial investment of capital. The increase in capital expenditures during
1999 and 1998 was due to the Company's June 1998 acquisition of American Radio
and December 1999 acquisition of Outdoor Systems. As a result of the Outdoor
Systems acquisition, the Company expects capital expenditures to increase in
future periods.
FINANCING ACTIVITIES
Cash used by financing activities totaled $923 million in 1999 compared to cash
provided from financing activities of approximately $1.4 billion in 1998. Cash
used for financing activities in 1999 related to the Company's repurchase of its
Class A common stock and the purchase of its outstanding debt.
During 1999, the Company, pursuant to a $500 million stock buyback
authorization, acquired approximately 17.6 million shares of its Class A common
stock at a cost of $485 million. In January 2000, the Company expanded its stock
buyback authorization by an additional $500 million. As of March 20, 2000, the
Company has purchased approximately 4.7 million additional shares at a cost of
$156 million.
The Company's revolving credit agreement provides for $1.5 billion of available
borrowings. Infinity's borrowings are guaranteed by CBS. Borrowing availability
under the credit agreement is subject to compliance with certain covenants,
including a maximum leverage ratio and a minimum interest coverage ratio.
In December 1999, the Company assumed approximately $1.9 billion in debt as part
of the Outdoor Systems acquisition, comprised of revolving credit debt of
approximately $1.1 billion and Senior Subordinated Notes (8 7/8% Notes and
9 3/8% Notes) of approximately $0.8 billion. At December 31, 1999, the Company
had borrowings under the credit facility of $988 million, of which $38 million
were short-term. These borrowings were principally from the refinancing of debt
assumed in the Outdoor Systems acquisition.
During 1999, the Company repurchased at market rates, certain outstanding
8 7/8%, 9% and 9 3/8% Senior Subordinated Notes, 9 3/4% Senior Notes and 11 3/8%
Subordinated Exchange Debentures with an aggregate face value of $272 million,
at a cost of $294 million. Additionally during 1999, the Company redeemed the
remaining 7% Convertible Subordinated Debentures with a face value of $76
million, at a cost of $79 million.
As previously discussed, on March 3, 2000, the Company entered into an Asset
Purchase Agreement to acquire 18 radio stations from Clear Channel
Communications, Inc. for approximately $1.4 billion. On March 21, 2000, the
Company announced that it had entered into an agreement to purchase Giraudy, one
of France's largest outdoor advertising companies, for approximately $425
million. The Company plans to finance these acquisitions with excess cash from
operations and by executing a credit facility which will increase its borrowing
availability by $2.0 billion.
Cash provided by financing activities totaled approximately $1.4 billion in 1998
compared to cash used of $329 million in 1997. The Company's IPO generated gross
proceeds of approximately $3.2 billion. Offsetting this amount was $2.5 billion
of cash used to
22 INFINITY BROADCASTING CORPORATION
<PAGE> 23
prepay the intercompany note to CBS. During the year, CBS contributed
approximately $1.7 billion of cash to Infinity, of which approximately $1.4
billion was in connection with the American Radio acquisition. Also during 1998,
the Company repaid $784 million of debt, including $567 million for the
revolving credit debt assumed in the American Radio acquisition. Cash used by
financing activities of $329 million during 1997 reflects the repayment of Old
Infinity debt as well as $180 million of net payments to CBS as the Company
generated cash earnings.
Generally, the Company's excess cash can be distributed to shareholders,
including CBS, through dividend declarations. However, the Company does not
anticipate paying any dividends on its common stock in the near term.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risk from changes in interest rates and foreign
exchange rates. To manage this exposure, the Company periodically enters into
interest rate and currency exchange agreements. The Company does not use
financial instruments for trading purposes and the Company is not a party to any
leveraged derivatives.
At December 31, 1999, the Company's long-term debt was approximately $1.9
billion, of which $888 million was fixed-rate debt. The fair value of the
Company's fixed-rate debt was approximately $978 million. A 1% decrease in
interest rates would increase the fair value of the Company's fixed-rate debt by
approximately $30 million. Based on the balance of variable-rate debt at
December 31, 1999, a 1% increase in interest rates would increase annual
interest expense by approximately $10 million. At December 31, 1998, the
Company's debt was $525 million, essentially all of which consisted of
fixed-rate obligations. The fair value of the Company's debt at December 31,
1998 was approximately $527 million.
At December 31, 1999, the Company had variable-to-fixed interest rate swap
contracts outstanding with a notional value of $775 million. The swap contracts
expire within three months. The fair value of these swaps at December 31, 1999,
was not material. At December 31, 1998, no interest rate swap contracts were
outstanding.
The Company continually monitors its economic exposure to changes in foreign
exchange rates and enters into foreign exchange forward contracts to hedge its
transaction exposure where appropriate. Foreign exchange forward contracts are
used to manage certain of these risks, specifically with respect to the Canadian
dollar. These contracts generally mature in less than six months. At December
31, 1999 and 1998, the notional amount of forward contracts was $91 million and
$0 million, respectively. A 10% change in Canadian dollar exchange rates in the
Company's portfolio would not be material.
The Company's credit exposure under these agreements is limited to the cost of
replacing an agreement in the event of non-performance by the Company's
counterparty. To minimize this risk, the Company selects high credit quality
counterparties.
For further information regarding our debt and financial instruments, see Notes
9 and 15 to the consolidated financial statements.
YEAR 2000
The Company has not experienced any significant disruptions to its financial or
operating activities caused by the failure of its computerized systems resulting
from Year 2000 issues. In addressing this matter, the Company had undertaken
efforts to identify, modify or replace and then test systems to ensure Year 2000
compliance by December 31, 1999. Total expenditures of $5 million were necessary
to achieve Year 2000 compliance, of which $3 million was incurred in 1999 and $2
million was incurred through December 31, 1998. CBS has incurred an additional
$2 million on behalf of the Company to ensure compliance of the management
information systems infrastructure. Approximately 60% of these expenditures
related to the replacement of existing systems. These costs were funded through
the Company's cash flows from operations. All system modification costs were
expensed as incurred. The Year 2000 effort also included communications with all
significant third party suppliers and customers to determine the extent to which
the Company's systems were vulnerable to those parties' failures to reach Year
2000 compliance. There has been no significant loss of revenue, unanticipated
costs or service interruptions.
INFORMATION RELATING TO FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K, including Item 7--"Management's Discussion and
Analysis of Financial Condition and Results of Operations," contains certain
forward-looking statements within the meaning of Section 27A of the Securities
Act of
INFINITY BROADCASTING CORPORATION 23
<PAGE> 24
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, that are not historical facts but rather reflect the Company's current
expectations concerning future results and events. The words "believes,"
"expects," "intends," "plans," "anticipates," "likely," "will," and similar
expressions identify such forward-looking statements. These forward-looking
statements are subject to risks, uncertainties, and other factors, some of which
are beyond the Company's control, that could cause actual results to differ
materially from those forecast or anticipated in such forward-looking
statements.
Such risks, uncertainties, and factors include, but are not limited to, the
impact of changes in national, regional and local economies; successful
integration of any acquired properties; the Company's ability to develop and/or
acquire radio on-air talent and programming and to attract and retain
advertisers; the impact of significant competition from other radio stations and
programming alternatives such as broadcast television, newspapers, magazines,
cable television, the Internet, direct mail, and the impact of new technologies;
changes in FCC regulations; increased governmental regulation of the location,
size or content of outdoor advertising; and such other competitive and business
risks as from time to time may be detailed in the Company's Securities and
Exchange Commission reports.
Readers are cautioned not to place undue reliance on these forward-looking
statements which reflect management's view only as of the date of this Annual
Report. The Company undertakes no obligation to publicly release the result of
any revisions to these forward-looking statements which may be made to reflect
events or circumstances after the date of this report or to reflect the
occurrence of unanticipated events.
24 INFINITY BROADCASTING CORPORATION
<PAGE> 25
REPORT OF MANAGEMENT
The Company has prepared the consolidated financial statements and related
financial information included in this report. Management has the primary
responsibility for the consolidated financial statements and other financial
information and for ascertaining that the data fairly reflect the financial
position, results of operations, and cash flows of the Company. The consolidated
financial statements were prepared in accordance with generally accepted
accounting principles appropriate in the circumstances, and necessarily include
amounts that are based on best estimates and judgments with appropriate
consideration given to materiality. Financial information included elsewhere in
this report is presented on a basis consistent with the consolidated financial
statements.
The Company maintains a system of internal accounting controls, supported by
adequate documentation, to provide reasonable assurance that assets are
safeguarded and that the books and records reflect the authorized transactions
of the Company. Limitations exist in any system of internal accounting controls
based on the recognition that the cost of the system should not exceed the
benefits derived. The Company believes its system of internal accounting
controls appropriately balances the cost/benefit relationship.
The independent auditors provide an objective assessment of the degree to which
management meets its responsibility for fair financial reporting. They regularly
evaluate elements of the internal control structure and perform such tests and
procedures as they deem necessary to express an opinion on the fairness of the
financial statements.
The Board of Directors pursues its responsibility for the Company's financial
statements through its Audit Committee composed of directors who are not
officers or employees of the Company. The Audit Committee meets regularly with
the independent auditors, management, and the corporate auditors. The
independent auditors and the corporate auditors have direct access to the Audit
Committee, with and without the presence of management representatives, to
discuss the scope and results of their audit work and their comments on the
adequacy of internal accounting controls and the quality of financial reporting.
We believe that the Company's policies and procedures, including its system of
internal accounting controls, provide reasonable assurance that the financial
statements are prepared in accordance with the applicable securities laws and
with a corresponding standard of business conduct.
INFINITY BROADCASTING CORPORATION 25
<PAGE> 26
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF INFINITY BROADCASTING CORPORATION:
We have audited the accompanying consolidated balance sheet of Infinity
Broadcasting Corporation and subsidiaries as of December 31, 1999 and 1998, and
the related consolidated statements of earnings and comprehensive income, cash
flows, and changes in stockholders' equity for each of the years in the
three-year period ended December 31, 1999. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Infinity
Broadcasting Corporation and subsidiaries as of December 31, 1999 and 1998, and
the results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 1999, in conformity with generally
accepted accounting principles.
/s/ KPMG LLP
KPMG LLP
New York, New York
January 25, 2000, except as to
Note 17, which is as of March 21, 2000
26 INFINITY BROADCASTING CORPORATION
<PAGE> 27
CONSOLIDATED STATEMENTS OF EARNINGS AND
COMPREHENSIVE INCOME
(in thousands except earnings per-share amounts)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999 1998 1997
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Total revenues $2,790,571 $2,162,063 $1,691,517
Less agency commissions (341,439) (268,959) (211,426)
- ---------------------------------------------------------------------------------------------------
Net revenues 2,449,132 1,893,104 1,480,091
- ---------------------------------------------------------------------------------------------------
Operating expenses excluding depreciation and
amortization 1,383,010 1,101,562 910,682
Depreciation and amortization 324,956 249,652 197,135
- ---------------------------------------------------------------------------------------------------
Total operating expenses 1,707,966 1,351,214 1,107,817
- ---------------------------------------------------------------------------------------------------
Operating earnings 741,166 541,890 372,274
Interest expense, net (15,540) (63,773) (3,645)
Other income, net 500 6,324 5,610
- ---------------------------------------------------------------------------------------------------
Earnings before income taxes and minority interest 726,126 484,441 374,239
Income taxes (349,146) (248,776) (196,978)
Minority interest in (income) loss of consolidated
subsidiaries (16) (859) 368
- ---------------------------------------------------------------------------------------------------
Net earnings $ 376,964 $ 234,806 $ 177,629
- ---------------------------------------------------------------------------------------------------
Basic earnings per common share $ 0.44 $ 0.33 $ 0.25
Diluted earnings per common share $ 0.43 $ 0.33 $ 0.25
- ---------------------------------------------------------------------------------------------------
Weighed average common shares outstanding --
Basic 866,553 706,379 700,000
Diluted 867,972 706,379 700,000
- ---------------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME:
Net earnings $ 376,964 $ 234,806 $ 177,629
Foreign currency translation adjustment (13,300) -- --
- ---------------------------------------------------------------------------------------------------
Comprehensive income $ 363,664 $ 234,806 $ 177,629
- ---------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to the Consolidated Financial Statements.
INFINITY BROADCASTING CORPORATION 27
<PAGE> 28
CONSOLIDATED BALANCE SHEET
(in thousands except per-share amounts)
<TABLE>
<CAPTION>
DECEMBER 31, 1999 1998
- ------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Cash and cash equivalents $ 71,636 $ 497,701
Receivables (net of allowance for doubtful accounts of
$48,868 and $27,463, respectively) 748,622 460,966
Prepaid and other current assets 108,846 39,206
Deferred income taxes 44,017 19,641
- ------------------------------------------------------------------------------------------
Total current assets 973,121 1,017,514
Property and equipment, net 2,091,735 236,584
Intangible assets, net 15,927,693 9,359,170
Other assets 334,906 184,975
- ------------------------------------------------------------------------------------------
Total assets $19,327,455 $10,798,243
- ------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 314,014 $ 176,430
Accrued compensation 69,170 39,750
Accrued interest 17,112 12,113
Accrued income taxes 12,192 3,000
Short-term debt 38,000 --
Other current liabilities 943 647
- ------------------------------------------------------------------------------------------
Total current liabilities 451,431 231,940
Long-term debt 1,906,348 523,960
Deferred income taxes 1,313,398 1,156,244
Other noncurrent liabilities 65,236 28,072
- ------------------------------------------------------------------------------------------
Total liabilities 3,736,413 1,940,216
- ------------------------------------------------------------------------------------------
Contingent liabilities and other commitments
- ------------------------------------------------------------------------------------------
Stockholders' equity:
Preferred stock, par value $0.01 (50,000 shares
authorized, no shares issued) -- --
Class A common stock, par value $0.01 (2,000,000 shares
authorized, 390,709 and 155,250 shares issued at
December 31, 1999 and 1998, respectively) 3,907 1,553
Class B common stock, par value $0.01 (2,000,000 shares
authorized, 700,000 shares issued at December 31, 1999
and 1998, respectively) 7,000 7,000
Capital in excess of par value 15,657,734 8,805,448
Accumulated earnings 420,990 44,026
Accumulated other comprehensive loss (13,300) --
- ------------------------------------------------------------------------------------------
16,076,331 8,858,027
Less: Common stock held in treasury, at cost (17,636
shares and zero shares held in treasury at December
31, 1999 and 1998, respectively) (485,289) --
- ------------------------------------------------------------------------------------------
Total stockholders' equity 15,591,042 8,858,027
- ------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $19,327,455 $10,798,243
- ------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to the Consolidated Financial Statements.
28 INFINITY BROADCASTING CORPORATION
<PAGE> 29
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999 1998 1997
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 376,964 $ 234,806 $ 177,629
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 324,956 249,652 197,135
Deferred taxes 15,122 12,156 13,883
Gain on sales of assets, net -- (3,703) (3,584)
Other noncash items (6,241) (6,970) --
Changes in assets and liabilities, net of acquisitions
and dispositions:
Increase in accounts receivable (94,068) (37,695) (35,382)
(Increase) decrease in other assets (30,861) 14,120 (14,924)
Increase (decrease) in accounts payable and accrued
expenses 57,721 (7,633) (11,459)
(Decrease) increase in accrued interest (19,279) 5,210 (3,858)
Increase in accrued income taxes payable 30,511 3,000 --
Decrease in other liabilities (2,937) (20,940) (9,176)
- --------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 651,888 442,003 310,264
- --------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from dispositions 58,750 138,731 87,475
Business acquisitions and investments (169,364) (1,509,634) (50,341)
Capital expenditures (44,076) (31,717) (15,264)
- --------------------------------------------------------------------------------------------------------
Net cash (used for) provided by investing activities (154,690) (1,402,620) 21,870
- --------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Receipts from (payments to) CBS, net -- 1,698,429 (179,563)
Repayment of CBS note -- (2,500,000) --
Dividends paid to CBS -- (25,200) --
Net proceeds from issuance of common stock -- 3,046,652 --
Net increase in short-term debt 38,000 -- --
Bank revolver borrowings 963,000 -- --
Bank revolver payments (13,000) -- --
Outdoor Systems bank revolver payments (1,054,162) -- --
Payment of notes and convertible debentures (373,007) (784,085) (149,931)
Treasury stock repurchase (485,289) -- --
Proceeds from exercise of stock options 1,195 -- --
- --------------------------------------------------------------------------------------------------------
Net cash (used for) provided by financing activities (923,263) 1,435,796 (329,494)
- --------------------------------------------------------------------------------------------------------
(Decrease) increase in cash and cash equivalents (426,065) 475,179 2,640
Cash and cash equivalents at beginning of year 497,701 22,522 19,882
- --------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 71,636 $ 497,701 $ 22,522
- --------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest $ 57,266 $ 67,974 $ 9,058
Income taxes 305,756 233,905 163,720
- --------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to the Consolidated Financial Statements.
INFINITY BROADCASTING CORPORATION 29
<PAGE> 30
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(in thousands)
<TABLE>
<CAPTION>
CLASS A CLASS B ACCUMULATED
PREFERRED STOCK COMMON STOCK COMMON STOCK CAPITAL IN OTHER
--------------- ---------------- ---------------- EXCESS OF ACCUMULATED COMPREHENSIVE
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT PAR VALUE EARNINGS LOSS
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1996 -- $ -- -- $ -- -- $ -- $ 6,216,175 $202,526 $ --
Net earnings 177,629
Contribution to prepay
long-term debt 149,931
Cash from operations returned
to CBS (329,493)
Other intercompany activity,
net (19,380)
- --------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1997 -- $ -- -- $ -- -- $ -- $ 6,017,233 $380,155 $ --
Net earnings 234,806
Contribution for American
Radio acquisition 1,400,000
Contribution to repay
American Radio credit
facility 566,576
Contribution to repay
American Radio long-term
debt 71,096
Dividends paid to CBS (1,954,265) (570,935)
Issuance of Class A
common stock 155,250 1,553 3,045,099
Issuance of Class B
common stock 700,000 7,000 (7,000)
Cash from operations returned
to CBS (335,680)
Other intercompany activity,
net 2,389
- --------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1998 -- $ -- 155,250 $1,553 700,000 $7,000 $ 8,805,448 $ 44,026 $ --
Net earnings 376,964
Stock issued in conjunction
with acquisition 234,735 2,347 6,770,511
Purchase of treasury stock
Exercise of options, net of
related tax benefit 724 7 12,571
Gain on equity method
investment, net of related
tax benefit 69,204
Comprehensive income:
Foreign currency translation
adjustment (13,300)
- --------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1999 -- $ -- 390,709 $3,907 700,000 $7,000 $15,657,734 $420,990 $(13,300)
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
COMMON TOTAL
STOCK HELD STOCKHOLDERS'
IN TREASURY EQUITY
<S> <C> <C>
Balance at December 31, 1996 $ -- $ 6,418,701
Net earnings 177,629
Contribution to prepay
long-term debt 149,931
Cash from operations returned
to CBS (329,493)
Other intercompany activity,
net (19,380)
- -----------------------------------------------------------------
Balance at December 31, 1997 $ -- $ 6,397,388
Net earnings 234,806
Contribution for American
Radio acquisition 1,400,000
Contribution to repay
American Radio credit
facility 566,576
Contribution to repay
American Radio long-term
debt 71,096
Dividends paid to CBS (2,525,200)
Issuance of Class A
common stock 3,046,652
Issuance of Class B
common stock --
Cash from operations returned
to CBS (335,680)
Other intercompany activity,
net 2,389
- -----------------------------------------------------------------
Balance at December 31, 1998 $ -- $ 8,858,027
Net earnings 376,964
Stock issued in conjunction
with acquisition 6,772,858
Purchase of treasury stock (485,289) (485,289)
Exercise of options, net of
related tax benefit 12,578
Gain on equity method
investment, net of related
tax benefit 69,204
Comprehensive income:
Foreign currency translation
adjustment (13,300)
- -----------------------------------------------------------------
Balance at December 31, 1999 $(485,289) $15,591,042
- -----------------------------------------------------------------
</TABLE>
See accompanying Notes to the Consolidated Financial Statements.
30 INFINITY BROADCASTING CORPORATION
<PAGE> 31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: BASIS OF PRESENTATION
Infinity Broadcasting Corporation (Infinity or the Company) was incorporated in
September 1998. The Company was formed to own and operate CBS Corporation's
(CBS) out-of-home media business, consisting of radio and outdoor advertising.
In December 1998, CBS contributed to the Company, at book value, its radio and
outdoor advertising properties and related assets. The Company completed an
initial public offering of approximately 155 million shares of its Class A
common stock in December 1998 (the IPO).
The consolidated financial statements have been prepared assuming that the
Company existed as a stand-alone entity during all periods presented. Any
acquisitions of radio or outdoor advertising properties by CBS during this
period have been presented as the Company's transactions, and any consideration
to effect these acquisitions has been treated as a capital contribution by CBS
to the Company. These acquisitions include: (a) the radio operations of CBS Inc.
in November 1995; (b) Infinity Media Corporation (formerly Infinity Broadcasting
Corporation) and subsidiaries, which include TDI Worldwide Inc. (TDI),
(collectively, Old Infinity) on December 31, 1996; and (c) the radio operations
of American Radio Systems Corporation (American Radio), now known as CBS Radio
Inc., on June 4, 1998. The operating results of the acquired entities have been
included in the Company's Consolidated Statements of Earnings and Comprehensive
Income from their respective dates of acquisition. See Note 3 to the
consolidated financial statements.
The financial information included herein may not necessarily reflect the
consolidated results of operations, financial position, changes in stockholders'
equity, and cash flows of the Company in the future or what they would have been
had the Company been a separate, stand-alone entity during the periods
presented.
Certain previously reported amounts have been reclassified to conform to the
1999 presentation.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the net assets and entities
described in Note 1 to the consolidated financial statements. All material
intercompany accounts and transactions have been eliminated. Equity method
investments are stated at their cost of acquisition adjusted for our equity in
undistributed net income (loss) since the date of acquisition.
REVENUE RECOGNITION
Revenues are primarily derived from the sale of radio advertising spots and
outdoor advertising space. Radio advertising revenue is recognized when the
spots are broadcast. Revenues from outdoor advertising space are recognized
proportionately over the contract term.
STOCK-BASED COMPENSATION
The Company measures compensation cost for stock-based awards, including awards
by CBS, using the intrinsic value based method of accounting prescribed by
Accounting Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued
to Employees." The pro forma net earnings and pro forma earnings per share
disclosures using the fair value based method defined in Statement of Financial
Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation,"
and other related information are provided in Note 13 to the consolidated
financial statements.
PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost and depreciated over their estimated
useful lives. Depreciation is generally computed on the straight-line method
based on useful lives of 27.5 to 40 years for buildings, 20 years for land
improvements, 5 to 20 years for advertising structures and 3 to 12 years for
equipment. Leasehold improvements are amortized over the shorter of the useful
life or the term of the lease. Expenditures for additions and improvements are
capitalized, and costs for repairs and maintenance are charged to operations as
incurred.
CASH AND CASH EQUIVALENTS
The Company considers all investment securities with a maturity of three months
or less when acquired to be cash equivalents. All cash and temporary investments
are placed with high credit quality financial institutions, and the amount of
credit exposure to any one financial institution is limited.
INFINITY BROADCASTING CORPORATION 31
<PAGE> 32
INTANGIBLE ASSETS
Intangible assets primarily include goodwill, Federal Communications Commission
(FCC) licenses, which are limited as to availability and have historically
appreciated in value with the passage of time, and franchise agreements, which
include transit franchise and other land rights. Goodwill represents the excess
of the purchase price of acquired businesses over the estimated fair value of
tangible and identifiable intangible net assets acquired. FCC licenses and
goodwill are amortized using the straight-line method over 20 to 40 years.
Franchise agreements are amortized over the anticipated life of the contract,
which is between 20 to 25 years. Subsequent to the acquisition of an intangible
or other long-lived asset, the Company evaluates whether later events and
circumstances indicate the remaining estimated useful life of that asset may
warrant revision or that the remaining carrying value of such asset may not be
recoverable. When factors indicate that an intangible or other long-lived asset
should be evaluated for possible impairment, the Company uses an estimate of the
related asset's undiscounted future cash flows over the remaining life of that
asset in measuring recoverability. If such an analysis indicates that impairment
has in fact occurred, the Company writes down the book value of the intangible
or other long-lived asset to its fair value, generally measured by discounted
future cash flows.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair value of financial instruments is determined by the Company
using the available market information and appropriate valuation methodologies.
Accordingly, the estimates are not necessarily indicative of the amounts that
the Company could realize in a current market exchange or the value that
ultimately will be realized by the Company upon maturity or disposition. The use
of different market assumptions or estimation methodologies may have a material
effect on the estimated fair value amounts.
INCOME TAXES
Income taxes are provided using the asset and liability method in accordance
with SFAS No. 109, "Accounting for Income Taxes." Deferred tax assets and
liabilities are recognized based on differences between book and tax basis of
assets and liabilities using presently enacted tax rates. The provision for
income taxes is the sum of the amount of income taxes paid or payable for the
year as determined by applying the provisions of enacted tax laws to taxable
income for that year and the net changes during the year in the Company's
deferred tax assets and liabilities other than changes arising from acquisitions
and dispositions.
The Company has entered into a tax sharing agreement with CBS (the Tax Sharing
Agreement) (see Note 14 to the consolidated financial statements). Prior to the
Company's December 1998 initial public offering, current taxes payable were paid
immediately through contributed capital. Subsequent to the initial public
offering, the Company reimburses CBS as if it were a stand-alone taxpayer, based
upon the terms of the Tax Sharing Agreement. During 1999, the Company paid to
CBS $290 million for federal and state income and franchise taxes calculated on
a stand-alone basis.
Through December 7, 1999, the Company was included as part of CBS's consolidated
federal income tax return. The Company has provided for income taxes as if it
were a stand-alone taxpayer in accordance with SFAS 109. As a result of the
dilution of CBS's ownership interest in Infinity caused by the issuance of
shares to acquire Outdoor Systems, Inc. (Outdoor Systems), now known as Infinity
Outdoor, Inc., Infinity and CBS will no longer be permitted to file consolidated
federal tax returns. Subsequent to December 7, 1999, the Company will file a
separate consolidated federal tax return. The Company will continue to be
consolidated or combined with CBS in state filings, where applicable.
EARNINGS PER SHARE
The earnings per share have been presented assuming that 700 million shares of
Class B common stock were outstanding for all periods presented prior to the
Company's IPO. For the year ended December 31, 1999, basic and fully diluted
weighted average shares outstanding totaled approximately 867 million and 868
million, respectively. The difference between basic and fully diluted weighted
average shares outstanding relates to the dilutive effect of stock options.
Basic and fully diluted weighted average shares outstanding totaled
approximately 706 million at December 31, 1998.
ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the
32 INFINITY BROADCASTING CORPORATION
<PAGE> 33
date of the consolidated financial statements, and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates. On an ongoing basis, management reviews its estimates,
including those related to intangible assets, program rights, contracts,
allowances for doubtful accounts, income taxes and litigation based on currently
available information. Changes in facts and circumstances may result in revised
estimates.
SUBSIDIARY STOCK TRANSACTIONS
Gains and losses on subsidiary and equity investee stock transactions are
recognized directly in stockholders' equity through an increase or decrease to
capital in excess of par value in the period in which the transaction occurs.
DERIVATIVE FINANCIAL INSTRUMENTS
Derivative financial instruments are used, from time to time, to manage interest
rate and foreign currency exchange risks. The Company does not use financial
instruments for trading or speculative purposes and the Company is not a party
to any leveraged derivatives.
Under interest rate swap contracts, the differentials to be received or paid are
recognized as an adjustment to interest expense over the life of the contract.
Gains and losses on terminations of swap contracts are recognized as interest
expense when terminated in conjunction with the termination of the hedged
transaction, or to the extent that such hedged transaction remains outstanding,
deferred and amortized to interest expense over the remaining life of the hedged
transaction.
Forward exchange contracts are used to hedge the currency fluctuations on
transactions denominated in foreign currencies. Gains and losses on forward
exchange contracts and the offsetting losses and gains on hedged transactions
are recorded currently in other income, net in the Consolidated Statements of
Earnings and Comprehensive Income. Forward exchange contracts are carried at
fair value and are reflected in other current assets or other current
liabilities, as appropriate in the Consolidated Balance Sheet.
NEW PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities." In June 1999,
SFAS 133 was amended by SFAS 137, "Accounting for Derivative Instruments and
Hedging Activities -- Deferral of Effective Date of FASB Statement No. 133,"
which delays the effective date for adoption of SFAS No. 133 for one year, to
fiscal years beginning after June 15, 2000. SFAS No. 133 standardizes the
accounting for derivative instruments, including certain derivative instruments
embedded in other contracts, by requiring that an entity recognize those items
as assets or liabilities in the statement of financial position and measure them
at fair value. The Company's derivative and hedging transactions are not
material and it is anticipated that adoption of this standard will not
materially impact the Company's financial results when adopted January 1, 2001.
NOTE 3: ACQUISITIONS
On December 7, 1999, the Company completed the acquisition of Outdoor Systems,
now known as Infinity Outdoor, Inc., for approximately $8.7 billion, which
includes the issuance of approximately 233 million shares of the Company's Class
A common stock and the assumption of approximately $1.9 billion of debt, at fair
value, and stock options to acquire approximately 28 million shares of the
Company's Class A common stock. The acquisition has been accounted for under the
purchase method of accounting. The excess of the purchase price over the fair
value of the net assets acquired is being amortized over a 30 year period. On
December 6, 1999, CBS, Infinity and Outdoor Systems (the Parties) entered into a
final judgment with the United States in connection with Infinity's acquisition
of Outdoor Systems. Under the terms of the final judgment, the Parties must
divest certain outdoor advertising properties, principally in the New York City
area, in accordance with the terms and conditions of the final judgment. The
Company does not view these divestitures as material to its business.
On June 4, 1998, the Company completed the acquisition of the radio broadcasting
operations of American Radio for approximately $1.4 billion in cash plus the
assumption of debt with a fair value of approximately $1.3 billion. The Company
received a capital contribution of approximately $1.4 billion from CBS to effect
this acquisition and received an additional capital contribution of $567 million
to repay a portion of the debt assumed in the American Radio acquisition. The
acquisition has been accounted for under the purchase method of accounting. The
excess of the purchase price over the fair value of the net assets acquired is
being amortized over a 40 year period.
The estimated fair values of the Outdoor Systems (which are based upon
preliminary estimates that may
INFINITY BROADCASTING CORPORATION 33
<PAGE> 34
be modified at a later date) and American Radio assets acquired and liabilities
assumed are summarized in the following table:
FAIR VALUES OF ASSETS ACQUIRED AND LIABILITIES ASSUMED
(in millions)
<TABLE>
<CAPTION>
OUTDOOR AMERICAN
SYSTEMS RADIO
AT DECEMBER 7, AT JUNE 4,
1999 1998
- -----------------------------------------------------------
<S> <C> <C>
Cash $ 38 $ 18
Receivables 192 88
Property and equipment 1,846 129
Identifiable intangible assets:
FCC licenses -- 2,346
Goodwill 6,531 825
Other assets 228 53
Debt (1,865) (1,316)
Deferred income taxes (92) (654)
Other liabilities (106) (89)
- -----------------------------------------------------------
Total purchase price $ 6,772 $ 1,400
- -----------------------------------------------------------
</TABLE>
The following unaudited pro forma information combines the consolidated results
of operations of the Company with those of Outdoor Systems and American Radio as
if the acquisitions occurred on January 1, 1998. The pro forma results give
effect to certain purchase accounting adjustments, including additional
depreciation expense resulting from a step-up in the basis of fixed assets,
additional amortization expense from goodwill and other identifiable intangible
assets, increased interest expense from acquisition debt, the related income tax
effects and issuance of additional shares of Class A common stock.
PRO FORMA RESULTS
(unaudited, in millions except per-share amounts)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999 1998
- ------------------------------------------------------
<S> <C> <C>
Net revenues $3,178 $2,734
Net earnings 238 73
Net earnings per common share --
Basic and diluted 0.22 0.08
- ------------------------------------------------------
</TABLE>
This pro forma financial information is presented for comparative purposes only
and is not necessarily indicative of the operating results that actually would
have occurred had the Outdoor Systems and American Radio acquisitions been
consummated on January 1, 1998. In addition, these results are not intended to
be a projection of future results and do not reflect any synergies that might be
achieved from combined operations.
NOTE 4: EMPLOYEE BENEFIT PLANS
Certain of the Company's employees are covered by various pension plans
sponsored by CBS. Most pension plan benefits are based on either a formula based
on career earnings or a final average compensation amount. Pension benefits
generally are paid from trusts funded by contributions from the Company. The
pension funding policy is consistent with funding requirements of U.S. federal
and other governmental laws and regulations. Certain employees are also covered
by postretirement benefit arrangements sponsored by CBS consisting of various
retiree medical, dental and life insurance arrangements.
The Company has accounted for these plans as multi-employer plans. The Company's
allocated expense under benefit plans sponsored by CBS was as follows:
BENEFIT PLAN COSTS
(in thousands)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999 1998 1997
- ----------------------------------------------------------
<S> <C> <C> <C>
Pension plan cost $935 $4,199 $5,451
Postretirement benefit plan cost 430 1,647 1,524
- ----------------------------------------------------------
</TABLE>
SFAS No. 112, "Employers Accounting for Postemployment Benefits," does not have
a significant effect on the Company's consolidated financial position or results
of operations.
The majority of the Company's employees can participate in various defined
contribution savings plans sponsored by the Company. During 1999, 1998 and 1997,
certain employees of the Company participated in defined contribution savings
plans sponsored by CBS. Such plans generally allow employees to contribute up to
15% of their income on a pretax basis. Depending on the particular plan, the
Company will match from 30% to 50% of the first 5% of the employee's base
earnings, match 50% of the first 6% of the employee's base earnings, match up to
$1,000, or match on a discretionary basis.
NOTE 5: INCOME TAXES
INCOME TAX EXPENSE
(in thousands)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999 1998 1997
- ----------------------------------------------------------
<S> <C> <C> <C>
Current:
Federal $276,631 $185,598 $143,900
State 50,521 41,880 32,406
Foreign 6,872 9,142 6,789
- ----------------------------------------------------------
Total current income tax
expense 334,024 236,620 183,095
- ----------------------------------------------------------
Deferred:
Federal 10,212 10,004 11,426
State 4,910 2,152 2,457
- ----------------------------------------------------------
Total deferred income tax
expense 15,122 12,156 13,883
- ----------------------------------------------------------
Income tax expense $349,146 $248,776 $196,978
- ----------------------------------------------------------
</TABLE>
34 INFINITY BROADCASTING CORPORATION
<PAGE> 35
The Company has Mexican net operating loss carry-forwards of $254 million as of
December 31, 1999. These net operating losses arose from the operations of
Outdoor Systems prior to its acquisition in December 1999. During 1999, the
Company utilized U.S. net operating losses of $21 million or $7 million of
income tax benefit. The Mexican net operating loss carryforwards expire in 2008.
In addition, the Company has a U.S. alternative minimum tax loss carryforward of
$14 million, comprised of $9 million from the acquisition of Outdoor Systems and
$5 million generated during 1999.
Although realization is not assured, management believes, based on operating
results in 1999 and its expectations for the future, that the taxable income of
the Company will more likely than not be sufficient to utilize all of the net
operating loss carryforwards prior to their expiration.
Deferred income taxes result from temporary differences in the financial bases
and tax bases of assets and liabilities. The types of differences that give rise
to deferred income tax assets and liabilities are presented in the table below:
DEFERRED INCOME TAXES BY SOURCE
(in thousands)
<TABLE>
<CAPTION>
DECEMBER 31, 1999 1998
- -------------------------------------------------------
<S> <C> <C>
Deferred tax assets:
Provision for expenses and
losses $ 102,450 $ 112,936
Operating losses and credit
Carryforwards 105,000 --
Other 20,556 --
- -------------------------------------------------------
Total deferred tax asset 228,006 112,936
- -------------------------------------------------------
Deferred tax liabilities:
Property, equipment, and
intangible assets 1,256,677 1,083,989
Other 240,710 165,550
- -------------------------------------------------------
Total deferred tax
liabilities 1,497,387 1,249,539
- -------------------------------------------------------
Deferred income tax
liabilities, net $1,269,381 $1,136,603
- -------------------------------------------------------
</TABLE>
A reconciliation of the U.S. Federal statutory tax rate on earnings to the
Company's effective tax rate on earnings before income taxes is summarized as
follows:
EFFECTIVE TAX RATE RECONCILIATION
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999 1998 1997
- ------------------------------------------------------
<S> <C> <C> <C>
Federal income tax statutory rate 35% 35% 35%
Increase in rate resulting from:
Amortization of non-deductible
goodwill 7 10 11
State income tax expense, net of
federal effect 5 6 6
Other 1 -- 1
- ------------------------------------------------------
Income tax effective rate 48% 51% 53%
- ------------------------------------------------------
</TABLE>
The Company has entered into a Tax Sharing Agreement with CBS (see Notes 2 and
14 to the consolidated financial statements).
NOTE 6: PROPERTY AND EQUIPMENT
(in thousands)
<TABLE>
<CAPTION>
DECEMBER 31, 1999 1998
- -------------------------------------------------------
<S> <C> <C>
Advertising structures $1,779,792 $ 12,622
Land and buildings 195,201 116,218
Equipment 205,026 169,867
Construction in progress 24,793 11,714
- -------------------------------------------------------
Property and equipment, at cost 2,204,812 310,421
Accumulated depreciation (113,077) (73,837)
- -------------------------------------------------------
Property and equipment, net $2,091,735 $236,584
- -------------------------------------------------------
</TABLE>
Included in advertising structures are costs allocated to display leases
totaling $813 million and $0 million at December 31, 1999 and 1998,
respectively. For the years ended December 31, 1999, 1998, and 1997,
depreciation expense totaled $43 million, $26 million, and $20 million,
respectively.
NOTE 7: INTANGIBLE ASSETS
(in thousands)
<TABLE>
<CAPTION>
DECEMBER 31, 1999 1998
- --------------------------------------------------------
<S> <C> <C>
Goodwill $12,370,590 $5,789,580
FCC licenses 3,859,496 3,804,541
Transit franchise agreements 391,890 276,750
Other intangible assets 96,522 --
- --------------------------------------------------------
Intangible assets, at cost 16,718,498 9,870,871
Accumulated amortization (790,805) (511,701)
- --------------------------------------------------------
Intangible assets, net $15,927,693 $9,359,170
- --------------------------------------------------------
</TABLE>
For the years ended December 31, 1999, 1998 and 1997, amortization expense
totaled $282 million, $223 million, and $177 million, respectively.
Goodwill, FCC licenses and franchise agreements are presented in the
Consolidated Balance Sheet net of accumulated amortization. As of December 31,
1999 and 1998, accumulated amortization for goodwill was $530 million and $363
million, respectively, accumulated amortization for FCC licenses was $217
million and $120 million, respectively, and accumulated amortization for
franchise agreements and other intangible assets was $44 million and $28
million, respectively.
INFINITY BROADCASTING CORPORATION 35
<PAGE> 36
NOTE 8: ACCOUNTS PAYABLE AND ACCRUED EXPENSES
(in thousands)
<TABLE>
<CAPTION>
DECEMBER 31, 1999 1998
- ---------------------------------------------------------
<S> <C> <C>
Accounts payable $ 75,898 $ 41,685
Accrued franchise payments 40,841 25,562
Other 197,275 109,183
- ---------------------------------------------------------
Total accounts payable and accrued
expenses $314,014 $176,430
- ---------------------------------------------------------
</TABLE>
NOTE 9: DEBT
LONG-TERM DEBT
(in thousands)
<TABLE>
<CAPTION>
DECEMBER 31, 1999 1998
- -----------------------------------------------------------
<S> <C> <C>
Revolver $ 950,000 $ --
8 7/8% Senior Subordinated Notes,
due 2007 447,360 --
9 3/8% Senior Subordinated Notes,
due 2006 212,120 --
9 3/4% Senior Notes, due 2005 105,310 148,960
9% Senior Subordinated Notes, due
2006 67,802 152,485
11 3/8% Subordinated Exchange
Debentures, due 2009 46,543 98,832
7% Convertible Subordinated
Debentures, due 2011 -- 78,812
Other 8,855 3,191
Unamortized premium, net 69,280 42,328
- -----------------------------------------------------------
Total $1,907,270 $524,608
Less current portion (922) (648)
- -----------------------------------------------------------
Long-term debt, net of current
portion $1,906,348 $523,960
- -----------------------------------------------------------
</TABLE>
In connection with the formation and capitalization of the Company as discussed
in Note 1, the Company entered into an agreement with CBS, whereby Infinity had
access to a five-year revolving credit agreement, expiring August 29, 2001. The
revolving credit facility, as amended in December 1999, provides for $1.5
billion of credit available for the exclusive use of Infinity. Infinity
borrowings are guaranteed by CBS. The credit facility provides for short-term
money market loans and revolver borrowings. Borrowing rates under the facility
are determined at the time of each borrowing and are based generally on a
floating rate index, the London Interbank Offer Rate (LIBOR), plus a margin
based on CBS's senior unsecured debt rating and leverage ratio. Borrowing
availability under the credit agreement is subject to compliance with certain
covenants, including a maximum leverage ratio and a minimum interest coverage
ratio. At December 31, 1999, the Company had borrowings under the credit
facility of $988 million, of which $38 million were short-term. These borrowings
were principally from the refinancing of debt assumed upon the closing of the
Outdoor Systems acquisition.
In December 1999, the Company assumed approximately $1.9 billion in debt as part
of the Outdoor Systems acquisition, comprised of revolving credit debt of
approximately $1.1 billion and Senior Subordinated Notes (8 7/8% Notes and
9 3/8% Notes) of approximately $0.8 billion. The 8 7/8% Notes and 9 3/8% Notes
were recorded at their fair market value as of the acquisition date, which
resulted in a net premium of approximately $59 million. The indentures for each
of these obligations contain covenants applicable to Outdoor Systems including,
among others, limitations on sales of assets, dividend payments, future
indebtedness and the issuance of preferred stock. Under the most restrictive of
the covenants of these indentures, $440 million of Outdoor Systems net assets at
December 31, 1999, are restricted. This in turn, limits the ability of Outdoor
Systems to pay dividends. As a result of the change in control related to the
acquisition of Outdoor Systems by Infinity, an offer to purchase the outstanding
securities was made in January 2000. The offer expired in February 2000 and $6
million of the notes were redeemed.
In conjunction with the June 1998 acquisition of American Radio, the Company
assumed approximately $1.3 billion of American Radio debt, of which $567
million, borrowed under their revolving credit agreement, was repaid immediately
upon acquisition. The 9% Senior Subordinated Notes, the 9 3/4% Senior Notes, and
the 11 3/8% Cumulative Exchangeable Preferred Stock (subsequently exchanged into
11 3/8% Subordinated Exchange Debentures) were recorded at their fair market
value as of the acquisition date, which resulted in a net premium of $73
million. At the time of the acquisition, American Radio's 7% Convertible
Exchangeable Preferred Stock remained outstanding. In September 1998, this
preferred stock was converted into 7% Convertible Subordinated Debentures. Under
the most restrictive covenants of the indentures relating to the American Radio
debt, approximately $1.2 billion of American Radio's net assets at December 31,
1999 are restricted. This, in turn, limits the ability of American Radio to pay
dividends.
During 1999, the Company purchased at market prices, certain outstanding 8 7/8%,
9% and 9 3/8% Senior Subordinated Notes, 9 3/4% Senior Notes and 11 3/8%
Subordinated Exchange Debentures with an aggregate face value of $272 million,
at a cost of $294 million. Additionally during 1999, the Company redeemed the
remaining shares of the 7% Convertible Subordinated Debentures with a face value
of $76 million, at a cost of $79 million. During 1998, the Company purchased at
market prices, certain outstanding 11 3/8% Subordinated Exchange Debentures and
9% Senior Subordinated Notes with a face value of $128 million, at a cost of
$148 million. Addition-
36 INFINITY BROADCASTING CORPORATION
<PAGE> 37
ally during 1998, the Company redeemed shares of the 7% Convertible Subordinated
Debentures with a face value of $61 million, at a cost of $64 million.
There are no significant scheduled long-term debt repayments from January 1,
2000 to December 31, 2004, except for the revolving credit facility, which is
due in 2001.
NOTE 10: LEGAL MATTERS
The Company is party to various legal proceedings arising in the ordinary course
of business. In the opinion of management of the Company, however, there are no
legal proceedings pending against the Company likely to have a material adverse
effect on the Company.
NOTE 11: CONTINGENT LIABILITIES AND OTHER COMMITMENTS
LEASES
The Company has commitments under operating leases for certain facilities and
equipment. Rental expense for the years ended December 31, 1999, 1998, and 1997
was $52 million, $30 million, and $18 million, respectively. These totals
include immaterial amounts for contingent rentals and sublease income.
Additionally, the Company has franchise rights entitling it to display
advertising on such outdoor media as buses, taxis, trains, bus shelters,
terminals, billboards, and phone kiosks. Under most of these franchise
agreements, the franchiser is entitled to receive the greater of a percentage of
the relevant advertising revenues, net of advertising agency fees, or a
specified guaranteed minimum annual payment. Franchise payments totaled $271
million, $222 million and $192 million in 1999, 1998 and 1997, respectively.
At December 31, 1999, aggregate minimum rental and franchise payments due during
the next five years and thereafter are as follows:
MINIMUM RENTAL PAYMENTS
(in thousands)
<TABLE>
<CAPTION>
GUARANTEED
MINIMUM
OPERATING FRANCHISE
LEASES PAYMENTS
- -------------------------------------------------------
<S> <C> <C>
2000 $130,177 $201,952
2001 101,289 189,738
2002 83,121 144,291
2003 69,587 107,633
2004 46,012 88,048
Thereafter 113,388 104,686
- -------------------------------------------------------
Minimum rental payments $543,574 $836,348
- -------------------------------------------------------
</TABLE>
OTHER COMMITMENTS
The Company routinely enters into commitments to purchase broadcast rights.
Expenses for broadcast rights totaled $65 million, $48 million and $34 million
for the years ended December 31, 1999, 1998 and 1997, respectively. These
contracts permit the broadcast of such properties for various periods. At
December 31, 1999, the Company was committed to make payments under such
broadcasting contracts, along with commitments for talent contracts, of $154
million. At December 31, 1999, aggregate payments for these commitments during
the next five years and thereafter are as follows:
OTHER COMMITMENTS
(in thousands)
<TABLE>
<S> <C>
- -------------------------------------------------------
2000 $ 84,667
2001 35,616
2002 20,490
2003 7,319
2004 3,962
Thereafter 2,228
- -------------------------------------------------------
Total other commitments $154,282
- -------------------------------------------------------
</TABLE>
NOTE 12: STOCKHOLDERS' EQUITY
In December 1998, the Company completed its IPO, resulting in gross proceeds to
the Company of approximately $3.2 billion. Prior to December 1998, the Company
was a wholly-owned subsidiary of CBS. Immediately prior to the IPO, the Company
amended its Certificate of Incorporation to change its authorized capital stock
to 50 million shares of Preferred Stock, 2 billion shares of Class A common
stock, and 2 billion shares of Class B common stock.
On June 17, 1999, the Company announced that its board of directors had
authorized the purchase of up to $500 million of its Class A common stock. On
January 13, 2000, the Company expanded its stock buy-back program to purchase an
additional $500 million of the Company's Class A common stock. During 1999, the
Company acquired approximately 17.6 million shares of its Class A common stock
at a cost of $485 million and as of December 31, 1999, the acquired shares
remain held in treasury. The entire buy-back was funded from the Company's
internal cash resources.
On December 7, 1999, the Company acquired Outdoor Systems for approximately $8.7
billion. The total purchase price was paid through the issuance of approximately
233 million shares of the Company's Class A common stock and the assumption of
approximately $1.9 billion of debt, at fair value, and
INFINITY BROADCASTING CORPORATION 37
<PAGE> 38
stock options to acquire approximately 28 million shares of the Company's Class
A common stock. The acquisition is being accounted for under the purchase
method.
Subsequent to the merger between Westwood One and Metro Networks, Inc., the
Company beneficially owns shares and vested warrants representing approximately
17% of Westwood One's common stock. The Company recognized a change in interest
gain of $69 million, net of deferred taxes of $45 million, increasing the
carrying value of the Company's investment in Westwood One to $253 million. The
Company accounts for its investment in Westwood One using the equity method of
accounting. Based upon quoted market prices at December 31, 1999, the market
value of the Company's investment in Westwood One would have exceeded the
carrying value of the investment by $355 million.
As of December 31, 1999, the Company had approximately 373 million shares of
Class A common stock outstanding and 700 million shares of Class B common stock
outstanding. As of December 31, 1998, the Company had approximately 155 million
shares of Class A common stock outstanding and 700 million shares of Class B
common stock outstanding. As of December 31, 1999 and 1998, no preferred shares
were issued. As of December 31, 1999, CBS beneficially owned 100% of the Class B
common stock, representing 64.3% of the Company's equity ownership and 90.0% of
the combined voting power of the Company's Class A and Class B common stock, on
a fully diluted basis.
Holders of Class A common stock and Class B common stock generally have
identical voting rights and vote together as a single class (and not as separate
classes), except that holders of Class A common stock are entitled to one vote
per share while holders of Class B common stock are entitled to five votes per
share, and the shares of Class B common stock maintain certain conversion rights
and transfer restrictions. Holders of Class A common stock and Class B common
stock will share equally on a per-share basis in any dividends declared by the
Board of Directors. At December 31, 1999, the number of recordholders of the
Class A and Class B common stock was approximately 650 and 1, respectively.
NOTE 13: STOCK-BASED COMPENSATION PLANS
The Company accounts for stock-based compensation plans under APB Opinion 25.
For stock options granted, the option price is not less than the market value of
shares on the grant date; therefore, no compensation cost has been recognized
for stock options granted.
At December 31, 1999, the Company had several stock-based compensation plans
that provide for the granting of stock-based awards, including non-statutory
stock options, to non-employee directors of the Company, officers or employees
of the Company, its parent, or their subsidiaries. At December 31, 1999,
approximately 18 million shares of the Company's Class A common stock were
authorized for awards under the plans, of which approximately 12 million shares
remained available for future award. Generally, stock option awards vest over
three years from the date of grant and expire ten years from the date of grant.
In conjunction with the acquisition of Outdoor Systems on December 7, 1999, the
Company assumed approximately 28 million options to acquire shares of the
Company's Class A common stock with a weighted-average exercise price of $2.89
per share.
INFINITY STOCK OPTION INFORMATION
<TABLE>
<CAPTION>
1999
----------------------
WEIGHTED-
AVERAGE
EXERCISE
SHARES PRICE
- ---------------------------------------------------
<S> <C> <C>
Balance at January 1 -- $ --
Options granted 5,715,937 26.15
Awards assumed 27,821,998 2.89
Options exercised (723,903) 1.65
Options forfeited (48,000) 25.94
- ---------------------------------------------------
Balance at December 31 32,766,032 $ 6.94
- ---------------------------------------------------
Exercisable at December 31 27,098,095 $ 2.93
- ---------------------------------------------------
</TABLE>
38 INFINITY BROADCASTING CORPORATION
<PAGE> 39
INFINITY STOCK OPTIONS OUTSTANDING AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
WEIGHTED-
WEIGHTED- AVERAGE
OPTIONS AVERAGE EXERCISE
OUTSTANDING AT WEIGHTED- REMAINING PRICE OF
RANGE OF DECEMBER 31, AVERAGE CONTRACTUAL EXERCISABLE AT EXERCISABLE
EXERCISE PRICES 1999 EXERCISE PRICE LIFE IN YEARS DECEMBER 31, 1999 OPTIONS
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ -- 65,384(1) $ -- N/A 65,384 $ --
.01-- .99 17,162,897(2) .04 N/A 17,162,897 .04
1.00-- 4.99 5,802,700 1.58 6.4 5,802,700 1.58
5.00-- 9.99 158,920 7.25 7.4 158,920 7.25
10.00--14.99 1,259,518 12.47 8.1 1,259,518 12.47
15.00--19.99 2,648,676 19.87 9.2 2,648,676 19.87
20.00--27.99 5,667,937 26.15 9.2 -- --
- -----------------------------------------------------------------------------------------------------
Total 32,766,032 $ 6.94 27,098,095 $ 2.93
- -----------------------------------------------------------------------------------------------------
</TABLE>
Notes:
(1) These options have no exercise price, have no expiration date and are
exercisable only upon termination.
(2) These options are fully exercisable and have no expiration date.
Certain employees of the Company have options to acquire shares of CBS's common
stock that were issued prior to the initial public offering. The stock option
information in the following tables reflects options to acquire CBS's common
stock held by employees of the Company.
CBS CORPORATION STOCK OPTION INFORMATION
<TABLE>
<CAPTION>
1999 1998 1997
----------------------- ----------------------- -----------------------
WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1 20,206,220 $13.54 25,456,440 $ 7.30 23,723,498 $ 6.04
Options granted -- -- 3,459,745 30.01 2,623,653 18.56
Options exercised (1,449,368) 4.62 (8,491,073) 1.40 (846,829) 6.32
Options forfeited (63,475) 29.80 (218,892) 19.01 (43,882) 18.57
- ---------------------------------------------------------------------------------------------------------
Balance at December 31 18,693,377 $14.17 20,206,220 $13.54 25,456,440 $ 7.30
- ---------------------------------------------------------------------------------------------------------
Exercisable at December 31 17,121,659 $12.93 16,369,506 $10.02 19,426,144 $ 4.96
- ---------------------------------------------------------------------------------------------------------
</TABLE>
CBS CORPORATION STOCK OPTIONS OUTSTANDING AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
WEIGHTED-
WEIGHTED- AVERAGE
OPTIONS AVERAGE EXERCISE
OUTSTANDING AT WEIGHTED- REMAINING PRICE OF
RANGE OF DECEMBER 31, AVERAGE CONTRACTUAL EXERCISABLE AT EXERCISABLE
EXERCISE PRICES 1999 EXERCISE PRICE LIFE IN YEARS DECEMBER 31, 1999 OPTIONS
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$.0002-- 4.99 3,323,905 $ 1.92 2.4 3,323,905 $ 1.92
5-- 9.99 4,475,831 7.04 4.6 4,475,831 7.04
10--14.99 2,054,882 13.74 5.9 2,054,882 13.74
15--19.99 5,509,139 17.95 6.7 5,192,145 17.92
20--29.99 2,933,625 29.81 8.0 1,868,077 29.81
30--36.53 395,995 31.60 8.3 206,819 31.64
- -----------------------------------------------------------------------------------------------------
Total 18,693,377 $14.17 17,121,659 $12.93
- -----------------------------------------------------------------------------------------------------
</TABLE>
The majority of the options to acquire shares of CBS common stock contain a
provision that accelerates their vesting upon a change in control. The
consummation of the merger with Viacom would be considered to be a change in
control under these option agreements. Each CBS option outstanding at the time
of the merger will convert into 1.085 options to purchase shares of Viacom Class
B nonvoting common
INFINITY BROADCASTING CORPORATION 39
<PAGE> 40
stock at an exercise price adjusted for the 1.085 conversion factor. The merger
between Viacom and CBS does not accelerate vesting for holders of options to
acquire shares of Infinity's Class A common stock.
RESULTS OF OPERATIONS
(in thousands except per-share amounts)
Assuming compensation cost for the 1999 Infinity stock option grants and the CBS
stock option grants made prior to the IPO had been determined under the
provisions of SFAS 123, the Company's net earnings and earnings per common share
would have been as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999 1998 1997
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net earnings as reported $376,964 $234,806 $177,629
Pro forma net earnings 355,999 226,212 165,274
Net earnings per basic common share as reported 0.44 0.33 0.25
Net earnings per diluted common share as reported 0.43 0.33 0.25
Pro forma net earnings per basic and diluted common share 0.41 0.32 0.24
- ----------------------------------------------------------------------------------------------
</TABLE>
These pro forma effects may not be representative of future amounts since the
estimated fair value of stock options on the date of grant is amortized to
expense over the vesting period, and additional options may be granted in future
years.
Options to acquire shares of Infinity's Class A common stock granted during 1999
had a weighted average fair value per-share of $13.37. Options to acquire shares
of CBS common stock granted during 1998 and 1997 had a weighted average fair
value per-share of $14.08, and $7.79, respectively.
The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option pricing model. The following weighted-average assumptions
were used for option grants to acquire Infinity stock in 1999 and CBS stock in
1998, and 1997, respectively: risk-free interest rates of 5.1%, 5.5%, and 6.4%,
expected dividend yields of 0.0%, 0.0%, and 1.0%; expected volatility of 38%,
31%, and 30%; and expected lives of 7.5 years, 7.5 years, and 7.3 years,
respectively.
Pursuant to the Tax Sharing Agreement, the tax deductions resulting from the
exercise of CBS stock options by employees of the Company will not reduce the
Company's federal taxable income.
NOTE 14: RELATED PARTY TRANSACTIONS
In December 1998, the Company completed its IPO. After the IPO, CBS beneficially
owned 95.8% of the combined voting power and 81.8% of the equity of the Company.
As of December 31, 1999, CBS beneficially owned 90.0% of the combined voting
power and 64.3% of the equity of the Company, on a fully diluted basis.
In connection with the IPO, the Company entered into an intercompany agreement
with CBS (the Intercompany Agreement) pursuant to which CBS provides the Company
with a number of services, including among others, certain legal, financial,
administrative and executive services. The costs of these services are allocated
according to established methodologies determined by CBS on an annual basis. For
1999, 1998, and 1997, allocated expenses of $8 million, $7 million, and $13
million, respectively, were included in the Company's Consolidated Statements of
Earnings and Comprehensive Income.
The Intercompany Agreement also requires the Company and CBS to provide
broadcast time to each other. The Company expects to continue this practice. The
revenues or costs associated with these intercompany transactions were not
significant in the periods presented.
The Company and CBS have entered into and expect to continue to enter into joint
advertising arrangements. Revenues are distributed to the parties providing the
services based upon the contract terms. The revenues associated with such sales
were not significant in the periods presented.
The Tax Sharing Agreement with CBS generally provides that the Company will pay
to CBS an amount equal to the amount of income taxes the Company would have paid
if it had filed separate income tax returns. After December 7, 1999, the Company
will file a separate consolidated federal tax return. The Company will continue
to be consolidated or combined with CBS in state filings, where applicable.
Reference is made to the full text of the Intercompany and Tax Sharing
Agreements, copies of
40 INFINITY BROADCASTING CORPORATION
<PAGE> 41
which have been filed with the Securities and Exchange Commission.
During 1999, CBS closed on a number of strategic investments focused on growing
its Internet-based operations. CBS received an equity interest in these Internet
companies, in exchange for future promotional time on CBS and the Company's
properties. During the later half of 1999, the Company provided advertising and
promotional time on behalf of these investments and will receive an economic
interest in certain CBS Internet investments.
The Company owns a minority equity interest in Westwood One. Many of the
Company's radio stations are affiliated with Westwood One and Westwood One
distributes nationally, certain of the Company's network programming. In
connection with these arrangements, the Company receives affiliation fees as
well as programming cost reimbursements and in certain instances, shares in
revenue from the sale of the Company's programming. In addition, an officer and
a non-executive employee of the Company serve as officers of Westwood One for
which the Company receives a management fee, which includes warrants to acquire
shares of Westwood One's common stock. Revenue and expense reimbursements from
these arrangements recorded by the Company in 1999, 1998 and 1997 totaled $67
million, $64 million and $62 million, respectively. Mr. Karmazin is a director
of Westwood One and Mr. Suleman is the executive vice president, chief financial
officer and secretary and a director of Westwood One.
Infinity Outdoor is a party to a Services Agreement with Williams Manufacturing,
Inc. (WMI) and J&L Industries, Inc. (J&L), companies controlled by Mr. William
S. Levine, a director of the Company and Chairman of Infinity Outdoor. Pursuant
to the agreement, WMI and J&L made at least a majority of Mr. Levine's business
time available to Infinity Outdoor, for which Infinity Outdoor paid WMI and J&L
an aggregate of $450,000 in 1999.
In addition, certain partnerships controlled by Mr. Levine or in which Mr.
Levine is a partner lease certain sites to Infinity Outdoor on which the Company
has placed advertising displays. Infinity Outdoor made aggregate lease payments
to such partnerships of approximately $139,000 in 1999. In connection with the
acquisition of Infinity Outdoor by the Company, these leases were renegotiated
and new leases, on substantially identical terms, were entered into for terms
commencing January 1, 2000 through December 31, 2004. The Company believes that
these leases are on terms at least as favorable as would be available with
unrelated third parties through arms-length negotiations.
NOTE 15: FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair value of financial instruments is determined using the best
available market information and appropriate valuation methodologies. However,
considerable judgment is necessary in interpreting market data to develop the
estimates of fair value. Accordingly, the estimates presented are not
necessarily indicative of the amounts that the Company could realize in a
current market exchange or the value that ultimately will be realized upon
maturity or disposition. Additionally, because of the variety of valuation
techniques permitted under SFAS No. 107, "Disclosures about Fair Values of
Financial Instruments," comparability of fair values among entities may not be
meaningful. The use of different market assumptions or estimation methodologies
may have a material effect on the estimated fair value amounts.
As of December 31, 1999 and 1998, most of the Company's financial instruments
including cash and cash equivalents, receivables, payables and accruals are
short term in nature. Accordingly, the carrying amount of these financial
instruments approximates their fair value.
The following methods and assumptions were used to estimate the fair value of
financial instruments for which it was practicable to estimate that value:
- - The fair value of noncurrent customer and other receivables is estimated by
discounting the expected future cash flows at interest rates commensurate with
the creditworthiness of the customer or other third party. The fair value of
the Company's noncurrent customer and other receivables approximates its
carrying value at December 31, 1999 and 1998.
- - The fair value of long-term debt is estimated using quoted market prices or
discounted cash flow methods based on the Company's current borrowing rates
for similar types of borrowing arrangements with comparable terms and
maturities. The carrying values and fair values of the Company's fixed rate
debt were $888 million and approximately $978 million, respectively, at
December 31, 1999 and $525 million and approximately $527 million,
respectively, at December 31, 1998.
- - The Company is subject to risks associated with changes in foreign currency
exchange rates that
INFINITY BROADCASTING CORPORATION 41
<PAGE> 42
affect the value of transactions denominated in foreign currencies. Foreign
exchange forward contracts are used to manage certain of these risks,
primarily with respect to the Canadian dollar. These contracts generally
mature in less than six months. At December 31, 1999 and 1998, the notional
amount of forward contracts was $91 million and $0 million, respectively. The
increase in 1999 relates to contracts to hedge exposures at Outdoor Systems
which was acquired in December 1999. Foreign exchange forward contracts are
carried on the balance sheet at fair value based on quoted market prices to
terminate the contracts. At December 31, 1999 and 1998, the fair value of
these contracts was not material.
- - At December 31, 1999, the Company had variable-to-fixed interest rate swap
contracts outstanding with a notional value of $775 million. The swap
contracts expire in less than three months. The fair value of these swaps at
December 31, 1999 was not material. At December 31, 1998, no interest rate
swap contracts were outstanding.
- - The Company's credit exposure under foreign currency exchange contracts and
interest rate swap contracts is limited to the cost of replacing a contract in
the event of non-performance by our counterparties. To minimize this risk, we
select high credit quality counterparties. We do not anticipate nonperformance
by our counterparties.
- - Outstanding letters of credit totaled $54 million in 1999 and $0 million in
1998. The Company does not believe it is practicable to estimate the fair
value of these financial instruments and does not expect any material losses
from their resolution since performance is not likely to be required.
NOTE 16: SEGMENT AND GEOGRAPHIC INFORMATION
The Company's operations are principally focused on the out-of-home media
business and are aligned in two business segments, Radio and Outdoor. The
Company's Radio segment has been restated for all periods presented to reflect
the costs of the Company's corporate headquarters separately. These costs are
comprised mainly of compensation and general operating expenses for the
corporate headquarters. Previously, the costs related to the Company's corporate
headquarters were reflected as a component of the Radio segment.
SEGMENT DATA
(in millions)
<TABLE>
<CAPTION>
DEPRECIATION AND
REVENUES EBITDA OPERATING EARNINGS AMORTIZATION
------------------------ -------------------- ------------------ ------------------
YEAR ENDED DECEMBER 31, 1999 1998 1997 1999 1998 1997 1999 1998 1997 1999 1998 1997
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Radio $1,835 $1,459 $1,104 $ 918 $709 $510 $651 $476 $328 $267 $227 $176
Outdoor 614 434 376 161 96 73 102 73 52 58 23 21
- ---------------------------------------------------------------------------------------------------------------------
Total segments 2,449 1,893 1,480 1,079 805 583 753 549 380 325 250 197
Corporate -- -- -- (12) (7) (8) (12) (7) (8) -- -- --
- ---------------------------------------------------------------------------------------------------------------------
Total $2,449 $1,893 $1,480 $1,067 $798 $575 $741 $542 $372 $325 $250 $197
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
EXPENDITURES FOR
LONG-LIVED ASSETS TOTAL ASSETS LONG-LIVED ASSETS
-------------------- -------------------------- ------------------
YEAR ENDED DECEMBER 31, 1999 1998 1997 1999 1998 1997 1999 1998 1997
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Radio $ 530 $404 $229 $ 9,857 $ 9,869 $6,558 $38 $23 $10
Outdoor 1,894 15 12 9,423 522 505 15 7 5
- ----------------------------------------------------------------------------------------------------------
Total segments 2,424 419 241 19,280 10,391 7,063 53 30 15
Corporate 3 3 1 47 407 11 -- 2 --
- ----------------------------------------------------------------------------------------------------------
Total $2,427 $422 $242 $19,327 $10,798 $7,074 $53 $32 $15
- ----------------------------------------------------------------------------------------------------------
</TABLE>
Management believes that earnings before interest, taxes, minority interest,
depreciation and amortization (EBITDA) is an appropriate measure for evaluating
the operating performance of the Company's business. EBITDA eliminates the
effect of depreciation and amortization of tangible and intangible assets, most
of which were acquired in acquisitions accounted for under the purchase method
of accounting, including CBS Inc.'s radio operations, Old Infinity, American
Radio and Outdoor Systems. The exclusion of amortization expense eliminates
variations in results among stations or other entities caused by the timing of
acquisitions. More recent acquisitions reflect higher amortization expense due
to increasing prices associated with out-of-home properties.
However, EBITDA should be considered in addition to, not as a substitute for,
operating earnings, net
42 INFINITY BROADCASTING CORPORATION
<PAGE> 43
earnings, cash flows and other measures of financial performance reported in
accordance with generally accepted accounting principles. As EBITDA is not a
measure of performance calculated in accordance with generally accepted
accounting principles, this measure may not be comparable to similarly titled
measures employed by other companies.
The Company's operations are primarily based in the United States. However, net
revenues of $204 million and $161 million in 1999 and 1998, respectively, were
derived from the Company's foreign operations. The 1999 and 1998 foreign
revenues were primarily attributable to TDI sales in the United Kingdom, Ireland
and the Netherlands. As of December 31, 1999 and 1998, more than 83% and 95%,
respectively, of the Company's long lived assets are located within the United
States.
Long-lived assets in the preceding table consist of equity investments, net
property, plant and equipment, and long-term notes, and exclude such assets as
goodwill, FCC licenses, and other intangible assets. Expenditures for long-lived
assets correspond to the Company's capital expenditures and investments in
equity method entities.
NOTE 17: SUBSEQUENT EVENTS (AS OF MARCH 21, 2000)
On March 3, 2000, the Company entered into an Asset Purchase Agreement to
acquire 18 radio stations from Clear Channel Communications, Inc. for
approximately $1.4 billion. These stations are located in San Diego, Phoenix,
Denver, Cleveland, Cincinnati, Orlando and Greensboro--Winston-Salem. The
transaction is subject to regulatory reviews and approvals, and is expected to
close by year-end 2000.
On March 21, 2000, the Company announced that it had entered into an agreement
to purchase Giraudy, one of France's largest outdoor advertising companies, for
approximately $425 million. The transaction is expected to close mid-year 2000.
The Company plans to finance these acquisitions with excess cash from operations
and by executing a credit facility which will increase its borrowing
availability by $2.0 billion.
INFINITY BROADCASTING CORPORATION 43
<PAGE> 44
QUARTERLY FINANCIAL DATA
(unaudited, in thousands except per-share amounts)
<TABLE>
<CAPTION>
1999 1998
----------------------------------------- -----------------------------------------
4TH 3RD 2ND 1ST 4TH 3RD 2ND 1ST
QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenues $759,408 $618,716 $597,273 $473,735 $573,414 $534,318 $455,764 $329,608
Operating expenses 515,436 410,223 406,118 376,189 393,313 377,316 314,856 265,729
Operating earnings 243,972 208,493 191,155 97,546 180,101 157,002 140,908 63,879
Net earnings 118,208 111,468 99,628 47,660 69,226 67,261 66,877 31,442
Basic net earnings per
share 0.13 0.13 0.12 0.06 0.10 0.10 0.10 0.04
Diluted net earnings
per share 0.13 0.13 0.12 0.06 0.10 0.10 0.10 0.04
- ------------------------------------------------------------------------------------------------------------------
New York Stock
Exchange market price
per share:
High 41 1/2 30 3/16 33 1/2 28 3/4 27 1/8 -- -- --
Low 27 3/4 24 15/16 24 3/16 23 1/2 22 1/16 -- -- --
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
44 INFINITY BROADCASTING CORPORATION
<PAGE> 45
FIVE-YEAR SUMMARY OF SELECTED FINANCIAL AND
STATISTICAL DATA
(unaudited, in thousands except per-share amounts)
<TABLE>
<CAPTION>
HISTORICAL
------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1999(A) 1998(A) 1997(A) 1996 1995(A)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS DATA:
Net revenues............................ $ 2,449,132 $ 1,893,104 $1,480,091 $ 554,088 $ 216,288
Operating expenses excluding
depreciation and amortization.......... 1,383,010 1,101,562 910,682 357,354 145,155
Depreciation and amortization........... 324,956 249,652 197,135 57,528 17,914
Operating earnings...................... 741,166 541,890 372,274 139,206 53,219
Interest expense, net................... 15,540 63,773 3,645 -- --
Net earnings............................ 376,964 234,806 177,629 71,566 27,673
Net earnings per common share--basic.... $ 0.44 $ 0.33 $ 0.25 $ 0.10 $ 0.04
Weighted average shares
outstanding--basic..................... 866,553 706,379 700,000 700,000 700,000
Net earnings per common
share--diluted......................... $ 0.43 $ 0.33 $ 0.25 $ 0.10 $ 0.04
Weighted average shares
outstanding--diluted................... 867,972 706,379 700,000 700,000 700,000
OTHER OPERATING DATA:
EBITDA (b).............................. $ 1,066,622 $ 797,866 $ 575,019 $ 197,043 $ 71,324
Capital expenditures.................... 44,076 31,717 15,264 6,682 9,368
After-tax cash flow (b)................. 701,920 484,458 374,764 129,094 45,587
Cash flow from operating activities..... 651,888 442,003 310,264 103,943 49,401
Cash flow from investing activities..... (154,690) (1,402,620) 21,870 (1,000,847) (1,213,810)
Cash flow from financing activities..... (923,263) 1,435,796 (329,494) 916,771 1,164,221
- ------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
AT DECEMBER 31, 1999(A) 1998(A) 1997 1996(A) 1995(A)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets.......................... $19,327,455 $10,798,243 $7,074,103 $ 7,261,952 $ 1,878,208
Long-term debt (including current
portion)............................. 1,907,270 524,608 2,092 150,494 --
Stockholders' equity.................. 15,591,042 8,858,027 6,397,388 6,418,701 1,659,602
Working capital....................... 521,690 785,574 247,206 273,403 79,500
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(a) Includes financial information for the following acquired entities from
their respective dates of acquisition: Outdoor Systems, Inc. from its date
of acquisition, December 7, 1999; the radio operations of American Radio
from June 4, 1998; Old Infinity from December 31, 1996; and the radio
operations of CBS Inc. from November 24, 1995.
(b) EBITDA represents earnings before interest, taxes, minority interest,
depreciation and amortization. After-tax cash flow represents net earnings
plus depreciation and amortization. Although EBITDA and after-tax cash flow
are not measures of performance calculated in accordance with generally
accepted accounting principles, management believes that they are useful to
an investor in evaluating the Company because they are measures widely used
in the broadcast industry to evaluate a company's operating performance.
Nevertheless, EBITDA and after-tax cash flow should not be considered in
isolation or as a substitute for operating income, cash flows from operating
activities or any other measure for determining the Company's operating
performance or liquidity that is calculated in accordance with generally
accepted accounting principles. As EBITDA and after-tax cash flow are not
measures of performance calculated in accordance with generally accepted
accounting principles, these measures may not be comparable to similarly
titled measures employed by other companies. As EBITDA is not a measure of
performance calculated in accordance with generally accepted accounting
principles, this measure may not be comparable to similarly titled measures
employed by other companies. EBITDA differs from cash flows from operating
activities primarily because it does not consider changes in assets and
liabilities from period to period, and it does not include cash flows for
interest and taxes.
INFINITY BROADCASTING CORPORATION 45
<PAGE> 46
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Part of the information concerning executive officers required by this item is
set forth in Part I pursuant to General Instruction G to Form 10-K and part is
incorporated herein by reference to "Security Ownership" and "Principal
Shareholders" in the Proxy Statement.
The information as to directors is incorporated herein by reference to "Election
of Directors" in the Proxy Statement.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this item is incorporated herein by reference to
"Director Compensation" and "Executive Compensation" in the Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by this item is incorporated herein by reference to
"Security Ownership" and "Principal Shareholders" in the Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this item is incorporated herein by reference to
"Related Party Transactions" in the Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(A)(1) FINANCIAL STATEMENTS
The financial statements required by this item are listed under Part II, Item 8,
which list is incorporated herein by reference.
(A)(2) FINANCIAL STATEMENT SCHEDULES
The following financial statement schedule for Infinity Broadcasting Corporation
and the Independent Auditors' Report thereon are included in Part IV of this
report:
<TABLE>
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Independent Auditors' Report on Financial Statement Schedule 51
Schedule II--Valuation and Qualifying Accounts for the three
years ended December 31, 1999 52
</TABLE>
46 INFINITY BROADCASTING CORPORATION
<PAGE> 47
Other schedules are omitted because they are not applicable or because the
required information is included in the financial statements or notes thereto.
<TABLE>
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(A)(3) EXHIBITS
3. CERTIFICATE OF INCORPORATION AND BY-LAWS.
3.1 Restated Certificate of Incorporation of the Company as of
December 14, 1998 is incorporated by reference to Exhibit
3.1 to the report on Form 10-Q for the quarter ended June
30, 1999.
3.2 Restated By-Laws of the Company as of December 14, 1998 are
incorporated by reference to Exhibit 3.2 to the report on
Form 10-Q for the quarter ended June 30, 1999.
10. MATERIAL CONTRACTS.
10.1 Intercompany Agreement between CBS Corporation and the
Company is incorporated by reference to Exhibit 10(x) to the
report on Form 10-K of CBS Corporation for the year ended
December 31, 1998.
10.2 Tax Sharing Agreement between CBS Corporation and the
Company is incorporated by reference to Exhibit 10(y) to the
report on Form 10-K of CBS Corporation for the year ended
December 31, 1998.
10.3 $4.0 billion Credit Agreement among CBS Corporation, the
Lenders parties thereto, Nationsbank, N.A. and the
Toronto-Dominion Bank as Syndication Agents, The Chase
Manhattan Bank as Documentation Agent, and Morgan Guaranty
Trust Company of New York, as Administrative Agent, dated
August 29, 1996, is incorporated herein by reference to
Exhibit 10(1) to the report on Form 10-Q of CBS Corporation
for the quarter ended September 30, 1996.
10.4 First Amendment, dated January 29, 1997, to the CBS
Corporation Credit Agreement, dated August 29, 1996, among
CBS Corporation, the Lenders parties thereto, Nationsbank,
N.A. and the Toronto-Dominion Bank as Syndication Agents,
The Chase Manhattan Bank, as Documentation Agent, and Morgan
Guaranty Trust Company of New York as Administrative Agent,
is incorporated herein by reference to Exhibit 10(p) to the
report on Form 10-Q of CBS Corporation for the quarter ended
March 31, 1997.
10.5 Second Amendment, dated March 21, 1997, to the CBS
Corporation Credit Agreement, dated August 29, 1996, as
amended by the First Amendment thereto, dated January 29,
1997, among CBS Corporation, the Subsidiary Borrowers
parties thereto, the Lenders parties thereto, Nationsbank,
N.A. and The Toronto-Dominion Bank as Syndication Agents,
The Chase Manhattan Bank as Documentation Agent, and Morgan
Guaranty Trust Company of New York as Administrative Agent,
is incorporated herein by reference to Exhibit 10(q) to the
report on Form 10-Q of CBS Corporation for the quarter ended
March 31, 1997.
10.6 Third Amendment, dated March 3, 1998, to the CBS Corporation
Credit Agreement, dated August 29, 1996, as amended by the
First Amendment thereto, dated January 29, 1997, as amended
by the Second Amendment thereto, dated March 21, 1997, among
CBS Corporation, the Subsidiary Borrowers parties thereto,
the Lenders parties thereto, Nationsbank, N.A. and The
Toronto-Dominion Bank as Syndication Agents, The Chase
Manhattan Bank as Documentation Agent, and Morgan Guaranty
Trust Company of New York as Administrative Agent, is
incorporated herein by reference to Exhibit 10(x) to the
report on Form 10-Q of CBS Corporation for the quarter ended
March 31, 1998.
10.7 Fourth Amendment, dated February 26, 1999, to the CBS
Corporation Credit Agreement, dated August 29, 1996, as
amended by the First, Second, and Third Amendments, dated
January 29, 1997, March 21, 1997 and March 3, 1999,
respectively, among CBS Corporation, the Subsidiary
Borrowers parties thereto, the Lenders parties thereto,
Nationsbank, N.A. and the Toronto-Dominion Bank as
Syndication Agents, The Chase Manhattan Bank as
Documentation Agent, and Morgan Guaranty Trust Company of
New York as Administrative Agent, is incorporated by
reference to Exhibit 10.9 to the report on Form 10-Q for the
quarter ended March 31, 1999.
10.8 Credit Agreement, dated December 10, 1999, among the
Company, the Subsidiary Borrowers parties thereto, CBS
Corporation, as Guarantor, the Lenders named therein, The
Chase Manhattan Bank, as Documentation Agent, Morgan
Guaranty Trust Company of New York, as Administrative Agent,
and Bank of America, N.A. and The Toronto-Dominion Bank, as
Syndication Agents.
</TABLE>
INFINITY BROADCASTING CORPORATION 47
<PAGE> 48
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10.9 Management Agreement, dated March 30, 1999, between the
Company and Westwood One, Inc., is incorporated herein by
reference to Exhibit 10.17 to the report on Form 8-K of
Westwood One, Inc., filed with the Securities and Exchange
Commission on June 4, 1999.
10.10 Amendment and Restated Representation Agreement, dated March
30, 1999, between the Company and Westwood One, Inc., is
incorporated herein by reference to Exhibit 10.18 to the
report on Form 8-K of Westwood One, Inc., filed with the
Securities and Exchange Commission on June 4, 1999.
10.11* Employment Agreement, entered into on June 20, 1996 and
effective December 1996, between CBS Corporation and Mel
Karmazin, is incorporated herein by reference to Exhibit
10(s) to the report on Form 10-Q of CBS Corporation for the
quarter ended March 31, 1997.
10.12* Employment Agreement entered into on May 22, 1996, effective
November 28, 1995, and amended January 29, 1997, between CBS
Broadcasting Inc. and Daniel Mason, is incorporated by
reference to Exhibit 10.13 to the Company's Registration
Statement No. 333-63727 on Form S-1, Amendment No. 4, filed
with the Securities and Exchange Commission on December 4,
1998.
10.13* Restated Employment Agreement, dated December 1, 1998,
between TDI Worldwide, Inc. and William Apfelbaum, is
incorporated by reference to Exhibit 10.14 to the Company's
Registration Statement No. 33327 on Form S-1 Amendment No.
4, filed with the Securities and Exchange Commission on
December 4, 1998.
10.14* The CBS Corporation 1991 Long-Term Incentive Plan, as
amended to July 28, 1999, is incorporated by reference to
Exhibit 10.15 to the report on Form 10-Q for the quarter
ended September 30, 1999.
10.15* The CBS Corporation 1993 Long-Term Incentive Plan, as
amended to July 28, 1999, is incorporated by reference to
Exhibit 10.16 to the report on Form 10-Q for the quarter
ended September 30, 1999.
10.16* 1998 Long-Term Incentive Plan of the Company.
10.17* Executive Annual Incentive Plan of the Company.
10.18* The CBS Corporation Annual Performance Plan, as amended to
July 28, 1999, is incorporated by reference to Exhibit 10.19
to the report on Form 10-Q for the quarter ended September
30, 1999.
10.19* The Westinghouse Executive Pension Plan, as amended to July
28, 1999, is incorporated by reference to Exhibit 10.20 to
the report on Form 10-Q for the quarter ended September 30,
1999.
10.20* The CBS Corporation 1998 Executive Annual Incentive Plan is
incorporated herein by reference to Exhibit A to the Proxy
Statement of CBS Corporation filed March 25, 1998.
10.21 Form of Trademark License Agreement between CBS Worldwide
Inc. and the Company is incorporated by reference to Exhibit
10.24 to the Company's Registration Statement No. 333-63727
on Form S-1, Amendment No. 4, filed with the Securities and
Exchange Commission on December 4, 1998.
10.22 Form of Trademark License Agreement between CBS Broadcasting
Inc. and the Company is incorporated by reference to Exhibit
10.25 to the Company's Registration Statement No. 333-63727
on Form S-1, Amendment No. 4, filed with the Securities and
Exchange Commission on December 4, 1998.
10.23 Form of Trademark License Agreement between CBS Corporation
and the Company is incorporated by reference to Exhibit
10.26 to the Company's Registration Statement No. 333-63727
on Form S-1, Amendment No. 4, filed with the Securities and
Exchange Commission on December 4, 1998.
10.24* The Infinity Broadcasting Corporation Stock Plan for
Directors is incorporated by reference to Exhibit 10.25 to
Form 10-K for the year ended December 31, 1998.
10.25 Agreement and Plan of Merger, dated May 27, 1999, among the
Company, Burma Acquisition Corp. and Outdoor Systems, Inc.,
is incorporated herein by reference to Exhibit 99.1 to the
report on Form 8-K of Outdoor Systems, Inc., filed with the
Securities and Exchange Commission on June 3, 1999.
</TABLE>
48 INFINITY BROADCASTING CORPORATION
<PAGE> 49
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10.26 Amendment No. 1, dated June 16, 1999, to the Agreement and
Plan of Merger, dated May 27, 1999, among the Company, Burma
Acquisitions Corp. and Outdoor Systems, Inc., is
incorporated herein by reference to Exhibit 99.2 to the
Company's report on Form 8-K, filed with the Securities and
Exchange Commission on June 25, 1999.
10.27 Stockholders Agreement, dated May 27, 1999, among the
Company, William S. Levine, Arturo R. Moreno, Carole D.
Moreno, Levine Investments Limited Partnership and BRN
Properties Limited Partnership, is incorporated herein by
reference to Exhibit 99.2 to the report on Form 8-K of
Outdoor Systems, Inc., filed with the Securities and
Exchange Commission on June 3, 1999.
10.28 Amendment No. 1, dated July 15, 1999, to the Stockholders
Agreement, dated May 27, 1999, among the Company and the
stockholders named in the agreement, is incorporated herein
by reference to Exhibit 2.4 to the Company's Registration
Statement No. 333-88363 on Form S-4, filed with the
Securities and Exchange Commission on October 4, 1999.
10.29 Voting Agreement, dated May 27, 1999, between CBS
Broadcasting Inc. and Outdoor Systems, Inc. is incorporated
herein by reference to Exhibit 99.3 to the report on Form
8-K of Outdoor Systems, Inc., filed with the Securities and
Exchange Commission on June 3, 1999.
10.30 Asset Purchase Agreement, dated March 3, 2000, among Clear
Channel Communications, Inc., AMFM Inc., CCU Merger Sub,
Inc. and CBS Radio Inc.
21. SUBSIDIARIES
21.1 Subsidiaries of the Registrant
23. CONSENT OF KPMG LLP
24. POWERS OF ATTORNEY
24.1 Powers of Attorney of directors
27. FINANCIAL DATA SCHEDULE
27.1 Financial Data Schedule
</TABLE>
* Identifies management contract or compensatory plan or arrangement.
INFINITY BROADCASTING CORPORATION 49
<PAGE> 50
(B) REPORTS ON FORM 8-K
A Current Report on Form 8-K (Items 5 and 7), filed with the Securities and
Exchange Commission on October 20, 1999, restating and updating the Company's
description of its capital stock.
A Current Report on Form 8-K (Items 5 and 7), filed with the Securities and
Exchange Commission on October 29, 1999, filing a press release concerning the
Company's earnings for the third quarter of 1999 and financial information for
the three months ended September 30, 1999.
A Current Report on Form 8-K (Items 2 and 7), filed with the Securities and
Exchange Commission on December 22, 1999, filing a press release announcing that
the Company completed its acquisition of Outdoor Systems, Inc. on December 7,
1999.
50 INFINITY BROADCASTING CORPORATION
<PAGE> 51
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULE
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF INFINITY BROADCASTING CORPORATION:
Under date of January 25, 2000, except as to Note 17, which is as of March 21,
2000, we reported on the consolidated balance sheet of Infinity Broadcasting
Corporation and subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of earnings and comprehensive income, cash flows, and
changes in stockholders' equity for each of the years in the three-year period
ended December 31, 1999, which are included in the 1999 Annual Report on Form
10-K. In connection with our audits of the aforementioned consolidated financial
statements, we also audited the related consolidated financial statement
schedule included in the 1999 Annual Report on Form 10-K. This consolidated
financial statement schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion in this consolidated financial
statement schedule based on our audits.
In our opinion, such consolidated financial statement schedule, when considered
in relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.
/s/ KPMG LLP
KPMG LLP
New York, New York
March 21, 2000
INFINITY BROADCASTING CORPORATION 51
<PAGE> 52
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997
(in thousands)
<TABLE>
<CAPTION>
ADDITIONS
---------------------------
INCREASE
BALANCE AT CHARGED TO RESULTING AMOUNTS BALANCE
BEGINNING COSTS AND FROM WRITTEN AT END
DESCRIPTION OF YEAR EXPENSES ACQUISITIONS OFF OF YEAR
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1999 allowance for doubtful accounts $27,463 $13,590 $18,104(1) $(10,289) $48,868
1998 allowance for doubtful accounts 15,086 14,365 8,349(2) (10,337) 27,463
1997 allowance for doubtful accounts 11,417 10,382 -- (6,713) 15,086
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Relates to the acquisition of Outdoor Systems, Inc. on December 7, 1999.
(2) Relates to the acquisition of American Radio Systems, Inc. on June 4, 1998.
52 INFINITY BROADCASTING CORPORATION
<PAGE> 53
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) 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, on the 27th of March,
2000.
INFINITY BROADCASTING CORPORATION
By: /s/ FARID SULEMAN
--------------------------------------
Farid Suleman
Executive Vice President,
Chief Financial Officer and Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the date indicated.
SIGNATURE AND TITLE
Mel Karmazin, Chairman, President, and Chief Executive Officer
(Principal Executive Officer) and Director
Farid Suleman, Executive Vice President, Chief Financial Officer, Treasurer
(Principal Financial and Accounting Officer) and Director
George H. Conrades, Director
Bruce S. Gordon, Director
William S. Levine, Director
Arturo R. Moreno, Director
Richard R. Pivirotto, Director
Jeffrey Sherman, Director
Paula Stern, Director
Robert D. Walter, Director
By: /s/ FARID SULEMAN
---------------------------
Farid Suleman
Attorney-in-Fact
March 27, 2000
Original powers of attorney authorizing Farid Suleman and certain others,
individually, to sign this report on behalf of the listed directors and officers
of the Company have been filed with the Securities and Exchange Commission and
are included as Exhibit 24 to this report.
INFINITY BROADCASTING CORPORATION 53
<PAGE> 1
Exhibit 10.8
EXECUTION COPY
- --------------------------------------------------------------------------------
$1,500,000,000
CREDIT AGREEMENT
among
INFINITY BROADCASTING CORPORATION,
THE SUBSIDIARY BORROWERS PARTIES HERETO,
CBS CORPORATION,
as Guarantor
THE LENDERS NAMED HEREIN,
THE CHASE MANHATTAN BANK,
as Documentation Agent,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Administrative Agent,
and
BANK OF AMERICA, N.A. and THE TORONTO-DOMINION BANK,
as Syndication Agents
Dated as of December 10, 1999
- --------------------------------------------------------------------------------
CHASE SECURITIES INC.,
as Sole Lead Arranger and Book Manager
<PAGE> 2
TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS..............................................................................................1
SECTION 1.1. Defined Terms..............................................................................1
SECTION 1.2. Terms Generally...........................................................................18
ARTICLE II.THE CREDITS.............................................................................................19
SECTION 2.1. Commitments...............................................................................19
SECTION 2.2. Revolving Credit Loans; Competitive Loans.................................................19
SECTION 2.3. Competitive Bid Procedure.................................................................20
SECTION 2.4. Revolving Credit Borrowing Procedure......................................................22
SECTION 2.5. Repayment of Loans........................................................................22
SECTION 2.6. Swingline Loans...........................................................................22
SECTION 2.7. Letters of Credit.........................................................................25
SECTION 2.8. Conversion and Continuation Options.......................................................28
SECTION 2.9. Fees......................................................................................29
SECTION 2.10. Interest on Loans; Eurodollar Tranches; Etc...............................................29
SECTION 2.11. Default Interest..........................................................................30
SECTION 2.12. Alternate Rate of Interest................................................................30
SECTION 2.13. Termination and Reduction of Commitments..................................................31
SECTION 2.14. Optional Prepayments of Revolving Credit Loans............................................31
SECTION 2.15. Reserve Requirements......................................................................32
SECTION 2.16. Indemnity.................................................................................33
SECTION 2.17. Pro Rata Treatment; Funding Matters; Evidence of Debt.....................................34
SECTION 2.18. Sharing of Setoffs........................................................................35
SECTION 2.19. Payments..................................................................................36
SECTION 2.20. Taxes.....................................................................................36
SECTION 2.21. Termination or Assignment of Commitments Under Certain Circumstances......................37
ARTICLE III. REPRESENTATIONS AND WARRANTIES.......................................................................38
SECTION 3.1. Corporate Existence.......................................................................38
SECTION 3.2. Financial Condition.......................................................................38
SECTION 3.3. Litigation................................................................................39
SECTION 3.4. No Breach, etc............................................................................39
SECTION 3.5. Corporate Action..........................................................................40
SECTION 3.6. Approvals.................................................................................40
SECTION 3.7. ERISA.....................................................................................40
SECTION 3.8. Taxes.....................................................................................40
SECTION 3.9. Investment Company Act....................................................................40
SECTION 3.10. Hazardous Materials.......................................................................40
SECTION 3.11. Material Subsidiaries.....................................................................40
SECTION 3.12. No Material Misstatements.................................................................41
SECTION 3.13. Ownership of Property.....................................................................41
SECTION 3.14. Intellectual Property.....................................................................41
SECTION 3.15. FCC Matters...............................................................................41
SECTION 3.16. Year 2000 Matters.........................................................................41
</TABLE>
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ARTICLE IV. CONDITIONS OF EFFECTIVENESS AND LENDING................................................................42
SECTION 4.1. Effectiveness.............................................................................42
SECTION 4.2. Initial Loans to Subsidiary Borrowers.....................................................42
SECTION 4.3. All Credit Events.........................................................................43
ARTICLE V. COVENANTS...............................................................................................43
SECTION 5.1. Financial Statements......................................................................43
SECTION 5.2. Corporate Existence, Etc..................................................................45
SECTION 5.3. Insurance.................................................................................46
SECTION 5.4. Prohibition of Fundamental Changes........................................................46
SECTION 5.5. Limitation on Liens.......................................................................47
SECTION 5.6. Limitation on Subsidiary Indebtedness.....................................................49
SECTION 5.7. Consolidated Leverage Ratio...............................................................49
SECTION 5.8. Consolidated Coverage Ratio...............................................................49
SECTION 5.9. Use of Proceeds...........................................................................49
SECTION 5.10. Transactions with Affiliates..............................................................50
SECTION 5.11. Limitation on Negative Pledge Clauses.....................................................50
ARTICLE VI. EVENTS OF DEFAULT......................................................................................50
ARTICLE VII. THE AGENTS............................................................................................53
ARTICLE VIII. GUARANTEE............................................................................................55
SECTION 8.1. Guarantee.................................................................................55
SECTION 8.2. No Subrogation, etc.......................................................................55
SECTION 8.3. Amendments, etc. with respect to the Borrower Obligations.................................56
SECTION 8.4. Guarantee Absolute and Unconditional......................................................56
SECTION 8.5. Reinstatement.............................................................................57
SECTION 8.6. Payments..................................................................................57
SECTION 8.7. Infinity Guarantee........................................................................57
ARTICLE IX. MISCELLANEOUS..........................................................................................57
SECTION 9.1. Notices...................................................................................57
SECTION 9.2. Survival of Agreement.....................................................................58
SECTION 9.3. Binding Effect............................................................................58
SECTION 9.4. Successors and Assigns....................................................................58
SECTION 9.5. Expenses; Indemnity.......................................................................61
SECTION 9.6. Right of Setoff...........................................................................62
SECTION 9.7. APPLICABLE LAW............................................................................62
SECTION 9.8. Waivers; Amendment........................................................................62
SECTION 9.9. Entire Agreement..........................................................................63
SECTION 9.10. Waiver of Jury Trial......................................................................63
SECTION 9.11. Severability..............................................................................63
SECTION 9.12. Counterparts..............................................................................63
SECTION 9.13. Headings..................................................................................63
SECTION 9.14. Jurisdiction; Consent to Service of Process...............................................64
SECTION 9.15. Confidentiality...........................................................................64
</TABLE>
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EXHIBITS
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Exhibit A Administrative Questionnaire
Exhibit B-1 Form of Competitive Bid Request
Exhibit B-2 Form of Notice of Competitive Bid Request
Exhibit B-3 Form of Competitive Bid
Exhibit B-4 Form of Revolving Credit Borrowing Request
Exhibit B-5 Form of Swingline Borrowing Request
Exhibit B-6 Form of Notice of Designated Letter of Credit
Exhibit B-7 Form of Subsidiary Borrower Designation
Exhibit B-8 Form of Subsidiary Borrower Request
Exhibit C Form of Assignment and Acceptance
Exhibit D Form of Confidentiality Agreement
Exhibit E-1 Omitted
Exhibit E-2 Omitted
Exhibit F Form of Closing Certificate
Exhibit G Form of Issuing Lender Agreement
SCHEDULES
- ---------
Schedule 1.1 Commitments; Addresses for Notices
Schedule 3.11 Material Subsidiaries
Schedule 5.5(m) Certain Infinity Assets
Schedule 5.6 Existing Infinity Indebtedness
</TABLE>
-iii-
<PAGE> 5
CREDIT AGREEMENT entered into as of December 10, 1999, among INFINITY
BROADCASTING CORPORATION, a Delaware corporation ("Infinity"), each Subsidiary
Borrower (as herein defined); CBS Corporation, a Pennsylvania corporation
("CBS"), as a guarantor; the lenders whose names appear on Schedule 1.1 hereto
or who subsequently become parties hereto as provided herein (the "Lenders");
BANK OF AMERICA, N.A. ("Bank of America") and THE TORONTO-DOMINION BANK
("Toronto Dominion"), as syndication agents for the Lenders (in such capacity,
the "Syndication Agents"); THE CHASE MANHATTAN BANK, a New York banking
corporation ("Chase"), as documentation agent for the Lenders; and MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, a New York banking corporation ("Morgan"),
as administrative agent for the Lenders.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Infinity is a party to the Credit Agreement dated as of August
29, 1996, as amended by the First Amendment thereto dated as of January 29,
1997, the Second Amendment thereto dated as of March 21, 1997, the Third
Amendment thereto dated as of March 3, 1998 and the Fourth Amendment thereto
dated as of February 26, 1999 (the "Existing Credit Agreement"), CBS ("CBS"),
the Subsidiary Borrowers (as defined therein) parties thereto, the Lenders,
NationsBank, N.A. and The Toronto-Dominion Bank, as Syndication Agents, The
Chase Manhattan Bank, as Documentation Agent, and Morgan Guaranty Trust Company
of New York, as Administrative Agent;
WHEREAS, CBS and Infinity have requested the rights and obligations of
Infinity under the Existing Credit Agreement (and those of any Subsidiary
Borrower party to the Existing Credit Agreement that is a Subsidiary of
Infinity) be re-evidenced in this separate credit agreement pursuant to which
the Lenders shall provide extensions of credit to be used for general corporate
purposes, which extensions of credit shall enable (a) each Borrower (as herein
defined) to borrow loans on a revolving credit basis on and after the Closing
Date (as herein defined) and prior to the Revolving Credit Maturity Date (as
herein defined), (b) Infinity to request the issuance of Letters of Credit (as
herein defined) and (c) each Borrower to invite the Lenders to bid on an
uncommitted basis on short-term borrowings by such Borrower, in an aggregate
principal amount for all such extensions of credit not in excess of
$1,500,000,000; and
WHEREAS, the Lenders are willing to extend credit to the Borrowers on
the terms and subject to the conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto hereby agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. Defined Terms. As used in this Agreement, the following
terms shall have the meanings specified below:
"ABR Loan" shall mean (a) any Revolving Credit Loan bearing interest at
a rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II and (b) any ABR Swingline Loan.
<PAGE> 6
2
"ABR Revolving Credit Loan" shall mean any Revolving Credit Loan which
is an ABR Loan.
"ABR Swingline Exposures" shall mean at any time the aggregate
principal amount at such time of the outstanding ABR Swingline Loans. The ABR
Swingline Exposure of any Lender at any time shall mean its Revolving Credit
Percentage of the aggregate ABR Swingline Exposures at such time.
"ABR Swingline Loan" shall have the meaning assigned to such term in
Section 2.6(a).
"Absolute Rate Loan" shall mean any Competitive Loan bearing interest
at a fixed percentage rate per annum (expressed in the form of a decimal rounded
to no more than four decimal places) specified by the Lender making such Loan in
its Competitive Bid.
"Administrative Agent" shall mean Morgan, together with its affiliates,
as an arranger of the Commitments and as the administrative agent for the
Lenders under this Agreement, and any successor thereto pursuant to Article VII.
"Administrative Agent Fee Letter" shall mean the Fee Letter with
respect to this Agreement between CBS and the Administrative Agent, as amended,
supplemented or otherwise modified from time to time.
"Administrative Agent's Fees" shall have the meaning assigned to such
term in Section 2.9(c).
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit A hereto.
"Affiliate" shall mean, as to Infinity, any Person which directly or
indirectly controls, is under common control with or is controlled by Infinity.
As used in this definition, "control" (including, with correlative meanings,
"controlled by" and "under common control with") shall mean possession, directly
or indirectly, of power to direct or cause the direction of management or
policies (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise), provided that, in any event, any
Person which owns directly or indirectly 10% or more of the securities having
ordinary voting power for the election of directors or other governing body of a
corporation or 10% or more of the partnership or other ownership interests of
any other Person (other than as a limited partner of such other Person) will be
deemed to control such corporation or other Person. Notwithstanding the
foregoing, (a) no individual shall be deemed to be an Affiliate of Infinity
solely by reason of his or her being an officer, director or employee of
Infinity or any of its Subsidiaries and (b) CBS and Infinity and their
Subsidiaries shall not be deemed to be Affiliates of each other.
"Agents" shall mean the collective reference to the Administrative
Agent, the Documentation Agent and the Syndication Agents.
"Aggregate LC Exposure" shall mean, at any time, the sum of (a) the
aggregate undrawn amount of all Letters of Credit outstanding at such time and
(b) the aggregate amount which has been drawn under Letters of Credit but for
which the applicable Issuing Lender or the Lenders, as the case may be, have not
been reimbursed by Infinity at such time.
<PAGE> 7
3
"Agreement" shall mean this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Alternate Base Rate" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of
(a) the Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%. For purposes hereof, "Prime Rate"
shall mean the rate of interest per annum publicly announced from time to time
by the Lender serving as the Administrative Agent as its prime rate in effect at
its principal office in New York City; each change in the Prime Rate shall be
effective on the date such change is publicly announced as effective; and
"Federal Funds Effective Rate" shall mean, for any day, the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative Agent
from three Federal funds brokers of recognized standing selected by it. If for
any reason the Administrative Agent shall have determined (which determination
shall be conclusive absent manifest error) that it is unable to ascertain the
Federal Funds Effective Rate for any reason, including the inability or failure
of the Administrative Agent to obtain sufficient quotations in accordance with
the terms thereof, the Alternate Base Rate shall be the Prime Rate until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Commitment Fee Rate" shall mean the "Applicable Commitment
Fee Rate" determined in accordance with the Pricing Grid set forth in Annex I
hereto.
"Applicable Eurodollar Margin" shall mean the "Applicable Eurodollar
Margin" determined in accordance with the Pricing Grid set forth in Annex I
hereto.
"Applicable LC Fee Rate" shall mean (a) with respect to Financial
Letters of Credit, the "Applicable Financial LC Fee Rate" determined in
accordance with the Pricing Grid set forth in Annex I hereto and (b) with
respect to Non-Financial Letters of Credit, the "Applicable Non-Financial LC Fee
Rate" determined in accordance with the Pricing Grid set forth in Annex I
hereto.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Administrative
Agent, in the form of Exhibit C.
"Bank of America" shall have the meaning assigned to such term in the
preamble to this Agreement.
"Board" shall mean the Board of Governors of the Federal Reserve System
of the United States.
"Borrower" shall mean, as applicable, Infinity or the relevant
Subsidiary Borrower.
"Borrower Obligations" shall mean, with respect to each Borrower, the
unpaid principal of and interest on the Loans made to such Borrower (including,
without limitation, interest accruing after the maturity of the Loans made to
such Borrower and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to such Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding)
<PAGE> 8
4
and all other obligations and liabilities of such Borrower to the Administrative
Agent or to any Lender, whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, this Agreement.
"Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which banks are
open for business in New York City; provided, however, that, when used in
connection with a Eurodollar Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in Dollar deposits in the
London interbank market.
"Capital Lease Obligations" of any Person shall mean the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Capital Stock" shall mean any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other than
a corporation) and any and all warrants or options to purchase any of the
foregoing.
"CBS" shall have the meaning assigned to such term in the preamble to
this Agreement.
"CBS Consolidated EBITDA" shall mean, with respect to CBS and its
Consolidated Subsidiaries for any period, operating profit (loss) (excluding
that related to Discontinued Operations), plus other income (loss), plus
interest income, plus depreciation and amortization (excluding amortization
related to programming rights), excluding (a) gains (losses) on sales of assets
(except (I) gains (losses) on sales of inventory sold in the ordinary course of
business and (II) gains (losses) on sales of other assets if such gains (losses)
are less than $10,000,000 individually and less than $50,000,000 in the
aggregate during such period), and (b) other non-cash items (including (i)
provisions for losses and additions to valuation allowances, (ii) provisions for
restructuring, litigation and environmental reserves and losses on the
Disposition of businesses and (iii) pension settlement charges), in each case
determined for such period on a basis consistent with that reported in CBS's
Form 10-Q for the fiscal quarter ended September 30, 1998 filed with the SEC,
minus cash payments made during such period in respect of non-cash charges taken
during any previous period (excluding cash payments in respect of non-cash
charges taken prior to December 31, 1998).
"CBS Consolidated Leverage Ratio" shall mean, as of the last day of any
period, the ratio of CBS Consolidated Total Funded Indebtedness at such date to
CBS Consolidated EBITDA for such period.
"CBS Consolidated Total Funded Indebtedness" shall mean, with respect
to CBS and its Consolidated Subsidiaries at any date, the sum at such date of
(a) all Indebtedness for Borrowed Money (including commercial paper and unpaid
reimbursement obligations in respect of drawn letters of credit but otherwise
excluding letters of credit), (b) all indebtedness for the deferred purchase
price of Property or services (other than trade accounts payable and accruals in
the ordinary course of business), (c) all Capital Lease Obligations, (d) the
amount of any Indebtedness for Borrowed Money secured by receivables sold by
Infinity and its Consolidated Subsidiaries pursuant to a program established for
the purpose of financing such receivables, and (e) all Guarantees of
indebtedness of the type referred to in
<PAGE> 9
5
any of clauses (a) through (d) above (other than Guarantees of any such
indebtedness of CBS and its Consolidated Subsidiaries); provided, that, in no
event shall Indebtedness attributable to Discontinued Operations be included in
Consolidated Total Funded Indebtedness.
"Change of Control" shall mean that CBS, or following the Viacom
Merger, Viacom, shall have ceased to hold, directly or indirectly, beneficial
ownership (within the meaning of Rules 13d-3 and 13d-5 promulgated by the SEC
pursuant to the Exchange Act) of more than 50% of the outstanding shares of
voting and economic stock of Infinity.
"Chase" shall have the meaning assigned to such term in the preamble to
this Agreement.
"Closing Certificate" shall mean a certificate, substantially in the
form of Exhibit F.
"Closing Date" shall mean December 10, 1999.
"Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Commitment" shall mean, with respect to each Lender, the commitment of
such Lender to make Revolving Credit Loans pursuant to Section 2.1, to make or
refund ABR Swingline Loans pursuant to Section 2.6 and to issue or participate
in Letters of Credit pursuant to Section 2.7, as set forth on Schedule 1.1, as
such Lender's Commitment may be permanently terminated or reduced from time to
time pursuant to Section 2.13 or changed pursuant to Section 9.4.
"Commitment Fee Calculation Amount" shall mean, as to any Lender at any
time, an amount equal to the excess, if any, of (a) such Lender's Commitment
over (b) the sum of (i) the aggregate principal amount of all Revolving Credit
Loans made by such Lender then outstanding, (ii) such Lender's LC Exposure at
such time and (iii) in the case of each Swingline Lender, the aggregate
principal amount of all Swingline Loans made by such Swingline Lender then
outstanding.
"Commitment Fees" shall mean all fees payable pursuant to Section
2.9(a).
"Communications Act" shall mean the Communications Act of 1934, as
amended.
"Competitive Bid" shall mean an offer to make a Competitive Loan
pursuant to Section 2.3.
"Competitive Bid Rate" shall mean, as to any Competitive Bid made
pursuant to Section 2.3(b), (a) in the case of a Eurodollar Competitive Loan,
the Margin, and (b) in the case of an Absolute Rate Loan, the fixed rate of
interest offered by the Lender making such Competitive Bid.
"Competitive Bid Request" shall mean a request made pursuant to Section
2.3 in the form of Exhibit B-1.
"Competitive Loan" shall mean a Loan from a Lender to a Borrower
pursuant to the bidding procedure described in Section 2.3. Each Competitive
Loan shall be a Eurodollar Competitive Loan or an Absolute Rate Loan.
<PAGE> 10
6
"Compliance Certificate" shall have the meaning assigned to such term
in Section 5.1.
"Confidential Information" shall have the meaning assigned to such term
in Section 9.15(a).
"Confidential Information Memorandum" shall mean the Information
Memorandum dated October 1999 and furnished to the Lenders.
"Confidentiality Agreement" shall mean a confidentiality agreement
substantially in the form of Exhibit D, with such changes as Infinity may
approve.
"Consolidated Coverage Ratio" shall mean, for any period, the ratio of
(a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense for
such period.
"Consolidated EBITDA" shall mean, with respect to Infinity and its
Consolidated Subsidiaries for any period, operating profit (loss), plus other
income (loss), plus interest income, plus depreciation and amortization
(excluding amortization related to programming rights), excluding (a) gains
(losses) on sales of assets (except (I) gains (losses) on sales of inventory
sold in the ordinary course of business and (II) gains (losses) on sales of
other assets if such gains (losses) are less than $10,000,000 individually and
less than $50,000,000 in the aggregate during such period), and (b) other
non-cash items (including (i) provisions for losses and additions to valuation
allowances, (ii) provisions for restructuring, litigation and environmental
reserves and losses on the Disposition of businesses and (iii) pension
settlement charges), in each case determined for such period on a basis
consistent with that reported in Infinity's Form 10-Q and 10-Q/A for the fiscal
quarter ended June 30, 1999 filed with the SEC, minus cash payments made during
such period in respect of non-cash charges taken during any previous period
(excluding cash payments in respect of non-cash charges taken prior to December
31, 1998).
"Consolidated Interest Expense" shall mean, for any period, the gross
interest expense of Infinity and its Consolidated Subsidiaries for such period,
computed and consolidated in accordance with GAAP, but excluding the
amortization of deferred financing charges for such period.
"Consolidated Leverage Ratio" shall mean, as of the last day of any
period, the ratio of Consolidated Total Funded Indebtedness at such date to
Consolidated EBITDA for such period.
"Consolidated Subsidiary" shall mean, as to any Person, each Subsidiary
of such Person (whether now existing or hereafter created or acquired) the
financial statements of which shall be consolidated with the financial
statements of such Person in accordance with GAAP.
"Consolidated Total Funded Indebtedness" shall mean, with respect to
Infinity and its Consolidated Subsidiaries at any date, the sum at such date of
(a) all Indebtedness for Borrowed Money (including commercial paper and unpaid
reimbursement obligations in respect of drawn letters of credit but otherwise
excluding letters of credit), (b) all indebtedness for the deferred purchase
price of Property or services (other than trade accounts payable and accruals in
the ordinary course of business), (c) all Capital Lease Obligations, (d) the
amount of any Indebtedness for Borrowed Money secured by receivables sold by
Infinity and its Consolidated Subsidiaries pursuant to a program established for
the purpose of financing such receivables, and (e) all Guarantees of
indebtedness of the type referred to in any of clauses (a) through (d) above
(other than Guarantees of any such indebtedness of Infinity and its Consolidated
Subsidiaries).
<PAGE> 11
7
"Credit Event" shall mean the making of any Loan or the issuance of any
Letter of Credit hereunder (including the designation of a Designated Letter of
Credit as a "Letter of Credit" hereunder). It is understood that conversions and
continuations pursuant to Section 2.8 do not constitute "Credit Events".
"Debt Rating" shall mean the rating applicable to CBS's senior,
unsecured, non-credit-enhanced long-term indebtedness for borrowed money, as
assigned by either Rating Agency.
"Default" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"Designated Letters of Credit" shall mean each letter of credit issued
by an Issuing Lender that (a) is not a Letter of Credit hereunder at the time of
its issuance and (b) is designated on or after the Closing Date by Infinity,
with the consent of such Issuing Lender, as a "Letter of Credit" hereunder by
written notice to the Administrative Agent in the form of Exhibit B-6.
"Discontinued Operations" shall mean the operations classified as
"discontinued operations" pursuant to Accounting Principles Board Opinion No. 30
as presented in the quarterly report of CBS on Form 10-Q for the quarter ended
September 30, 1997 and filed with the SEC on December 14, 1997.
"Disposition" shall mean, with respect to any Property, any sale,
lease, assignment, conveyance, transfer or other disposition thereof; and the
terms "Dispose" and "Disposed of" shall have correlative meanings.
"Documentation Agent" shall mean Chase, together with its affiliates,
as an arranger of the Commitments and as the documentation agent for the Lenders
under this Agreement.
"Dollars" or "$" shall mean lawful money of the United States of
America.
"Environmental Laws" shall mean any and all Federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment, including, without limitation, ambient air, surface water, ground
water or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals or industrial, toxic or hazardous substances
or wastes.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Affiliate" shall mean, with respect to Infinity, any trade or
business (whether or not incorporated) that is a member of a group of which
Infinity is a member and which is treated as a single employer under Section 414
of the Code.
"Eurodollar Competitive Loan" shall mean any Competitive Loan which is
a Eurodollar Loan.
<PAGE> 12
8
"Eurodollar Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Eurodollar Rate.
"Eurodollar Rate" shall mean, with respect to an Interest Period
pertaining to any Eurodollar Loan, the rate of interest determined on the basis
of the rate for deposits in Dollars for a period equal to such Interest Period
commencing on the first day of such Interest Period appearing on Page 3750 of
the Telerate Screen as of 11:00 A.M., London time, two Business Days prior to
the beginning of such Interest Period. In the event that such rate does not
appear on Page 3750 of the Telerate Screen (or otherwise on the Telerate
Service), the "Eurodollar Rate" shall be determined by reference to such other
publicly available service for displaying eurodollar rates as may be agreed upon
by the Administrative Agent and CBS or, in the absence of such agreement, the
"Eurodollar Rate" shall instead be the interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the average of the rates at which
Dollar deposits approximately equal in principal amount to (a) in the case of a
Eurodollar Tranche, the portion of such Eurodollar Tranche of the Lender serving
as Administrative Agent and (b) in the case of a Eurodollar Competitive Loan, a
principal amount that would have been the portion of such Loan of the Lender
serving as the Administrative Agent had such Loan been a Eurodollar Revolving
Credit Loan, and for a maturity comparable to such Interest Period, are offered
by the principal London offices of the Reference Banks (or, if any Reference
Bank does not at the time maintain a London office, the principal London office
of any affiliate of such Reference Bank) for immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period.
"Eurodollar Revolving Credit Loan" shall mean any Revolving Credit Loan
which is a Eurodollar Loan.
"Eurodollar Tranche" shall mean the collective reference to Eurodollar
Revolving Credit Loans made by the Lenders, the then current Interest Periods
with respect to all of which begin on the same date and end on the same later
date (whether or not such Loans shall originally have been made on the same
day).
"Event of Default" shall have the meaning assigned to such term in
Article VI, provided that any requirement for the giving of notice, the lapse of
time, or both, has been satisfied.
"Exchange Act Report" shall have the meaning assigned to such term in
Section 3.3.
"Excluded Indebtedness" shall mean (a) Indebtedness of any Person which
is acquired by Infinity or any of its Subsidiaries after the Original Closing
Date, which Indebtedness was outstanding prior to the date of acquisition of
such Person and was not created in anticipation thereof, (b) any Indebtedness
owing by Infinity or any of its Subsidiaries to Infinity or any of its
Subsidiaries (including any intercompany Indebtedness created by the declaration
of a note payable dividend by any Subsidiary to Infinity or any of its other
Subsidiaries) and (c) Specified Section 5.5(n) Indebtedness.
"Existing Credit Agreement" shall have the meaning assigned to such
term in the recitals to this Agreement.
"Facility Exposure" shall mean, with respect to any Lender, the sum of
(a) the Outstanding Revolving Extensions of Credit of such Lender, (b) the
aggregate outstanding principal
<PAGE> 13
9
amount of any Competitive Loans made by such Lender and (c) in the case of a
Swingline Lender, the aggregate outstanding principal amount of any Quoted
Swingline Loans made by such Swingline Lender.
"FCC" shall mean the Federal Communications Commission.
"FCC Licenses" shall mean, with respect to Infinity or any of its
Subsidiaries, any radio, television or other license, permit, certificate of
compliance or authorization issued by the FCC and required for the operation of
its respective radio and television broadcast stations.
"Federal Funds Effective Rate" shall have the meaning assigned to such
term in the definition of "Alternate Base Rate".
"Fees" shall mean the Commitment Fees, the Administrative Agent's Fees,
the Issuing Lender Fees and the LC Fees.
"Financial Covenants" shall have the meaning assigned to such term in
Section 1.2(b).
"Financial Letter of Credit" shall mean any Letter of Credit that, as
determined by the Administrative Agent, (a) supports a financial obligation and
(b) qualifies for the 100% credit conversion factor under the applicable Bank
for International Settlements guidelines.
"Financial Officer" of any corporation shall mean its chief financial
officer, its Vice President and Treasurer or its Vice President and Chief
Accounting Officer or, in each case, any comparable officer or any Person
designated by any such officer.
"Foreign Currency" shall mean any currency other than Dollars which is
readily convertible by the relevant Issuing Lender into Dollars.
"Foreign Exchange Rate" shall mean, with respect to any Foreign
Currency on a particular date, the rate at which such Foreign Currency may be
exchanged into Dollars, determined by reference to the selling rate in respect
of such Foreign Currency published in the "Wall Street Journal" on the relevant
date of determination. In the event that such rate is not, or ceases to be, so
published by the "Wall Street Journal", the "Foreign Exchange Rate" with respect
to such Foreign Currency shall be determined by reference to such other publicly
available source for determining exchange rates as may be agreed upon by the
Administrative Agent and Infinity or, in the absence of such agreement, such
"Foreign Exchange Rate" shall instead be the Administrative Agent's spot rate of
exchange in the interbank market where its foreign currency exchange operations
in respect of such Foreign Currency are then being conducted, at or about 12:00
noon, local time, at such date for the purchase of Dollars with such Foreign
Currency, for delivery two banking days later.
"GAAP" shall mean generally accepted accounting principles applied on a
consistent basis (but subject to changes approved by Infinity's independent
public accountants, or, with respect to determining the CBS Consolidated
Leverage Ratio, changes approved by CBS's independent public accountants).
"Governmental Authority" shall mean any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or regulatory
body.
"Granting Bank" shall have to meaning specified in Section 9.4(i).
<PAGE> 14
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"Guarantee" of or by any Person shall mean any obligation, contingent
or otherwise, of such Person guaranteeing or entered into with the purpose of
guaranteeing any Indebtedness of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
Person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase Property, securities or services for the purpose
of assuring the owner of such Indebtedness of the payment of such Indebtedness
or (c) to maintain working capital, equity capital or other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness; provided, however, that the term "Guarantee"
shall not include endorsements for collection or deposit, in either case in the
ordinary course of business.
"Indebtedness" of any Person shall mean, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid, (d)
all obligations of such Person under conditional sale or other title retention
agreements relating to Property or assets purchased by such Person, (e) all
obligations of such Person issued or assumed as the deferred purchase price of
Property or services, (f) all Indebtedness of others secured by (or for which
the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on Property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed, (g) all Guarantees by
such Person of Indebtedness of others, (h) all Capital Lease Obligations of such
Person and (i) all obligations of such Person as an account party in respect of
outstanding letters of credit (whether or not drawn) and bankers' acceptances;
provided, however, that Indebtedness shall not include (i) trade accounts
payable arising in the ordinary course of business, (ii) deferred compensation,
(iii) any Indebtedness of such Person to the extent (A) such Indebtedness does
not appear on the financial statements of such Person, (B) such Indebtedness is
recourse only to certain assets of such Person and (C) the assets to which such
Indebtedness is recourse only appear on the financial statements of such Person
net of such Indebtedness or (iv) obligations (not constituting obligations for
borrowed money) specifically with respect to the production, distribution and
acquisition of television and other programming rights or talent; and provided
further that the amount of any Indebtedness described in clause (f) above shall
be the lower of the amount of the obligation or the fair market value of the
collateral securing such obligation. The Indebtedness of any Person shall
include the Indebtedness of any partnership in which such Person is a general
partner, which Indebtedness is recourse to such general partner.
"Indebtedness for Borrowed Money" shall mean Indebtedness of the type
described in clause (a) or (b) of the definition of "Indebtedness" and any
Guarantee thereof.
"Infinity" shall have the meaning assigned to such term in the preamble
to this Agreement.
"Infinity Ratings" shall mean, at any time, the most recently announced
rating applicable to Infinity's commercial paper, as assigned by each Rating
Agency.
"Information" shall have the meaning assigned to such term in Section
3.13.
<PAGE> 15
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"Intellectual Property" shall mean the collective reference to patents,
trademarks (registered or unregistered), trade names, service marks, assumed
names, copyrights, technology, know-how and processes.
"Interest Payment Date" shall mean (a) with respect to any Eurodollar
Loan or Absolute Rate Loan, the last day of the Interest Period applicable
thereto and, in the case of a Eurodollar Loan with an Interest Period of more
than three months' duration or an Absolute Rate Loan with an Interest Period of
more than 90 days' duration, each day that would have been an Interest Payment
Date for such Loan had successive Interest Periods of three months' duration or
90 days' duration, as the case may be, been applicable to such Loan and, in
addition, the date of any conversion of any Eurodollar Revolving Credit Loan to
an ABR Loan, the date of repayment or prepayment of any Eurodollar Loan and the
applicable Maturity Date; (b) with respect to any ABR Loan (other than an ABR
Swingline Loan which is not an Unrefunded Swingline Loan), the last day of each
March, June, September and December and the applicable Maturity Date; (c) with
respect to any ABR Swingline Loan (other than an Unrefunded Swingline Loan), the
earlier of (i) the day that is five Business Days after such Loan is made and
(ii) the Revolving Credit Maturity Date and (d) with respect to any Quoted
Swingline Loan, the date established as such by the relevant Swingline Borrower
and the relevant Swingline Lender prior to the making thereof (but in any event
no later than the Revolving Credit Maturity Date).
"Interest Period" shall mean (a) as to any Eurodollar Loan, the period
commencing on the borrowing date or conversion date of such Loan, or on the last
day of the immediately preceding Interest Period applicable to such Loan, as the
case may be, and ending on the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the calendar month that is 1,
2, 3 or 6 months or (subject, in the case of Revolving Credit Loans, to the
prior consent of each Lender) 9 or 12 months thereafter, as the relevant
Borrower may elect, and (b) as to any Absolute Rate Loan, the period commencing
on the date of such Loan and ending on the date specified in the Competitive
Bids in which the offer to make such Absolute Rate Loan was extended, which
shall not be later than 180 days after the date of such Loan; provided, however,
that (i) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day
unless, in the case of Eurodollar Loans only, such next succeeding Business Day
would fall in the next calendar month, in which case such Interest Period shall
end on the next preceding Business Day and (ii) notwithstanding anything to the
contrary herein, no Borrower may select an Interest Period which would end after
the Maturity Date applicable to the relevant Loan. Interest shall accrue from
and including that first day of an Interest Period to but excluding the last day
of such Interest Period.
"Interim Certificate" shall have the meaning assigned to such term in
Annex I hereto.
"Issuing Lender" shall mean any Lender designated as an Issuing Lender
in an Issuing Lender Agreement executed by such Lender, Infinity and the
Administrative Agent.
"Issuing Lender Agreement" shall mean an agreement, substantially in
the form of Exhibit G, executed by a Lender, Infinity, and the Administrative
Agent pursuant to which such Lender agrees to become an Issuing Lender
hereunder, it being understood that any Issuing Lender Agreements under the
Existing Credit Agreement with respect to Letters of Credit issued on behalf of
Infinity or any Subsidiary Borrowers shall be deemed, on the Closing Date, to be
between the Lender party thereto, Infinity, and the Administrative Agent and
issued pursuant hereto.
"Issuing Lender Fees" shall mean, as to any Issuing Lender, the fees
set forth in the applicable Issuing Lender Agreement.
<PAGE> 16
12
"LC Disbursement" shall mean any payment or disbursement made by an
Issuing Lender under or pursuant to a Letter of Credit.
"LC Exposure" shall mean, as to each Lender, such Lender's Revolving
Credit Percentage of the Aggregate LC Exposure.
"LC Fee" shall have the meaning assigned such term in Section 2.9(b).
"Lenders" shall have the meaning assigned to such term in the preamble
to this Agreement.
"Letters of Credit" shall mean letters of credit or bank guarantees
issued by an Issuing Lender for the account of Infinity pursuant to Section 2.7
(including any Designated Letters of Credit).
"Lien" shall mean, with respect to any asset or Property, (a) any
mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest
in or on such asset or Property and (b) the interest of a vendor or a lessor
under any conditional sale agreement, capital lease or title retention agreement
relating to such asset or Property.
"Loan" shall mean any loan made by a Lender hereunder.
"Margin" shall mean, as to any Eurodollar Competitive Loan, the margin
(expressed as a percentage rate per annum in the form of a decimal rounded to no
more than four places) to be added to or subtracted from the Eurodollar Rate in
order to determine the interest rate applicable to such Loan, as specified in
the Competitive Bid relating to such Loan.
"Margin Stock" shall have the meaning assigned to such term under
Regulation U.
"Material Acquisition" shall mean any acquisition of Property or series
of related acquisitions of Property (including by way of merger) which (a)
constitutes assets comprising all or substantially all of an operating unit of a
business or constitutes all or substantially all of the common stock of a Person
and (b) involves the payment of consideration by Infinity and its Subsidiaries
(valued at the initial principal amount thereof in the case of non-cash
consideration consisting of notes or other debt securities and valued at fair
market value in the case of other non-cash consideration) in excess of
$50,000,000.
"Material Adverse Effect" shall mean (a) a material adverse effect on
the Property, business, results of operations or financial condition of Infinity
and its Subsidiaries taken as a whole or (b) material impairment of the ability
of Infinity to perform any of its obligations under this Agreement.
"Material Disposition" shall mean any Disposition of Property or series
of related Dispositions of Property which yields gross proceeds to Infinity or
any of its Subsidiaries (valued at the initial principal amount thereof in the
case of non-cash proceeds consisting of notes or other debt securities and
valued at fair market value in the case of other non-cash proceeds) in excess of
$50,000,000.
"Material Subsidiary" shall mean any Subsidiary of Infinity except for
Subsidiaries which in the aggregate would not constitute a significant
subsidiary under Regulation S-X of the SEC, provided, that each Subsidiary
Borrower shall in any event constitute a Material Subsidiary.
<PAGE> 17
13
"Maturity Date" shall mean (a) in the case of the Revolving Credit
Loans and the ABR Swingline Loans, the Revolving Credit Maturity Date, (b) in
the case of the Quoted Swingline Loans, the date established as such by the
relevant Swingline Borrower and the relevant Swingline Lender prior to the
making thereof (but in any event no later than the Revolving Credit Maturity
Date) and (c) in the case of Competitive Loans, the last day of the Interest
Period applicable thereto, as specified in the related Competitive Bid Request.
"Moody's" shall mean Moody's Investors Service, Inc.
"Morgan" shall have the meaning assigned to such term in the preamble
to this Agreement.
"Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 3(37) of ERISA to which contributions have been made by Infinity or any
ERISA Affiliate of CBS and which is covered by Title IV of ERISA.
"Net Cash Proceeds" shall mean, in connection with any Disposition of
all or any material part of any Allocated Unit, the proceeds thereof in the form
of cash and cash equivalents (including any such proceeds received by way of
deferred payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of such Disposition, net of (i) attorneys' fees, accountants' fees,
investment banking fees and other customary fees and expenses actually incurred
in connection therewith, (ii) taxes paid or reasonably estimated to be payable
on a current basis as a result thereof (after taking into account any available
tax credits or deductions) and (iii) any cash purchase price adjustments paid in
connection therewith (but only as and when paid).
"1996 First Quarter Financial Statements" shall mean the unaudited
consolidated financial statements of CBS and its subsidiaries as of and for the
fiscal quarter ended March 31, 1996 as set forth in the Quarterly Report on Form
10-Q of CBS.
"Non-Financial Letter of Credit" shall mean any Letter of Credit that
is not a Financial Letter of Credit.
"Non-U.S. Person" shall have the meaning assigned to such term in
Section 2.20(f).
"Original Closing Date" shall mean August 29, 1996.
"Outdoor Systems" shall mean Outdoor Systems, Inc.
"Outdoor Systems Merger" shall mean the merger of Outdoor Systems with
and into a Subsidiary of Infinity.
"Outdoor Systems Merger Date" shall mean the date of the consummation
of the Outdoor Systems Merger.
"Outstanding Revolving Extensions of Credit" shall mean, as to any
Lender at any time, an amount equal to the sum of (a) the aggregate principal
amount of all Revolving Credit Loans made by
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14
such Lender then outstanding, (b) such Lender's LC Exposure at such time and (c)
such Lender's ABR Swingline Exposure at such time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA, or any successor thereto.
"Person" shall mean any natural person, corporation, business trust,
joint venture, association, company, partnership, limited liability company or
other entity, or any government or any agency or political subdivision thereof.
"Plan" shall mean any employee pension benefit plan as defined in
Section 3(2) of ERISA (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA or Section 412 of the Code and which is
maintained for employees of CBS or any ERISA Affiliate.
"Prime Rate" shall have the meaning assigned to such term in the
definition of "Alternate Base Rate".
"Pro Forma Period" shall have the meaning assigned to such term in
Section 1.2(c).
"Projections" shall have the meaning assigned to such term in Section
3.12.
"Property" shall mean any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"Quoted Swingline Loans" shall have the meaning assigned to such term
in Section 2.6(a).
"Quoted Swingline Rate" shall have the meaning assigned to such term in
Section 2.6(a).
"Rating Agencies" shall mean S&P and Moody's.
"Reference Banks" shall mean Chase, Morgan, Bank of America and Toronto
Dominion.
"Register" shall have the meaning assigned to such term in Section
9.4(d).
"Regulation D" shall mean Regulation D of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Required Lenders" shall mean, at any time, Lenders whose respective
Total Facility Percentages aggregate not less than 51%.
"Responsible Officer" of any corporation shall mean any executive
officer or Financial Officer of such corporation and any other officer or
similar official thereof responsible for the administration of the obligations
of such corporation in respect of this Agreement (or, in the case of
<PAGE> 19
15
matters relating to ERISA, any officer responsible for the administration of the
pension funds of such corporation).
"Revolving Credit Borrowing Request" shall mean a request made pursuant
to Section 2.4 in the form of Exhibit B-4.
"Revolving Credit Loans" shall mean the revolving loans made by the
Lenders to any Borrower pursuant to Section 2.4. Each Revolving Credit Loan
shall be a Eurodollar Loan or an ABR Loan.
"Revolving Credit Maturity Date" shall mean August 29, 2001.
"Revolving Credit Percentage" of any Lender at any time shall mean the
percentage of the aggregate Commitments (or, following any termination of all
the Commitments, the Commitments most recently in effect) represented by such
Lender's Commitment (or, following any such termination, the Commitment of such
Lender most recently in effect).
"Sale/Leaseback" shall mean any lease, whether an operating lease or a
capital lease, whereby Infinity or any of its Subsidiaries, directly or
indirectly, becomes or remains liable as lessee or as guarantor or other surety,
of any Property whether now owned or hereafter acquired, (a) that Infinity or
any of its Subsidiaries, as the case may be, has sold or transferred or is to
sell or transfer to any other Person (other than Infinity or any of its
Subsidiaries), or (b) that is acquired by any other Person, as part of a
financing transaction to which Infinity or any of its Subsidiaries is a party,
in contemplation of leasing such Property to Infinity or any of its
Subsidiaries, as the case may be.
"Sale/Leaseback Attributable Debt" shall mean, for any Sale/Leaseback,
the present value (discounted at the rate of interest implicit in such
Sale/Leaseback, determined in accordance with GAAP or, in the event that such
rate of interest is not reasonably determinable, discounted at the interest rate
applicable to an ABR Revolving Credit Loan on the date of the commencement of
such transaction), as of the date on which the amount thereof is to be
determined, of the obligation of the lessee for net rental payments during the
remaining term of such Sale/Leaseback (including any period for which such
Sale/Leaseback may, at the option of the lessor, be extended). In the case of
any master lease agreement, each fixed or capital asset subject thereto (or any
related group of such assets for which the lease terms commence at the same
time) shall be deemed to be the subject of a separate Sale/Leaseback, and, to
the extent that any fixed or capital asset is the subject of a Sale/Leaseback
and then of another, the Sale/Leaseback Attributable Debt will be deemed to be
incurred only under the first such Sale/Leaseback. For the purposes of Section
5.5(m), the Sale/Leaseback Attributable Debt of any Subsidiary of CBS which is
not a Wholly Owned Subsidiary shall be deemed to be the amount determined in
accordance with the foregoing provisions of this definition multiplied by CBS's
direct or indirect percentage common equity interest in such Subsidiary at the
date of determination.
"S&P" shall mean Standard & Poor's Ratings Services.
"SEC" shall mean the Securities and Exchange Commission.
"Specified Section 5.5(n) Indebtedness" shall have the meaning assigned
to such term in Section 5.5(n).
"SPC" shall have the meaning specified in Section 9.4(i).
<PAGE> 20
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"Subsidiary" shall mean, for any Person (the "Parent"), any
corporation, partnership or other entity of which shares of Voting Capital Stock
sufficient to elect a majority of the board of directors or other Persons
performing similar functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other ownership
interests of any other class or classes of such corporation, partnership or
other entity shall have or might have voting power by reason of the happening of
any contingency) are at the time directly or indirectly owned or controlled by
the Parent or one or more of its Subsidiaries or by the Parent and one or more
of its Subsidiaries. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary
or Subsidiaries of Infinity.
"Subsidiary Borrower" shall mean any Subsidiary (a) which is organized
under the laws of the United States of America, any state, territory or
possession thereof or the District of Columbia, (b) which is designated as a
Subsidiary Borrower by Infinity pursuant to a Subsidiary Borrower Designation,
(c) which has delivered to the Administrative Agent a Subsidiary Borrower
Request and (d) whose designation as a Subsidiary Borrower has not been
terminated pursuant to Section 4.2. Notwithstanding anything to the contrary
herein, on the Closing Date, any Subsidiary of Infinity which is a Subsidiary
Borrower under the Existing Credit Agreement shall be deemed to be a Subsidiary
Borrower under this Agreement and not under the Existing Credit Agreement.
"Subsidiary Borrower Designation" shall mean a designation,
substantially in the form of Exhibit B-7, which may be delivered by Infinity and
approved by CBS and shall be accompanied by a Subsidiary Borrower Request.
"Subsidiary Borrower Obligations" shall mean, with respect to each
Subsidiary Borrower, the unpaid principal of and interest on the Loans made to
such Borrower (including, without limitation, interest accruing after the
maturity of the Loans made to such Borrower and interest accruing after the
filing of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to such Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
and all other obligations and liabilities of such Borrower to the Administrative
Agent or to any Lender, whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, this Agreement.
"Subsidiary Borrower Request" shall mean a request, substantially in
the form of Exhibit B-8, which is received by the Administrative Agent in
connection with a Subsidiary Borrower Designation.
"Swingline Borrower" shall mean Infinity and any Subsidiary Borrower
designated as a "Swingline Borrower" by Infinity in a written notice to the
Administrative Agent, provided, that, unless otherwise agreed by the
Administrative Agent, no more than one Subsidiary Borrower may be a Swingline
Borrower at any one time.
"Swingline Commitment" shall mean, with respect to any Swingline
Lender, the commitment of such Lender to make ABR Swingline Loans pursuant to
Section 2.6, as designated in accordance with Section 2.6(g).
"Swingline Lender" shall mean any Lender designated by Infinity as a
"Swingline Lender" pursuant to Section 2.6(g).
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"Swingline Loans" shall mean the collective reference to the ABR
Swingline Loans and the Quoted Swingline Loans.
"Swingline Percentage" of any Swingline Lender at any time shall mean
the percentage of the aggregate Swingline Commitments represented by such
Swingline Lender's Swingline Commitment.
"Syndication Agents" shall have the meaning assigned to such term in
the preamble to this Agreement.
"Test Period" shall have the meaning assigned to such term in Section
1.2(c).
"Toronto Dominion" shall have the meaning assigned to such term in the
preamble to this Agreement.
"Total Commitment" shall mean at any time the aggregate amount of the
Commitments in effect at such time.
"Total Facility Exposure" shall mean at any time the aggregate amount
of the Facility Exposures at such time.
"Total Facility Percentage" shall mean, as to any Lender at any time,
the quotient (expressed as a percentage) of (a) such Lender's Commitment (or (x)
for the purposes of acceleration of the Loans pursuant to clause (II) of Article
VI or (y) if the Commitments have terminated, such Lender's Facility Exposure)
and (b) the aggregate of all Lenders' Commitments (or (x) for the purposes of
acceleration of the Loans pursuant to clause (II) of Article VI or (y) if the
Commitments have terminated, the Total Facility Exposure).
"Transferee" shall mean any assignee or participant described in
Section 9.4(b) or (f).
"Type" when used in respect of any Loan, shall refer to the Rate by
reference to which interest on such Loan is determined. For purposes hereof,
"Rate" shall mean the Eurodollar Rate, the Alternate Base Rate, the Quoted
Swingline Rate and the rate paid on Absolute Rate Loans.
"Unrefunded Swingline Loans" shall have the meaning assigned to such
term in Section 2.6(d).
"U.S. Person" shall mean a citizen, national or resident of the United
States of America, or an entity organized in or under the laws of the United
States of America.
"Viacom" shall mean Viacom, Inc., a Delaware corporation.
"Viacom Merger" shall mean the merger between CBS and Viacom.
"Voting Capital Stock" shall mean securities or other ownership
interests of a corporation, partnership or other entity having by the terms
thereof ordinary voting power to vote in the election of the board of directors
or other Persons performing similar functions of such corporation, partnership
or other entity (without regard to the occurrence of any contingency).
<PAGE> 22
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"Wholly Owned Subsidiary" shall mean any Subsidiary of which all shares
of Voting Capital Stock (other than, in the case of a corporation, directors'
qualifying shares) are owned directly or indirectly by the Parent (as defined in
the definition of "Subsidiary").
SECTION 1.2. Terms Generally. (a) The definitions in Section 1.1 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall, except where the context otherwise requires, be deemed to be
followed by the phrase "without limitation". All references herein to Articles,
Sections, Exhibits and Schedules shall be deemed references to Articles and
Sections of, and Exhibits and Schedules to, this Agreement unless the context
shall otherwise require.
(b) Except as otherwise expressly provided herein, all terms of an
accounting nature shall be construed in accordance with GAAP as in effect from
time to time; provided, however, that, for purposes of determining compliance
with the covenants set forth in Sections 5.7 and 5.8 (such Sections being
referred to as the "Financial Covenants"), except as otherwise set forth in the
Financial Covenants and the definitions related thereto, such terms shall be
construed in accordance with GAAP as in effect on June 30, 1999. Any
determination of the CBS Consolidated Leverage Ratio shall be made in a
comparable manner by reference to the 1996 First Quarter Financial Statements.
(c) For the purposes of calculating Consolidated EBITDA and
Consolidated Interest Expense for any period (a "Test Period"), (i) if at any
time from the period (a "Pro Forma Period") commencing on the second day of such
Test Period and ending on the date which is ten days prior to the date of
delivery of the Compliance Certificate or Interim Certificate, as the case may
be, in respect of such Test Period (or, in the case of any pro forma calculation
made pursuant hereto in respect of a particular transaction, ending on the date
such transaction is consummated after giving effect thereto), Infinity or any
Subsidiary shall have made any Material Disposition, the Consolidated EBITDA for
such Test Period shall be reduced by an amount equal to the Consolidated EBITDA
(if positive) attributable to the Property which is the subject of such Material
Disposition for such Test Period or increased by an amount equal to the
Consolidated EBITDA (if negative) attributable thereto for such Test Period, and
Consolidated Interest Expense for such Test Period shall be reduced by an amount
equal to the Consolidated Interest Expense for such Test Period attributable to
any Indebtedness of Infinity or any Subsidiary repaid, repurchased, defeased or
otherwise discharged with respect to Infinity and its Subsidiaries in connection
with such Material Disposition (or, if the Capital Stock of any Subsidiary is
sold, the Consolidated Interest Expense for such Test Period directly
attributable to the Indebtedness of such Subsidiary to the extent Infinity and
its continuing Subsidiaries are no longer liable for such Indebtedness after
such Disposition); (ii) if during such Pro Forma Period Infinity or any
Subsidiary shall have made a Material Acquisition, Consolidated EBITDA and
Consolidated Interest Expense for such Test Period shall be calculated after
giving pro forma effect thereto (including the incurrence or assumption of any
Indebtedness in connection therewith) as if such Material Acquisition (and the
incurrence or assumption of any such Indebtedness) occurred on the first day of
such Test Period; (iii) if during such Pro Forma Period any Person that
subsequently became a Subsidiary or was merged with or into Infinity or any
Subsidiary since the beginning of such Pro Forma Period shall have entered into
any disposition or acquisition transaction that would have required an
adjustment pursuant to clause (i) or (ii) above if made by Infinity or a
Subsidiary during such Pro Forma Period, Consolidated EBITDA and Consolidated
Interest Expense for such Test Period shall be calculated after giving pro forma
effect thereto as if such transaction occurred on the first day of such Test
Period; and (iv) with respect to CBS, the financial results and effects of the
operations of the Eye on People and TeleNoticias businesses shall be entirely
excluded from CBS Consolidated EBITDA. For the purposes of this paragraph,
whenever pro forma effect is to be given to a Material Disposition or Material
Acquisition, the amount of income
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or earnings relating thereto and the amount of Consolidated Interest Expense
associated with any Indebtedness discharged or incurred in connection therewith,
the pro forma calculations shall be determined in good faith by a Financial
Officer of Infinity. If any Indebtedness bears a floating rate of interest and
the incurrence or assumption thereof is being given pro forma effect, the
interest expense on such Indebtedness shall be calculated as if the rate in
effect on the last day of the relevant Pro Forma Period had been the applicable
rate for the entire relevant Test Period (taking into account any interest rate
protection agreement applicable to such Indebtedness if such interest rate
protection agreement has a remaining term in excess of 12 months). Comparable
adjustments shall be made in connection with any determination of CBS
Consolidated EBITDA.
(d) For the purposes of the CBS Consolidated Leverage Ratio, (i) the
Discontinued Operations shall be disregarded and (ii) the businesses classified
as Discontinued Operations shall be limited to those businesses treated as such
in the financial statements of CBS referred to in the definition of
"Discontinued Operations" and the accounting treatment of Discontinued
Operations shall be consistent with the accounting treatment thereof in such
financial statements.
ARTICLE II.
THE CREDITS
SECTION 2.1. Commitments. Subject to the terms and conditions hereof
and relying upon the representations and warranties herein set forth, each
Lender agrees, severally and not jointly, to make Revolving Credit Loans to
Infinity or any Subsidiary Borrower, at any time and from time to time on and
after the Closing Date and until the earlier of (a) the Business Day immediately
preceding the Revolving Credit Maturity Date and (b) the termination of the
Commitment of such Lender, in an aggregate principal amount at any time
outstanding not to exceed such Lender's Commitment. Each Borrower may borrow,
prepay and reborrow Revolving Credit Loans on and after the Closing Date and
prior to the Revolving Credit Maturity Date, subject to the terms, conditions
and limitations set forth herein. On the Closing Date, all loans and obligations
of, and any Letters of Credit issued on behalf of, Infinity and any Subsidiary
Borrowers under or in connection with the Existing Credit Agreement shall be
deemed to be outstanding hereunder and not under the Existing Credit Agreement.
SECTION 2.2. Revolving Credit Loans; Competitive Loans. (a) Each
Revolving Credit Loan shall be made to the relevant Borrower by the Lenders
ratably in accordance with their respective Commitments. Each Competitive Loan
shall be made to the relevant Borrower by the Lender whose Competitive Bid
therefor is accepted, and in the amount so accepted, in accordance with the
procedures set forth in Section 2.3. The Revolving Credit Loans or Competitive
Loans shall be made in minimum amounts equal to (i) in the case of Competitive
Loans, $5,000,000 or an integral multiple of $1,000,000 in excess thereof, (ii)
in the case of Eurodollar Revolving Credit Loans, $50,000,000 or an integral
multiple of $5,000,000 in excess thereof, and (iii) in the case of ABR Revolving
Credit Loans, $25,000,000 or an integral multiple of $5,000,000 in excess
thereof (or an aggregate principal amount equal to the remaining balance of the
available Total Commitment).
(b) Each Lender shall make each Loan (other than a Swingline Loan, as
to which this Section 2.2 shall not apply) to be made by it on the proposed date
thereof by wire transfer of immediately available funds to the Administrative
Agent in New York, New York, not later than 12:00 noon, New York City time (or,
in connection with an ABR Loan to be made on the same day on which a notice is
submitted, 12:30 p.m., New York City time) and the Administrative Agent shall by
3:00 p.m., New York City time, credit the amounts so received to the general
deposit account of the relevant Borrower with the Administrative Agent.
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SECTION 2.3. Competitive Bid Procedure. (a) In order to request
Competitive Bids, the relevant Borrower shall hand deliver or telecopy to the
Administrative Agent a duly completed Competitive Bid Request in the form of
Exhibit B-1, to be received by the Administrative Agent (i) in the case of a
Eurodollar Competitive Loan, not later than 10:00 a.m., New York City time, four
Business Days before a proposed Competitive Loan and (ii) in the case of an
Absolute Rate Loan, not later than 10:00 a.m., New York City time, one Business
Day before a proposed Competitive Loan. A Competitive Bid Request that does not
conform substantially to the format of Exhibit B-1 may be rejected in the
Administrative Agent's discretion (exercised in good faith), and the
Administrative Agent shall promptly notify the relevant Borrower of such
rejection by telephone, confirmed by telecopier. Such request shall in each case
refer to this Agreement and specify (x) whether the Competitive Loan then being
requested is to be a Eurodollar Competitive Loan or an Absolute Rate Loan, (y)
the date of such Loan (which shall be a Business Day) and the aggregate
principal amount thereof which shall be in a minimum principal amount of
$5,000,000 and in an integral multiple of $1,000,000, and (z) the Interest
Period with respect thereto (which may not end after the Revolving Credit
Maturity Date). Promptly after its receipt of a Competitive Bid Request that is
not rejected as aforesaid (and in any event by 5:00 p.m., New York City time, on
the date of such receipt if such receipt occurs by the time specified in the
first sentence of this paragraph), the Administrative Agent shall invite by
telecopier (in the form set forth in Exhibit B-2) the Lenders to bid, on the
terms and conditions of this Agreement, to make Competitive Loans pursuant to
such Competitive Bid Request.
(b) Each Lender may, in its sole discretion, make one or more
Competitive Bids to the relevant Borrower responsive to a Competitive Bid
Request. Each Competitive Bid must be received by the Administrative Agent by
telecopier, in the form of Exhibit B-3, (i) in the case of a Eurodollar
Competitive Loan, not later than 9:30 a.m., New York City time, three Business
Days before a proposed Competitive Loan and (ii) in the case of an Absolute Rate
Loan, not later than 9:30 a.m., New York City time, on the day of a proposed
Competitive Loan. Multiple Competitive Bids will be accepted by the
Administrative Agent. Competitive Bids that do not conform substantially to the
format of Exhibit B-3 may be rejected by the Administrative Agent after
conferring with, and upon the instruction of, the relevant Borrower, and the
Administrative Agent shall notify the Lender making such nonconforming
Competitive Bid of such rejection as soon as practicable. Each Competitive Bid
shall refer to this Agreement and specify (x) the principal amount (which shall
be in a minimum principal amount of $5,000,000 and in an integral multiple of
$1,000,000 and which may equal the entire principal amount of the Competitive
Loan requested by the relevant Borrower) of the Competitive Loan or Loans that
the applicable Lender is willing to make to the relevant Borrower, (y) the
Competitive Bid Rate or Rates at which such Lender is prepared to make the
Competitive Loan or Loans and (z) the Interest Period and the last day thereof.
A Competitive Bid submitted pursuant to this paragraph (b) shall be irrevocable
(subject to the satisfaction of the conditions to borrowing set forth in Article
IV).
(c) The Administrative Agent shall promptly (and in any event by 10:15
a.m., New York City time, on the date on which such Competitive Bids shall have
been made) notify the relevant Borrower by telecopier of all the Competitive
Bids made, the Competitive Bid Rate and the principal amount of each Competitive
Loan in respect of which a Competitive Bid was made and the identity of the
Lender that made each Competitive Bid. The Administrative Agent shall send a
copy of all Competitive Bids to the relevant Borrower for its records as soon as
practicable after completion of the bidding process set forth in this Section
2.3.
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(d) The relevant Borrower may in its sole and absolute discretion,
subject only to the provisions of this paragraph (d), accept or reject any
Competitive Bid referred to in paragraph (c) above. The relevant Borrower shall
notify the Administrative Agent by telephone, confirmed by telecopier in such
form as may be agreed upon by such Borrower and the Administrative Agent,
whether and to what extent it has decided to accept or reject any of or all the
Competitive Bids referred to in paragraph (c) above, (x) in the case of a
Eurodollar Competitive Loan, not later than 11:00 a.m., New York City time,
three Business Days before a proposed Competitive Loan, and (y) in the case of
an Absolute Rate Loan, not later than 11:00 a.m., New York City time, on the day
of a proposed Competitive Loan; provided, however, that (i) the failure by such
Borrower to give such notice shall be deemed to be a rejection of all the
Competitive Bids referred to in paragraph (c) above, (ii) such Borrower shall
not accept a Competitive Bid made at a particular Competitive Bid Rate if it has
decided to reject a Competitive Bid made at a lower Competitive Bid Rate, (iii)
the aggregate amount of the Competitive Bids accepted by such Borrower shall not
exceed the principal amount specified in the Competitive Bid Request (but may be
less than that requested), (iv) if such Borrower shall accept a Competitive Bid
or Competitive Bids made at a particular Competitive Bid Rate but the amount of
such Competitive Bid or Competitive Bids shall cause the total amount of
Competitive Bids to be accepted by it to exceed the amount specified in the
Competitive Bid Request, then such Borrower shall accept a portion of such
Competitive Bid or Competitive Bids in an amount equal to the amount specified
in the Competitive Bid Request less the amount of all other Competitive Bids
accepted with respect to such Competitive Bid Request, which acceptance, in the
case of multiple Competitive Bids at such Competitive Bid Rate, shall be made
pro rata in accordance with the amount of each such Competitive Bid at such
Competitive Bid Rate, and (v) except pursuant to clause (iv) above no
Competitive Bid shall be accepted for a Competitive Loan unless such Competitive
Loan is in a minimum principal amount of $5,000,000 and an integral amount
multiple of $1,000,000; provided, further, however, that if a Competitive Loan
must be in an amount less than $5,000,000 because of the provisions of clause
(iv) above, such Competitive Loan may be for a minimum of $1,000,000 or any
integral multiple thereof, and in calculating the pro rata allocation of
acceptances of portions of multiple Competitive Bids at a particular Competitive
Bid Rate pursuant to clause (iv) the amounts shall be rounded to integral
multiples of $1,000,000 in a manner which shall be in the discretion of such
Borrower. A notice given by any Borrower pursuant to this paragraph (d) shall be
irrevocable.
(e) The Administrative Agent shall promptly notify each bidding Lender
whether or not its Competitive Bid has been accepted (and if so, in what amount
and at what Competitive Bid Rate) by telecopy sent by the Administrative Agent,
and each successful bidder will thereupon become bound, subject to the other
applicable conditions hereof, to make the Competitive Loan in respect of which
its Competitive Bid has been accepted.
(f) A Competitive Bid Request shall not be made within five Business
Days after the date of any previous Competitive Bid Request, unless the
Administrative Agent shall agree otherwise.
(g) If the Lender which is the Administrative Agent shall elect to
submit a Competitive Bid in its capacity as a Lender, it shall submit such
Competitive Bid directly to the relevant Borrower one quarter of an hour earlier
than the latest time at which the other Lenders are required to submit their
Competitive Bids to the Administrative Agent pursuant to paragraph (b) above.
(h) All notices required by this Section 2.3 shall be given in
accordance with Section 9.1.
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(i) No Borrower shall have the right to prepay any Competitive Loan
without the consent of the affected Lender or Lenders.
SECTION 2.4. Revolving Credit Borrowing Procedure. In order to request
a Revolving Credit Loan, the relevant Borrower shall hand deliver or telecopy to
the Administrative Agent a Revolving Credit Borrowing Request in the form of
Exhibit B-4 (a) in the case of a Eurodollar Revolving Credit Loan, not later
than 11:00 a.m., New York City time, three Business Days before a proposed
borrowing and (b) in the case of an ABR Revolving Credit Loan, not later than
11:00 a.m., New York City time, on the day of a proposed borrowing. Such notice
shall be irrevocable and shall in each case specify (i) whether the Revolving
Credit Loan then being requested is to be a Eurodollar Revolving Credit Loan or
an ABR Revolving Credit Loan, (ii) the date of such Revolving Credit Loan (which
shall be a Business Day) and the amount thereof; and (iii) in the case of a
Eurodollar Revolving Credit Loan, the Interest Period with respect thereto. The
Administrative Agent shall promptly advise the Lenders of any notice given
pursuant to this Section 2.4 and of each Lender's portion of the requested Loan.
SECTION 2.5. Repayment of Loans. Each Borrower shall repay all
outstanding Revolving Credit Loans and ABR Swingline Loans made to it, in each
case on the Revolving Credit Maturity Date (or such earlier date on which the
Commitments shall terminate in accordance herewith). Each Borrower shall repay
Quoted Swingline Loans and Competitive Loans made to it, in each case on the
Maturity Date applicable thereto. Each Loan shall bear interest from and
including the date thereof on the outstanding principal balance thereof as set
forth in Section 2.10.
SECTION 2.6. Swingline Loans. (a) Subject to the terms and conditions
hereof and relying upon the representations and warranties herein set forth,
each Swingline Lender agrees, severally and not jointly, at any time and from
time to time on and after the Closing Date and until the earlier of the Business
Day immediately preceding the Revolving Credit Maturity Date and the termination
of the Swingline Commitment of such Swingline Lender, (i) to make available to
any Swingline Borrower Swingline Loans ("Quoted Swingline Loans") on the basis
of quoted interest rates (each, a "Quoted Swingline Rate") furnished by such
Swingline Lender from time to time in its discretion to such Swingline Borrower
(through the Administrative Agent) and accepted by such Swingline Borrower in
its discretion and (ii) to make Swingline Loans ("ABR Swingline Loans") to any
Swingline Borrower bearing interest at a rate equal to the Alternate Base Rate
in an aggregate principal amount (in the case of this clause (ii)) not to exceed
such Swingline Lender's Swingline Commitment. The aggregate outstanding
principal amount of the Quoted Swingline Loans of any Swingline Lender, when
added to the aggregate outstanding principal amount of the ABR Swingline Loans
of such Swingline Lender, may exceed such Swingline Lender's Swingline
Commitment, provided, that in no event shall the aggregate outstanding principal
amount of the Swingline Loans exceed the aggregate Swingline Commitments then in
effect. Each Quoted Swingline Loan shall be made only by the Swingline Lender
furnishing the relevant Quoted Swingline Rate. Each ABR Swingline Loan shall be
made by the Swingline Lenders ratably in accordance with their respective
Swingline Percentages. The Swingline Loans shall be made in a minimum aggregate
principal amount of $5,000,000 or an integral multiple of $1,000,000 in excess
thereof (or an aggregate principal amount equal to the remaining balance of the
available Swingline Commitments). Each Swingline Lender shall make the portion
of each Swingline Loan to be made by it available to any Swingline Borrower by
means of a credit to the general deposit account of such Swingline Borrower with
the Administrative Agent or a wire transfer, at the expense of such Swingline
Borrower, to an account designated in writing by such Swingline Borrower, in
each case by 3:30 p.m., New York City time, on the date such Swingline Loan is
requested to be made pursuant to paragraph (b) below, in immediately available
funds. Each Swingline Borrower may borrow, prepay and reborrow Swingline Loans
on or after the Closing Date and prior to the Revolving Credit Maturity Date (or
such
<PAGE> 27
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earlier date on which the Commitments shall terminate in accordance herewith) on
the terms and subject to the conditions and limitations set forth herein.
(b) The relevant Swingline Borrower shall give the Administrative Agent
telephonic, written or telecopy notice substantially in the form of Exhibit B-5
(in the case of telephonic notice, such notice shall be promptly confirmed by
telecopy) no later than 2:30 p.m., New York City time (or, in the case of a
proposed Quoted Swingline Loan, 12:00 noon, New York City time), on the day of a
proposed Swingline Loan. Such notice shall be delivered on a Business Day, shall
be irrevocable (subject, in the case of Quoted Swingline Loans, to receipt by
the relevant Swingline Borrower of Quoted Swingline Rates acceptable to it) and
shall refer to this Agreement and shall specify the requested date (which shall
be a Business Day) and amount of such Swingline Loan. The Administrative Agent
shall promptly advise the Swingline Lenders of any notice received from any
Swingline Borrower pursuant to this paragraph (b). In the event that a Swingline
Borrower accepts a Quoted Swingline Rate in respect of a proposed Quoted
Swingline Loan, it shall notify the Administrative Agent (which shall in turn
notify the relevant Swingline Lender) of such acceptance no later than 2:30
p.m., New York City time, on the relevant borrowing date.
(c) In the event that any ABR Swingline Loan shall be outstanding for
more than five Business Days, the Administrative Agent shall, on behalf of the
relevant Swingline Borrower (which hereby irrevocably directs and authorizes the
Administrative Agent to act on its behalf), request each Lender, including the
Swingline Lenders, to make an ABR Revolving Credit Loan in an amount equal to
such Lender's Revolving Credit Percentage of the principal amount of such ABR
Swingline Loan. Each Lender will make the proceeds of its Revolving Credit Loan
available to the Administrative Agent for the account of the Swingline Lenders
at the office of the Administrative Agent prior to 12:00 Noon, New York City
time, in funds immediately available on the Business Day next succeeding the
date such notice is given. The proceeds of such Revolving Credit Loans shall be
immediately applied to repay the ABR Swingline Loans.
(d) If, for any reason, Revolving Credit Loans may not be (as
determined by the Administrative Agent in its sole discretion), or are not, made
pursuant to Section 2.6(c) to repay ABR Swingline Loans as required by said
Section, then, effective on the date such Revolving Credit Loans would otherwise
have been made, each Lender severally, unconditionally and irrevocably agrees
that it shall purchase an undivided participating interest in such ABR Swingline
Loans ("Unrefunded Swingline Loans") in an amount equal to the amount of the
Revolving Credit Loan which otherwise would have been made by such Lender
pursuant to Section 2.6(c), which purchase shall be funded by the time such
Revolving Credit Loan would have been required to be made pursuant to Section
2.6(c). In the event that the Lenders purchase undivided participating interests
pursuant to the first sentence of this paragraph (d), each Lender shall
immediately transfer to the Administrative Agent, for the account of the
Swingline Lenders, in immediately available funds, the amount of its
participation. Any Lender holding a participation in an Unrefunded Swingline
Loan may exercise any and all rights of banker's lien, setoff or counterclaim
with respect to any and all moneys owing by the relevant Swingline Borrower to
such Lender by reason thereof as fully as if such Lender had made a Loan
directly to such Swingline Borrower in the amount of such participation.
(e) Whenever, at any time after any Swingline Lender has received from
any Lender such Lender's participating interest in an ABR Swingline Loan, such
Swingline Lender receives any payment on account thereof, such Swingline Lender
will promptly distribute to such Lender its participating interest in such
amount (appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender's participating interest was outstanding
and funded);
<PAGE> 28
24
provided, however, that in the event that such payment received by such
Swingline Lender is required to be returned, such Lender will return to such
Swingline Lender any portion thereof previously distributed by such Swingline
Lender to it.
(f) Notwithstanding anything to the contrary in this Agreement, each
Lender's obligation to make the Revolving Credit Loans referred to in Section
2.6(c) and to purchase and fund participating interests pursuant to Section
2.6(d) shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any setoff, counterclaim,
recoupment, defense or other right which such Lender or any Swingline Borrower
may have against any Swingline Lender, any Swingline Borrower or any other
Person for any reason whatsoever; (ii) the occurrence or continuance of a
Default or an Event of Default or the failure to satisfy any of the conditions
specified in Article IV; (iii) any adverse change in the condition (financial or
otherwise) of Infinity or any of its Subsidiaries; (iv) any breach of this
Agreement by any Borrower or any Lender; or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
(g) Upon written or telecopy notice to the Swingline Lenders and to the
Administrative Agent, Infinity may at any time terminate, from time to time in
part reduce, or from time to time (with the approval of the relevant Swingline
Lender) increase, the Swingline Commitment of any Swingline Lender. At any time
when there shall be fewer than ten Swingline Lenders, Infinity may appoint from
among the Lenders a new Swingline Lender, subject to the prior consent of such
new Swingline Lender and prior notice to the Administrative Agent, so long as at
no time shall there be more than ten Swingline Lenders. Notwithstanding anything
to the contrary in this Agreement, (i) if any ABR Swingline Loans shall be
outstanding at the time of any termination, reduction, increase or appointment
pursuant to the preceding two sentences, the Swingline Borrowers shall on the
date thereof prepay or borrow ABR Swingline Loans to the extent necessary to
ensure that at all times the outstanding ABR Swingline Loans held by the
Swingline Lenders shall be pro rata according to the respective Swingline
Commitments of the Swingline Lenders and (ii) in no event may the aggregate
Swingline Commitments exceed $300,000,000. On the date of any termination or
reduction of the Swingline Commitments pursuant to this paragraph (g), the
Swingline Borrowers shall pay or prepay so much of the Swingline Loans as shall
be necessary in order that, after giving effect to such termination or
reduction, (i) the aggregate outstanding principal amount of the ABR Swingline
Loans of any Swingline Lender will not exceed the Swingline Commitment of such
Swingline Lender and (ii) the aggregate outstanding principal amount of all
Swingline Loans will not exceed the aggregate Swingline Commitments.
(h) Each Swingline Borrower may prepay any Swingline Loan in whole or
in part at any time without premium or penalty; provided that such Swingline
Borrower shall have given the Administrative Agent written or telecopy notice
(or telephone notice promptly confirmed in writing or by telecopy) of such
prepayment not later than 10:30 a.m., New York City time, on the Business Day
designated by such Swingline Borrower for such prepayment; and provided further
that each partial payment shall be in an amount that is an integral multiple of
$1,000,000. Each notice of prepayment under this paragraph (h) shall specify the
prepayment date and the principal amount of each Swingline Loan (or portion
thereof) to be prepaid, shall be irrevocable and shall commit such Swingline
Borrower to prepay such Swingline Loan (or portion thereof) by the amount stated
therein on the date stated therein. All prepayments under this paragraph (h)
shall be accompanied by accrued interest on the principal amount being prepaid
to the date of payment. Each payment of principal of or interest on ABR
Swingline Loans shall be allocated, as between the Swingline Lenders, pro rata
in accordance with their respective Swingline Percentages.
<PAGE> 29
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SECTION 2.7. Letters of Credit. (a) Subject to the terms and conditions
hereof and relying upon the representations and warranties herein set forth,
each Issuing Lender agrees, at any time and from time to time on or after the
Closing Date until the earlier of (i) the tenth Business Day preceding the
Revolving Credit Maturity Date and (ii) the termination of the Commitments in
accordance with the terms hereof, to issue and deliver or to extend the expiry
of Letters of Credit for the account of Infinity in an aggregate outstanding
undrawn amount which does not exceed the maximum amount specified in the
applicable Issuing Lender Agreement; provided that in no event shall the
Aggregate LC Exposure exceed $750,000,000 at any time. Each Letter of Credit (i)
shall be in a form approved in writing by Infinity and the applicable Issuing
Lender and (ii) shall permit drawings upon the presentation of such documents as
shall be specified by Infinity in the applicable notice delivered pursuant to
paragraph (c) below. The Lenders agree that, subject to compliance with the
conditions precedent set forth in Section 4.3, any Designated Letter of Credit
may be designated as a Letter of Credit hereunder from time to time on or after
the Closing Date pursuant to the procedures specified in the definition of
"Designated Letters of Credit".
(b) Each Letter of Credit shall by its terms expire not later than the
fifth Business Day preceding the Revolving Credit Maturity Date. Any Letter of
Credit may provide for the renewal thereof for additional periods (which shall
in no event extend beyond the date referred to in the preceding sentence). Each
Letter of Credit shall by its terms provide for payment of drawings in Dollars
or in a Foreign Currency, provided that a Letter of Credit denominated in a
Foreign Currency may not be issued if, after giving effect thereto, the Dollar
equivalent of the aggregate face amount of all Letters of Credit denominated in
Foreign Currencies then outstanding would exceed $150,000,000, as determined by
the Administrative Agent.
(c) Infinity shall give the applicable Issuing Lender and the
Administrative Agent written or telecopy notice not later than 10:00 a.m., New
York City time, five Business Days (or such shorter period as shall be
acceptable to such Issuing Lender) prior to any proposed issuance of a Letter of
Credit. Each such notice shall refer to this Agreement and shall specify (i) the
date on which such Letter of Credit is to be issued (which shall be a Business
Day) and the face amount of such Letter of Credit, (ii) the name and address of
the beneficiary, (iii) whether such Letter of Credit is a Financial Letter of
Credit or a Non-Financial Letter of Credit (subject to confirmation of such
status by the Administrative Agent), (iv) whether such Letter of Credit shall
permit a single drawing or multiple drawings, (v) the form of the documents
required to be presented at the time of any drawing (together with the exact
wording of such documents or copies thereof), (vi) the expiry date of such
Letter of Credit (which shall conform to the provisions of paragraph (b) above)
and (vii) if such Letter of Credit is to be in a Foreign Currency, the relevant
Foreign Currency. The Administrative Agent shall give to each Lender prompt
written or telecopy advice of the issuance of any Letter of Credit. Each
determination by the Administrative Agent as to whether or not a Letter of
Credit constitutes a Financial Letter of Credit shall be conclusive and binding
upon Infinity and the Lenders.
(d) By the issuance of a Letter of Credit and without any further
action on the part of the applicable Issuing Lender or the Lenders in respect
thereof, the applicable Issuing Lender hereby grants to each Lender, and each
Lender hereby acquires from such Issuing Lender, a participation in such Letter
of Credit equal to such Lender's Revolving Credit Percentage at the time of any
drawing thereunder of the face amount of such Letter of Credit, effective upon
the issuance of such Letter of Credit. In addition, the applicable Issuing
Lender hereby grants to each Lender, and each Lender hereby acquires from such
Issuing Lender, a participation in each Designated Letter of Credit equal to
such Lender's Revolving Credit Percentage at the time of any drawing thereunder
of the face amount of such Designated Letter of Credit, effective on the date
such Designated Letter of Credit is designated as a
<PAGE> 30
26
Letter of Credit hereunder. In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
the Administrative Agent, for the account of each Issuing Lender, in accordance
with paragraph (f) below, such Lender's Revolving Credit Percentage of each
unreimbursed LC Disbursement made by such Issuing Lender; provided, however,
that the Lenders shall not be obligated to make any such payment with respect to
any payment or disbursement made under any Letter of Credit to the extent
resulting from the gross negligence or wilful misconduct of such Issuing Lender.
(e) Each Lender acknowledges and agrees that its acquisition of
participations pursuant to paragraph (d) above in respect of Letters of Credit
shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any setoff, counterclaim,
recoupment, defense or other right which such Lender or Infinity may have
against any Issuing Lender, Infinity or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of a Default or an Event of
Default or the failure to satisfy any of the conditions specified in Article IV;
(iii) any adverse change in the condition (financial or otherwise) of Infinity
or any of its Subsidiaries; (iv) any breach of this Agreement by Infinity or any
Lender; or (v) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing.
(f) On the date on which it shall have ascertained that any documents
presented under a Letter of Credit appear to be in conformity with the terms and
conditions of such Letter of Credit, the applicable Issuing Lender shall give
written or telecopy notice to Infinity and the Administrative Agent of the
amount of the drawing and the date on which payment thereon has been or will be
made. If the applicable Issuing Lender shall not have received from Infinity the
payment required pursuant to paragraph (g) below by 12:00 noon, New York City
time, two Business Days after the date on which payment of a draft presented
under any Letter of Credit has been made, such Issuing Lender shall so notify
the Administrative Agent, which shall in turn promptly notify each Lender,
specifying in the notice to each Lender such Lender's Revolving Credit
Percentage of such LC Disbursement. Each Lender shall pay to the Administrative
Agent, not later than 2:00 p.m., New York City time, on such second Business
Day, such Lender's Revolving Credit Percentage of such LC Disbursement (which
obligation shall be expressed in Dollars only), which the Administrative Agent
shall promptly pay to the applicable Issuing Lender. The Administrative Agent
will promptly remit to each Lender such Lender's Revolving Credit Percentage of
any amounts subsequently received by the Administrative Agent from Infinity in
respect of such LC Disbursement; provided that (i) amounts so received for the
account of any Lender prior to payment by such Lender of amounts required to be
paid by it hereunder in respect of any LC Disbursement and (ii) amounts
representing interest at the rate provided in paragraph (g) below on any LC
Disbursement for the period prior to the payment by such Lender of such amounts
shall in each case be remitted to the applicable Issuing Lender.
(g) If an Issuing Lender shall pay any draft presented under a Letter
of Credit, Infinity shall pay to such Issuing Lender an amount equal to the
amount of such draft before 12:00 noon, New York City time, on the second
Business Day immediately following the date of payment of such draft, together
with interest (if any) on such amount at a rate per annum equal to the interest
rate in effect for ABR Loans (or, in the case of Foreign Currency-denominated
Letters of Credit, the rate which would reasonably and customarily be charged by
such Issuing Lender on outstanding loans denominated in the relevant Foreign
Currency) from (and including) the date of payment of such draft to (but
excluding) the date on which either Infinity shall have repaid, or the Lenders
shall have refunded, such draft in full (which interest shall be payable on such
second Business Day and from time to time thereafter on demand until either
Infinity shall have repaid, or the Lenders shall have refunded, such draft in
full). In the event that such drawing shall be refunded by the Lenders as
provided in Section 2.7(f), Infinity shall
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27
pay to the Administrative Agent, for the account of the Lenders, quarterly on
the last day of each March, June, September and December, interest on the amount
so refunded at a rate per annum equal to the interest rate in effect for ABR
Loans from (and including) the date of such refunding to (but excluding) the
date on which the amount so refunded by the Lenders shall have been paid in full
in Dollars by Infinity. Each payment made to an Issuing Lender by Infinity
pursuant to this paragraph shall be made at such Issuing Lender's address for
notices specified herein in lawful money of (x) the United States of America (in
the case of payments made on Dollar-denominated Letters of Credit) or (y) the
applicable foreign jurisdiction (in the case of payments on Foreign
Currency-denominated Letters of Credit) and in immediately available funds. The
obligation of Infinity to pay the amounts referred to above in this paragraph
(g) (and the obligations of the Lenders under paragraphs (d) and (f) above)
shall be absolute, unconditional and irrevocable and shall be satisfied strictly
in accordance with their terms irrespective of:
(i) any lack of validity or enforceability of any Letter of
Credit or any Issuing Lender Agreement or of the obligations of
Infinity under this Agreement or any Issuing Lender Agreement;
(ii) the existence of any claim, setoff, defense or other
right which Infinity or any other Person may at any time have against
the beneficiary under any Letter of Credit, the Agents, any Issuing
Lender or any Lender (other than the defense of payment in accordance
with the terms of this Agreement or a defense based on the gross
negligence or wilful misconduct of the applicable Issuing Lender) or
any other Person in connection with this Agreement or any other
transaction;
(iii) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or
any statement therein being untrue or inaccurate in any respect;
provided that payment by the applicable Issuing Lender under such
Letter of Credit against presentation of such draft or document shall
not have constituted gross negligence or wilful misconduct;
(iv) payment by the applicable Issuing Lender under a Letter
of Credit against presentation of a draft or other document which does
not comply in any immaterial respect with the terms of such Letter of
Credit; provided that such payment shall not have constituted gross
negligence or wilful misconduct; or
(v) any other circumstance or event whatsoever, whether or not
similar to any of the foregoing; provided that such other circumstance
or event shall not have been the result of gross negligence or wilful
misconduct of the applicable Issuing Lender.
It is understood that in making any payment under a Letter of Credit
(x) such Issuing Lender's exclusive reliance on the documents presented to it
under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereof equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be forged, fraudulent or invalid in any respect, if
such document on its face appears to be in order, and whether or not any other
statement or any other document presented pursuant to such Letter of Credit
proves to be forged or invalid or any statement therein proves to be inaccurate
or untrue in any respect whatsoever, and (y) any noncompliance in any immaterial
respect of the documents presented under a Letter of Credit with the terms
thereof shall, in either case, not, in and of itself, be deemed wilful
misconduct or gross negligence of such Issuing Lender.
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(h) (i) Notwithstanding anything to the contrary contained in this
Agreement, for purposes of calculating any LC Fee or Commitment Fee payable in
respect of any Business Day, the Administrative Agent shall convert the amount
available to be drawn under any Letter of Credit denominated in Foreign Currency
into an amount of Dollars based upon the relevant Foreign Exchange Rate in
effect for such day. If on any date the Administrative Agent shall notify
Infinity that, by virtue of any change in the Foreign Exchange Rate of any
Foreign Currency in which a Letter of Credit is denominated, the Total Facility
Exposure shall exceed the Total Commitment then in effect, then, within three
Business Days after the date of such notice, Infinity shall prepay the Revolving
Credit Loans and/or the Swingline Loans to the extent necessary to eliminate
such excess. Each Issuing Lender which has issued a Letter of Credit denominated
in a Foreign Currency agrees to notify the Administrative Agent of the average
daily outstanding amount thereof for any period in respect of which LC Fees or
Commitment Fees are payable and, upon request by the Administrative Agent, for
any other date or period. For all purposes of this Agreement, determinations by
the Administrative Agent of the Dollar equivalent of any amount expressed in a
Foreign Currency shall be made on the basis of Foreign Exchange Rates reset
monthly (or on such other periodic basis as shall be selected by the
Administrative Agent in its sole discretion) and shall in each case be
conclusive absent manifest error.
(ii) Notwithstanding anything to the contrary contained in this Section
2.7, prior to demanding any reimbursement from the Lenders pursuant to Section
2.7(f) in respect of any Letter of Credit denominated in a Foreign Currency, the
relevant Issuing Lender shall convert Infinity's obligation under Section 2.7(g)
to reimburse such Issuing Lender in such Foreign Currency into an obligation to
reimburse such Issuing Lender (and, in turn, the Lenders) in Dollars. The amount
of any such converted obligation shall be computed based upon the relevant
Foreign Exchange Rate (as quoted by the Administrative Agent to such Issuing
Lender) in effect for the day on which such conversion occurs.
SECTION 2.8. Conversion and Continuation Options. (a) The relevant
Borrower may elect from time to time to convert Eurodollar Revolving Credit
Loans (or, subject to Section 2.10(f), a portion thereof) to ABR Revolving
Credit Loans on the last day of an Interest Period with respect thereto by
giving the Administrative Agent prior irrevocable notice of such election. The
relevant Borrower may elect from time to time to convert ABR Revolving Credit
Loans (subject to Section 2.10(f)) to Eurodollar Revolving Credit Loans by
giving the Administrative Agent at least three Business Days' prior irrevocable
notice of such election. Any such notice of conversion to Eurodollar Revolving
Credit Loans shall specify the length of the initial Interest Period therefor.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each Lender thereof. All or any part of outstanding Eurodollar Revolving Credit
Loans and ABR Revolving Credit Loans may be converted as provided herein,
provided that no Revolving Credit Loan may be converted into a Eurodollar
Revolving Credit Loan when any Event of Default has occurred and is continuing
and the Administrative Agent has or the Required Lenders have determined in its
or their sole discretion not to permit such a conversion.
(b) Any Eurodollar Revolving Credit Loans (or, subject to Section
2.10(f), a portion thereof) may be continued as such upon the expiration of the
then current Interest Period with respect thereto by the relevant Borrower
giving irrevocable notice to the Administrative Agent, not less than three
Business Days prior to the last day of the then current Interest Period with
respect thereto, of the length of the next Interest Period to be applicable to
such Revolving Credit Loans, provided that no Eurodollar Revolving Credit Loan
may be continued as such when any Event of Default has occurred and is
continuing and the Administrative Agent has or the Required Lenders have
determined in its or their sole discretion not to permit such a continuation,
and provided, further, that if the relevant Borrower shall fail to give any
required notice as described above in this paragraph or if such continuation is
not permitted pursuant to the preceding proviso such Eurodollar Revolving Credit
Loans
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shall be automatically converted to ABR Revolving Credit Loans on the last day
of such then expiring Interest Period. Upon receipt of any notice from a
Borrower pursuant to this Section 2.8(b), the Administrative Agent shall
promptly notify each Lender thereof.
SECTION 2.9. Fees. (a) Infinity agrees to pay to the Administrative
Agent for the account of each Lender a Commitment Fee for the period from and
including the Closing Date to the Revolving Credit Maturity Date (or such
earlier date on which the Commitments shall terminate in accordance herewith),
computed at a per annum rate equal to the Applicable Commitment Fee Rate on the
average daily Commitment Fee Calculation Amount in respect of such Lender during
the period for which payment is made. All Commitment Fees shall be computed on
the basis of the actual number of days elapsed in a year of 360 days and shall
be payable quarterly in arrears on the last day of each March, June, September
and December, on the Revolving Credit Maturity Date or such earlier date on
which the Commitments shall be terminated, commencing on the first of such dates
to occur after the Closing Date.
(b) Infinity agrees to pay each Lender, through the Administrative
Agent, on the last day of each March, June, September and December and on the
Revolving Credit Maturity Date or the date on which the Commitment of such
Lender shall be terminated as provided herein and all Letters of Credit issued
hereunder shall have expired, a letter of credit fee (an "LC Fee") computed at a
per annum rate equal to the Applicable LC Fee Rate on such Lender's Revolving
Credit Percentage of the average daily undrawn amount of the Financial Letters
of Credit or Non-Financial Letters of Credit, as the case may be, outstanding
during the preceding quarter (or shorter period commencing with the Closing Date
or ending with the Revolving Credit Maturity Date or the date on which the
Commitment of such Lender shall have been terminated and all Letters of Credit
issued hereunder shall have expired). All LC Fees shall be computed on the basis
of the actual number of days elapsed in a year of 360 days.
(c) Infinity and CBS, jointly and severally, agree to pay, without
duplication, to the Administrative Agent, for its own account, the
administrative agent's fees ("Administrative Agent's Fees") provided for in the
Administrative Agent Fee Letter at the times provided therein.
(d) Infinity agrees to pay to each Issuing Lender, through the
Administrative Agent, for its own account, the applicable Issuing Lender Fees.
(e) All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the relevant Lenders or to the Issuing Lenders. Once paid, none of the
Fees shall be refundable under any circumstances (other than corrections of
errors in payment).
SECTION 2.10. Interest on Loans; Eurodollar Tranches; Etc. (a) Subject
to the provisions of Section 2.11, Eurodollar Loans shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 360
days) at a rate per annum equal to (i) in the case of each Eurodollar Revolving
Credit Loan, the Eurodollar Rate for the Interest Period in effect for such Loan
plus the Applicable Eurodollar Margin and (ii) in the case of each Eurodollar
Competitive Loan, the Eurodollar Rate for the Interest Period in effect for such
Loan plus the Margin offered by the Lender making such Loan and accepted by the
relevant Borrower pursuant to Section 2.3. The Eurodollar Rate for each Interest
Period shall be determined by the Administrative Agent, and such determination
shall be conclusive absent manifest error. The Administrative Agent shall
promptly advise the relevant Borrower and each Lender of such determination.
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(b) Subject to the provisions of Section 2.11, ABR Loans shall bear
interest (computed on the basis of the actual number of days elapsed over a year
of 365 or 366 days, as the case may be, when determined by reference to the
Prime Rate and over a year of 360 days at all other times) at a rate per annum
equal to the Alternate Base Rate. The Alternate Base Rate shall be determined by
the Administrative Agent, and such determination shall be conclusive absent
manifest error.
(c) Subject to the provisions of Section 2.11, Quoted Swingline Loans
shall bear interest (computed on the basis of the actual number of days elapsed
over a year of 360 days) at a rate per annum equal to the relevant Quoted
Swingline Rate.
(d) Subject to the provisions of Section 2.11, each Absolute Rate Loan
shall bear interest at a rate per annum (computed on the basis of the actual
number of days elapsed over a year of 360 days) equal to the fixed rate of
interest offered by the Lender making such Loan and accepted by the relevant
Borrower pursuant to Section 2.3.
(e) Interest on each Loan shall be payable on each applicable Interest
Payment Date.
(f) Notwithstanding anything to the contrary in this Agreement, all
borrowings, conversions, continuations, repayments and prepayments of Eurodollar
Revolving Credit Loans hereunder and all selections of Interest Periods
hereunder in respect of Eurodollar Revolving Credit Loans shall be in such
amounts and shall be made pursuant to such elections so that, after giving
effect thereto, the aggregate principal amount of the Eurodollar Revolving
Credit Loans comprising each Eurodollar Tranche shall be equal to $50,000,000 or
a whole multiple of $5,000,000 in excess thereof. Unless otherwise agreed by the
Administrative Agent, in no event shall there be more than 25 Eurodollar
Tranches outstanding at any time.
(g) If no election as to the Type of Revolving Credit Loan is specified
in any notice of borrowing with respect thereto, then the requested Loan shall
be an ABR Loan. If no Interest Period with respect to a Eurodollar Revolving
Credit Loan is specified in any notice of borrowing, conversion or continuation,
then the relevant Borrower shall be deemed to have selected an Interest Period
of one month's duration.
SECTION 2.11. Default Interest. (a) If all or a portion of the
principal amount of any Loan shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), all outstanding Loans (whether or not
overdue) shall bear interest at a rate per annum which is equal to the rate that
would otherwise be applicable thereto pursuant to the provisions of Section 2.10
plus 2% and (b) if all or a portion of any LC Disbursement, any interest payable
on any Loan or LC Disbursement or any Fee or other amount payable hereunder
shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum equal to
the rate otherwise applicable to ABR Loans pursuant to Section 2.10(b) plus 2%,
in each case, with respect to clauses (a) and (b) above, from the date of such
non-payment until such amount is paid in full (as well after as before
judgment).
SECTION 2.12. Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Loan (i) the Administrative Agent shall have
determined (which determination shall be conclusive and binding upon each
Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period, or (ii) the Required Lenders shall have determined and
shall have notified the Administrative Agent that the Eurodollar Rate determined
or to be determined for such Interest Period will not adequately and fairly
<PAGE> 35
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reflect the cost to such Lenders (as conclusively certified by such Lenders) of
making or maintaining Eurodollar Loans during such Interest Period, the
Administrative Agent shall, as soon as practicable thereafter, give written or
telecopy notice of such determination to the Borrowers and the Lenders. In the
event of any such determination, until the Administrative Agent shall have
advised the Borrowers and the Lenders that the circumstances giving rise to such
notice no longer exist, (i) any request by a Borrower for a Eurodollar
Competitive Loan pursuant to Section 2.3 to be made after such determination
shall be of no force and effect and shall be denied by the Administrative Agent,
(ii) any request by a Borrower for a Eurodollar Revolving Credit Loan pursuant
to Section 2.4 to be made after such determination shall be deemed to be a
request for an ABR Loan and (iii) any request by a Borrower for conversion into
or a continuation of a Eurodollar Revolving Credit Loan pursuant to Section 2.8
to be made after such determination shall have no force and effect (in the case
of a requested conversion) or shall be deemed to be a request for a conversion
into an ABR Loan (in the case of a requested continuation). Also, in the event
of any such determination, the relevant Borrower shall be entitled, in its sole
discretion, if the requested Loan has not been made, to cancel its acceptance of
the Competitive Bids or to cancel its Competitive Bid Request relating thereto.
Each determination by the Administrative Agent or the Required Lenders hereunder
shall be conclusive absent manifest error.
SECTION 2.13. Termination and Reduction of Commitments. (a) Upon at
least three Business Days' prior irrevocable written or telecopy notice to the
Administrative Agent, Infinity may at any time in whole permanently terminate,
or from time to time in part permanently reduce, the Commitments; provided,
however, that (i) each partial reduction of the Commitments shall be in a
minimum principal amount of $10,000,000 and in integral multiples of $1,000,000
in excess thereof and (ii) no such termination or reduction shall be made if,
after giving effect thereto and to any prepayments of the Loans made on the
effective date thereof, (x) the Outstanding Revolving Extensions of Credit of
any Lender would exceed such Lender's Commitment then in effect or (y) the Total
Facility Exposure would exceed the Total Commitment then in effect. The
Administrative Agent shall promptly advise the Lenders of any notice given
pursuant to this Section 2.13(a).
(b) Except as otherwise provided in Section 2.21, each reduction in the
Commitments hereunder shall be made ratably among the Lenders in accordance with
their respective Commitments. Infinity agrees to pay to the Administrative Agent
for the account of the Lenders, on the date of termination or reduction of the
Commitments, the Commitment Fees on the amount of the Commitments so terminated
or reduced accrued through the date of such termination or reduction.
SECTION 2.14. Optional Prepayments of Revolving Credit Loans. The
relevant Borrower may at any time and from time to time prepay the Revolving
Credit Loans, in whole or in part, without premium or penalty, upon giving
irrevocable written or telecopy notice (or telephone notice promptly confirmed
by written or telecopy notice) to the Administrative Agent: (i) before 10:00
a.m., New York City time, three Business Days prior to prepayment, in the case
of Eurodollar Revolving Credit Loans, and (ii) before 10:00 a.m., New York City
time, one Business Day prior to prepayment, in the case of ABR Revolving Credit
Loans. Such notice shall specify the date and amount of prepayment and whether
the prepayment is of Eurodollar Revolving Credit Loans, ABR Revolving Credit
Loans or a combination thereof, and, if of a combination thereof, the amount
allocable to each. If a Eurodollar Revolving Credit Loan is prepaid on any day
other than the last day of the Interest Period applicable thereto, the relevant
Borrower shall also pay any amounts owing pursuant to Section 2.16. Upon receipt
of any such notice the Administrative Agent shall promptly notify each Lender
thereof. If any such notice is given, the amount specified in such notice shall
be due and payable on the date specified therein, together with (except in the
case of ABR Revolving Credit Loans) accrued interest to such date
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on the amount prepaid. Partial prepayments of Revolving Credit Loans shall be in
an aggregate principal amount of $10,000,000 or a whole multiple of $1,000,000
in excess thereof.
SECTION 2.15. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision herein, if after the Original Closing Date
any change in applicable law or regulation (including any change in the reserve
percentages provided for in Regulation D) or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof shall change the basis of taxation of
payments to any Lender of the principal of or interest on any Eurodollar Loan or
Absolute Rate Loan made by such Lender (other than changes in respect of taxes
imposed on the overall net income of such Lender by the jurisdiction in which
such Lender has its principal office (or in which it holds any Eurodollar Loan
or Absolute Rate Loan) or by any political subdivision or taxing authority
therein and other than taxes that would not have been imposed but for the
failure of such Lender to comply with applicable certification, information,
documentation or other reporting requirements), or shall impose, modify or deem
applicable any reserve, special deposit or similar requirement against assets of
or deposits with or for the account of such Lender, or shall impose on such
Lender or the London interbank market any other condition affecting this
Agreement or any Eurodollar Loan or Absolute Rate Loan made by such Lender, and
the result of any of the foregoing shall be to increase the cost to such Lender
of making or maintaining any Eurodollar Loan or Absolute Rate Loan or to reduce
the amount of any sum received or receivable by such Lender hereunder (whether
of principal, interest or otherwise) in respect of any Eurodollar Loan or
Absolute Rate Loan by an amount deemed by such Lender to be material, then the
relevant Borrower agrees to pay to such Lender as provided in paragraph (c)
below such additional amount or amounts as will compensate such Lender for such
additional costs incurred or reduction suffered. Notwithstanding the foregoing,
no Lender shall be entitled to request compensation under this paragraph with
respect to any Competitive Loan if the change giving rise to such request shall,
or in good faith should, have been taken into account in formulating the
Competitive Bid pursuant to which such Competitive Loan shall have been made.
(b) If any Lender or any Issuing Lender shall have determined that the
adoption after the Original Closing Date hereof of any law, rule, regulation or
guideline regarding capital adequacy, or any change in any law, rule, regulation
or guideline regarding capital adequacy or in the interpretation or
administration of any of the foregoing by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or any lending office of such Lender) or
Issuing Lender or any Lender's or Issuing Lender's holding company with any
request or directive regarding capital adequacy (whether or not having the force
of law) of any such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on such Lender's or Issuing
Lender's capital or on the capital of such Lender's or Issuing Lender's holding
company, if any, as a consequence of this Agreement or the Loans made by such
Lender or the LC Exposure of such Lender or Letters of Credit issued by such
Issuing Lender pursuant hereto to a level below that which such Lender or
Issuing Lender or such Lender's or Issuing Lender's holding company could have
achieved but for such applicability, adoption, change or compliance (taking into
consideration such Lender's or Issuing Lender's policies and the policies of
such Lender's or Issuing Lender's holding company with respect to capital
adequacy) by an amount deemed by such Lender or Issuing Lender to be material,
then from time to time Infinity agrees to pay to such Lender or Issuing Lender
as provided in paragraph (c) below such additional amount or amounts as will
compensate such Lender or Issuing Lender or such Lender's or Issuing Lender's
holding company for any such reduction suffered.
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(c) A certificate of each Lender or Issuing Lender setting forth such
amount or amounts as shall be necessary to compensate such Lender or Issuing
Lender as specified in paragraph (a) or (b) above, as the case may be, and the
basis therefor in reasonable detail shall be delivered to the relevant Borrower
and shall be conclusive absent manifest error. The relevant Borrower shall pay
each Lender or Issuing Lender the amount shown as due on any such certificate
within 30 days after its receipt of the same. Upon the receipt of any such
certificate, the relevant Borrower shall be entitled, in its sole discretion, if
any requested Loan has not been made, to cancel its acceptance of the relevant
Competitive Bids or to cancel the Competitive Bid Request relating thereto,
subject to Section 2.16.
(d) Except as provided in this paragraph, failure on the part of any
Lender to demand compensation for any increased costs or reduction in amounts
received or receivable or reduction in return on capital with respect to any
period shall not constitute a waiver of such Lender's right to demand
compensation with respect to any other period. The protection of this Section
2.15 shall be available to each Lender regardless of any possible contention of
the invalidity or inapplicability of the law, rule, regulation, guideline or
other change or condition which shall have occurred or been imposed so long as
it shall be customary for Lenders affected thereby to comply therewith. No
Lender shall be entitled to compensation under this Section 2.15 for any costs
incurred or reductions suffered with respect to any date unless it shall have
notified the relevant Borrower that it will demand compensation for such costs
or reductions under paragraph (c) above not more than 90 days after the later of
(i) such date and (ii) the date on which it shall have become aware of such
costs or reductions. Notwithstanding any other provision of this Section 2.15,
no Lender shall demand compensation for any increased cost or reduction referred
to above if it shall not at the time be the general policy or practice of such
Lender to demand such compensation in similar circumstances under comparable
provisions of other credit agreements, if any. In the event any Borrower shall
reimburse any Lender pursuant to this Section 2.15 for any cost and such Lender
shall subsequently receive a refund in respect thereof, such Lender shall so
notify such Borrower and, upon its request, will pay to such Borrower the
portion of such refund which such Lender shall determine in good faith to be
allocable to the cost so reimbursed. The covenants contained in this Section
2.15 shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
SECTION 2.16. Indemnity. Each Borrower agrees to indemnify each Lender
against any loss or expense described below which such Lender may sustain or
incur as a consequence of (a) any failure by such Borrower to fulfill on the
date of any borrowing hereunder the applicable conditions set forth in Article
IV, (b) any failure by such Borrower to borrow, continue or convert any Loan
hereunder after irrevocable notice of such borrowing, continuation or conversion
has been given or deemed given or Competitive Bids have been accepted pursuant
to Article II or (c) any payment, prepayment or conversion of a Eurodollar Loan
or Absolute Rate Loan made to such Borrower required by any other provision of
this Agreement or otherwise made or deemed made, whatever the circumstances may
be that give rise to such payment, prepayment or conversion, or any transfer of
any such Loan pursuant to Section 2.21 or 9.4(b), on a date other than the last
day of the Interest Period applicable thereto. The loss or expense for which
such Lender shall be indemnified under this Section 2.16 shall be equal to the
excess, if any, as reasonably determined by such Lender, of (i) its cost of
obtaining the funds for the Loan being paid, prepaid, converted or not borrowed,
continued or converted (assumed to be the Eurodollar Rate in the case of
Eurodollar Loans) for the period from the date of such payment, prepayment,
conversion or failure to borrow, continue or convert to the last day of the
Interest Period for such Loan (or, in the case of a failure to borrow, continue
or convert, the Interest Period for such Loan which would have commenced on the
date of such failure) over (ii) the amount of interest (as reasonably determined
by such Lender) that would be realized by such Lender in reemploying the funds
so paid, prepaid, converted or not borrowed, continued or converted for such
period or Interest Period, as the case
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may be; provided, however, that such amount shall not include any loss of a
Lender's margin or spread over its cost of obtaining funds as described above. A
certificate of any Lender setting forth any amount or amounts which such Lender
is entitled to receive pursuant to this Section 2.16 shall be delivered to the
relevant Borrower and shall be conclusive absent manifest error. This covenant
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.
SECTION 2.17. Pro Rata Treatment; Funding Matters; Evidence of Debt.
(a) Except as required under Section 2.21, each payment or prepayment of
principal of any Revolving Credit Loan, each payment of interest on the
Revolving Credit Loans, each payment of the Commitment Fees pursuant to Section
2.9(a)(i), each payment of LC Fees, and each reduction of the Commitments, shall
be allocated pro rata among the Lenders in accordance with their respective
Commitments (or, if such Commitments shall have expired or been terminated, in
accordance with the respective principal amounts of their outstanding Revolving
Credit Loans). Each Lender agrees that in computing such Lender's portion of any
Loan to be made hereunder, the Administrative Agent may, in its discretion,
round such Lender's percentage of such Loan to the next higher or lower whole
Dollar amount.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the relevant borrowing date that such Lender will not make
available to the Administrative Agent such Lender's portion of a borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such borrowing in accordance with
this Agreement and the Administrative Agent may, in reliance upon such
assumption, make available to the relevant Borrower on such date a corresponding
amount. If and to the extent that such Lender shall not have made such portion
available to the Administrative Agent, each of such Lender and the relevant
Borrower agrees to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to such Borrower until the date such amount is
repaid to the Administrative Agent at (i) in the case of such Borrower, the
interest rate applicable at the time to the relevant Loan and (ii) in the case
of such Lender, the Federal Funds Effective Rate. If such Lender shall repay to
the Administrative Agent such corresponding amount, such amount shall constitute
such Lender's Loan as part of such borrowing for the purposes of this Agreement;
provided that such repayment shall not release such Lender from any liability it
may have to such Borrower for the failure to make such Loan at the time required
herein.
(c) The failure of any Lender to make any Loan shall not in itself
relieve any other Lender of its obligation to lend hereunder (it being
understood, however, that no Lender shall be responsible for the failure of any
other Lender to make any Loan required to be made by such other Lender).
(d) Each Lender may at its option make any Eurodollar Loan by causing
any domestic or foreign branch or affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of the
relevant Borrower to repay such Loan in accordance with the terms of this
Agreement.
(e) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness to such Lender resulting from
each Loan made by it from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time under this Agreement.
The Administrative Agent shall maintain accounts in which it will record (i) the
amount of each Loan made hereunder, the Borrower with respect to each Loan, the
Type of each Loan and each Interest Period, if any, applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable
from each Borrower to each Lender hereunder and (iii) the
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amount of any sum received by the Administrative Agent hereunder from any
Borrower and each Lender's share thereof. The entries made in the accounts
maintained pursuant to this paragraph (e) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the failure of any Lender
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligations of any Borrower to repay the Loans in
accordance with their terms.
(f) In order to expedite the transactions contemplated by this
Agreement, each Subsidiary Borrower shall be deemed, by its execution and
delivery of a Subsidiary Borrower Request, to have appointed CBS to act as agent
on behalf of such Subsidiary Borrower for the purpose of (a) giving any notices
contemplated to be given by such Subsidiary Borrower pursuant to this Agreement,
including, without limitation, borrowing notices, prepayment notices,
continuation notices, conversion notices, competitive bid requests and
competitive bid acceptances or rejections and (b) paying on behalf of such
Subsidiary Borrower any Subsidiary Borrower Obligations owing by such Subsidiary
Borrower; provided, that each Subsidiary Borrower shall retain the right, in its
discretion, to directly give any or all of such notices or make any or all of
such payments.
(g) The Administrative Agent shall promptly notify the Lenders upon
receipt of any Subsidiary Borrower Designation and Subsidiary Borrower Request.
The Administrative Agent shall promptly notify the Swingline Lenders upon
receipt of any designation of a Subsidiary Borrower as a Swingline Borrower.
SECTION 2.18. Sharing of Setoffs. Except to the extent that this
Agreement provides for payments to be allocated to Revolving Credit Loans,
Swingline Loans or Competitive Loans, as the case may be, each Lender agrees
that if it shall, through the exercise of a right of banker's lien, setoff or
counterclaim against any Borrower, or pursuant to a secured claim under Section
506 of Title 11 of the United States Code or other security or interest arising
from, or in lieu of, such secured claim, received by such Lender under any
applicable bankruptcy, insolvency or other similar law or otherwise, or by any
other means (other than pursuant to any provision of this Agreement), obtain
payment (voluntary or involuntary) in respect of any category of its Loans or
such Lender's Revolving Credit Percentage of any LC Disbursement as a result of
which the unpaid principal portion of such Loans or the unpaid portion of such
Lender's Revolving Credit Percentage of the LC Disbursements shall be
proportionately less than the unpaid principal portion of such Loans or the
unpaid portion of the Revolving Credit Percentage of the LC Disbursements of any
other Lender, it shall be deemed simultaneously to have purchased from such
other Lender at face value, and shall promptly pay to such other Lender the
purchase price for, a participation in such Loans or the Revolving Credit
Percentage of the LC Disbursements of such other Lender, so that the aggregate
unpaid principal amount of such Loans and participations in such Loans held by
each Lender or the Revolving Credit Percentage of LC Disbursements and
participations in LC Disbursements held by each Lender shall be in the same
proportion to the aggregate unpaid principal amount of all such Loans or LC
Disbursements then outstanding as the principal amount of such Loans or the
Revolving Credit Percentage of LC Disbursements of each Lender prior to such
exercise of banker's lien, setoff or counterclaim or other event was to the
principal amount of all such Loans or LC Disbursements outstanding prior to such
exercise of banker's lien, setoff or counterclaim or other event; provided,
however, that, if any such purchase or purchases or adjustments shall be made
pursuant to this Section 2.18 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. Any Lender holding a participation in a
Loan or LC Disbursement deemed to have been so purchased may exercise any and
all rights of banker's lien, setoff or counterclaim with respect to any and all
moneys owing by any Borrower to such Lender by reason
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thereof as fully as if such Lender had made a Loan directly such Borrower or
issued a Letter of Credit for the account of Infinity in the amount of such
participation.
SECTION 2.19. Payments. (a) Except as otherwise expressly provided
herein, each Borrower shall make each payment (including principal of or
interest on any Loan or any Fees or other amounts) hereunder without setoff or
counterclaim and shall make each such payment not later than 12:00 noon, New
York City time, on the date when due in Dollars to the Administrative Agent at
its offices at 60 Wall Street, New York, New York, in immediately available
funds.
(b) Whenever any payment (including principal of or interest on any
Loan or any Fees or other amounts) hereunder shall become due, or otherwise
would occur, on a day that is not a Business Day, such payment may be made on
the next succeeding Business Day, and such extension of time shall in such case
be included in the computation of interest or Fees, if applicable.
SECTION 2.20. Taxes. (a) Any and all payments by each Borrower
hereunder to or for the benefit of a Non-U.S. Person shall be made, in
accordance with Section 2.19, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto imposed by or on behalf
of the United States or any political subdivision thereof, excluding taxes
imposed on (or measured by) such Non-U.S. Person's net income or net receipts,
franchise taxes, taxes on doing business or taxes imposed on capital or net
worth (all such nonexcluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). If any
Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder to a Non-U.S. Person, (i) the sum payable shall be
increased by the amount necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.20) such Non-U.S. Person shall receive an amount equal to the sum it would
have received had no such deductions been made, (ii) such Borrower shall make
such deductions and (iii) such Borrower shall pay the full amount deducted to
the relevant taxing authority or other Governmental Authority in accordance with
applicable law.
(b) The relevant Borrower agrees to pay and reimburse on demand all
transfer, stamp, documentary or other similar taxes, assessments or charges
levied by any Governmental Authority in respect of this Agreement, any of the
Loans or the Letters of Credit (all such taxes, assessments or charges
hereinafter referred to as "Other Taxes").
(c) The relevant Borrower will indemnify each Lender (or Transferee)
and the Administrative Agent for the full amount of Taxes and Other Taxes
(including any Taxes or Other Taxes imposed by the applicable jurisdiction on
amounts payable under this Section 2.20) paid by such Lender (or Transferee) or
the Administrative Agent, as the case may be, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted by
the relevant taxing authority or other Governmental Authority. Such
indemnification shall be made within 30 days after the date such Lender (or
Transferee) or the Administrative Agent, as the case may be, makes written
demand therefor.
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes withheld by any Borrower in respect of any payment to a Non-U.S. Person,
such Borrower will furnish to the Administrative Agent, at its address referred
to in Section 9.1 for delivery to such Non-U.S. Person, the original or a
certified copy of a receipt (if available) evidencing payment thereof.
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(e) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.20 shall
survive the payment in full of the principal of and interest on all Loans made
hereunder and of all other amounts payable hereunder.
(f) Each Lender (or Transferee) that is not a citizen or resident of
the United States of America, a corporation, partnership or other entity created
or organized in or under the laws of the United States of America, or any estate
or trust that is subject to federal income taxation regardless of the source of
its income (a "Non-U.S. Person") shall deliver to Infinity and the
Administrative Agent (or, in the case of a participant, to the Lender from which
the related participation shall have been purchased) two copies of either U.S.
Internal Revenue Service Form 1001 or Form 4224, or, in the case of a Non-U.S.
Person claiming exemption from U.S. federal withholding tax under Section 871(h)
or 881(c) of the Code with respect to payments of "portfolio interest", a Form
W-8, or any subsequent versions thereof or successors thereto (and, if such
Non-U.S. Person delivers a Form W-8, an annual certificate representing that
such Non-U.S. Person is not a "bank" for purposes of Section 881(c) of the Code,
is not a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of
the Code) of Infinity and is not a controlled foreign corporation related to
Infinity (within the meaning of Section 864(d)(4) of the Code)), properly
completed and duly executed by such Non-U.S. Person claiming complete exemption
from U.S. federal withholding tax on all payments by any Borrower under this
Agreement. Such forms shall be delivered by each Non-U.S. Person promptly after
it becomes a party to this Agreement (or, in the case of any participant,
promptly after the date such participant purchases the related participation).
In addition, each Non-U.S. Person shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Person. Each Non-U.S. Person shall promptly notify Infinity at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to Infinity (or any other form of certification adopted by
the U.S. taxing authorities for such purpose). Unless Infinity and the
Administrative Agent (or, in the case of a participant, the Lender from which
the related participation shall have been purchased) have received forms or
other documents satisfactory to them indicating that payments hereunder are not
subject to United States withholding tax, the relevant Borrower or the
Administrative Agent shall withhold taxes from such payments at the applicable
statutory rate in the case of payments of interest to or for any Lender (or
Transferee) that is a Non-U.S. Person. Notwithstanding any other provision of
this Section 2.20(f), a Non-U.S. Person shall not be required to deliver any
form pursuant to this Section 2.20(f) that such Non-U.S. Person is not legally
able to deliver by reason of the adoption of any law, rule or regulation, or any
change in any law, rule or regulation or in the interpretation thereof, in each
case occurring after the date such Non-U.S. Person becomes a Lender (or
Transferee).
(g) No Borrower shall be required to pay any additional amounts to any
Non-U.S. Person in respect of United States withholding tax pursuant to
paragraph (a) above (i) if the obligation to pay such additional amounts would
not have arisen but for a failure by such Non-U.S. Person to comply with the
provisions of paragraph (f) above or (ii) in the case of a Transferee, to the
extent such additional amounts exceed the additional amounts that would have
been payable had no transfer or assignment to such Transferee occurred;
provided, however, that each Borrower shall be required to pay those amounts to
any Lender (or Transferee) that it was required to pay hereunder prior to the
failure of such Lender (or Transferee) to comply with the provisions of such
paragraph (f).
SECTION 2.21. Termination or Assignment of Commitments Under Certain
Circumstances. (a) Any Lender (or Transferee) claiming any additional amounts
payable pursuant to Section 2.15 or Section 2.20 shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any certificate or
document requested by any Borrower or to change the jurisdiction of its
applicable lending office if the making of such a filing or change would avoid
the need for or
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reduce the amount of any such additional amounts which may thereafter accrue and
would not, in the sole determination of such Lender (or Transferee), be
otherwise disadvantageous to such Lender (or Transferee).
(b) In the event that (x) any Lender shall have delivered a notice or
certificate pursuant to Section 2.15, (y) any Borrower shall be required to make
additional payments to any Lender under Section 2.20, or (z) any Lender (a
"Non-Consenting Lender") shall withhold its consent to any amendment described
in clause (i) or (ii) of Section 9.8(b) as to which consents have been obtained
from Lenders having Total Facility Percentages aggregating at least 90%,
Infinity shall have the right, at its own expense, upon notice to such Lender
(or Lenders) and the Administrative Agent, (i) to terminate the Commitments of
such Lender (except in the case of clause (z) above) or (ii) to require such
Lender (or, in the case of clause (z) above, each Non-Consenting Lender) to
transfer and assign without recourse (in accordance with and subject to the
restrictions contained in Section 9.4) all its interests, rights and obligations
under this Agreement to one or more other financial institutions acceptable to
the Administrative Agent (which approval shall not be unreasonably withheld)
which shall assume such obligations; provided that (w) in the case of any
replacement of Non-Consenting Lenders, each assignee shall have consented to the
relevant amendment, (x) no such termination or assignment shall conflict with
any law, rule or regulation or order of any Governmental Authority, (y) the
Borrowers or the assignee (or assignees), as the case may be, shall pay to each
affected Lender in immediately available funds on the date of such termination
or assignment the principal of and interest accrued to the date of payment on
the Loans made by it hereunder and all other amounts accrued for its account or
owed to it hereunder and (z) Infinity may not terminate Commitments representing
more than 10% of the original aggregate Commitments pursuant to this paragraph
(b).
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
Infinity hereby represents and warrants, and each Subsidiary Borrower
by its execution and delivery of a Subsidiary Borrower Request represents and
warrants (to the extent specifically applicable to such Subsidiary Borrower), to
each of the Lenders that:
SECTION 3.1. Corporate Existence. Each of Infinity and each Material
Subsidiary: (a) is a corporation, partnership or other entity duly organized and
validly existing under the laws of the jurisdiction of its organization; (b) has
all requisite corporate or other power, and has all material governmental
licenses, authorizations, consents and approvals, necessary to own its assets
and carry on its business as now being or as proposed to be conducted, except
where the failure to have any of the foregoing would not result in a Material
Adverse Effect; and (c) is qualified to do business in all jurisdictions in
which the nature of the business conducted by it makes such qualification
necessary and where failure so to qualify would result in a Material Adverse
Effect.
SECTION 3.2. Financial Condition. (a) Each of (i) the consolidated
balance sheet of Infinity and its Consolidated Subsidiaries as at December 31,
1998, and the related consolidated statements of income and cash flows of
Infinity and its Consolidated Subsidiaries for the fiscal year ended on such
date, with the opinion thereon of KPMG LLP, and (ii) the unaudited consolidated
balance sheets of Infinity and its Consolidated Subsidiaries as at March 31,
1999 and June 30, 1999, and the related unaudited consolidated statements of
income and cash flows of Infinity and its Consolidated Subsidiaries for the
fiscal quarters ended on such dates, all certified by a Financial Officer of
Infinity,
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39
heretofore furnished to each of the Lenders, fairly present the consolidated
financial condition of Infinity and its Consolidated Subsidiaries as at such
dates and the consolidated results of their operations for the fiscal year or
fiscal quarter ended on such dates in accordance with GAAP (subject, in the case
of the statements referred to in clause (ii) above, to year-end audit
adjustments). Neither Infinity nor any of its Material Subsidiaries had on such
dates any known material contingent liability, except as referred to or
reflected or provided for in the Exchange Act Report or in such balance sheets
(or the notes thereto) as at such dates.
(b) There has been no material adverse change in the consolidated
financial condition, operations, assets, business or prospects taken as a whole
of Infinity and its Consolidated Subsidiaries from that set forth in the
consolidated financial statements of Infinity for the fiscal year ended December
31, 1998 referred to in Section 3.2(a) (it being agreed, however, that none of
(i) the reduction by any rating agency of any rating assigned to Indebtedness of
Infinity, (ii) non-cash provisions for loan losses and additions to valuation
allowances, (iii) any change in GAAP or compliance therewith and (iv) any legal
or arbitral proceedings which have been disclosed in the Exchange Act Report,
whether threatened, pending, resulting in a judgment or otherwise, prior to the
time a final judgment for the payment of money shall have been recorded against
Infinity or any Material Subsidiary by any Governmental Authority having
jurisdiction, and the judgment is non-appealable (or the time for appeal has
expired) and all stays of execution have expired or been lifted shall, in and of
itself, constitute such a material adverse change).
SECTION 3.3. Litigation. Except as disclosed to the Lenders in the
Exchange Act Report filed prior to the Closing Date or otherwise disclosed in
writing to the Lenders prior to the Closing Date, there are no legal or arbitral
proceedings, or any proceedings by or before any Governmental Authority, pending
or (to the knowledge of Infinity) threatened against Infinity or any of its
Material Subsidiaries which have resulted in a Material Adverse Effect (it being
agreed that any legal or arbitral proceedings which have been disclosed in the
Exchange Act Report, whether threatened, pending, resulting in a judgment or
otherwise, prior to the time a final judgment for the payment of money shall
have been recorded against Infinity or any Material Subsidiary by any
Governmental Authority having jurisdiction, and the judgment is non-appealable
(or the time for appeal has expired) and all stays of execution have expired or
been lifted shall not, in and of itself, be deemed to result in a Material
Adverse Effect). The "Exchange Act Report" shall mean, collectively, the Annual
Report of Infinity on Form 10-K and Form 10-K/A for the year ended December 31,
1998, each Report on Form 8-K of Infinity filed subsequent to December 31, 1998
and delivered to the Lenders prior to the date hereof, and the Report of
Infinity on Form 10-Q and Form 10-Q/A for the quarters ended March 31, 1999 and
June 30, 1999.
SECTION 3.4. No Breach, etc. None of the execution and delivery of
this Agreement, the consummation of the transactions herein contemplated and
compliance with the terms and provisions hereof will conflict with or result in
a breach of, or require any consent under, the charter or By-laws (or other
equivalent organizational documents) of any Borrower, or any applicable law or
regulation, or any order, writ, injunction or decree of any Governmental
Authority, or any material agreement or instrument to which Infinity or any of
its Material Subsidiaries is a party or by which any of them is bound or to
which any of them is subject, or constitute a default under any such agreement
or instrument, or result in the creation or imposition of any Lien upon any of
the revenues or assets of Infinity or any of its Material Subsidiaries pursuant
to the terms of any such agreement or instrument. Neither Infinity nor any of
its Material Subsidiaries is in default under or with respect to any of its
material contractual obligations in any respect which would have a Material
Adverse Effect.
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SECTION 3.5. Corporate Action. Each Borrower has all necessary
corporate power and authority to execute, deliver and perform its obligations
under this Agreement; the execution and delivery by each Borrower of this
Agreement (or, in the case of each Subsidiary Borrower, the relevant Subsidiary
Borrower Request), and the performance by each Borrower of this Agreement, have
been duly authorized by all necessary corporate action on such Borrower's part;
this Agreement (or, in the case of each Subsidiary Borrower, the relevant
Subsidiary Borrower Request) has been duly and validly executed and delivered by
each Borrower; and this Agreement constitutes a legal, valid and binding
obligation of each Borrower, enforceable in accordance with its terms except as
such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or similar laws of general
applicability affecting the enforcement of creditors' rights and (b) the
application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
SECTION 3.6. Approvals. No authorizations, approvals or consents of,
and no filings or registrations with, any Governmental Authority are necessary
for the execution, delivery or performance by each Borrower of this Agreement or
for the validity or enforceability hereof.
SECTION 3.7. ERISA. Infinity and, to the best of its knowledge, its
ERISA Affiliates have fulfilled their respective obligations under the minimum
funding standards of ERISA and the Code with respect to each Plan and are in
compliance in all material respects with the currently applicable provisions of
ERISA and the Code except where any failure or non-compliance would not result
in a Material Adverse Effect.
SECTION 3.8. Taxes. As of the Closing Date, United States Federal
income tax returns of CBS and its Material Subsidiaries have been examined and
closed through the fiscal year of CBS ended December 31, 1989. Infinity and its
Material Subsidiaries have filed all United States Federal income tax returns
and all other material tax returns which are required to be filed by them and
have paid all taxes shown as due on such returns or pursuant to any assessment
received by Infinity or any of its Material Subsidiaries, except those being
contested and reserved against in accordance with Section 5.2.
SECTION 3.9. Investment Company Act. No Borrower is an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
SECTION 3.10. Hazardous Materials. Infinity and each of its
Subsidiaries have obtained all permits, licenses and other authorizations which
are required under all Environmental Laws, except to the extent failure to have
any such permit, license or authorization has not resulted in a Material Adverse
Effect. Infinity and each of its Subsidiaries are in compliance with the terms
and conditions of all such permits, licenses and authorizations, and are also in
compliance with other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
any applicable Environmental Law or in any regulation, code, plan, order,
decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder, except to the extent failure to comply would
not result in a Material Adverse Effect.
SECTION 3.11. Material Subsidiaries. Set forth in Schedule 3.11 is a
complete and correct list, as of the Closing Date, of all Material Subsidiaries.
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SECTION 3.12. No Material Misstatements. No written information,
report, financial statement, exhibit or schedule (the "Information") furnished
by or on behalf of Infinity to the Administrative Agent or any Lender in
connection with the syndication of the Commitments or the negotiation of this
Agreement or included in this Agreement or delivered pursuant hereto contained
as of the time it was furnished any material misstatement of fact or omitted as
of such time to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were, are or will be
made, not misleading; provided that the foregoing representation and warranty is
made only to the best of Infinity's knowledge in the case of Information
relating to Outdoor Systems and its Subsidiaries furnished prior to the Outdoor
Systems Merger Date (which knowledge, until the Outdoor Systems Merger Date,
will be principally based upon public disclosure by Outdoor Systems); and
provided, further, that with respect to Information consisting of statements,
estimates and projections regarding the future performance of Infinity and its
respective Subsidiaries ("Projections"), no representation or warranty is made
other than that such Projections have been prepared in good faith utilizing due
and careful consideration and the best information available to Infinity at the
time of preparation thereof.
SECTION 3.13. Ownership of Property. Each of Infinity and each of its
Material Subsidiaries has good record and marketable title in fee simple to, or
a valid leasehold interest in, all its real property, and good title to, or a
valid leasehold interest in, all its other Property, except to the extent that
the failure to have such title would not result in a Material Adverse Effect.
SECTION 3.14. Intellectual Property. Each of Infinity and each of its
Material Subsidiaries maintains, and is in compliance in all material respects
with, appropriate policies and procedures for establishing and protecting their
respective rights in Intellectual Property. Except as, in the aggregate, would
not result in a Material Adverse Effect, (a) each of Infinity and each of its
Material Subsidiaries owns, or is licensed to use, all Intellectual Property
necessary for the conduct of their respective businesses; (b) no claim has been
asserted and is pending by any Person challenging or questioning the use of any
Intellectual Property or the validity or effectiveness of any Intellectual
Property, nor does Infinity know of any valid basis for any such claim; and (c)
to the best knowledge of Infinity, the use of the Intellectual Property by
Infinity and its Material Subsidiaries does not infringe on the rights of any
Person.
SECTION 3.15. FCC Matters. Except as, in the aggregate, would not
result in a Material Adverse Effect: (a) Infinity and each of its Material
Subsidiaries have all the FCC Licenses necessary for the conduct of their
respective businesses; (b) Infinity and each of its Material Subsidiaries are in
substantial compliance with the Communications Act and with the rules and
regulations thereunder; (c) neither Infinity nor any of its Material
Subsidiaries is a party to, or has any knowledge of, any pending investigation,
notice of violation, order or complaint issued with respect to it by or before
the FCC; and (d) Infinity and its Material Subsidiaries have no reason to
believe that any FCC License will not be renewed in the ordinary course of
business.
SECTION 3.16. Year 2000 Matters. The statements contained in
Infinity's filings with the Securities and Exchange Commission with respect to
year 2000 compliance are true and correct as they relate to Infinity.
<PAGE> 46
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ARTICLE IV.
CONDITIONS OF EFFECTIVENESS AND LENDING
SECTION 4.1. Effectiveness. The effectiveness of this Agreement is
subject to the satisfaction of the following conditions (the date on which all
of such conditions shall have been satisfied, the "Closing Date"):
(a) Credit Agreement. The Administrative Agent shall have
received this Agreement, executed and delivered by a duly authorized
officer of Infinity and CBS.
(b) Closing Certificate. The Administrative Agent shall have
received a Closing Certificate, substantially in the form of Exhibit F,
of CBS and Infinity, with appropriate insertions and attachments.
(c) Consent. The Administrative Agent shall have (i) received
the consent of the Required Lenders (as defined in the Existing Credit
Agreement) authorizing the Administrative Agent to execute this
Agreement and (ii) executed this Agreement.
SECTION 4.2. Initial Loans to Subsidiary Borrowers. The obligation of
each Lender to make its initial Loan to a particular Subsidiary Borrower, if
designated as such after the Closing Date, is subject to the satisfaction of the
conditions that (a) Infinity shall have delivered to the Administrative Agent a
Subsidiary Borrower Designation for such Subsidiary Borrower and (b) such
Subsidiary Borrower shall have furnished to the Administrative Agent (i) a
Subsidiary Borrower Request, (ii) a Closing Certificate of such Subsidiary
Borrower, with appropriate insertions and attachments and (iii) one or more
executed legal opinions with respect to such Subsidiary Borrower, in form and
substance reasonably satisfactory to the Administrative Agent and including, to
the extent applicable, the opinions set forth in Exhibits B-7 and B-8. Infinity
may from time to time deliver a subsequent Subsidiary Borrower Designation with
respect to any Subsidiary Borrower, countersigned by such Subsidiary Borrower,
for the purpose of terminating such Subsidiary Borrower's designation as such,
so long as, on the effective date of such termination, all Subsidiary Borrower
Obligations in respect of such Subsidiary Borrower shall have been paid in full.
In addition, if on any date a Subsidiary Borrower shall cease to be a
Subsidiary, all Subsidiary Borrower Obligations in respect of such Subsidiary
Borrower shall automatically become due and payable on such date and no further
Loans may be borrowed by such Subsidiary Borrower hereunder.
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SECTION 4.3. All Credit Events. The obligation of each Lender to make
each Loan, and the obligation of each Issuing Lender to issue each Letter of
Credit, are subject to the satisfaction of the following conditions.
(a) The Administrative Agent shall have received a request
for, or notice of, such Credit Event if and as required by Section 2.3,
2.4, 2.6 or 2.7, as applicable.
(b) Each of the representations and warranties made by
Infinity and, in the case of a borrowing by a Subsidiary Borrower, by
such Subsidiary Borrower, in Article III, or in any certificate
delivered pursuant hereto, shall be true and correct in all material
respects on and as of the date of such Credit Event with the same
effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date in
which case such representations and warranties shall be true and
correct in all material respects as of such earlier date provided that,
with respect to any Loan made or Letter of Credit issued after the
Closing Date, in the event that the Infinity Ratings are then A-2 or
higher by S&P and P-2 or higher by Moody's, the representation in
Section 3.2(b) shall be excluded from the foregoing requirement.
(c) At the time of and immediately after giving effect to such
Credit Event no Default or Event of Default shall have occurred and be
continuing.
(d) After giving effect to such Credit Event, (i) the
Outstanding Revolving Extensions of Credit of each Lender shall not
exceed such Lender's Commitment then in effect and (ii) the Total
Facility Exposure shall not exceed the Total Commitment then in effect.
Each Credit Event shall be deemed to constitute a representation and warranty by
Infinity on the date of such Credit Event as to the matters specified in
paragraphs (b) and (c) of this Section 4.3.
ARTICLE V.
COVENANTS
Infinity covenants and agrees with each Lender that, as long as the
Commitments shall be in effect or the principal of or interest on any Loan shall
be unpaid, or there shall be any Aggregate LC Exposure, unless the Required
Lenders shall otherwise consent in writing:
SECTION 5.1. Financial Statements. Commencing on December 31, 1999,
Infinity shall deliver to each of the Lenders:
(a) within 55 days after the end of each of the first three
quarterly fiscal periods of each fiscal year of Infinity, consolidated
statements of income and cash flows of Infinity and its Consolidated
Subsidiaries for such period and for the period from the beginning of
the respective fiscal year to the end of such period, and the related
consolidated balance sheet as at the end of such period, setting forth
in each case in comparative form the corresponding consolidated
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figures for the corresponding period in the preceding fiscal year,
accompanied by a certificate of a Financial Officer of Infinity which
certificate shall state that such financial statements fairly present
the consolidated financial condition and results of operations of
Infinity and its Consolidated Subsidiaries in accordance with GAAP as
at the end of, and for, such period, subject to normal year-end audit
adjustments (provided that the requirement herein for the furnishing of
such quarterly financial statements may be fulfilled by providing to
the Lenders the report of Infinity to the SEC on Form 10-Q for the
applicable quarterly period, accompanied by the officer's certificate
described in the last sentence of this Section 5.1);
(b) within 105 days after the end of each fiscal year of
Infinity, consolidated statements of income and cash flows of Infinity
and its Consolidated Subsidiaries for such year and the related
consolidated balance sheet as at the end of such year, setting forth in
comparative form the corresponding consolidated figures for the
preceding fiscal year, and accompanied by an opinion thereon
(unqualified as to the scope of the audit) of independent certified
public accountants of recognized national standing, which opinion shall
state that such consolidated financial statements fairly present the
consolidated financial condition and results of operations of Infinity
and its Consolidated Subsidiaries as at the end of, and for, such
fiscal year (provided that the requirement herein for the furnishing of
annual financial statements may be fulfilled by providing to the
Lenders the report of Infinity to the SEC on Form 10-K for the
applicable fiscal year);
(c) promptly upon their becoming publicly available, copies of
all registration statements and regular periodic reports (including
without limitation any and all reports on Form 8-K), if any, which
Infinity or any of its Subsidiaries shall have filed with the SEC or
any national securities exchange;
(d) promptly upon the mailing thereof to the shareholders of
Infinity generally, copies of all financial statements, reports and
proxy statements so mailed;
(e) within 30 days after a Responsible Officer of Infinity
knows or has reason to believe that any of the events or conditions
specified below with respect to any Plan or Multiemployer Plan have
occurred or exist which would reasonably be expected to result in a
Material Adverse Effect, a statement signed by a senior financial
officer of Infinity setting forth details respecting such event or
condition and the action, if any, which Infinity or its ERISA Affiliate
proposes to take with respect thereto (and a copy of any report or
notice required to be filed with or given to PBGC by Infinity or an
ERISA Affiliate with respect to such event or condition):
(i) any reportable event, as defined in Section
4043(b) of ERISA and the regulations issued thereunder, with
respect to a Plan, as to which PBGC has not by regulation
waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event
(provided that a failure to meet the minimum funding standard
of Section 412 of the Code or Section 302 of ERISA shall be a
reportable event regardless of the issuance of any waiver in
accordance with Section 412(d) of the Code);
(ii) the filing under Section 4041 of ERISA of a
notice of intent to terminate any Plan or the termination of
any Plan;
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(iii) the institution by PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by Infinity or any ERISA Affiliate of a notice from a
Multiemployer Plan that such action has been taken by PBGC
with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal by Infinity
or any ERISA Affiliate under Section 4201 or 4204 of ERISA
from a Multiemployer Plan, or the receipt by Infinity or any
ERISA Affiliate of notice from a Multiemployer Plan that it is
in reorganization or insolvency pursuant to Section 4241 or
4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary of
any Multiemployer Plan against Infinity or any ERISA Affiliate
to enforce Section 515 of ERISA, which proceeding is not
dismissed within 30 days; and
(vi) a failure to make a required installment or
other payment with respect to a Plan (within the meaning of
Section 412(n) of the Code), in which case the notice required
hereunder shall be provided within 10 days after the due date
for filing notice of such failure with the PBGC;
(f) promptly after a Responsible Officer of Infinity knows or
has reason to believe that any Default or Event of Default has
occurred, a notice of such Default or Event of Default describing it in
reasonable detail and, together with such notice or as soon thereafter
as possible, a description of the action that Infinity has taken and
proposes to take with respect thereto;
(g) promptly after a Responsible Officer of Infinity knows
that any change has occurred in CBS's Debt Rating by either Rating
Agency, a notice describing such change; and
(h) promptly from time to time such other information
regarding the financial condition, operations or business of Infinity
or any of its Subsidiaries (including, without limitation, any Plan or
Multiemployer Plan and any reports or other information required to be
filed under ERISA) as any Lender through the Administrative Agent may
reasonably request.
Infinity will furnish to the Administrative Agent and each Lender, at the time
it furnishes each set of financial statements pursuant to paragraph (a) or (b)
above, a certificate (which may be a copy in the case of each Lender) of a
Financial Officer of Infinity (a "Compliance Certificate") (i) to the effect
that no Default or Event of Default has occurred and is continuing (or, if any
Default or Event of Default has occurred and is continuing, describing it in
reasonable detail and describing the action that Infinity has taken and proposes
to take with respect thereto), and (ii) setting forth in reasonable detail the
computations (including any pro forma calculations as described in Section
1.2(c)) necessary to determine whether Infinity is in compliance with the
Financial Covenants as of the end of the respective quarterly fiscal period or
fiscal year.
SECTION 5.2. Corporate Existence, Etc. Infinity will, and will cause
each of its Material Subsidiaries to, preserve and maintain its legal existence
and all of its material rights, privileges and franchises (provided that (a)
nothing in this Section 5.2 shall prohibit any transaction expressly permitted
under Section 5.4 and (b) Infinity or such Material Subsidiary shall not be
required to preserve or maintain any such right, privilege or franchise if the
Board of Directors of Infinity or such Material Subsidiary, as the case may be,
shall determine that the
<PAGE> 50
46
preservation or maintenance thereof is no longer desirable in the conduct of the
business of Infinity or such Material Subsidiary, as the case may be); comply
with the requirements of all applicable laws, rules, regulations and orders of
Governmental Authorities (including, without limitation, all Environmental Laws)
and with all contractual obligations if failure to comply with such requirements
or obligations would reasonably be expected to result in a Material Adverse
Effect; pay and discharge all material taxes, assessments, governmental charges,
levies or other obligations of whatever nature imposed on it or on its income or
profits or on any of its Property prior to the date on which penalties attach
thereto, except for any such tax, assessment, charge, levy or other obligation
the payment of which is being contested in good faith and by proper proceedings
and against which adequate reserves are being maintained; maintain all its
Property used or useful in its business in good working order and condition,
ordinary wear and tear excepted, all as in the judgment of Infinity or such
Material Subsidiary may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times
(provided that Infinity or such Material Subsidiary shall not be required to
maintain any such Property if the failure to maintain any such Property is, in
the judgment of Infinity or such Material Subsidiary, desirable in the conduct
of the business of Infinity or such Material Subsidiary); keep proper books of
records and accounts in which entries that are full, true and correct in all
material respects shall be made in conformity with GAAP; and permit
representatives of any Lender, during normal business hours upon reasonable
advance notice, to inspect any of its books and records and to discuss its
business and affairs with its Financial Officers or their designees, all to the
extent reasonably requested by such Lender.
SECTION 5.3. Insurance. Infinity will, and will cause each of its
Material Subsidiaries to, keep insured by financially sound and reputable
insurers all Property of a character usually insured by corporations engaged in
the same or similar business and similarly situated against loss or damage of
the kinds and in the amounts consistent with prudent business practice and carry
such other insurance as is consistent with prudent business practice (it being
understood that self-insurance shall be permitted to the extent consistent with
prudent business practice).
SECTION 5.4. Prohibition of Fundamental Changes. Infinity will not, and
will not permit any of its Material Subsidiaries to (i) enter into any
transaction of merger, consolidation, liquidation or dissolution or (ii) Dispose
of, in one transaction or a series of related transactions, all or a substantial
part (determined by reference to Infinity and its Subsidiaries taken as a whole)
of its business or Property, whether now owned or hereafter acquired (excluding
(x) financings by way of sales of receivables or inventory, (y) inventory or
other Property Disposed of in the ordinary course of business and (z) obsolete
or worn-out Property, tools or equipments no longer used or useful in its
business). Notwithstanding the foregoing provisions of this Section 5.4:
(a) any Subsidiary of Infinity may be merged or consolidated
with or into: (i) Infinity if Infinity shall be the continuing or
surviving corporation or (ii) any other such Subsidiary; provided that
(x) if any such transaction shall be between a Subsidiary and a Wholly
Owned Subsidiary, such Wholly Owned Subsidiary shall be the continuing
or surviving corporation and (y) if any such transaction shall be
between a Subsidiary and a Subsidiary Borrower, the continuing or
surviving corporation shall be a Subsidiary Borrower;
(b) any Subsidiary of Infinity may distribute, dividend or
Dispose of any of or all its Property (upon voluntary liquidation or
otherwise) to Infinity or a Wholly Owned Subsidiary of Infinity;
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(c) Infinity may merge or consolidate with or into any other
Person if (i) either (x) Infinity is the continuing or surviving
corporation or (y) the corporation formed by such consolidation or into
which Infinity is merged shall be a corporation organized under the
laws of the United States of America, any State thereof or the District
of Columbia and shall expressly assume the obligations of Infinity
hereunder pursuant to a written agreement and shall have delivered to
the Administrative Agent such agreement and a certificate of a
Responsible Officer and an opinion of counsel to the effect that such
merger or consolidation complies with this Section 5.4(c), and (ii)
after giving effect thereto and to any repayment of Loans to be made
upon consummation thereof (it being expressly understood that no
repayment of Loans is required solely by virtue thereof), no Default or
Event of Default shall have occurred and be continuing;
(d) any Subsidiary of Infinity may merge or consolidate with
or into any other Person if, after giving effect thereto and to any
repayment of Loans to be made upon the consummation thereof (it being
expressly understood that, except as otherwise expressly provided in
Section 4.2 with respect to Subsidiary Borrowers, no repayment of Loans
is required solely by virtue thereof), no Default or Event of Default
shall have occurred and be continuing; and
(e) Infinity or any Subsidiary of Infinity may Dispose of its
Property if, after giving effect thereto and to any repayment of Loans
to be made upon the consummation thereof (it being expressly understood
that, except as otherwise expressly provided in Section 4.2 with
respect to Subsidiary Borrowers, no repayment of Loans is required
solely by virtue thereof), no Default or Event of Default shall have
occurred and be continuing.
SECTION 5.5. Limitation on Liens. Infinity will not, and will not
permit any of its Material Subsidiaries to, create, incur, assume or suffer to
exist any Lien upon any of its Property, or enter into any Sale/Leaseback with
respect to any such Property, whether now owned or hereafter acquired; provided
that the foregoing restrictions shall not apply to:
(a) Liens imposed by any Governmental Authority for taxes,
assessments or charges not yet due and payable or which are being
contested in good faith and by appropriate proceedings if adequate
reserves with respect thereto are maintained;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, architects' or other like Liens arising in the ordinary
course of business which are not overdue for a period of more than 30
days or which are being contested in good faith and by appropriate
proceedings;
(c) Liens securing judgments or to perfect an appeal of any
order or decree but only to the extent, for an amount and for a period
not resulting in an Event of Default under paragraph (h) of Article VI;
(d) pledges or deposits under worker's compensation,
unemployment insurance and other social security legislation;
(e) pledges or deposits to secure the performance of bids,
trade contracts (other than for borrowed money), leases, statutory
obligations to secure surety, appeal or performance bonds and
contractual and other obligations of a like nature incurred in the
ordinary course of business and not involving the borrowing of money;
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(f) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements, licenses,
restrictions on the use of Property or minor imperfections in title
thereto and Liens under leases and subleases which, in the aggregate,
are not material in amount, and which do not interfere in any material
respects with the ordinary conduct of the business of Infinity and its
Subsidiaries taken as a whole;
(g) Liens on Property of any Subsidiary of Infinity or of any
Person which is or was merged with or into Infinity or any Subsidiary
thereof, provided that such Liens are or were in existence at the time
such Person becomes or became a Subsidiary of Infinity or such Person
merged with or into Infinity or any Subsidiary thereof, as the case may
be, were not created in anticipation thereof other than to finance the
purchase thereof and are not spread to cover any Property other than
the Property covered at the time of the relevant transaction;
(h) Liens upon real and/or personal property acquired (by
purchase, construction, foreclosure, deed in lieu of foreclosure or
otherwise) by Infinity or any of its Subsidiaries, each of which Liens
either (A) existed on such Property before the time of its acquisition
and was not created in anticipation thereof or (B) was created solely
for the purpose of securing Indebtedness representing, or incurred to
finance, refinance or refund, all or a part of the cost (including the
cost of construction) of such Property or improvements thereon;
provided that no such Lien shall extend to or cover any Property of
Infinity or such Subsidiary other than the respective Property so
acquired and improvements thereon;
(i) mortgages on Property securing indebtedness in favor of
the United States of America or any state thereof or any department,
agency or instrumentality or political subdivision of the United States
of America or any state thereof, incurred for the purpose of financing
all or any part of the purchase price or the cost of construction of
the Property subject to such mortgages (including without limitation
such debt secured by such mortgages in connection with pollution
control, industrial revenue or similar financings) or incurred to
secure progress, advance or other payments pursuant to any contract or
provision of any statute;
(j) Liens securing Indebtedness owed to Infinity or to any
Wholly Owned Subsidiary of Infinity;
(k) Liens (i) upon the receivables and inventory of Infinity
or any of its Subsidiaries to secure Indebtedness resulting from
financings of such receivables and inventory in an aggregate amount not
greater than $400,000,000 less the aggregate amount of Indebtedness
that is secured pursuant to clause (ii) below, provided that the terms
of such Indebtedness do not provide for any recourse to Infinity or any
Material Subsidiary (except to the extent of breaches of
representations and warranties of Infinity or any of its Subsidiaries
in connection with such financings and other recourse customary in
connection with "off-balance sheet" financings) and (ii) upon the
Property of Infinity to secure Indebtedness of Infinity in an aggregate
amount not greater than $125,000,000;
(l) Sale/Leasebacks consummated prior to the Closing Date;
(m) any Sale/Leaseback of assets of Infinity owned on the
Closing Date and listed on Schedule 5.5(m);
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(n) additional Liens upon real and/or personal property, and
additional Sale/Leasebacks, provided that the sum of (i) the aggregate
principal amount of the obligations secured by such Liens (other than
Indebtedness as defined in clause (f) of the definition thereof which
has not been assumed by Infinity or any of its Subsidiaries and where
the Lien relates to Property acquired by Infinity or any of its
Subsidiaries in satisfaction, in whole or in part, of indebtedness to
Infinity or any of its Subsidiaries, in the ordinary course of business
(any such Indebtedness, "Specified Section 5.5(n) Indebtedness")) and
(ii) the aggregate Sale/Leaseback Attributable Debt with respect to
such Sale/Leasebacks shall not exceed $125,000,000 at any one time
outstanding; and
(o) any extension, renewal or replacement of the foregoing;
provided, however, that, except to the extent otherwise permitted by
this Section 5.5 (including Section 5.5(n)), the Liens permitted under
this paragraph shall not be spread to cover any additional Indebtedness
or Property (other than a substitution of like Property or improvements
on such Property or other Property of equivalent value).
SECTION 5.6. Limitation on Subsidiary Indebtedness. Infinity will not
permit any of its Subsidiaries to create, incur, assume or suffer to exist any
Indebtedness (which includes, for the purposes of this Section 5.6, any
preferred stock), except (i) Excluded Indebtedness, (ii) Indebtedness of any
Subsidiary Borrower under this Agreement and (iii) Indebtedness incurred on any
date when, after giving effect thereto, the aggregate principal amount of
Indebtedness incurred pursuant to this clause (iii) that is outstanding on such
date (it being understood that, for the purposes of this clause (iiv), the term
"Indebtedness" does not include borrowings under this Agreement or Excluded
Indebtedness) does not exceed $300,000,000 at any time.
SECTION 5.7. Consolidated Leverage Ratio. Infinity will not permit the
Consolidated Leverage Ratio at the end of any period of four consecutive fiscal
quarters ending on any date set forth below to be greater than the ratio set
forth below opposite such date:
Date Ratio
---- -----
12/31/99 and 3/31/00 4.00 to 1
6/30/00 and 9/30/00 3.75 to 1
12/31/00 and thereafter 3.50 to 1
SECTION 5.8. Consolidated Coverage Ratio. Infinity will not permit the
Consolidated Coverage Ratio for any period of four consecutive fiscal quarters
to be less than 3.00 to 1.
SECTION 5.9. Use of Proceeds. On and after the Closing Date, each
Borrower will use the proceeds of the Loans and will use the Letters of Credit
hereunder solely for general corporate purposes (in each case in compliance with
all applicable legal and regulatory requirements, including, without limitation,
Regulation U and the Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended, and the regulations thereunder), provided that
neither any Agent nor any Lender shall have any responsibility as to the use of
any of such proceeds.
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SECTION 5.10. Transactions with Affiliates. Infinity will not, and will
not permit any of its Material Subsidiaries to, directly or indirectly enter
into any material transaction with any Affiliate of Infinity except on terms at
least as favorable to Infinity or such Subsidiary as it could obtain on an
arm's-length basis.
SECTION 5.11. Limitation on Negative Pledge Clauses. Infinity will not,
and will not permit any of its Material Subsidiaries to, enter into any
contractual obligation (a "Lien Restriction") in connection with the incurrence
of Indebtedness for Borrowed Money which, with respect to any material asset of
Infinity or any of its Material Subsidiaries, would prohibit Infinity or such
Material Subsidiary from granting a Lien on such asset as collateral security
for the obligations of Infinity hereunder or, as applicable, a Guarantee of such
obligations by such Material Subsidiary (collectively, "Credit Obligations"),
except (a) Lien Restrictions with respect to any asset encumbered by a Lien
permitted by Section 5.5, (b) Lien Restrictions with respect to any asset (or
any proceeds thereof) which are comparable to Lien Restrictions affecting such
asset on the Original Closing Date, (c) Lien Restrictions included in the
documentation governing the terms of any Indebtedness of any Person which is
acquired by Infinity or any of its Material Subsidiaries after the Original
Closing Date, which Indebtedness was outstanding prior to the date of
acquisition of such Person and was not created in anticipation thereof and (d)
Lien Restrictions in connection with securitizations or other transactions
involving sales of receivables affecting only such receivables. It is understood
that an "equal and ratable" clause shall not be deemed to constitute a Lien
Restriction so long as such clause would permit the obligations entitled to the
benefit of such clause and the applicable Credit Obligations to be secured by
Liens on the relevant assets on a pari passu basis.
ARTICLE VI.
EVENTS OF DEFAULT.
In case of the happening of any of the following events ("Events of
Default"):
(a) (i) any Borrower shall default in the payment when due of
any principal of any Loan or (ii) any Borrower shall default in the
payment when due of any interest on any Loan, any reimbursement
obligation in respect of any LC Disbursement, any Fee or any other
amount payable by it hereunder and, in the case of this clause (ii),
such default shall continue unremedied for a period of five Business
Days;
(b) any representation, warranty or certification made or
deemed made herein (or in any modification or supplement hereto) by any
Borrower, or any certificate furnished to any Lender or the
Administrative Agent pursuant to the provisions hereof, shall prove to
have been false or misleading in any material respect as of the time
made, deemed made or furnished;
(c) (i) Infinity shall default in the performance of any of
its obligations under Section 5.1(f), Section 5.4, Section 5.5,
Sections 5.7 through 5.9 (inclusive) or Section 5.11 or (ii) Infinity
shall default in the performance of any of its other obligations under
this Agreement and, in the case of this clause (ii), such default shall
continue unremedied for a period of 15 days after notice thereof to
Infinity by the Administrative Agent or the Required Lenders (through
the Administrative Agent);
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(d) Infinity or any of its Subsidiaries shall (i) fail to pay
at maturity any Indebtedness in an aggregate amount in excess of
$100,000,000, or (ii) fail to make any payment (whether of principal,
interest or otherwise), regardless of amount, due in respect of, or
fail to observe or perform any other term, covenant, condition or
agreement contained in any agreement or instrument evidencing or
governing, any such Indebtedness in excess of $100,000,000 if the
effect of any failure referred to in this clause (ii) (x) is to cause,
or to permit the holder or holders of such Indebtedness or a trustee on
its or their behalf to cause, such Indebtedness to become due prior to
its stated maturity (provided that this subclause (ii)(x) shall not
apply to any provision that permits the holders, or a trustee on their
behalf, to cause Indebtedness to become due prior to its stated
maturity because of the failure to deliver to such holders or such
trustee financial statements or certificates for any Subsidiary that is
not required by law or regulation to file financial statements with the
SEC, unless such Indebtedness has become due prior to its stated
maturity as a result of such failure) or (y) has caused such
Indebtedness to become due prior to its stated maturity (it being
agreed that for purposes of this paragraph (d) only (other than
subclause (ii)(x) of this paragraph (d)), the term "Indebtedness" shall
include obligations under any interest rate protection agreement,
foreign currency exchange agreement or other interest or exchange rate
hedging agreement and that the amount of any Person's obligations under
any such agreement shall be the net amount that such Person could be
required to pay as a result of a termination thereof by reason of a
default thereunder);
(e) Infinity or any of its Material Subsidiaries shall admit
in writing its inability, or be generally unable, to pay its debts as
such debts become due;
(f) Infinity or any of its Material Subsidiaries shall (i)
apply for or consent to the appointment of, or the taking of possession
by, a receiver, trustee or liquidator of itself or of all or a
substantial part of its Property, (ii) make a general assignment for
the benefit of its creditors, (iii) commence a voluntary case under the
Bankruptcy Code (as now or hereafter in effect), (iv) file a petition
seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or readjustment
of debts, (v) fail to controvert in a timely and appropriate manner, or
acquiesce in writing to, any petition filed against it in an
involuntary case under the Bankruptcy Code, or (vi) take any corporate
action for the purpose of effecting any of the foregoing;
(g) a proceeding or a case shall be commenced, without the
application or consent of Infinity or any of its Material Subsidiaries,
in any court of competent jurisdiction, seeking (i) its liquidation,
reorganization, dissolution or winding-up, or the composition or
readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of Infinity or such Material
Subsidiary or of all or any substantial part of its assets or (iii)
similar relief in respect of Infinity or such Material Subsidiary under
any law relating to bankruptcy, insolvency, reorganization, winding-up,
or composition or adjustment of debts, and such proceeding or case
shall continue undismissed, or an order, judgment or decree approving
or ordering any of the foregoing shall be entered and continue unstayed
and in effect, for a period of 60 or more days; or an order for relief
against Infinity or such Material Subsidiary shall be entered in an
involuntary case under the Bankruptcy Code;
(h) a final judgment or judgments for the payment of money in
excess of $100,000,000 in the aggregate shall be rendered by one or
more courts, administrative tribunals or other bodies having
jurisdiction against Infinity and/or any of its Material Subsidiaries
and the same shall not be paid or discharged (or provision shall not be
made for such discharge), or a stay of execution
<PAGE> 56
52
thereof shall not be procured, within 60 days from the date of the date
of entry thereof and Infinity or the relevant Material Subsidiary shall
not, within said period of 60 days, or such longer period during which
execution of the same shall have been stayed, appeal therefrom and
cause the execution thereof to be stayed during such appeal;
(i) an event or condition specified in Section 5.1(e) shall
occur or exist with respect to any Plan or Multiemployer Plan and, as a
result of such event or condition, together with all other such events
or conditions, Infinity or any ERISA Affiliate shall incur or in the
good faith opinion of the Required Lenders shall be reasonably likely
to incur a liability to a Plan, a Multiemployer Plan or PBGC (or any
combination of the foregoing) which would constitute, in the good faith
determination of the Required Lenders, a Material Adverse Effect;
(j) a Change of Control shall have occurred or, with respect
to any period of 25 consecutive calendar months (whether commencing
before or after the date of this Agreement, but not before December 31,
1998), individuals who were directors of Infinity on the first day of
such period or who were nominated by such directors (or by directors in
a direct chain of directors so nominated) shall no longer occupy a
majority of the seats (other than vacant seats) on the Board of
Directors of Infinity (excluding by reason of the death or retirement
of any director);
(k) The guarantee by CBS contained in Article VIII shall
cease, for any reason, to be in full force and effect or CBS shall so
assert; or
(l) The guarantee by Infinity contained in Article VIII shall
cease, for any reason, to be in full force and effect or Infinity shall
so assert;
then and in every such event (other than an event with respect to Infinity
described in paragraph (f) or (g) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to Infinity, take any or all of the
following actions, at the same or different times: (I) terminate forthwith the
Commitments, (II) declare the Loans then outstanding to be forthwith due and
payable in whole or in part, whereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon and any unpaid
accrued Fees and all other liabilities of each Borrower accrued hereunder, shall
become forthwith due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived by each
Borrower, anything contained herein to the contrary notwithstanding, and (III)
require that Infinity deposit cash with the Administrative Agent, in an amount
equal to the Aggregate LC Exposure, as collateral security for the repayment of
any future LC Disbursements; and in any event with respect to any Borrower
described in paragraph (f) or (g) above, (A) if such Borrower is Infinity, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and any unpaid accrued Fees
and all other liabilities of each Borrower accrued hereunder, shall
automatically become due and payable and Infinity shall be required to deposit
cash with the Administrative Agent, in an amount equal to the Aggregate LC
Exposure, as collateral security for the repayment of any future drawings under
the Letters of Credit and (B) if such Borrower is a Subsidiary Borrower, the
principal of the Loans made to such Subsidiary Borrower then outstanding,
together with accrued interest thereon and all other liabilities of such
Subsidiary Borrower accrued hereunder, shall automatically become due and
payable, in each case without presentment, demand, protest or any other notice
of any kind, all of which are hereby expressly waived by each Borrower, anything
contained herein to the contrary notwithstanding.
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ARTICLE VII.
THE AGENTS
In order to expedite the transactions contemplated by this Agreement,
each Agent is hereby appointed to act as Agent on behalf of the Lenders. Each of
the Lenders and the Issuing Lenders hereby irrevocably authorizes the
Administrative Agent to take such actions on its behalf and to exercise such
powers as are specifically delegated to the Administrative Agent by the terms
and provisions hereof, together with such actions and powers as are reasonably
incidental thereto. The Administrative Agent is hereby expressly authorized by
the Lenders and the Issuing Lenders, without hereby limiting any implied
authority, (a) to receive on behalf of the Lenders all payments of principal of
and interest on the Loans and the LC Disbursements and all other amounts due to
the Lenders and Issuing Lenders hereunder, and promptly to distribute to each
Lender and Issuing Lender its proper share of each payment so received; (b) to
give notice on behalf of each of the Lenders to the Borrowers of any Event of
Default specified in this Agreement of which the Administrative Agent has actual
knowledge acquired in connection with its agency hereunder; and (c) to
distribute to each Lender and Issuing Lender copies of all notices, financial
statements and other materials delivered by any Borrower pursuant to this
Agreement as received by the Administrative Agent.
Neither any Agent nor any of its directors, officers, employees or
agents shall be liable as such for any action taken or omitted by any of them
except for its or his own gross negligence or wilful misconduct, or be
responsible for any statement, warranty or representation herein or the contents
of any document delivered in connection herewith, or be required to ascertain or
to make any inquiry concerning the performance or observance by any Borrower of
any of the terms, conditions, covenants or agreements contained in this
Agreement. The Agents shall not be responsible to the Lenders for the due
execution, genuineness, validity, enforceability or effectiveness of this
Agreement or other instruments or agreements. The Administrative Agent shall in
all cases be fully protected in acting, or refraining from acting, in accordance
with written instructions signed by the Required Lenders (or, when expressly
required hereby, all the Lenders) and, except as otherwise specifically provided
herein, such instructions and any action or inaction pursuant thereto shall be
binding on all the Lenders and the Issuing Lenders. The Administrative Agent
shall, in the absence of knowledge to the contrary, be entitled to rely on any
instrument or document believed by it in good faith to be genuine and correct
and to have been signed or sent by the proper Person or Persons. Neither the
Agents nor any of their directors, officers, employees or agents shall have any
responsibility to any Borrower on account of the failure of or delay in
performance or breach by any Lender or Issuing Lender of any of its obligations
hereunder or to any Lender or Issuing Lender on account of the failure of or
delay in performance or breach by any other Agent, any other Lender or Issuing
Lender or any Borrower of any of their respective obligations hereunder or in
connection herewith. The Administrative Agent may execute any and all duties
hereunder by or through agents or employees and shall be entitled to rely upon
the advice of legal counsel selected by it with respect to all matters arising
hereunder and shall not be liable for any action taken or suffered in good faith
by it in accordance with the advice of such counsel.
The Lenders and the Issuing Lenders hereby acknowledge that the
Administrative Agent shall be under no duty to take any discretionary action
permitted to be taken by it pursuant to the provisions of this Agreement unless
it shall be requested in writing to do so by the Required Lenders.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided below, the Administrative Agent may resign at any time by
notifying the Lenders, the Issuing
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Lenders and the Borrowers. Upon any such resignation, the Required Lenders shall
have the right to appoint from the Lenders a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint from the Lenders a successor Administrative Agent which shall
be a bank with an office in New York, New York, having a combined capital and
surplus of at least $500,000,000 or an affiliate of any such bank, which
successor shall be acceptable to Infinity (such acceptance not to be
unreasonably withheld). Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor bank, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After the Administrative Agent's
resignation hereunder, the provisions of this Article and Section 9.5 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Administrative Agent.
With respect to the Loans made by them and their LC Exposure hereunder,
the Agents in their individual capacity and not as Agents shall have the same
rights and powers as any other Lender and may exercise the same as though they
were not Agents, and the Agents and their affiliates may accept deposits from,
lend money to and generally engage in any kind of business with the Borrowers or
any of their respective Subsidiaries or any Affiliate thereof as if they were
not Agents.
Each Lender and Issuing Lender agrees (i) to reimburse the
Administrative Agent in the amount of its pro rata share (based on its Total
Facility Percentage or, after the date on which the Loans shall have been paid
in full, based on its Total Facility Percentage immediately prior to such date)
of any reasonable, out-of-pocket expenses incurred for the benefit of the
Lenders or the Issuing Lenders by the Administrative Agent, including reasonable
counsel fees and compensation of agents and employees paid for services rendered
on behalf of the Lenders or the Issuing Lenders, which shall not have been
reimbursed by or on behalf of any Borrower and (ii) to indemnify and hold
harmless the Administrative Agent and any of its directors, officers, employees
or agents, in the amount of such pro rata share, from and against any and all
liabilities, taxes, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against it in its capacity as
Administrative Agent in any way relating to or arising out of this Agreement or
any action taken or omitted by it under this Agreement, to the extent the same
shall not have been reimbursed by or on behalf of Infinity, provided that no
Lender or Issuing Lender shall be liable to the Administrative Agent or any such
director, officer, employee or agent for any portion of such liabilities, taxes,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or wilful
misconduct of the Administrative Agent or any of its directors, officers,
employees or agents.
Each Lender and Issuing Lender acknowledges that it has, independently
and without reliance upon the Agents or any other Lender or Issuing Lender and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender and
Issuing Lender also acknowledges that it will, independently and without
reliance upon any Agent or any other Lender or Issuing Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any related agreement or any document furnished hereunder
or thereunder.
Neither the Documentation Agent nor either Syndication Agent nor any
managing agent shall have any duties or responsibilities hereunder in its
capacity as such.
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ARTICLE VIII.
GUARANTEE
SECTION 8.1. Guarantee. In order to induce the Administrative Agent
and the Lenders to become bound by this Agreement and to make or maintain the
Loans hereunder, and in consideration thereof, CBS hereby unconditionally and
irrevocably guarantees, as primary obligor and not merely as surety, to the
Administrative Agent, for the ratable benefit of the Lenders, the prompt and
complete payment and performance by each Borrower when due (whether at stated
maturity, by acceleration or otherwise) of the Borrower Obligations, and CBS
further agrees to pay any and all expenses (including, without limitation, all
reasonable fees, charges and disbursements of counsel) which may be paid or
incurred by the Administrative Agent or by the Lenders in enforcing, or
obtaining advice of counsel in respect of, any of their rights under the
guarantee contained in this Article VIII. The guarantee contained in this
Article VIII, subject to Section 8.5, shall remain in full force and effect
until the Borrower Obligations are paid in full and the Commitments are
terminated, notwithstanding that from time to time prior thereto any Borrower
may be free from any Borrower Obligations.
CBS agrees that whenever, at any time, or from time to time, it shall
make any payment to the Administrative Agent or any Lender on account of its
liability under this Article VIII, it will notify the Administrative Agent and
such Lender in writing that such payment is made under the guarantee contained
in this Article VIII for such purpose. No payment or payments made by any
Borrower or any other Person or received or collected by the Administrative
Agent or any Lender from any Borrower or any other Person by virtue of any
action or proceeding or any setoff or appropriation or application, at any time
or from time to time, in reduction of or in payment of the Borrower Obligations
shall be deemed to modify, reduce, release or otherwise affect the liability of
CBS under this Article VIII which, notwithstanding any such payment or payments,
shall remain liable for the unpaid and outstanding Borrower Obligations until,
subject to Section 8.5, the Borrower Obligations are paid in full and the
Commitments are terminated.
SECTION 8.2. No Subrogation, etc. Notwithstanding any payment or
payments made by CBS hereunder, or any set-off or application of funds of CBS by
the Administrative Agent or any Lender, CBS shall not be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against any Borrower or against any collateral security or guarantee or right of
offset held by the Administrative Agent or any Lender for the payment of the
Borrower Obligations, nor shall CBS seek or be entitled to seek any
contribution, reimbursement, exoneration or indemnity from or against any
Borrower in respect of payments made by CBS hereunder, until all amounts owing
to the Administrative Agent and the Lenders by the Borrowers on account of the
Borrower Obligations are paid in full and the Commitments are terminated. So
long as the Borrower Obligations remain outstanding, if any amount shall be paid
by or on behalf of any Borrower or any other Person to CBS on account of any of
the rights waived in this Section 8.2, such amount shall be held by CBS in
trust, segregated from other funds of CBS, and shall, forthwith upon receipt by
CBS, be turned over to the Administrative Agent in the exact form received by
CBS (duly indorsed by CBS to the Administrative Agent, if required), to be
applied against the Borrower Obligations, whether matured or unmatured, in such
order as the Administrative Agent may determine.
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SECTION 8.3. Amendments, etc. with respect to the Borrower Obligations.
CBS shall remain obligated under this Article VIII notwithstanding that, without
any reservation of rights against CBS, and without notice to or further assent
by CBS, any demand for payment of or reduction in the principal amount of any of
the Borrower Obligations made by the Administrative Agent or any Lender may be
rescinded by the Administrative Agent or such Lender, and any of the Borrower
Obligations continued, and the Borrower Obligations, or the liability of any
other party upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Administrative Agent or any
Lender, and this Agreement and any other documents executed and delivered in
connection herewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Required Lenders (or all Lenders, as the case may be)
may deem advisable from time to time, and any collateral security, guarantee or
right of offset at any time held by the Administrative Agent or any Lender for
the payment of the Borrower Obligations may be sold, exchanged, waived,
surrendered or released. Neither the Administrative Agent nor any Lender shall
have any obligation to protect, secure, perfect or insure any lien at any time
held by it as security for the Borrower Obligations or for the guarantee
contained in this Article VIII or any property subject thereto.
SECTION 8.4. Guarantee Absolute and Unconditional. CBS waives any
and all notice of the creation, renewal, extension or accrual of any of the
Borrower Obligations and notice of or proof of reliance by the Administrative
Agent or any Lender upon the guarantee contained in this Article VIII or
acceptance of the guarantee contained in this Article VIII; the Borrower
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon the guarantee contained in this Article VIII; and all dealings between CBS
or the Borrowers, on the one hand, and the Administrative Agent and the Lenders,
on the other, shall likewise be conclusively presumed to have been had or
consummated in reliance upon the guarantee contained in this Article VIII. CBS
waives diligence, presentment, protest, demand for payment and notice of default
or nonpayment to or upon CBS or any Borrower with respect to the Borrower
Obligations. The guarantee contained in this Article VIII shall be construed as
a continuing, absolute and unconditional guarantee of payment without regard to
(a) the validity or enforceability of this Agreement, any of the Borrower
Obligations or any collateral security therefor or guarantee or right of offset
with respect thereto at any time or from time to time held by the Administrative
Agent or any Lender, (b) the legality under applicable requirements of law of
repayment by the relevant Borrower of any Borrower Obligations or the adoption
of any requirement of law purporting to render any Borrower Obligations null and
void, (c) any defense, setoff or counterclaim (other than a defense of payment
or performance by the applicable Borrower) which may at any time be available to
or be asserted by CBS against the Administrative Agent or any Lender, or (d) any
other circumstance whatsoever (with or without notice to or knowledge of CBS or
any Borrower) which constitutes, or might be construed to constitute, an
equitable or legal discharge of any Borrower for any Borrower Obligations, or of
CBS under the guarantee contained in this Article VIII, in bankruptcy or in any
other instance. When the Administrative Agent or any Lender is pursuing its
rights and remedies under this Article VIII against CBS, the Administrative
Agent or any Lender may, but shall be under no obligation to, pursue such rights
and remedies as it may have against any Borrower or any other Person or against
any collateral security or guarantee for the Borrower Obligations or any right
of offset with respect thereto, and any failure by the Administrative Agent or
any Lender to pursue such other rights or remedies or to collect any payments
from any Borrower or any such other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of any Borrower or any such other Person or of any such collateral
security, guarantee or right of offset, shall not relieve CBS of any liability
under this Article VIII, and shall not impair or affect the
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rights and remedies, whether express, implied or available as a matter of law,
of the Administrative Agent and the Lenders against CBS.
SECTION 8.5. Reinstatement. The guarantee contained in this Article
VIII shall continue to be effective, or be reinstated, as the case may be, if at
any time payment, or any part thereof, of any of the Borrower Obligations is
rescinded or must otherwise be restored or returned by the Administrative Agent
or any Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any Borrower or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, any
Borrower or any substantial part of its property, or otherwise, all as though
such payments had not been made.
SECTION 8.6. Payments. CBS hereby agrees that any payments in respect
of the Borrower Obligations pursuant to this Article VIII will be paid to the
Administrative Agent without setoff or counterclaim in Dollars at the office of
the Administrative Agent specified in Section 9.1.
SECTION 8.7. Infinity Guarantee. Infinity hereby unconditionally and
irrevocably guarantees, as primary obligor and not merely as surety, to the
Administrative Agent, for the ratable benefit of the Lenders, the prompt and
complete payment and performance by each Subsidiary Borrower when due (whether
at stated maturity, by acceleration or otherwise) of the Borrower Obligations,
and further agrees that all of the provisions of Sections 8.1 through 8.6, shall
apply to the guarantee by Infinity of the Subsidiary Borrowers' performance and
payment of the Subsidiary Borrower Obligations, to the same extent as the
guarantee of CBS of the Borrowers' performance and payment of the Borrower
Obligations.
ARTICLE IX.
MISCELLANEOUS
SECTION 9.1. Notices. Notices and other communications provided for
herein shall be in writing (or, where permitted to be made by telephone, shall
be confirmed promptly in writing) and shall be delivered by hand or overnight
courier service, mailed or sent by telecopier as follows:
(a) if to Infinity, to it at Infinity Broadcasting
Corporation, 40 West 52nd Street, New York, New York 10019, Attention
of Chief Financial Officer and Treasurer (Telecopy No. (212) 314-9336),
with a copy to General Counsel (Telecopy No. (212) 597-4031);
(b) if to CBS, to it at CBS Corporation, 51 West 52nd Street,
New York, New York 10019, Attention of Vice President and Treasurer
(Telecopy No. (212) 314-9336), with a copy to General Counsel (Telecopy
No. (212) 597-4031);
(c) if to the Administrative Agent, to it at 60 Wall Street,
New York, New York 10260, Attention of Laura Reim (Telecopy No. (212)
648-5336);
(d) if to any Issuing Lender, to it at the address for notices
specified in the applicable Issuing Lender Agreement;
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(e) if to a Lender, to it at its address (or telecopy number)
set forth in Schedule 1.1 or in the Assignment and Acceptance pursuant
to which such Lender shall have become a party hereto; and
(f) if to a Subsidiary Borrower, to it at its address set
forth in the relevant Subsidiary Request.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service, sent by
telecopy or, if permitted by the terms hereof and if promptly confirmed in
writing, by telephone, or on the date five Business Days after dispatch by
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.1 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 9.1.
SECTION 9.2. Survival of Agreement. All representations and warranties
made hereunder and in any certificate delivered pursuant hereto or in connection
herewith shall be considered to have been relied upon by the Agents and the
Lenders and shall survive the execution and delivery of this Agreement and the
making of the Loans and other extensions of credit hereunder, regardless of any
investigation made by the Agents or the Lenders or on their behalf.
SECTION 9.3. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of each Borrower, each Agent and each Lender and their
respective successors and assigns, except that Infinity shall not have the right
to assign its rights or obligations hereunder or any interest herein without the
prior consent of all the Lenders.
SECTION 9.4. Successors and Assigns. (a) Whenever in this Agreement
any of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party, and all covenants, promises
and agreements by or on behalf of each Borrower, CBS, either Agent or any Lender
that are contained in this Agreement shall bind and inure to the benefit of
their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion of
its interests, rights and obligations under this Agreement (including all or a
portion of its Commitment or Swingline Commitment and the Loans at the time
owing to it); provided, however, that (i) except in the case of an assignment to
a Lender or an affiliate of such Lender (other than if at the time of such
assignment, such Lender or affiliate would be entitled to require any Borrower
to pay greater amounts under Section 2.20(a) than if no such assignment had
occurred, in which case such assignment shall be subject to the consent
requirement of this clause (i)), Infinity and the Administrative Agent must give
their prior written consent to such assignment (which consent shall not be
unreasonably withheld), (ii) (x) except in the case of assignments of
Competitive Loans or assignments to any Person that is a Lender prior to giving
effect to such assignment, the amount of the aggregate Commitments and/or Loans
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Acceptance with respect to such assignment is delivered
to the Administrative Agent) shall not be less than $12,500,000 and (y) the
amount of the aggregate Commitments and/or Loans retained by any assigning
Lender (determined as of the date the Assignment and Acceptance with respect to
such assignment is delivered to the Administrative Agent) shall not be less than
$12,500,000, unless (in the case of clause (x) or (y) above) the assigning
Lender's Commitment and Loans (other than any
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Competitive Loans) are being reduced to $0 pursuant to such assignment, (iii)
the assignor and assignee shall execute and deliver to the Administrative Agent
an Assignment and Acceptance, together with a processing and recordation fee of
$3,500 and (iv) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire. Upon acceptance and
recording pursuant to Section 9.4(e), from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least five Business Days after the execution thereof (or any lesser period to
which the Administrative Agent and Infinity may agree), (A) the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement and (B) the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto (but shall continue to be entitled to the benefits of Sections 2.15,
2.16, 2.20 and 9.5, as well as to any Fees accrued for its account hereunder and
not yet paid)). Notwithstanding the foregoing, any Lender or Issuing Lender
assigning its rights and obligations under this Agreement may maintain any
Competitive Loans or Letters of Credit made or issued by it outstanding at such
time, and in such case shall retain its rights hereunder in respect of any Loans
or Letters of Credit so maintained until such Loans or Letters of Credit have
been repaid or terminated in accordance with this Agreement.
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim, (ii)
except as set forth in clause (i) above, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other instrument or document furnished pursuant hereto, or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or any other instrument or document furnished pursuant hereto
or the financial condition of Infinity or any of its Subsidiaries or the
performance or observance by Infinity or any of its Subsidiaries of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; (iv) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the most recent financial statements delivered pursuant to Sections 3.2 and 5.1
and such other documents and information as it has deemed appropriate to make it
own credit analysis and decision to enter into such Assignment and Acceptance;
(v) such assignee will independently and without reliance upon the
Administrative Agent, such assigning Lender or any other Agent or Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Administrative Agent by
the terms hereof, together with such powers as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance with
their terms all the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as agent of each
Borrower, shall maintain at one of its offices in The City of New York a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive in the absence of
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manifest error and each Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by any Borrower and any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) above and, if required, the written consent of Infinity and the
Administrative Agent to such assignment, the Administrative Agent shall (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to Infinity.
(f) Each Lender may without the consent of any Borrower or the Agents
sell participations to one or more banks, other financial institutions or other
entities (provided that any such other entity is a not a competitor of Infinity
or any Affiliate of Infinity) all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitments and the
Loans owing to it); provided, however, that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(ii) the participating banks or other entities shall be entitled to the benefit
of the cost protection provisions contained in Sections 2.15, 2.16 and 2.20 to
the same extent as if they were Lenders (provided that additional amounts
payable to any Lender pursuant to Section 2.20 shall be determined as if such
Lender had not sold any such participations) and (iv) the Borrowers, the Agents
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement, and such Lender shall retain the sole right to enforce the
obligations of each Borrower relating to the Loans and the Letters of Credit and
to approve any amendment, modification or waiver of any provision of this
Agreement (other than amendments, modifications or waivers decreasing any fees
payable hereunder or the amount of principal of or the rate at which interest is
payable on the Loans or LC Disbursements, extending any scheduled principal
payment date or date fixed for the payment of interest on the Loans or LC
Disbursements or of LC Fees or Commitment Fees, increasing the amount of or
extending the Commitments or releasing the guarantee contained in Article VIII,
in each case to the extent the relevant participant is directly affected
thereby).
(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.4, disclose to the assignee or participant or proposed assignee or participant
any information relating to any Borrower furnished to such Lender by or on
behalf of such Borrower; provided that, prior to any such disclosure of
information designated by such Borrower as confidential, each such assignee or
participant or proposed assignee or participant shall execute a Confidentiality
Agreement whereby such assignee or participant shall agree (subject to the
exceptions set forth therein) to preserve the confidentiality of such
confidential information. A copy of each such Confidentiality Agreement executed
by an assignee shall be promptly furnished to Infinity. It is understood that
confidential information relating to the Borrowers would not ordinarily be
provided in connection with assignments or participations of Competitive Loans.
(h) Notwithstanding the limitations set forth in paragraph (b) above,
(i) any Lender may at any time assign or pledge all or any portion of its rights
under this Agreement to a Federal Reserve Bank and (ii) any Lender which is a
"fund" may at any time assign or pledge all or any portion of its rights under
this Agreement to secure such Lender's indebtedness, in each case without the
prior written consent of any Borrower or the Administrative Agent; provided that
each such assignment shall be made in accordance with applicable law and no such
assignment shall release a Lender from any of its
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obligations hereunder. In order to facilitate any such assignment, each Borrower
shall, at the request of the assigning Lender, duly execute and deliver to the
assigning Lender a registered promissory note or notes evidencing the Loans made
to such Borrower by the assigning Lender hereunder.
(i) Notwithstanding anything to the contrary contained herein, any Bank
(a "Granting Bank") may grant to a special purpose funding vehicle (a "SPC"),
identified as such in writing from time to time by the Granting Bank to the
Administrative Agent and the Borrower, the option to provide to the Borrower all
or any part of any Loan that such Granting Bank would otherwise be obligated to
make to the Borrower pursuant to this Agreement; provided that (i) nothing
herein shall constitute a commitment by any SPC to make any Loan, and (ii) if an
SPC elects not to exercise such option or otherwise fails to provide all or any
part of such Loan, the Granting Bank shall be obligated to make such Loan
pursuant to the terms hereof. The making of an Loan by an SPC hereunder shall
utilize the Commitment of the Granting Bank to the same extent, and as if, such
Loan were made by such Granting Bank. Each party hereto hereby agrees that no
SPC shall be liable for any indemnity or similar payment obligation under this
Agreement (all liability for which shall remain with the Granting Bank). In
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that is
one year and one day after the payment in full of all outstanding commercial
paper or other senior indebtedness of any SPC, it will not institute against, or
join any other person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under the
laws of the United States or any State thereof. In addition, notwithstanding
anything to the contrary contained in this Section, any SPC may (i) with notice
to, but without the prior written consent of, the Borrower and the
Administrative Agent and without paying any processing fee therefor, assign all
or a portion of its interests in any Loans to the Granting Bank or to any
financial institutions (consented to by the Borrower and Administrative Agent )
providing liquidity and/or credit support to or for the account of such SPC to
support the funding or maintenance of Loans and (ii) disclose on a confidential
basis any non-public information relating to its Loans to any rating agency,
commercial paper dealer or provider of any surety, guarantee or credit or
liquidity enhancement to such SPC. This section may not be amended without the
written consent of any SPC which has been identified as such by the Granting
Bank to the Administrative Agent and the Borrower and which then holds any Loan
pursuant to this paragraph (i).
(j) Neither CBS nor Infinity shall assign or delegate any of its rights
or duties hereunder without the prior consent of all the Lenders.
SECTION 9.5. Expenses; Indemnity. (a) Infinity agrees to pay all
reasonable out-of-pocket expenses incurred by the Agents in connection with the
preparation, negotiation, execution and delivery of this Agreement or in
connection with any amendments, modifications or waivers of the provisions
hereof (whether or not the transactions hereby contemplated shall be
consummated) or incurred by any Agent, any Lender or any Issuing Lender in
connection with the enforcement or protection of the rights of the Agents, the
Lenders or the Issuing Lenders under this Agreement or in connection with the
Loans made or the Letters of Credit issued hereunder, including, without
limitation, the reasonable fees, charges and disbursements of Simpson Thacher &
Bartlett, counsel for the Agents, and, in connection with any such enforcement
or protection, the reasonable fees, charges and disbursements of any other
counsel for any Agent, Lender or Issuing Lender.
(b) Infinity agrees to indemnify and hold harmless each Agent, each
Lender, each Issuing Lender and each of their respective directors, officers,
employees, affiliates and agents (each, an "Indemnified Person") against, and to
reimburse each Indemnified Person, upon its demand, for, any
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losses, claims, damages, liabilities or other expenses ("Losses") to which such
Indemnified Person becomes subject insofar as such Losses arise out of or in any
way relate to or result from (i) the execution or delivery of this Agreement,
any Letter of Credit or any agreement or instrument contemplated hereby (and any
amendment hereto or thereto), the performance by the parties hereto or thereto
of their respective obligations hereunder or thereunder or the consummation of
the transactions contemplated hereby or thereby or (ii) the use (or proposed
use) of the proceeds of the Loans or other extensions of credit hereunder,
including, without limitation, Losses consisting of reasonable legal or other
expenses incurred in connection with investigating, defending or participating
in any legal proceeding relating to any of the foregoing (whether or not such
Indemnified Person is a party thereto); provided that the foregoing will not
apply to any Losses to the extent they are found by a final decision of a court
of competent jurisdiction to have resulted from the gross negligence or willful
misconduct of such Indemnified Person.
(c) The provisions of this Section 9.5 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term or
provision of this Agreement or any investigation made by or on behalf of any
Agent or Lender. All amounts under this Section 9.5 shall be payable on written
demand therefor.
SECTION 9.6. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Agent and each Lender is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Agent or Lender to or for the credit or the account of any Borrower
against any of and all the obligations of such Borrower now or hereafter
existing under this Agreement or the Administrative Agent Fee Letter held by
such Agent or Lender which shall be due and payable. The rights of each Agent
and each Lender under this Section 9.6 are in addition to other rights and
remedies (including other rights of setoff) which such Agent or Lender may have.
SECTION 9.7. APPLICABLE LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS
AND PRINCIPLES OF SUCH STATE.
SECTION 9.8. Waivers; Amendment. (a) No failure or delay of any Agent,
any Issuing Lender or any Lender in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the Agents,
the Issuing Lenders and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies which they would otherwise have. No waiver
of any provision of this Agreement or consent to any departure by any Borrower
from any such provision shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice or demand on any Borrower in any case shall entitle any Borrower to any
other or further notice or demand in similar or other circumstances.
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(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement in writing entered into by
the Borrowers, CBS and the Required Lenders; provided, however, that no such
agreement shall (i) reduce the amount or extend the scheduled date of maturity
of any Loan or of any installment thereof, or reduce the stated amount of any LC
Disbursement, interest or fee payable hereunder or extend the scheduled date of
any payment thereof or increase the amount or extend the expiration date of any
Commitment of any Lender, in each case without the prior written consent of each
Lender directly affected thereby; (ii) amend, modify or waive any provision of
this Section 9.8(b), or reduce the percentage specified in the definition of
"Required Lenders", release the guarantee contained in Article VIII or consent
to the assignment or transfer by CBS or Infinity of any of its rights and
obligations under this Agreement, in each case without the prior written consent
of all the Lenders; or (iii) amend, modify or waive any provision of Article VII
without the prior written consent of each Agent affected thereby; provided,
further that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent, the Swingline Lenders or the
Issuing Lenders hereunder in such capacity without the prior written consent of
the Administrative Agent, each Swingline Lender directly affected thereby or
each Issuing Lender directly affected thereby, as the case may be.
SECTION 9.9. Entire Agreement. This Agreement (together with the
Issuing Lender Agreements, the Subsidiary Borrower Designations and the
Subsidiary Borrower Requests) constitutes the entire contract between the
parties relative to the subject matter hereof. Any previous agreement among the
parties with respect to the subject matter hereof is superseded by this
Agreement. Nothing in this Agreement, expressed or implied, is intended to
confer upon any party other than the parties hereto any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.10.
SECTION 9.11. Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 9.12. Counterparts. This Agreement may be executed in two or
more counterparts, each of which constitute an original but all of which when
taken together shall constitute but one contract, and shall become effective as
provided in Section 9.3.
SECTION 9.13. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
<PAGE> 68
64
SECTION 9.14. Jurisdiction; Consent to Service of Process. (a) Each
Borrower hereby irrevocably and unconditionally submits, for itself and its
Property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such New York State court or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final judgment in
any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Each Subsidiary Borrower designates and directs Infinity at its offices at 40
West 52nd Street, New York, New York 10019, as its agent to receive service of
any and all process and documents on its behalf in any legal action or
proceeding referred to in this Section 9.14 in the State of New York and agrees
that service upon such agent shall constitute valid and effective service upon
such Subsidiary Borrower and that failure of Infinity to give any notice of such
service to any Subsidiary Borrower shall not affect or impair in any way the
validity of such service or of any judgment rendered in any action or proceeding
based thereon. Nothing in this Agreement shall affect any right that any Agent
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement against any Borrower or its Properties in the courts of any
jurisdiction.
(b) Each Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any New York State or Federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.1. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.15. Confidentiality. (a) Each Lender agrees to keep
confidential and not to disclose (and to cause its affiliates, officers,
directors, employees, agents and representatives to keep confidential and not to
disclose) and, at the request of Infinity (except as provided below or if such
Lender is required to retain any Confidential Information (as defined below)
pursuant to customary internal or banking practices, bank regulations or
applicable law), promptly to return to Infinity or destroy the Confidential
Information and all copies thereof, extracts therefrom and analyses or other
materials based thereon, except that such Lender shall be permitted to disclose
Confidential Information (i) to such of its officers, directors, employees,
agents, affiliates and representatives as need to know such Confidential
Information in connection with such Lender's participation in this Agreement,
each of whom shall be informed by such Lender of the confidential nature of the
Confidential Information and shall agree to be bound by the terms of this
Section 9.15; (ii) to the extent required by applicable laws and regulations or
by any subpoena or similar legal process or requested by any Governmental
Authority or agency having jurisdiction over such Lender; provided, however,
that, except in the case of disclosure to bank regulators or examiners in
accordance with customary banking practices, written notice of each instance in
which Confidential Information is required or requested to be disclosed shall be
furnished to Infinity not less than 30 days prior to the expected date of such
disclosure or, if 30 days' notice is not practicable under the circumstances, as
<PAGE> 69
65
promptly as practicable under the circumstances; (iii) to the extent such
Confidential Information (A) is or becomes publicly available other than as a
result of a breach of this Agreement, (B) becomes available to such Lender on a
non-confidential basis from a source other than a party to this Agreement or any
other party known to such Lender to be bound by an agreement containing a
provision similar to this Section 9.15 or (C) was available to such Lender on a
non-confidential basis prior to this disclosure to such Lender by a party to
this Agreement or any other party known to such Lender to be bound by an
agreement containing a provision similar to this Section 9.15; (iv) as permitted
by Section 9.4(g); or (v) to the extent Infinity shall have consented to such
disclosure in writing. As used in this Section 9.15, "Confidential Information"
shall mean any materials, documents or information furnished by or on behalf of
any Borrower in connection with this Agreement designated by or on behalf of
such Borrower as confidential.
(b) Each Lender (i) agrees that, except to the extent the conditions
referred to in subclause (A), (B) or (C) of clause (iii) of paragraph (a) above
have been met and as provided in paragraph (c) below, (A) it will use the
Confidential Information only in connection with its participation in this
Agreement and (B) it will not use the Confidential Information in connection
with any other matter or in a manner prohibited by any law, including, without
limitation, the securities laws of the United States and (ii) understands that
breach of this Section 9.15 might seriously prejudice the interest of the
Borrowers and that the Borrowers are entitled to equitable relief, including an
injunction, in the event of such breach.
(c) Notwithstanding anything to the contrary contained in this Section
9.15, each Agent and each Lender shall be entitled to retain all Confidential
Information for so long as it remains an Agent or a Lender to use solely for the
purposes of servicing the credit and protecting its rights hereunder.
<PAGE> 70
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
INFINITY BROADCASTING CORPORATION
By: /s/ Farid Suleman
--------------------------------------
Title: Executive Vice President and Chief
Financial Officier and Treasurer
INFINITY BROADCASTING CORPORATION OF BOSTON
By: /s/ Farid Suleman
--------------------------------------
Title: Executive Vice President and Chief
Financial Officier and Treasurer
INFINITY BROADCASTING CORPORATION OF NEW YORK
By: /s/ Farid Suleman
--------------------------------------
Title: Executive Vice President and Chief
Financial Officier and Treasurer
HEMISPHERE BROADCASTING CORPORATION
By: /s/ Farid Suleman
--------------------------------------
Title: Executive Vice President and Chief
Financial Officier and Treasurer
TRANSPORTATION DISPLAYS, INC.
By: /s/ Farid Suleman
--------------------------------------
Title: Executive Vice President and Chief
Financial Officier and Treasurer
CBS CORPORATION,
as guarantor pursuant to Article 8
By: /s/ Fredric G. Reynolds
--------------------------------------
Title: Executive Vice President and Chief
Financial Officer
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, as Administrative Agent
By: /s/ Dennis Wilczek
--------------------------------------
Title: Associate
<PAGE> 1
Exhibit 10.16
INFINITY BROADCASTING CORPORATION
1998 LONG-TERM INCENTIVE PLAN
ARTICLE I
GENERAL
1.1 PURPOSE
The purposes of the 1998 Long-Term Incentive Plan, as amended from time to
time (the "Plan"), for key personnel of Infinity Broadcasting Corporation
("Corporation") and its subsidiaries (the Corporation and its subsidiaries
severally and collectively referred to in the Plan as the "Company") are to
foster and promote the long-term financial success of the Company and materially
increase stockholder value by (i) attracting and retaining key personnel of
outstanding ability, (ii) strengthening the Company's capability to develop,
maintain and direct a competent management team, (iii) motivating key personnel,
by means of performance-related incentives, to achieve long-range performance
goals, (iv) providing incentive compensation opportunities competitive with
those of other major companies and (v) enabling key personnel to participate in
the long-term growth and financial success of the Company.
1.2 ADMINISTRATION
(a) The Plan will be administered by a committee of the Board of Directors
of the Corporation ("Committee") which will consist of two or more members. Each
member will be a "non-employee director," as that term is defined by Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as such rule may be amended, or any successor rule, and an "outside
director," as that term is defined by Section 162(m) of the Internal Revenue
Code of 1986, as amended. The members will be appointed by the Board of
Directors, and any vacancy on the Committee will be filled by the Board of
Directors or in a manner authorized by the Board.
(b) Subject to the limitations of the Plan, the Committee will have the
sole and complete authority: (i) to select in accordance with Section 1.3
persons who will participate in the Plan ("Participant" or "Participants")
(including the right to delegate authority to select as Participants persons who
are not required to file reports with respect to securities of the Company
pursuant to Section 16(a) of the Exchange Act ("Nonreporting Persons")); (ii) to
make Awards and payments in such forms and amounts as it may determine
(including the right to delegate authority to make Awards to Nonreporting
Persons within limits approved from time to time by the Committee), (iii) to
impose such limitations, restrictions and conditions upon such Awards as the
Committee, or, with respect to Awards to Nonreporting Persons, the Committee's
authorized delegates, deems appropriate; (iv) to interpret the Plan and the
terms of any document relating to the Plan and to adopt, amend and rescind
administrative guidelines and other rules and regulations relating to the Plan;
(v) to amend or cancel an existing Award in whole or in part (including the
right to delegate authority to amend or cancel an existing Award to a
Nonreporting Person in whole or in part within limits approved from time to time
by the Committee), except that the Committee and its authorized delegates may
not, unless otherwise provided in the Plan, or unless the Participant affected
thereby consents, take any action under this clause that would adversely affect
the rights of such Participant with respect to the Award, and except that the
Committee and its authorized delegates may not, unless otherwise provided in the
Plan, take any action to amend any outstanding Option under the Plan in order to
decrease the Option Price under such Option; and (vi) to make all other
determinations and to take all other actions necessary or
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advisable for the interpretation, implementation and administration of the Plan.
The Committee's determinations on matters within its authority will be
conclusive and binding upon the Company and all other persons.
(c) The Committee will act with respect to the Plan on behalf of the
Corporation and on behalf of any subsidiary issuing stock under the Plan,
subject to appropriate action by the board of directors of any such subsidiary.
All expenses associated with the Plan will be borne by the Corporation subject
to such allocation to its subsidiaries and operating units as it deems
appropriate.
1.3 SELECTION FOR PARTICIPATION
Participants selected by the Committee (or its authorized delegates) must
be Eligible Persons, as defined below. "Eligible Persons" are key persons who
are officers or salaried employees of the Company or its parent or their
subsidiaries. Eligible Persons will also include independent contractors of the
Company as to an Award if the person is an independent contractor at the time
the Award is granted. In making this selection and in determining the form and
amount of Awards, the Committee may give consideration to the functions and
responsibilities of the Eligible Person, his or her past, present and potential
contributions to the Company and such other factors as the Committee deems
relevant.
1.4 TYPES OF AWARDS UNDER PLAN
Awards ("Awards") under the Plan may be in the form of any one or more of
the following: (i) Incentive Stock Options ("ISOs") and Non-statutory Stock
options ("NSOs") (Incentive Stock Options and Non-statutory Stock Options
severally and collectively referred to in the Plan as "Options"), as described
in Article II; (ii) Stock Appreciation Rights ("SARs") and Participant Limited
Stock Appreciation Rights ("Participant Limited Rights"), as described in
Article II; (iii) Performance Awards ("Performance Awards") as described in
Article IV; and (iv) Restricted Stock ("Restricted Stock") and Restricted Units
("Restricted Units"), each as described in Article V.
1.5 SHARES SUBJECT TO THE PLAN
(a) Shares of stock issued under the Plan may be in whole or in part
authorized and unissued or treasury shares of the Corporation's Class A Common
Stock, par value $0.01 per share ("Common Stock"), or "Formula Value Stock" as
defined in Section 8.12(d) (Common Stock and Formula Value Stock severally and
collectively referred to in the Plan as "Stock").
(b) The maximum number of shares of Stock which may be issued for all
purposes under the Plan (including but not limited to shares issued pursuant to
the exercise of ISOs) will be 25,000,000, increased on January 1 of each
calendar year from and including January 1, 2001 by 10,000,000 shares. The
maximum number of such shares subject to options to purchase Stock, SARs and
Participant Limited Rights under the Plan awarded to any one Participant in any
one calendar year may not exceed 3,500,000 shares plus unused share amounts that
could have been awarded to that Participant in previous calendar years.
(c) Except as otherwise provided below, any shares of Stock subject to an
Option or other Award which is canceled or terminates without any shares having
been issued pursuant thereto having been exercised will again be available for
Awards under the Plan. Shares subject to an Option canceled upon the exercise of
an SAR will not again be available for Awards under the Plan except to the
extent the SAR is settled in cash. To the extent that an Award is settled in
cash, shares of Stock subject to that Award will again be available for Awards.
Shares of Stock tendered by a Participant or withheld by the Company to pay the
exercise price of an Option or to satisfy the tax withholding obligations of the
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exercise or vesting of an Award will be available again for Awards under the
Plan. Shares of Restricted Stock forfeited to the Company in accordance with the
Plan and the terms of the particular Award will be available again for Awards
under the Plan.
(d) No fractional shares will be issued, and the Committee will determine
the manner in which fractional share value will be treated.
ARTICLE II
STOCK OPTIONS
2.1 AWARD OF STOCK OPTIONS
(a) The Committee may, from time to time, subject to the provisions of the
Plan and such other terms and conditions as the Committee may prescribe, award
to any Participant ISOs and NSOs to purchase Stock.
(b) The Committee may provide with respect to any option to purchase Stock
that, if the Participant, while an Eligible Person, exercises the option in
whole or in part using already-owned Stock, the Participant will, subject to
this Section 2.1 and such other terms and conditions as may be imposed by the
Committee, receive an additional option ("Reload Option"). The Reload Option
will be to purchase, at Fair Market Value as of the date the original option was
exercised, a number of shares of Stock equal to the number of whole shares used
by the Participant to exercise the original option. The Reload Option will be
exercisable only between the date of its grant and the date of expiration of the
original option.
(c) A Reload Option will be subject to such additional terms and conditions
as the Committee may approve, which terms may provide that the Committee may
cancel the Participant's right to receive the Reload Option and that the Reload
Option will be granted only if the Committee has not canceled such right prior
to the exercise of the original option. Such terms may also provide that, upon
the exercise by a Participant of a Reload Option while an Eligible Person, an
additional Reload Option will be granted with respect to the number of whole
shares used to exercise the first Reload Option.
2.2 STOCK OPTION AGREEMENTS
The award of an option will be evidenced by a written agreement ("Stock
Option Agreement") in such form and containing such terms and conditions as the
Committee may from time to time determine. The Committee may also at any time
and from time to time provide for the deferral of delivery of any shares for
which the option may be exercisable until a specified date or dates and subject
to terms and conditions determined by the Committee.
2.3 OPTION PRICE
The purchase price of Stock under each Option ("Option Price") will not be
less than the Fair Market Value of such Stock on the date the Option is awarded.
2.4 EXERCISE AND TERM OF OPTIONS
(a) Except as otherwise provided in the Plan, Options will become
exercisable at such time or times as the Committee may specify. The Committee
may at any time and from time to time accelerate the time at which all or any
part of the Option may be exercised.
(b) The Committee will establish procedures governing the exercise of
options and will require that notice of exercise be given. Stock purchased on
exercise of an option must be paid for as follows:
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(1) in cash or by check (acceptable to the Company in accordance with guidelines
established for this purpose), bank draft or money order payable to the order of
the Company or (2) if so provided by the Committee (not later than the time of
grant, in the case of an ISO) (i) through the delivery of shares of Stock which
are then outstanding and which have a Fair Market Value on the date of exercise
equal to the exercise price, (ii) by delivery of an unconditional and
irrevocable undertaking by a broker to deliver promptly to the Company
sufficient funds to pay the exercise price, or (iii) by any combination of the
permissible forms of payment.
2.5 TERMINATION OF ELIGIBILITY
Unless the Committee provides otherwise: (a) in the event the Participant
is no longer an Eligible Person and ceased to be such as a result of termination
of service to the Company with the consent of the Committee or as a result of
his or her death, retirement or disability, each of his or her outstanding
Options (whether held by the Participant or, if the Option is an NSO that has
been transferred to a Permissible Transferee (as defined in Section 8.12) in
accordance with Section 8.1, by that Permissible Transferee) will be exercisable
by the Participant (or his or her legal representative or designated
beneficiary) or Permissible Transferee, as the case may be, to the extent that
such Option was then exercisable, at any time prior to an expiration date
established by the Committee at the time of award, but in no event after such
expiration date; and (b) if the Participant ceases to be an Eligible Person for
any other reason, all of the Participant's then outstanding Options (whether
held by the Participant or, if the Option is an NSO that has been transferred to
a Permissible Transferee in accordance with Section 8.1, by that Permissible
Transferee) will terminate immediately.
2.6 COMPANY LIMITED RIGHTS
(a) If so provided in the Stock Option Agreement, as it may be amended from
time to time, in the event of a Change in Control (as defined in Article VII of
the Plan), the Company will have the right to cancel any portion of the Option
(whether vested or nonvested) that remains unexercised on the date the Company
exercises its Company Limited Right pursuant to this Section 2.6 (or the entire
Option if no part of the Option has yet been exercised) in exchange for a
payment in cash of an amount equal to the number of shares of Common Stock as to
which the Option remains unexercised at the time the Company exercises such
right multiplied by the excess of (a) the higher of (x) the Minimum Price Per
Share (as defined below), or (y) the highest reported closing sale price of a
share of the Common Stock on the New York Stock Exchange at any time during the
period beginning on the sixtieth (60th) day prior to the date on which the
Company exercises such right and ending on the date on which the Company
exercises such right, over (b) the Option Price per share.
(b) For purposes of this Section 2.6, unless otherwise provided in the
relevant Stock Option Agreement, the term "Minimum Price Per Share" will mean
the highest gross price (before brokerage commissions and soliciting dealers'
fees) paid or to be paid for a share of Common Stock (whether by way of
exchange, conversion, distribution upon liquidation or otherwise) in any Change
in Control which is in effect at any time during the period beginning on the
sixtieth (60th) day prior to the date on which the Company exercises such right
and ending on the date on which the Company exercises such right. For purposes
of this definition, if the consideration paid or to be paid in any such Change
in Control consists, in whole or in part, of consideration other than cash, then
the Board will take such action as in its judgment it deems appropriate to
establish the cash value of such consideration.
(c) The Company's right to cancel an Option pursuant to Section 2.6 may be
exercised at any time until the end of the thirtieth (30th) day following the
occurrence of the Change in Control.
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ARTICLE III
STOCK APPRECIATION RIGHTS AND LIMITED RIGHTS
3.1 AWARD OF STOCK APPRECIATION RIGHT
(a) An SAR is an Award entitling the recipient on exercise to receive an
amount, in cash or Stock or a combination thereof (such form to be determined by
the Committee), determined in whole or in part by reference to appreciation in
Stock value.
(b) In general, an SAR entitles the Participant to receive, with respect to
each share of Stock as to which the SAR is exercised, the excess of the share's
Fair Market Value on the date of exercise over its Fair Market Value on the date
the SAR was granted.
(c) SARs may be granted in tandem with options granted under the Plan
("Tandem SARS") or independently of Options ("Independent SARs"). An SAR granted
in tandem with an NSO may be granted either at or after the time the Option is
granted. An SAR granted in tandem with an ISO may be granted only at the time
the Option is granted.
(d) SARs awarded under the Plan will be evidenced by either a Stock Option
Agreement (when SARs are granted in tandem with an Option) or a separate written
agreement between the Company and the Participant in such form and containing
such terms and conditions as the Committee may from time to time determine.
(e) Except as otherwise provided herein, a Tandem SAR will be exercisable
only at the same time and to the same extent and subject to the same conditions
as the Option related thereto is exercisable, and the Committee may prescribe
additional conditions and limitations on the exercise of the SAR. The exercise
of a Tandem SAR will cancel the related Option. Tandem SARs may be exercised
only when the Fair Market Value of Stock to which it relates exceeds the Option
Price.
(f) Except as otherwise provided herein, an Independent SAR will become
exercisable at such time or times, and on such conditions, as the Committee may
specify, and the Committee may at any time accelerate the time at which all or
any part of the SAR may be exercised.
The Committee may provide, under such terms and conditions as it may deem
appropriate, for the automatic grant of additional SARs upon the full or partial
exercise of an Independent SAR.
Any exercise of an Independent SAR must be in writing, signed by the proper
person and delivered or mailed to the Company, accompanied by any other
documents required by the Committee.
(g) Except as otherwise provided herein, all SARs will automatically be
exercised on the last trading day prior to the expiration date established by
the Committee at the time of the award for the SAR, or, in the case of a Tandem
SAR, for the related Option, so long as exercise on such date will result in a
payment to the Participant.
(h) Unless otherwise provided by the Committee, no SAR will become
exercisable or will be automatically exercised for six months following the date
on which it was granted or the effective date of the Plan, whichever is later.
(i) At the time of award of an SAR, the Committee may limit the amount of
the payment that may be made to a Participant upon the exercise of the SAR. The
Committee may further determine that, if the amount to be received by a
Participant in any year is limited pursuant to this provision, payment of all or
a portion of the amount that is unpaid as a result of the limitation may be made
to the Participant at a subsequent time. No such limitation will require a
Participant to return to the Company any amount theretofore received by him or
her upon the exercise of an SAR.
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(j) Payment of the amount to which a Participant is entitled upon the
exercise of an SAR will be made in cash, Stock, or partly in cash and partly in
Stock, as the Committee may determine. To the extent that payment is made in
Stock, the shares will be valued at their Fair Market Value on the date of
exercise of the SAR. The Committee may also at any time and from time to time
provide for the deferral of delivery of any shares and/or cash for which the SAR
may be exercisable until a specified date or dates and subject to terms and
conditions determined by the Committee.
(k) Unless otherwise determined by the Committee, each SAR will expire on
the first to occur of the following: (i) the expiration date set by the
Committee at the time of an award of an SAR, (ii) in the case of a Tandem SAR,
termination of the related option, (iii) expiration of a period of six months
after the Participant's ceasing to be an Eligible Person as a result of
termination of service to the Company with the consent of the Committee or as a
result of his or her death, retirement or disability, or (iv) the Participant
ceasing to be an Eligible Person for any other reason.
3.2 PARTICIPANT LIMITED RIGHTS
(a) The Committee may award Participant Limited Rights pursuant to the
provisions of this Section 3.2 to the holder of an Option to purchase Common
Stock granted under the Plan (a "Related Option") with respect to all or a
portion of the shares subject to the Related Option. A Participant Limited Right
may be exercised only during the period beginning on the first day following a
Change in Control, as defined in Article VII of the Plan, and ending on the
thirtieth day following such date. Each Participant Limited Right will be
exercisable only to the same extent that the Related Option is exercisable, and
in no event after the termination of the Related Option. Participant Limited
Rights will be exercisable only when the Fair Market Value (determined as of the
date of exercise of the Participant Limited Rights) of each share of Common
Stock with respect to which the Participant Limited Rights are to be exercised
exceeds the Option Price per share of Common Stock subject to the Related
option.
(b) Upon the exercise of Participant Limited Rights, the Related Option
will be considered to have been exercised to the extent of the number of shares
of Common Stock with respect to which such Participant Limited Rights are
exercised. Upon the exercise or termination of the Related Option, the
Participant Limited Rights with respect to such Related Option will be
considered to have been exercised or terminated to the extent of the number of
shares of Common Stock with respect to which the Related Option was so exercised
or terminated.
(c) The effective date of the grant of a Participant Limited Right will be
the date on which the Committee approves the grant of such Participant Limited
Right. Each grantee of a Participant Limited Right will be notified promptly of
the grant of the Participant Limited Right in such manner as the Committee
prescribes.
(d) Upon the exercise of Participant Limited Rights, the holder thereof
will receive in cash an amount equal to the product computed by multiplying (i)
the excess of (a) the higher of (x) the Minimum Price Per Share (as hereinafter
defined), or (y) the highest reported closing sales price of a share of Common
Stock on the New York Stock Exchange at any time during the period beginning on
the sixtieth day prior to the date on which such Participant Limited Rights are
exercised and ending on the date on which such Participant Limited Rights are
exercised, over (b) the Option Price per share of Common Stock subject to the
Related Option, by (ii) the number of shares of Common Stock with respect to
which such Participant Limited Rights are being exercised.
(e) For purposes of this Section 3.2, the term "Minimum Price Per Share"
will mean the highest gross price (before brokerage commissions and soliciting
dealers' fees) paid or to be paid for a share of Common Stock (whether by way of
exchange, conversion, distribution upon liquidation or otherwise) in any Change
in Control which is in effect at any time during the period beginning on the
sixtieth day
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prior to the date on which such Participant Limited Rights are exercised and
ending on the date on which such Participant Limited Rights are exercised. For
purposes of this definition, if the consideration paid or to be paid in any such
Change in Control will consist, in whole or in part, of consideration other than
cash, the Board will take such action, as in its judgment it deems appropriate,
to establish the cash value of such consideration.
ARTICLE IV
PERFORMANCE AWARDS
4.1 NATURE OF PERFORMANCE AWARDS
A Performance Award provides for the recipient to receive an amount in cash
or Stock or a combination thereof (such form to be determined by the Committee)
following the attainment of Performance Goals. Performance Goals may be related
to personal performance, corporate performance (including corporate stock
performance), departmental performance or any other category of performance
deemed by the Committee to be important to the success of the Company or may be
related to the occurrence of any triggering event or events that the Committee
may deem appropriate. The Committee will determine the Performance Goals, the
period or periods during which performance is to be measured or otherwise
determined and all other terms and conditions applicable to the Award.
Regardless of the degree to which Performance Goals are attained, a Performance
Award will be paid only when, if and to the extent that the Committee determines
to make such payment.
4.2 OTHER AWARDS SUBJECT TO PERFORMANCE CONDITION
The Committee may, at the time any Award described in this Plan is granted,
impose the condition (in addition to any conditions specified or authorized in
the Plan) that Performance Goals be met prior to the Participant's realization
of any payment or benefit under the Award.
ARTICLE V
RESTRICTED STOCK AND RESTRICTED UNITS
5.1 AWARDS OF RESTRICTED STOCK AND RESTRICTED UNITS
(a) The Committee may award to any Participant shares of Stock subject to
this Article V and such other terms and conditions as the Committee may
prescribe, such Stock referred to herein as "Restricted Stock." Each certificate
for Restricted Stock will be registered in the name of the Participant and
deposited by him or her, together with a stock power endorsed in blank, with the
Corporation.
(b) The Committee may also award to any Participant Restricted Units
subject to this Article V and such other terms and conditions as the Committee
may prescribe. For purposes hereof, a "Restricted Unit" will mean any award of a
contractual right granted under this Article V to receive Stock (or, at the
discretion of the Committee, cash in an amount based on the Fair Market Value of
the Stock, or a combination of Stock and cash) which would become vested and
nonforfeitable, in whole or in part, upon the completion of such period of
service as may be determined by the Committee.
5.2 RESTRICTED STOCK/RESTRICTED UNIT AGREEMENT
Awards of Restricted Stock and Restricted Units under the Plan will be
evidenced by a written agreement in such form and containing such terms and
conditions as the Committee may determine.
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5.3 RESTRICTION PERIOD; DIVIDEND EQUIVALENTS
(a) At the time of award of Restricted Stock or Restricted Units, there
will be established for each Participant a "Restriction Period" of such length
as the Committee determines. The Restriction Period may be waived by the
Committee. Shares of Restricted Stock and Restricted Units may not be sold,
assigned, transferred, pledged or otherwise encumbered, except as hereinafter
provided.
(b) Subject to such restrictions on transfer, the Participant as owner of
such shares of Restricted Stock will have the rights of the holder of such
Restricted Stock, except that the Committee may provide at the time of the Award
that any dividends or other distributions paid with respect to such Stock during
the Restriction Period will be accumulated and held by the Company and will be
subject to the same forfeiture provisions and the same restrictions on transfer
as apply to the shares of Restricted Stock with respect to which they were paid.
(c) Upon the expiration or waiver by the Committee of the Restriction
Period and the satisfaction (as determined by the Committee) of any other
conditions determined by the Committee, restrictions applicable to the
Restricted Stock or Restricted Units will lapse and the Corporation will, in the
case of Restricted Stock, redeliver to the Participant (or his or her legal
representative or designated beneficiary) the shares deposited pursuant to
Section 5.1 free and clear of all restrictions except as may be imposed by law
and, in the case of Restricted Units, will pay out such units as provided in the
Restricted Unit Agreement.
5.4 TERMINATION OF ELIGIBILITY
(a) Unless otherwise determined by the Committee, in the event the
Participant is no longer an Eligible Person and ceased to be such as a result of
termination of service to the Company with the consent of the Committee, or as a
result of his or her death, retirement or disability, the restrictions imposed
under this Article V will lapse with respect to such number of the shares of
Restricted Stock and with respect to such number of Restricted Units previously
awarded to him or her as may be determined by the Committee. All other shares of
Restricted Stock and Restricted Units previously awarded to him or her which are
still subject to restrictions, along with any dividends or other distributions
thereon that have been accumulated and held by the Company, will be forfeited,
and in the case of Restricted Stock, the Corporation will have the right to
complete the blank stock power.
(b) Unless otherwise determined by the Committee, in the event the
Participant ceases to be an Eligible Person for any other reason, all shares of
Restricted Stock and all Restricted Units previously awarded to him or her which
are still subject to restrictions, along with any dividend or other
distributions on Restricted Stock that have been accumulated and held by the
Company, will be forfeited, and, in the case of Restricted Stock, the
Corporation will have the right to complete the blank stock power.
5.5 DIVIDEND EQUIVALENTS
The Committee will determine whether and to what extent, if any, to credit
to the account of, or to pay currently to, each recipient of Restricted Units,
an amount equal to any dividends or other distributions paid during the
Restriction Period with respect to the corresponding number of shares of Stock
covered thereby ("Dividend Equivalent"). To the extent provided by the Committee
at or after the date of grant, any Dividend Equivalents with respect to cash
dividends on the Stock credited to a Participant's account will be deemed to
have been invested in shares of Stock on the record date established for the
related dividend and, accordingly, a number of additional Restricted Units shall
be credited to such Participant's account equal to the greatest whole number
which may be obtained by
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dividing (x) the value of such Dividend Equivalent on the record date by (y) the
Fair Market Value of a share of Stock on such date.
ARTICLE VI
DEFERRAL OF PAYMENTS
6.1 DEFERRAL OF AMOUNTS
(a) If the Committee makes a determination to designate Awards or, from
time to time, groups or types of Awards, eligible for deferral hereunder, a
Participant may, subject to such terms and conditions and within such limits as
the Committee may from time to time establish, elect to defer the receipt of
amounts due to him or her under the Plan. Amounts so deferred are referred to
herein as "Deferred Amounts." The Committee may also permit amounts now or
hereafter deferred or available for deferral under any present or future
incentive compensation program or deferral arrangement of the Company to be
deemed Deferred Amounts and to become subject to the provisions of this Article.
Awards which are so deferred will be deemed to have been awarded in cash and the
cash deferred as Deferred Amounts.
(b) The period between the date on which the Participant's Deferred Amount
would have been payable absent deferral and the final payment of such Deferred
Amount will be referred to herein as the "Deferral Period."
6.2 PAYMENT OF DEFERRED AMOUNTS
Payment of Deferred Amounts will be made on such terms and conditions as
the Committee may determine and will be made at such time or times, and may be
in cash, Stock, or partly in cash and partly in Stock, as the Committee in its
sole discretion may from time to time determine.
ARTICLE VII
CHANGES IN CONTROL
7.1 EFFECT OF CHANGE IN CONTROL
Upon the occurrence of a change in control (a) as defined in the relevant
agreement for an Award or (b) as may be determined by the Committee (each of (a)
and (b) a "Change of Control"), then notwithstanding any other provisions of the
Plan:
(i) if so provided in the respective Stock Option Agreements, as they may
be amended from time to time, Options and, subject to the exercise
provisions of Section 3.2(a) of the Plan, Participant Limited Rights, but
not SARs, outstanding and unexercised on the date of the Change in Control
will become immediately exercisable;
(ii) if so provided in the respective Stock Option Agreements, as they may
be amended from time to time, Company Limited Rights will become
immediately exercisable;
(iii) Performance Awards will be deemed to have been earned if so
determined by the Committee and may be paid on such basis as the Committee
may prescribe.
(iv) Restricted Stock and Restricted Units may be deemed to be earned and
the Restriction Period may be deemed to be expired on such terms and
conditions as the Committee may determine; and
(v) amounts deferred under this Plan may be paid on such terms as the
Committee determines.
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ARTICLE VIII
GENERAL PROVISIONS
8.1 NON-TRANSFERABILITY
No Option, Participant Limited Right, SAR, Performance Award, Restricted
Unit or share of Restricted Stock or Deferred Amount under the Plan will be
transferable other than by will, by the applicable laws of descent and
distribution, or, if permitted by the Company, by transfer to a properly
designated beneficiary in the event of death; provided, however, that the
Committee may, in its sole discretion, permit the transfer of an NSO Option
(including any Tandem SARs or Participant Limited Rights but not any right to
receive a Reload Option upon exercise of the NSO Option) by a Participant to a
Permissible Transferee (as defined in Section 8.12) subject to such terms and
conditions as the Committee may, from time to time, determine. All Awards and
Deferred Amounts will be exercisable or received during the Participant's
lifetime only by such Participant or his or her legal representative or, in the
case of an NSO Option (including any Tandem SARs or Participant Limited Rights)
that has been transferred to a Permissible Transferee in accordance with this
Section 8.1, by that Permissible Transferee. Any transfer contrary to this
Section 8.1 will nullify the option, Participant Limited Right, SAR, Performance
Award, Restricted Unit or share of Restricted Stock, and any attempted transfer
of a Deferred Amount contrary to this Section 8.1 will be void and of no effect.
8.2 BENEFICIARIES
The Committee may, but need not, establish or authorize the establishment
of procedures not inconsistent with Section 8.1 under which a Participant may
designate a beneficiary or beneficiaries to hold, exercise and/or receive
amounts due under an Award or with respect to Deferred Amounts in the event of
the Participant's death.
8.3 ADJUSTMENTS UPON CHANGES IN STOCK
If there is any change in the Stock and/or the corporate structure of the
Company, through merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, split up, dividend in kind or other change in the
corporate structure or distribution to the stockholders, appropriate adjustments
may be made by the Board of Directors of the Company (or if the Company is not
the surviving corporation in any such transaction, the board of directors of the
surviving corporation) in the aggregate number and kind of shares subject to the
Plan, and the number and kind of shares and the price per share subject to
outstanding Options or which may be issued under outstanding Performance Awards
or Awards of Restricted Stock. Appropriate adjustments may also be made by the
Board of Directors or the Committee in the terms of any Awards under the Plan to
reflect such changes and to modify any other terms of outstanding Awards,
including modifications of performance targets and changes in the length of
Performance Periods.
8.4 CONDITIONS OF AWARDS
(a) Unless the Committee determines otherwise, either by waiving the
condition(s) or by limiting or otherwise amending the condition(s) with respect
to any specified Award or group of Awards, the rights of a Participant with
respect to any Award received under this Plan will be subject to the conditions
that, until the Participant has fully received all payments, transfers and other
benefits under the Award, he or she will (i) not engage, either directly or
indirectly, in any manner or capacity as advisor, principal, agent, partner,
officer, director, employee, member of any association or otherwise, in any
business or activity which is at the time competitive with any business or
activity conducted by the Company and (ii) be available, unless he or she has
died, at reasonable times for consultations at
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the request of the Company's management with respect to phases of the business
with which he or she is or was actively connected during the time he or she was
an officer, employee or independent contractor, but such consultations will not
(except in the case of a Participant whose active service was outside the United
States) be required to be performed at any place or places outside of the United
States of America or during usual vacation periods or periods of illness or
other incapacity. In the event that either of the above conditions is applicable
(or is applicable as modified by the Committee) and is not fulfilled, the
Participant will forfeit all rights to any unexercised Option or SAR, or any
Performance Award or Stock held which has not yet been determined by the
Committee to be payable or unrestricted (and any unpaid amounts equivalent to
dividends or other distributions or amounts equivalent to interest relating
thereto) as of the date of the breach of condition. Any determination by the
Board of Directors of the Corporation, which will act upon the recommendation of
the Chief Executive Officer, that the Participant is, or has, engaged in a
competitive business or activity as aforesaid or has not been available for
consultations as aforesaid or, if the Committee has modified such condition(s)
with respect to the Participant's Award, that the Participant has not complied
with such condition(s) as modified by the Committee will be conclusive.
(b) This Section 8.4 will not apply to Participant Limited Rights.
8.5 USE OF PROCEEDS
All cash proceeds from the exercise of Options will constitute general
funds of the Company.
8.6 TAX WITHHOLDING
(a) The Company will collect, through withholding or otherwise, an amount
sufficient to satisfy any applicable statutory federal, state and local
withholding tax requirements (the "withholding requirements") with respect to
payments made pursuant to the Plan.
(b) In the case of an Award pursuant to which Stock may be delivered, the
Committee will have the right to require that the Participant or other
appropriate person remit to the Company an amount sufficient to satisfy any
applicable statutory withholding requirements, or make other arrangements
satisfactory to the Committee with regard to such requirements, prior to the
delivery of any Stock. If and to the extent that such withholding is required,
the Committee may permit the Participant or such other person to elect at such
time and in such manner as the Committee provides to have the Company hold back
from the shares to be delivered, or to deliver to the Company, Stock having a
value calculated to satisfy the statutory withholding requirement. In the
alternative, the Committee may, at the time of grant of any such Award, require
that the Company withhold from any shares to be delivered Stock with a value
calculated to satisfy any applicable statutory tax withholding requirements.
(c) If at the time an ISO is exercised the Committee determines that the
Company could be liable for statutory withholding requirements with respect to a
disposition of the Stock received upon exercise, the Committee may require as a
condition of exercise that the person exercising the ISO agree (i) to inform the
Company promptly of any disposition of Stock received upon exercise, and (ii) to
give such security as the Committee deems adequate to meet the potential
liability of the Company for the statutory withholding requirements and to
augment such security from time to time in any amount reasonably deemed
necessary by the Committee to preserve the adequacy of such security.
8.7 NON-UNIFORM DETERMINATIONS
The Committee's determinations under the Plan, including without
limitation, (i) the determination of the Participants to receive Awards, (ii)
the form, amount, timing and payment of such Awards,
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(iii) the terms and provisions of such Awards and (iv) the agreements evidencing
the same, need not be uniform and may be made by it selectively among
Participants who receive, or who are eligible to receive, Awards under the Plan,
whether or not such Participants are similarly situated.
8.8 LEAVES OF ABSENCE; TRANSFERS
The Committee will be entitled to make such rules, regulations and
determinations as it deems appropriate under the Plan with respect to any leave
of absence from the Company granted to a Participant. Without limiting the
generality of the foregoing, the Committee will be entitled to determine (i)
whether or not any such leave of absence will be treated as if the Participant
ceased to be an Eligible Person and (ii) the impact, if any, of any such leave
of absence on Awards under the Plan. In the event a Participant transfers within
the Company, such Participant will not be deemed to have ceased to be an
Eligible Person for purposes of the Plan.
8.9 GENERAL RESTRICTION
(a) Each Award under the Plan will be subject to the condition that, if at
any time the Committee determines that (i) the listing, registration or
qualification of shares of Stock upon any securities exchange or under any state
or federal law, (ii) the consent or approval of any government or regulatory
body or (iii) an agreement by the Participant with respect thereto, is necessary
or desirable, then such Award will not be consummated in whole or in part unless
such listing, registration, qualification, consent, approval or agreement has
been effected or obtained free from any conditions not acceptable to the
Committee.
(b) Shares of Common Stock for use under the provisions of this Plan will
not be issued until they have been duly listed, upon official notice of
issuance, upon the New York Stock Exchange and such other exchanges, if any, as
the Board of Directors of the Corporation determines, and a registration
statement under the Securities Act of 1933 with respect to such shares has
become, and is, effective.
8.10 EFFECTIVE DATE
(a) The Plan is effective on December 7, 1998, as amended.
(b) No Award may be granted under the Plan after December 6, 2008, but
Awards previously made may extend beyond that date and Reload Options and
additional Reload Options provided for with respect to original options
outstanding prior to that date may continue unless the Committee otherwise
provides and subject to such additional terms and conditions as the Committee
may provide except that all Reload Options issued after that date will be NSOs,
and the provisions of Article VI of the Plan will survive and remain effective
as to all present and future Deferred Amounts until such later date as the
Committee or the Board of Directors may determine.
(c) The adoption of the Plan will not preclude the adoption by appropriate
means of any other stock option or other incentive plan for officers or
employees.
8.11 AMENDMENT, SUSPENSION AND TERMINATION OF PLAN
The Board of Directors or the Committee may at any time or times amend the
Plan for any purpose which may at the time be permitted by law, or may at any
time suspend or terminate the Plan as to any further grants of Awards.
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8.12 CERTAIN DEFINITIONS
(a) The terms "retirement" and "disability" as used under the Plan will
have the meanings determined from time to time by the Committee.
(b) The term "Fair Market Value" as it relates to Common Stock means the
average of the high and low prices of the Common Stock as reported by the
Composite Tape of the New York Stock Exchange (or such successor reporting
system as the Committee may select) on the relevant date or, if no sale of the
Common Stock has been reported for that day, the average of such prices on the
next preceding day and the next following day for which there were reported
sales. The term "Fair Market Value" as it relates to Formula Value Stock will
mean the value determined by the Committee.
(c) "subsidiary" means any corporation, partnership or other entity of
which shares of voting stock sufficient to elect a majority of the Board of
Directors, or other persons performing similar functions, is owned by the
Corporation, either directly or indirectly through one or more subsidiaries.
(d) "Formula Value Stock" means shares of a class or classes of stock the
value of which is derived from a formula established by the Committee which
reflects such financial measures as the Committee may determine. Such shares
will have such other characteristics as may be determined at time of their
authorization.
(e) Unless otherwise determined by the Committee, "Permissible Transferee"
means any of the following: (1) a member of the Participant's Immediate Family;
(2) a trust solely for the benefit of the Participant and/or the Participant's
Immediate Family; and (3) a partnership or limited liability company whose only
partners or members, as the case may be, are the Participant and/or Permissible
Transferees of the Participant as otherwise identified in this definition.
"Immediate Family" has the meaning set forth in Rule l6a-1(e) under the Exchange
Act, as such rule may be amended from time to time, or any successor rule.
8.13 GOVERNING LAW.
The Plan and all agreements or other documents relating to the Plan will be
construed in accordance with and governed by the laws of the State of Delaware,
without regard to the principles of conflict of laws.
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Exhibit 10.17
INFINITY BROADCASTING CORPORATION
EXECUTIVE ANNUAL INCENTIVE PLAN
SECTION 1. PURPOSE
1.1 The purpose of the Infinity Broadcasting Corporation Executive Annual
Incentive Plan is to provide competitive annual or other incentive opportunities
that foster and promote the financial success of the Company by: (a) aiding the
Company in attracting and retaining key executives of outstanding ability; (b)
strengthening the Company's capability to develop, maintain and direct a
competent management team; and (c) motivating key executives who are in a
position to contribute materially to the success of the Company to achieve
measurable performance goals. The Plan is intended to permit the Company to pay
to Participants who are Covered Employees annual incentives that qualify as
performance-based compensation for purposes of Section 162(m) of the Internal
Revenue Code and that are fully deductible by the Company under the Code.
1.2 Certain terms used in the Plan are defined in Section 10.
SECTION 2. EFFECTIVE DATE
2.1 The Plan is effective as of December 7, 1998, as amended.
SECTION 3. ELIGIBILITY; SELECTION FOR PARTICIPATION
3.1 Participation in the Plan will be limited to key executives of the
Company and/or its subsidiaries who are designated by the Committee as
Participants for a given Performance Period. In making this designation, the
Committee may give consideration to the functions and responsibilities of the
executive, his or her past, present and potential contributions to the Company,
and such other factors as the Committee deems relevant.
SECTION 4. AWARDS
4.1 The Committee may award incentives to Participants with respect to
Performance Periods, subject to the terms and conditions set forth in the Plan.
4.2 The Committee will establish one or more objective performance goals
for a given Performance Period. Such performance goal or goals will be based on
one or more of the following business criteria, as applied to the relevant
business unit or units, to a specified portion or portions of the Company, to
the Company as a whole, or to any combination thereof: revenues; earnings before
interest, taxes, depreciation and amortization ("EBITDA"); earnings before
interest and taxes ("EBIT"); free cash flow; earnings per share; ratings; cost
reductions; capital expenditure; and stock price.
4.3 The Committee will also establish target and maximum incentive award
opportunity amounts for each Participant for the given Performance Period and
the objective formula or standard that will be used by the Committee to
determine the amount of incentive compensation that may be payable to such
Participant under the Plan if and to the extent that the established performance
goal or goals are achieved; provided, however, that in no event may the maximum
incentive award opportunity or the maximum incentive award for any one
Participant for any Performance Period exceed the amount of ten million dollars
($10,000,000). This maximum amount will be adjusted annually to reflect
increases in the Consumer Price Index-U published by the Bureau of Labor
Statistics, or any successor to such index, for each twelve-month period
commencing January 1.
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4.4 After the close of the Performance Period, the Committee will determine
the extent to which the preestablished performance goal or goals for that
Performance Period have been achieved and the extent to which incentive
compensation for each Participant would be payable based on such performance and
the preestablished formula or method. Regardless of the degree to which a
performance goal or goals are achieved, incentive awards under the Plan will be
paid only when and if the Committee, in its sole discretion, determines to
approve the award or awards. The Committee, in its sole discretion, may reduce
(but may not increase) the amount which would otherwise be payable as incentive
compensation based on the extent to which the preestablished performance goal or
goals have been achieved and the preestablished formula or method, in which case
the Participant will receive only the reduced amount as an incentive award,
which may be zero, even if the performance goal or goals were achieved.
4.5 Appropriate adjustments may be made by the Committee in performance
goals, target and maximum incentive award opportunities, formulas or standards,
and/or in the measurement of the extent of achievement of performance goals to
reflect the impact of acquisitions, divestitures, changes in accounting
standards, or unusual or extraordinary events.
SECTION 5. FORM OF PAYMENT; SHARES OF STOCK
5.1 The Committee will also determine the time, form and manner of payment
of any incentive awards it may approve for payment under the Plan. Incentive
awards may be paid in cash, in shares of Stock, in Stock Options, in Stock
Appreciation Rights, in other Derivative Securities, in other securities of the
Company, or in any other form that the Committee may determine, or in any
combination of such forms, and may be paid in one or more installments and/or on
a deferred basis or on such other basis as the Committee may determine
("deferrals"), all on such terms and conditions as are set forth in the Plan and
otherwise as the Committee may from time to time determine.
5.2 The maximum number of shares of Stock subject to incentive stock
options and Stock Options that may be issued under the Plan is ten million
(10,000,000); and the maximum number of such shares of Stock subject to Stock
Options and Stock Appreciation Rights granted to any one Participant under the
Plan in any one Performance Period is one million (1,000,000); in each case
subject to adjustment and substitution as set forth in this Section 5.
5.3 Shares of Stock issued under the Plan may be in whole or in part
authorized and unissued or treasury shares of Stock. No fractional shares will
be issued, and the Committee will determine the manner in which fractional share
value will be treated.
5.4 Any shares of Stock that are issued pursuant to the Plan and are
subsequently forfeited, any shares of Stock subject to a Stock Option, Stock
Appreciation Right and/or other Derivative Security which is canceled or
terminates without any shares having been issued pursuant thereto, any shares of
Stock tendered by a Participant to pay the Exercise Price of a Stock Option or
other Derivative Security, and any shares of Stock tendered or withheld to
satisfy withholding tax requirements will automatically become available again
for use under the Plan; provided, however, this Section 5.4 will apply only to
the 10,000,000 share limit set forth in Section 5.2 (as adjusted in accordance
with the Plan).
5.5 If there is any change in the Stock and/or the corporate structure of
the Company, through merger, consolidation, division, share exchange,
combination, reorganization, recapitalization, stock dividend, stock split,
spin-off, split-up, dividend in kind or other change in the corporate structure
or distribution to the shareholders, appropriate adjustments may be made by the
Committee (or, if the Company is not the surviving corporation in any such
transaction, by the board of directors (or a committee thereof consisting solely
of Outside Directors) of the surviving corporation) in the aggregate
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number and kind of shares subject to the Plan, and the number and kind of shares
and the price per share subject to outstanding Stock Options, Stock Appreciation
Rights and other Derivative Securities or which may be issued under outstanding
deferrals. Appropriate adjustments may also be made by the Committee in the
terms of any incentive award opportunities under the Plan to reflect such
changes and to modify any of the terms of any outstanding Stock Options, Stock
Appreciation Rights or other Derivative Securities or deferrals.
SECTION 6. PAYMENT IN STOCK OPTIONS OR STOCK APPRECIATION RIGHTS
6.1 The Committee may, from time to time, subject to the provisions of the
Plan and such other terms and conditions as the Committee may prescribe,
determine that an incentive award or a portion of an incentive award will be
paid in the form of Stock Options or Stock Appreciation Rights. Stock
Appreciation Rights may be granted in tandem with Stock Options or independently
of Stock Options. The number of Stock Options or Stock Appreciation Rights will
be determined by dividing the amount of the incentive award to be paid in the
form of Stock Options or Stock Appreciation Rights by the value, as determined
by the Committee, of a Stock Option or Stock Appreciation Right, as the case may
be, for one share of Stock on the relevant date.
6.2 All Stock Options and all Stock Appreciation Rights will be evidenced
by a signed written agreement, with any amendments thereto, containing such
terms and conditions as are set forth in the Plan and otherwise as the Committee
may from time to time determine. Stock Appreciation Rights granted in tandem
with Stock Options will be evidenced by the Stock Option agreement. The
Committee may also at any time and from time to time provide for the deferral of
delivery of any shares and/or cash for which the Stock Option or Stock
Appreciation Right may be exercisable until a date or dates and subject to terms
and conditions determined by the Committee.
6.3 The purchase price per share of Stock under each Stock Option and the
reference price per share of the Stock to which a Stock Appreciation Right
relates (in either case, "Exercise Price") will not be less than the Fair Market
Value of such Stock on the date the Stock Option is granted. A Stock
Appreciation Right may be exercised only when the Fair Market Value of the Stock
to which it relates exceeds the Exercise Price.
6.4 The holder of a Stock Option, Stock Appreciation Right or other
Derivative Security will not have any of the rights of a shareholder with
respect to any shares of Stock that may be subject or relate thereto unless and
until such shares are issued by the Company following its exercise or otherwise.
SECTION 7. ADMINISTRATION
7.1 Subject to the terms of the Plan, the Committee will have the sole and
complete authority: (a) to designate Participants, to approve incentive awards,
to determine the time, form and manner of payment of any incentive awards it may
approve, and to impose such limitations, restrictions and conditions thereon as
the Committee deems appropriate; (b) to interpret the Plan and the terms of any
document relating to the Plan and to adopt, amend and rescind administrative
guidelines and other rules and regulations relating to the Plan; (c) to
accelerate the time at which all or any part of Stock Options, Stock
Appreciation Rights and/or other Derivative Securities may be exercised or the
time when all or any part of deferrals and/or Derivative Securities will be
paid; (d) to otherwise amend or cancel incentive award opportunities, Stock
Options, Stock Appreciation Rights or other Derivative Securities or deferrals
under the Plan in whole or in part, except that the Committee may not, unless
otherwise provided in the Plan or unless the Participant affected thereby
consents, take any action under this clause that would adversely affect the
rights of such Participant with respect to outstanding Stock Options, Stock
Appreciation Rights or other Derivative Securities or deferrals under the Plan,
and
3
<PAGE> 4
except that the Committee may not, unless otherwise provided in the Plan, take
any action to amend any outstanding Stock Option or Stock Appreciation Right
under the Plan in order to decrease the Exercise Price of such Stock Option or
Stock Appreciation Right; and (e) to make all other determinations and to take
all other actions necessary or advisable for the interpretation, implementation
and administration of the Plan.
7.2 The Committee's determinations on matters within its authority will be
conclusive and binding upon the Company and all other persons unless and until
the Committee determines otherwise.
SECTION 8. GENERAL PROVISIONS
8.1 No employee or other person will have any claim or right to be
designated as a Participant or to receive an incentive award under the Plan.
Participation in the Plan will not be construed as a right to employment or
other relationship(s) with the Company and/or its subsidiaries, and the Company
retains the right to terminate the employment or other relationship(s) of an
individual with the Company and/or its subsidiaries for any reason, with or
without cause.
8.2 During a Participant's lifetime, payments or distributions under the
Plan may be received only by the Participant or his or her legal representative.
Shares of restricted Stock during the applicable restriction period, Stock
Options, Stock Appreciation Rights, other Derivative Securities, rights to
deferral payments and any other rights or benefits under the Plan will not be
transferable or assignable by a Participant other than by will, by the
applicable laws of descent and distribution, or, if permitted by the Committee,
by transfer to a Properly Designated Beneficiary in the event of death;
provided, however, that the Committee may, in its sole discretion, permit the
transfer of Stock Options (including any tandem Stock Appreciation Rights) by a
Participant to Permissible Transferees, subject to such terms and conditions as
the Committee may determine. Any transfer or assignment contrary to these
provisions will be null and void.
8.3 The Company will collect, through withholdings or otherwise, an amount
sufficient to satisfy all applicable statutory federal, state and local
withholding tax requirements with respect to payments made pursuant to the Plan.
8.4 The Committee's determinations under the Plan, including without
limitation, (a) the selection of Participants, (b) the form, amount, timing and
payment of incentive awards, (c) the terms and provisions of incentive awards
and the payment thereof, and (d) any agreements evidencing the same, need not be
uniform and may be made by it selectively among Participants who receive, or who
are eligible to receive, incentive awards, whether or not such Participants are
similarly situated.
8.5 The Committee may, but need not, establish or authorize the
establishment of procedures not inconsistent with Section 8.2 under which a
Participant may designate a beneficiary or beneficiaries in the event of the
Participant's death.
8.6 The Company will not be required to establish any special or separate
fund or to segregate any assets for purposes of the Plan.
8.7 Nothing contained in the Plan will be deemed to limit or restrict the
right of the Company and its subsidiaries to compensate any of their key
executives and/or employees in whole or in part under separate bonus or
incentive plans or other compensation arrangements.
8.8 The Plan and all agreements or other documents relating to the Plan
will be construed in accordance with and governed by the laws of the State of
Delaware, without regard to the principles of conflict of laws.
4
<PAGE> 5
SECTION 9. CHANGE IN CONTROL
9.1 Upon the determination of the Committee that a change in control has
occurred for purposes of the Plan, the Committee may deem all or any part of any
incentive award opportunity to have been earned on such basis as the Committee
may determine, and incentive awards and outstanding Derivative Securities and
deferrals may then be paid and Stock Options, Stock Appreciation Rights and
other Derivative Securities may then be modified, and all or any part of any
restrictions or conditions may be waived or modified, all on such basis, at such
time (which may, in the case of incentive awards, be prior to the end of the
Performance Period), in such form and subject to such terms and conditions as
the Committee may prescribe.
SECTION 10. CERTAIN DEFINITIONS
10.1 The following terms or phrases will have the meanings set forth below.
- "Board" means the Board of Directors of the Company.
- "Code" or "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, or any successor statute or statutes.
Reference to any specific Code section will include any successor
section.
- "Committee" means the Compensation Committee of the Board (or a
subcommittee thereof) or any successor committee (or a subcommittee
thereof) established by the Board; provided, however, the Committee must
consist of at least two members and each member of the Committee must be
an Outside Director.
- "Company" means Infinity Broadcasting Corporation, a Delaware
corporation, and any successor thereto.
- "Covered Employee" means a person who is a covered employee within the
meaning of Section 162(m) of the Code and regulations promulgated
thereunder.
- "Derivative Security" means a derivative security with respect to an
equity security of the Company, where "derivative security" has the
meaning set forth in Rule 16a-1(c) under the Exchange Act, as such rule
may be amended from time to time, or any successor rule.
- "Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
- "Exercise Price" has the meaning assigned to it in Section 6.3.
- "Fair Market Value" means the mean of the high and low prices of the
Stock as reported by the Composite Tape of the New York Stock Exchange
(or such successor reporting system as may be selected by the Committee)
on the relevant date or, if no sale of the Stock has been reported for
that day, the average of such prices on the next preceding day and the
next following day for which there were reported sales.
- "Immediate Family" has the meaning set forth in Rule 16a-1(e) under the
Exchange Act, as such rule may be amended from time to time, or any
successor rule.
- "Outside Director" means an outside director as that term is defined by
Section 162(m) of the Code and regulations promulgated thereunder.
- "Participant" means a key executive of the Company and/or its
subsidiaries who is designated by the Committee as a Plan participant for
a given Performance Period in accordance with Section 3.1.
5
<PAGE> 6
- "Performance Period" means a calendar year or other fiscal year of the
Company or other longer or shorter period designated by the Committee
with respect to which incentive awards may be paid.
- "Permissible Transferee" means any of the following: (1) a member of the
Participant's Immediate Family; (2) a trust solely for the benefit of the
Participant and/or the Participant's Immediate Family; and (3) a
partnership or limited liability company whose only partners or members,
as the case may be, are the Participant and/or Permissible Transferees as
otherwise identified in this definition.
- "Plan" means the Company's Executive Annual Incentive Plan, as amended
from time to time.
- "Properly Designated Beneficiary" means a beneficiary or beneficiaries
designated by a Participant pursuant to Section 8.5 in the event of the
Participant's death, if such designation is permitted by the Committee.
- "Stock" means the Class A Common Stock and any other equity stock of the
Company, other than Class B Common Stock.
- "Stock Appreciation Right" means a right to receive, on exercise, an
amount, in cash or Stock or a combination thereof (such form to be
determined by the Committee), determined by reference to appreciation in
Stock value.
- "Stock Option" means a non-statutory stock option (that is, a Stock
Option which is not an incentive stock option as defined in Section
422(b) of the Code) to purchase shares of Stock for the purchase price
set forth in the relevant Stock Option Agreement, all in accordance with
the terms of the Plan.
10.2 Except where otherwise indicated by the context, references to
sections will mean the Sections of the Plan and the definition of any term
herein in the singular will also include the plural. Section or subsection
headings are inserted for convenience only. Such headings will not affect the
meaning of any of the provisions of the Plan and will not be deemed a part of
the Plan.
SECTION 11. AMENDMENT, SUSPENSION AND/OR TERMINATION OF PLAN
11.1 The Board of Directors or the Committee may at any time and from time
to time amend the Plan, in whole or in part, for any purpose, or may at any time
or from time to time suspend or terminate the Plan.
6
<PAGE> 1
Exhibit 10.30
ASSET PURCHASE AGREEMENT
------------------------
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of March 3,
2000 among the company or companies designated as Seller on the signature page
hereto (collectively, "Seller") and the company or companies designated as Buyer
on the signature page hereto (collectively, "Buyer").
Recitals
--------
A. Seller owns and operates the following radio broadcast stations
(collectively, the "Stations") pursuant to certain authorizations issued by the
Federal Communications Commission (the "FCC"):
WUBE-FM, Cincinnati, OH
WDOK(FM), Cleveland, OH
WQAL(FM), Cleveland, OH
WZJM(FM), Cleveland Heights, OH
KDJM(FM), Greeley, CO
KIMN(FM), Denver, CO
KXKL-FM, Denver, CO
WMFR(AM), High Point, NC
WSJS(AM), Winston-Salem, NC
WSML(AM), Graham, NC
WJHM(FM), Daytona Beach, FL
WOCL(FM), Deland, FL
WOMX-FM, Orlando, FL
KOOL-FM, Phoenix, AZ
KZON(FM), Phoenix, AZ
KMLE(FM), Chandler, AZ
KPLN(FM), San Diego, CA
KYXY(FM), San Diego, CA
B. Subject to the terms and conditions set forth herein, Buyer desires
to acquire the Station Assets (defined below).
C. Clear Channel Communications, Inc. and AMFM Inc. (parents of Seller)
and CCU Merger Sub, Inc. are parties to an Agreement and Plan of Merger dated
October 2, 1999 (the "AMFM Agreement").
<PAGE> 2
Agreement
---------
NOW, THEREFORE, taking the foregoing into account, and in consideration
of the mutual covenants and agreements set forth herein, the parties, intending
to be legally bound, hereby agree as follows:
ARTICLE 1: PURCHASE OF ASSETS
------------------
1.1. Station Assets. On the terms and subject to the conditions hereof,
on the Closing Date (defined below), Seller shall sell, assign, transfer, convey
and deliver to Buyer, and Buyer shall purchase and acquire from Seller the
following (the "Station Assets"): all of the right, title and interest of Seller
in and to all of the assets, properties, interests and rights of Seller of
whatsoever kind and nature, real and personal, tangible and intangible, which
are either used exclusively in the operation of the Stations or necessary to
operate the Stations in all material respects as currently operated, but
excluding the Excluded Assets as hereafter defined. Except as provided in
Section 1.2, the Station Assets include the following:
(a) all licenses, permits and other authorizations which are
issued to Seller by the FCC with respect to the Stations (the "FCC Licenses"),
including those described on Schedule 1.1(a), including any pending applications
for or renewals or modifications thereof between the date hereof and Closing;
(b) all Seller's equipment, electrical devices, antennae,
cables, tools, hardware, office furniture and fixtures, office materials and
supplies, inventory, motor vehicles, spare parts and other tangible personal
property of every kind and description which are either used exclusively in the
operation of the Stations or necessary to operate the Stations in all material
respects as currently operated, including those listed on Schedule 1.1(b),
except any retirements or dispositions thereof made between the date hereof and
Closing in the ordinary course of business and consistent with past practices of
Seller consistent with Article 9 (the "Tangible Personal Property"), and any
assignable vendor warranties with respect thereto;
(c) the contracts, agreements, and leases which are used in
the operation of the Stations and listed or described on Schedule 1.1(c),
together with all contracts, agreements, and leases made between the date hereof
and Closing in the ordinary course of business that are used in the operation of
the Stations consistent with Article 9 (the "Station Contracts");
(d) all of Seller's rights in and to the Stations' call
letters and Seller's rights in and to the trademarks, trade names, service
marks, internet domain names, franchises, copyrights, computer software,
programs and programming material, jingles, slogans, logos, and other intangible
property which are either used exclusively in the operation of the Stations or
necessary to operate the Stations in all material respects as currently operated
(except that, as to items used by more than one station, the Station Assets
include only the right to use such items in the manner used by Seller at the
applicable Station on a basis exclusive in the market
<PAGE> 3
so long as such items are used, but non-exclusive in that no right is granted to
Buyer hereunder with respect to other markets (some of which may overlap), and
such right is limited to the extent of Seller's rights), including those listed
on Schedule 1.1(d) (the "Intangible Property");
(e) Seller's rights in and to all the files, documents,
records, and books of account (or copies thereof) relating to the operation of
the Stations, including the Stations' local public files, programming
information and studies, blueprints, technical information and engineering data,
advertising studies, marketing and demographic data, sales correspondence, lists
of advertisers, credit and sales reports, and logs, but excluding records
relating to Excluded Assets (defined below); and
(f) except as set forth on Schedule 1.2(h), all interests in
real property which is used in the operation of the Stations (including any of
Seller's appurtenant easements and improvements located thereon), including the
real property described on Schedule 1.1(f) (the "Real Property").
The Station Assets shall be transferred to Buyer free and
clear of liens, claims and encumbrances ("Liens") except for (i) Assumed
Obligations (defined in Section 2.1), (ii) liens for taxes not yet due and
payable and for which Buyer receives a credit pursuant to Section 3.2, (iii)
such liens, easements, rights of way, building and use restrictions, exceptions,
reservations and limitations that do not in any material respect detract from
the value of the property subject thereto or impair the use thereof in the
ordinary course of the business of the Stations, and (iv) any items listed on
Schedule 1.1(b) (collectively, "Permitted Liens").
1.2. Excluded Assets. Notwithstanding anything to the contrary
contained herein, the Station Assets shall not include the following assets
along with all rights, title and interest therein (the "Excluded Assets"):
(a) all cash and cash equivalents of Seller, including without
limitation certificates of deposit, commercial paper, treasury bills, marketable
securities, asset or money market accounts and all such similar accounts or
investments;
(b) all accounts receivable or notes receivable arising in the
operation of the Stations prior to Closing;
(c) all tangible and intangible personal property of Seller
disposed of or consumed in the ordinary course of business of Seller between the
date of this Agreement and Closing consistent with Article 9;
(d) all Station Contracts that terminate or expire prior to
Closing in the ordinary course of business of Seller;
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<PAGE> 4
(e) Seller's name, corporate minute books, charter documents,
corporate stock record books and such other books and records as pertain to the
organization, existence or share capitalization of Seller, duplicate copies of
the records of the Stations, and all records not relating to the operation of
the Stations (it being understood that the Station Assets include copies of
records shared by one or more Stations and one or more other stations in the
market and that each party shall use reasonable efforts to maintain the
confidentiality of the other's non-public information that is related to the
Stations or other stations);
(f) contracts of insurance, and all insurance proceeds or
claims made thereunder;
(g) except as provided in Section 10.4, all pension, profit
sharing or cash or deferred (Section 401(k)) plans and trusts and the assets
thereof and any other employee benefit plan or arrangement and the assets
thereof, if any, maintained by Seller;
(h) all rights, properties and assets described on Schedule
1.2(h);
(i) all rights, properties and assets used in the operation of
the Stations and also used in the operation of any other radio station or
stations, except that any such items that are necessary to operate the Stations
in all material respects as currently operated shall not be excluded unless
replaced with items sufficient to operate the Stations in all material respects
as currently operated (and such obligation shall not be subject to any minimum
aggregate Damages limitations set forth in Article 15 hereof); and
(j) the rights and interests of any counter-party to any
Station Contract or licensor of Intangible Property
1.3. Lease Agreements. At Closing, Buyer and Seller shall enter into
the lease agreements described on Schedule 1.2(h) pursuant to leases in the form
of Exhibit A attached hereto.
ARTICLE 2: ASSUMPTION OF OBLIGATIONS
-------------------------
2.1. Assumed Obligations. Subject to Section 3.2, on the Closing Date,
Buyer shall assume the obligations of Seller arising after Closing under the
Station Contracts (the "Assumed Obligations"), including without limitation all
agreements for the sale of advertising time on the Stations for cash in the
ordinary course of business ("Time Sales Agreements") and all agreements for the
sale of advertising time on the Stations for non-cash consideration entered into
in the ordinary course of business consistent with past practices ("Trade
Agreements").
2.2. Retained Obligations. Buyer does not assume or agree to discharge
or perform and will not be deemed by reason of the execution and delivery of
this Agreement or any agreement, instrument or document delivered pursuant to or
in connection with this Agreement or otherwise by reason of the consummation of
the transactions contemplated hereby, to have
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<PAGE> 5
assumed or to have agreed to discharge or perform, any liabilities, obligations
or commitments of Seller of any nature whatsoever whether accrued, absolute,
contingent or otherwise and whether or not disclosed to Buyer, other than the
Assumed Obligations (the "Retained Obligations").
ARTICLE 3: PURCHASE PRICE
--------------
3.1. Purchase Price. In consideration for the sale of the Station
Assets to Buyer, in addition to the assumption of the Assumed Obligations, Buyer
shall at Closing (defined below) deliver to Seller by wire transfer of
immediately available funds One Billion Four Hundred Two Million Five Hundred
Thousand Dollars ($1,402,500,000), subject to adjustment pursuant to Section 3.2
(the "Purchase Price").
3.2. Prorations and Adjustments. Except as otherwise provided herein,
all deposits, reserves and prepaid and deferred income and expenses relating to
the Station Assets or the Assumed Obligations and arising from the conduct of
the business and operations of the Stations shall be prorated between Buyer and
Seller in accordance with generally accepted accounting principles consistently
applied ("GAAP") as of 11:59 p.m. on the date immediately preceding the Closing
Date. Such prorations shall include, without limitation, any prepayments on Time
Sales Agreements for time to be aired after the Closing, all ad valorem, real
estate and other property taxes (but excluding taxes arising by reason of the
transfer of the Station Assets as contemplated hereby which shall be paid as set
forth in Section 13.1), business and license fees, music and other license fees
(including any retroactive adjustments thereof), any vacation leave accrued for
Transferred Employees assumed by Buyer hereunder, utility expenses, amounts due
or to become due under Station Contracts, rents, lease payments and similar
prepaid and deferred items. Real estate taxes shall be apportioned on the basis
of taxes assessed for the preceding year, with a reapportionment, if any, as
soon as the new tax rate and valuation can be ascertained. Except as otherwise
provided herein, the prorations and adjustments contemplated by this Section
3.2, to the extent practicable, shall be made on the Closing Date. As to those
prorations and adjustments not capable of being ascertained on the Closing Date,
an adjustment and proration shall be made within ninety (90) calendar days of
the Closing Date. In the event of any disputes between the parties as to such
adjustments, the amounts not in dispute shall nonetheless be paid at the time
provided herein and such disputes shall be determined by an independent
certified public accountant mutually acceptable to the parties, and the fees and
expenses of such accountant shall be paid one-half by Seller and one-half by
Buyer. With respect to Trade Agreements, if there exists on the Closing Date an
aggregate negative trade balance in excess of $800,000 in the aggregate for all
Stations determined in accordance with GAAP, then such excess will be treated as
prepaid time sales and adjusted for as a proration in Buyer's favor, but no
adjustment in favor of Seller shall be made for any positive trade balance
existing on the Closing Date.
3.3. Allocation. The Purchase Price shall be allocated among the
Station Assets in a manner as mutually agreed between the parties based upon an
appraisal prepared by Bond & Pecaro (whose fees shall be paid one-half by Seller
and one-half by Buyer). Seller and Buyer agree to use the allocations determined
pursuant to this Section 3.3 for all tax purposes,
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<PAGE> 6
including without limitation, those matters subject to Section 1060 of the
Internal Revenue Code of 1986, as amended.
ARTICLE 4: CLOSING
-------
4.1. Closing. The consummation of the sale and purchase of the Station
Assets (the "Closing") shall occur on a date (the "Closing Date") and at a time
and place designated solely by Seller after FCC Consent (defined below) (which
date may be before, but shall not be later than, five business days after
closing under the AMFM Agreement), subject to satisfaction or waiver of the
conditions to Closing contained herein (other than those to be satisfied at
Closing). If requested by Seller, prior to Closing the parties shall hold a
pre-closing conference at a time and place designated by Seller, at which the
parties shall provide (for review only) all documents to be delivered at Closing
under this Agreement, each duly executed but undated, and otherwise confirm
their ability to timely consummate the Closing.
ARTICLE 5: GOVERNMENTAL CONSENTS
---------------------
Closing is subject to and conditioned upon (i) prior FCC consent (the
"FCC Consent") to the assignment of the FCC Licenses to Buyer, (ii) United
States Department of Justice ("DOJ") prior approval (the "DOJ Consent") of the
transactions contemplated hereby, including without limitation any such approval
as may be necessary to enable Seller to consummate the merger under the AMFM
Agreement, and (iii) expiration or termination of any applicable waiting period
("HSR Clearance") under the HSR Act (defined below).
5.1. FCC. On a date designated by Seller not earlier than three
business days and not later than thirty calendar days after the date of this
Agreement, Buyer and Seller shall file an application with the FCC (the "FCC
Application") requesting the FCC Consent. Buyer and Seller shall diligently
prosecute the FCC Application and otherwise use their best efforts to obtain the
FCC Consent as soon as possible. If the FCC Consent imposes upon Buyer any
condition, Buyer shall timely comply therewith, except as set forth in Section
5.3.
5.2. HSR. If not previously filed, then within five (5) business days
after the execution of this Agreement, Buyer and Seller shall make any required
filings with the Federal Trade Commission and the DOJ pursuant to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act")
with respect to the transactions contemplated hereby (including a request for
early termination of the waiting period thereunder), and shall thereafter
promptly respond to all requests received from such agencies for additional
information or documentation.
5.3. General. Buyer and Seller shall notify each other of all documents
filed with or received from any governmental agency with respect to this
Agreement or the transactions contemplated hereby. Buyer and Seller shall
furnish each other with such information and assistance as such the other may
reasonably request in connection with their preparation of any governmental
filing hereunder. If Buyer becomes aware of any fact relating to it which would
prevent or delay the FCC Consent, the DOJ Consent or HSR Clearance, Buyer shall
promptly
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<PAGE> 7
notify Seller thereof and take such steps as necessary to remove such
impediment, except as set forth below. During the four month period after the
date of this Agreement, the parties shall use their best efforts to obtain the
FCC Consent, the DOJ Consent and HSR Clearance. No party shall be required to
divest any assets in order to obtain FCC Consent, DOJ Consent or HSR Clearance,
unless related to a new acquisition or necessary to cure any inaccuracy in
Buyer's representations under the first three sentences of Section 6.4 based
upon the Communications Act and rules, regulations and policies of the FCC as in
existence on the date of the Agreement.
ARTICLE 6: REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer hereby makes the following representations and warranties to
Seller:
6.1. Organization and Standing. Buyer is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, and is or at Closing will be qualified to do business in each
jurisdiction in which the Station Assets are located. Buyer has the requisite
power and authority to execute and deliver this Agreement and all of the other
agreements and instruments to be executed and delivered by Buyer pursuant hereto
(collectively, the "Buyer Ancillary Agreements"), to consummate the transactions
contemplated hereby and thereby and to comply with the terms, conditions and
provisions hereof and thereof.
6.2. Authorization. The execution, delivery and performance of this
Agreement and the Buyer Ancillary Agreements by Buyer have been duly authorized
and approved by all necessary action of Buyer and do not require any further
corporate authorization or consent of Buyer. This Agreement is, and each Buyer
Ancillary Agreement when executed and delivered by Buyer and the other parties
thereto will be, a legal, valid and binding agreement of Buyer enforceable in
accordance with its respective terms, except in each case as such enforceability
may be limited by bankruptcy, moratorium, insolvency, reorganization or other
similar laws affecting or limiting the enforcement of creditors' rights
generally and except as such enforceability is subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
6.3. No Conflicts Neither the execution and delivery by Buyer of this
Agreement and the Buyer Ancillary Agreements or the consummation by Buyer of any
of the transactions contemplated hereby or thereby nor compliance by Buyer with
or fulfillment by Buyer of the terms, conditions and provisions hereof or
thereof will: (i) conflict with any organizational documents of Buyer or any
law, judgment, order or decree to which Buyer is subject; or (ii) require the
approval, consent, authorization or act of, or the making by Buyer of any
declaration, filing or registration with, any third party or any foreign,
federal, state or local court, governmental or regulatory authority or body,
except the FCC Consent and DOJ Consent, and, if applicable, HSR Clearance.
6.4. Qualification. Buyer is legally, financially and otherwise
qualified to be the licensee of, acquire, own and operate the Stations under the
Communications Act of 1934, as
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<PAGE> 8
amended (the "Communications Act") and the rules, regulations and policies of
the FCC. There are no facts that would, under existing law and the existing
rules, regulations, policies and procedures of the FCC, disqualify Buyer as an
assignee of the FCC Licenses or as the owner and operator of the Stations. No
waiver of any FCC rule or policy is necessary for the FCC Consent to be
obtained. As of the date of this Agreement, to Buyer's knowledge, there is no
action, suit or proceeding pending or threatened against Buyer which questions
the legality or propriety of the transactions contemplated by this Agreement or
could materially adversely affect Buyer's ability to perform its obligations
hereunder. Buyer has and will have available on the Closing Date sufficient
funds to enable it to consummate the transactions contemplated hereby.
6.5. No Finder. No broker, finder or other person is entitled to a
commission, brokerage fee or other similar payment in connection with this
Agreement or the transactions contemplated hereby as a result of any agreement
or action of Buyer or any party acting on Buyer's behalf.
ARTICLE 7: REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Seller makes the following representations and warranties to Buyer:
7.1. Organization. Seller is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, and is
qualified to do business in each jurisdiction in which the Station Assets are
located. Seller has the requisite power and authority to execute and deliver
this Agreement and all of the other agreements and instruments to be executed
and delivered by Seller pursuant hereto (collectively, the "Seller Ancillary
Agreements"), to consummate the transactions contemplated hereby and thereby and
to comply with the terms, conditions and provisions hereof and thereof.
7.2. Authorization. The execution, delivery and performance of this
Agreement and the Seller Ancillary Agreements by Seller have been duly
authorized and approved by all necessary action of Seller and do not require any
further corporate authorization or consent of Seller. This Agreement is, and
each Seller Ancillary Agreement when executed and delivered by Seller and the
other parties thereto will be, a legal, valid and binding agreement of Seller
enforceable in accordance with its respective terms, except in each case as such
enforceability may be limited by bankruptcy, moratorium, insolvency,
reorganization or other similar laws affecting or limiting the enforcement of
creditors' rights generally and except as such enforceability is subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
7.3. No Conflicts. Neither the execution and delivery by Seller of this
Agreement and the Seller Ancillary Agreements or the consummation by Seller of
any of the transactions contemplated hereby or thereby nor compliance by Seller
with or fulfillment by Seller of the terms, conditions and provisions hereof or
thereof will: (i) conflict with any organizational documents of Seller or any
law, judgment, order, or decree to which Seller is subject or,
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<PAGE> 9
except as set forth on Schedule 1.1(c) (which identifies Station Contracts that
require third party consent to assign), any Station Contract; or (ii) require
the approval, consent, authorization or act of, or the making by Seller of any
declaration, filing or registration with, any other third party or any foreign,
federal, state or local court, governmental or regulatory authority or body,
except the FCC Consent and DOJ Consent and, if applicable, HSR Clearance. Except
for any Affiliate (defined below) that conveys the appropriate interest to Buyer
pursuant to this Agreement upon Closing, no Affiliate of Seller owns or holds
any assets which are either used exclusively in the operation of the Stations or
necessary to operate Stations in all material respects as currently operated
other than Excluded Assets.
7.4. FCC Licenses. Seller (or one of the companies comprising Seller)
is the holder of the FCC Licenses described on Schedule 1.1(a). The FCC Licenses
listed in Schedule 1.1(a) comprise all material FCC licenses used in the present
operation of the Stations and each is in full force and effect and has not been
revoked, suspended, canceled, rescinded or terminated and has not expired. There
is not pending any action by or before the FCC to revoke, suspend, cancel,
rescind or materially adversely modify any of the FCC Licenses (other than
proceedings to amend FCC rules of general applicability), and there is not now
issued or outstanding, by or before the FCC, any order to show cause, notice of
violation, notice of apparent liability, or notice of forfeiture against Seller
with respect to the Stations. The Stations are operating in compliance in all
material respects with the FCC Licenses, the Communications Act, and the rules,
regulations and policies of the FCC.
7.5. Taxes. Seller has, in respect of the Stations' business, filed all
foreign, federal, state, county and local income, excise, property, sales, use,
franchise and other tax returns and reports which are required to have been
filed by it under applicable law and has paid all taxes which have become due
pursuant to such returns or pursuant to any assessments which have become
payable.
7.6. Personal Property. Schedule 1.1(b) contains a list of all material
items of Tangible Personal Property included in the Station Assets. Seller has
title to the Tangible Personal Property free and clear of Liens other than
Permitted Liens. The Station Assets include all items of Seller's equipment and
other tangible personal property that are necessary to operate the Stations in
all material respects as currently operated (or replacement items as provided by
Section 1.2(i)). The items of Tangible Personal Property listed on Schedule
1.1(b) are in all material respects in normal working condition consistent with
Seller's past practices, ordinary wear and tear excepted.
7.7. Real Property. Schedule 1.1(f) contains a description of all Real
Property included in the Station Assets. Seller has fee simple title to the
owned Real Property ("Owned Real Property") free and clear of Liens other than
Permitted Liens. Schedule 1.1(f) includes a description of each lease of Real
Property or similar agreement included in the Station Assets (the "Real Property
Leases"). The Owned Real Property includes, and the Real Property Leases
provide, access to the Stations' facilities. To Seller's knowledge, the Real
Property is not subject to any suit for condemnation or other taking by any
public authority. Seller has received no notice of termination of any material
Real Property Leases.
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<PAGE> 10
7.8. Contracts. Each of the Station Contracts (including without
limitation each of the Real Property Leases) is in effect and is binding upon
Seller and, to Seller's knowledge, the other parties thereto (subject to
bankruptcy, insolvency, reorganization or other similar laws relating to or
affecting the enforcement of creditors' rights generally). Seller has performed
its obligations under each of the Station Contracts in all material respects,
and is not in material default thereunder, and to Seller's knowledge, no other
party to any of the Station Contracts is in default thereunder in any material
respect. Seller has made available to Buyer for review all material Station
Contracts existing as of the date of this Agreement.
7.9. Environmental. Except as set forth on Schedule 1.1(f), to Seller's
knowledge, no hazardous or toxic substance or waste regulated under any
applicable environmental, health or safety law has been generated, stored,
transported or released on, in, from or to the Real Property included in the
Station Assets. Except as set forth on Schedule 1.1(f), to Seller's knowledge,
Seller has complied in all material respects with all environmental, health and
safety laws applicable to the Stations.
7.10. Intangible Property. Schedule 1.1(d) contains a description of
the material Intangible Property included in the Station Assets. Except as set
forth on Schedule 1.1(d), Seller has received no notice of any claim that its
use of the Intangible Property infringes upon any third party rights. Except as
set forth on Schedule 1.1(d), Seller owns or has the right to use the Intangible
Property free and clear of Liens other than Permitted Liens.
7.11. Compliance with Law. Seller has complied in all material respects
with all laws, regulations, rules, writs, injunctions, ordinances, franchises,
decrees or orders of any court or of any foreign, federal, state, municipal or
other governmental authority which are applicable to the operation of the
Stations. There is no action, suit or proceeding pending or threatened against
Seller in respect of the Stations that will subject Buyer to liability or which
questions the legality or propriety of the transactions contemplated by this
Agreement. To Seller's knowledge, there are no governmental claims or
investigations pending or threatened against Seller in respect of the Stations
(except those affecting the industry generally).
7.12. No Finder. No broker, finder or other person is entitled to a
commission, brokerage fee or other similar payment in connection with this
Agreement or the transactions contemplated hereby as a result of any agreement
or action of Seller or any party acting on Seller's behalf.
7.13. Financial Statements. Seller has delivered to Buyer copies of the
unaudited results of operations of the Stations for the twelve months ended
December 31, 1999, prepared in accordance with the books and records of the
Stations.
ARTICLE 8: ACCOUNTS RECEIVABLE
-------------------
8.1. Accounts Receivable. All accounts receivable arising prior to the
Closing Date in connection with the operation of the Stations, including but not
limited to accounts
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receivable for advertising revenues for programs and announcements performed
prior to the Closing Date and other broadcast revenues for services performed
prior to the Closing Date, shall remain the property of Seller (the "Accounts
Receivable") and Buyer shall not acquire any right or interest therein;
provided, however, that prepaid income and expenses of the Stations shall be
prorated as of Closing as set forth in Section 3.2 hereof. For a period of six
months from Closing (the "Collection Period"), Buyer shall collect the Accounts
Receivable in the normal and ordinary course of Buyer's business and shall apply
all such amounts collected to the debtor's oldest account receivable first
unless the account debtor disputes the oldest receivable in good faith and
expressly directs otherwise. Buyer's obligation shall not extend to the
institution of litigation, employment of counsel or a collection agency or any
other extraordinary means of collection. During the Collection Period, neither
Seller nor its agents shall make any direct solicitation of any such account
debtor for collection purposes or institute litigation for the collection of
amounts due. Any amounts relating to the Accounts Receivable that are paid
directly to Seller shall be retained by Seller. Within ten calendar days after
the end of each month, Buyer shall make a payment to Seller equal to the amount
of all collections of Accounts Receivable during the preceding month. At the end
of the Collection Period, any remaining Accounts Receivable shall be returned to
Seller for collection.
ARTICLE 9: COVENANTS OF SELLER
-------------------
9.1. Seller's Covenants. Seller covenants and agrees with respect to
the Stations that, between the date hereof and Closing, except as permitted by
this Agreement or with the prior written consent of Buyer, which shall not be
unreasonably withheld, Seller shall:
(a) continue to promote and advertise the Stations consistent
with past practice, make any capital expenses previously budgeted by Seller for
the Stations for such period, and otherwise operate the Stations in the ordinary
course of business consistent with past practice and in all material respects in
accordance with FCC rules and regulations and with all other applicable laws,
regulations, rules and orders;
(b) not materially adversely modify any of the FCC Licenses or
materially change the format of any of the Stations, or, other than in the
ordinary course of business in accordance with past practice (and with
replacement of any items that should be replaced in accordance with such
practices), sell, lease or dispose of or agree to sell, lease or dispose of any
of the Station Assets;
(c) furnish Buyer with such information relating to the
Station Assets as Buyer may reasonably request, at Buyer's expense and provided
such request does not interfere unreasonably with the business of the Stations;
(d) make available to Buyer, and authorize its accountants to
cooperate and make available to Buyer, at Buyer's expense and reasonable request
such financial information regarding the Stations as is maintained by Seller on
a basis not consolidated with other stations, and provide to Buyer copies of any
unaudited monthly results of operation of the Stations generated in the ordinary
course of business;
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<PAGE> 12
(e) after Seller publicly announces the transaction
contemplated hereby and files this Agreement with the FCC, then, when reasonably
requested by Buyer, provide Buyer access to the Stations' facilities that are
included in the Station Assets during normal business hours, provided, however,
that such access shall not interfere with the Stations' business;
(f) (i) notify Buyer promptly if a Station is off the air for
a continuous period of eight (8) hours or more or a Station's normal broadcast
transmissions are interrupted or impaired in any material respect for a
continuous period of 48 hours or more, (ii) maintain the Stations' inventories
of spare parts and expendable supplies at levels in the ordinary course of
business consistent with past practice, and (iii) maintain the Tangible Personal
Property in the ordinary course of business consistent with past practice, and
in the event of any loss or damage thereto, replace the lost or damaged items in
the ordinary course of business; and
(g) comply with reasonable requests of Buyer to request
ordinary course renewals or cancellations of any of the Station Contracts, and,
unless pursuant to Buyer's request or consent, and except for those terminable
on ninety (90) days or less notice without penalty, not enter into any new
Station Contracts (other than Time Sales Agreements or Trade Agreements) that
involve a post-Closing term of more than one year or a post-Closing expense to
Buyer in excess of $100,000 per Station Contract or that is with an Affiliate of
Seller (unless the terms are no less favorable to the Stations than could be
obtained on an arms-length basis from an unaffiliated third party).
9.2. Real Property. Buyer may at its expense conduct an environmental
review of the Real Property and a title review of the owned Real Property prior
to Closing. If it is established prior to Closing that there exists a material
adverse violation of, or condition requiring remediation under, applicable
environmental law at any of the Stations' owned Real Property (an "Environmental
Condition"), then Buyer may elect to designate the affected Real Property as an
Excluded Asset (but such exclusion shall not deprive Buyer of any other Station
Assets at such site to which it is entitled upon Closing), and upon Closing the
parties shall cooperate to facilitate Buyer's transition from such site to a new
location at Buyer's expense (except as set forth below) and without delay of
Closing. If Buyer makes such election with respect to an Environmental Condition
that is not disclosed in any environmental report set forth on Schedule 1.1(f)
and that at Closing has a remediation cost exceeding $250,000, then upon Closing
Seller shall either (at Seller's option): (i) lease such Real Property to Buyer
for a term of thirty years without basic rent but with reimbursement of all
costs of ownership of such Real Property other than costs related to the
Environmental Condition (and with reciprocal options to convey and acquire such
Real Property for no additional consideration if the Environmental Condition is
later remediated in all material respects) or (ii) acquire other Real Property,
build out such property (in a manner substantially comparable to than the
affected property) and move the affected Station facilities to such property or
(iii) remediate the Environmental Condition in all material respects after
Closing. If it is established prior to Closing that Seller's title to any owned
real property currently used by Seller in the operation of the Stations is
subject to a title defect or deficiency that materially adversely affects the
operation of a Station located thereon as currently operated, then, except for
Permitted Liens,
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<PAGE> 13
Seller shall remedy such defect in all material respects, but the Closing shall
not be delayed and Seller may remedy any such condition after Closing.
ARTICLE 10: JOINT COVENANTS
---------------
Buyer and Seller hereby covenant and agree that between the date hereof
and Closing:
10.1. Cooperation. Subject to express limitations contained elsewhere
herein, each party (i) shall cooperate fully with one another in taking any
reasonable actions (including without limitation, reasonable actions to obtain
the required consent of any governmental instrumentality or any third party)
necessary or helpful to accomplish the transactions contemplated by this
Agreement, including but not limited to the prompt satisfaction of any condition
to Closing set forth herein, and (ii) shall not take any action that conflicts
with its obligations hereunder or that causes its representations and warranties
to become untrue in any material respect.
10.2. Control of Stations. Buyer shall not, directly or indirectly,
control, supervise or direct the operations of the Stations prior to Closing.
Such operations, including complete control and supervision of all Station
programs, employees and policies, shall be the sole responsibility of Seller.
10.3. Consents to Assignment. Seller shall request, and the parties
shall use commercially reasonable efforts to obtain, (i) any third party
consents necessary for the assignment of any Station Contract (which shall not
require any payment to any such third party unless specifically required by such
Station Contract, in which case such payment shall be paid equally by Seller and
Buyer), and (ii) the execution of reasonable estoppel certificates by lessors
under any Real Property Leases requiring consent to assignment. To the extent
that any Station Contract may not be assigned without the consent of any third
party, and such consent is not obtained prior to Closing, this Agreement and any
assignment executed pursuant hereto shall not constitute an assignment thereof,
but to the extent permitted by law shall constitute an equitable assignment by
Seller and assumption by Buyer of Seller's rights and obligations under the
applicable Station Contract, with Seller making available to Buyer the benefits
thereof and Buyer performing the obligations thereunder on Seller's behalf.
10.4. Employee Matters.
-----------------
(a) After Seller publicly announces this transaction and files
this Agreement with the FCC, Buyer may interview (and offer employment upon
Closing) to the Stations' exclusive employees and the shared employees of the
Stations allocated to it under Section 10.4(c); provided that (i) such activity
shall not interfere with the business of the Stations and (ii) Buyer is
obligated to hire only those employees that are under employment contracts (and
assume Seller's obligations and liabilities under such employment contracts)
which are included in the Station Contracts. With respect to employees
potentially to be hired by Buyer, to the extent permitted by law Seller shall
provide access to its personnel records and such other information as may be
reasonably requested prior to Closing. With respect to employees
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<PAGE> 14
hired by Buyer ("Transferred Employees"), Seller shall be responsible for the
payment of all compensation and accrued employee benefits payable by it until
Closing and thereafter Buyer shall be responsible for all such obligations
payable by it. Buyer shall cause all Transferred Employees to be eligible to
participate in its "employee welfare benefit plans" (as defined in Section 3(1)
of ERISA) and its "defined contribution plans" (as defined in Section 414(i) of
the Code) to the extent Buyer's similarly-situated employees are generally
eligible to participate; provided, however, that all Transferred Employees and
their spouses and dependents shall be eligible for coverage immediately after
Closing (and shall not be excluded from coverage under any employee welfare
benefit plan that is a group health plan on account of any pre-existing
condition, as long as such condition was covered under Buyer's group health
plan) to the extent provided under such employee welfare benefit plans. For
purposes of any length of service requirements, waiting periods, vesting periods
or differential benefits based on length of service in any such employee welfare
benefit plans for which Transferred Employees may be eligible after Closing,
Buyer shall ensure, to the extent permitted by applicable law (including,
without limitation, ERISA and the Code), that service with Seller shall be
deemed to have been service with Buyer. No such service credit must be granted
with respect to participation or eligibility in any employee defined
contribution plan. In addition, Buyer shall ensure, to the extent permitted by
applicable law (including, without limitation, ERISA and the Code), that
Transferred Employees receive credit under any welfare benefit plan of Buyer for
any deductibles or co-payments paid by Transferred Employees and their spouses
and dependents for the current plan year under a plan maintained by Seller.
Notwithstanding any other provision contained herein, Buyer shall grant credit
for all unused sick leave accrued by Transferred Employees on the basis of their
service during the current calendar year as employees of Seller. Notwithstanding
any other provision contained herein, Buyer shall assume and discharge Seller's
liabilities for the payment of all unused vacation leave accrued by Transferred
Employees on the basis of their service as employees of Seller. As provided in
Section 3.2, Buyer shall be entitled to a proration in its favor for any accrued
vacation leave (but not accrued sick leave) assumed hereunder.
(b) At such time as the Seller can represent to the Buyer as
to the tax-qualified status of the 401(k) savings plan(s) in which Transferred
Employees retain account balances with the Seller or its subsidiaries (the
"Saving Plan(s)") and furnish to Buyer a favorable Internal Revenue Service
determination letter as to the tax-qualified status of such Savings Plan(s)
under Section 401(a) of the Code (or an opinion of counsel that the form of the
Savings Plan(s) is so qualified), Buyer and Seller may, at Buyer's sole
discretion after review of Seller's Plan(s), enter into a 401(k) plan asset
transfer agreement pursuant to which Buyer shall establish a defined
contribution plan (or cover Transferred Employees under an existing defined
contribution plan sponsored by Buyer) for the benefit of Transferred Employees
who were participants in the Savings Plan(s).
(c) Seller shall promptly provide Buyer a list of the
Stations' exclusive employees (those who perform services solely for the
Stations) and shared employees (those who perform services for the Stations and
other radio stations). The parties will cooperate to equitably allocate the
Stations' shared employees (in each market in a manner consistent with the
relative size of operations of the Stations in such market compared to Seller's
affected
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<PAGE> 15
stations (being those for which any shared employee provided services on the
date of this Agreement) based upon relative operating income). Those exclusive
and shared Station employees so allocated to Buyer to whom Buyer before Closing
offers post-Closing employment (and does not rescind such offer) are referred to
herein as "Designated Employees." During the period from the date of this
Agreement until the date three months after Closing, Buyer shall not solicit or
hire Seller's radio station employees in the markets in which the Stations are
located (other than solicitation and hiring (for post-Closing employment) of
Designated Employees) and Seller shall not solicit or hire Buyer's radio station
employees in the markets in which the Stations are located or Designated
Employees (other than to retain Designated Employees until Closing but not
transfer them from out of the market), in either case for employment at a radio
station in the markets in which the Stations are located. During the three month
period thereafter, Seller shall not solicit or hire Buyer's Designated
Employees. The parties' nonsolicitation and no-hire obligations hereunder shall
not apply to new hires or any employees terminated without cause.
10.5. 1031 Exchange. At or prior to Closing, Seller may assign its
rights under this Agreement (in whole or in part) to a qualified intermediary
(as defined in Treasury regulation section 1.1031(k)-1(g)(4)) or similar entity
or arrangement ("Qualified Intermediary"). Upon any such assignment, Seller
shall promptly give written notice thereof to Buyer, and Buyer shall cooperate
with the reasonable requests of Seller and any Qualified Intermediary in
connection therewith. Without limiting the generality of the foregoing, if
Seller gives notice of such assignment, Buyer shall (i) promptly provide Seller
with written acknowledgment of such notice and (ii) at Closing, pay the Purchase
Price (or any portion thereof designated by the Qualified Intermediary) to or on
behalf of the Qualified Intermediary (which payment shall, to the extent
thereof, satisfy the obligations of Buyer to make such payment hereunder).
Seller's assignment to a Qualified Intermediary will not relieve Seller of any
of its duties or obligations herein. Except for the obligations of Buyer set
forth in this Section, Buyer shall not have any liability or obligation to
Seller for the failure of the contemplated exchange to qualify as a like-kind
exchange under Section 1031 of the Internal Revenue Code.
10.6. Trust. Notwithstanding anything in this Agreement to the
contrary, Seller may at it option assign this Agreement (in whole or part) and
assign and transfer the Station Assets (in whole or in part) to a trustee to
hold and operate pursuant to a trust agreement, provided such trustee assumes
Seller's duties and obligations hereunder with respect to the Station Assets
held in such trust.
ARTICLE 11: CONDITIONS OF CLOSING BY BUYER
------------------------------
The obligations of Buyer hereunder are, at its option, subject to
satisfaction, at or prior to Closing, of each of the following conditions:
11.1. Representations, Warranties and Covenants. The representations
and warranties of Seller made in this Agreement shall be true and correct in all
material respects as of the Closing Date except for changes permitted or
contemplated by the terms of this Agreement, and the covenants and agreements to
be complied with and performed by Seller at or prior to
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<PAGE> 16
Closing shall have been complied with or performed in all material respects.
Buyer shall have received a certificate dated as of the Closing Date from
Seller, executed by an authorized officer of Seller to the effect that the
conditions set forth in this Section have been satisfied.
11.2. Governmental Consents. The FCC Consent and DOJ Consent, and, if
applicable, HSR Clearance, shall have been obtained, and no court or
governmental order prohibiting Closing shall be in effect.
ARTICLE 12: CONDITIONS OF CLOSING BY SELLER
-------------------------------
The obligations of Seller hereunder are, at its option, subject to
satisfaction, at or prior to Closing, of each of the following conditions:
12.1. Representations, Warranties and Covenants. The representations
and warranties of Buyer made in this Agreement shall be true and correct in all
material respects as of the Closing Date except for changes permitted or
contemplated by the terms of this Agreement, and the covenants and agreements to
be complied with and performed by Buyer at or prior to Closing shall have been
complied with or performed in all material respects. Seller shall have received
a certificate dated as of the Closing Date from Buyer, executed by an authorized
officer of Buyer, to the effect that the conditions set forth in this Section
have been satisfied.
12.2. Governmental Consents. The FCC Consent and DOJ Consent, and, if
applicable, HSR Clearance, shall have been obtained, and no court or
governmental order prohibiting Closing shall be in effect.
12.3. AMFM Closing. The closing under the AMFM Agreement shall have
been consummated.
ARTICLE 13: EXPENSES
--------
13.1. Expenses. Each party shall be solely responsible for all costs
and expenses incurred by it in connection with the negotiation, preparation and
performance of and compliance with the terms of this Agreement, except that (i)
all recordation, transfer and documentary taxes, fees and charges, and any
excise, sales or use taxes, applicable to the transfer of the Station Assets
shall be paid equally by Seller and Buyer, (ii) all FCC filing fees shall be
paid equally by Buyer and Seller, and (iii) all HSR Act filing fees and expenses
shall be paid equally by Seller and Buyer.
ARTICLE 14: DOCUMENTS TO BE DELIVERED AT CLOSING
------------------------------------
14.1. Seller's Documents. At Closing, Seller shall deliver or cause to
be delivered to Buyer:
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(i) certified copies of resolutions authorizing its execution,
delivery and performance of this Agreement, including the consummation of the
transactions contemplated hereby;
(ii) the certificate described in Section 11.1; and
(iii) such bills of sale, assignments, special warranty deeds,
documents of title and other instruments of conveyance, assignment and transfer
as may be necessary to convey, transfer and assign the Station Assets to Buyer,
free and clear of Liens, except for Permitted Liens.
14.2. Buyer's Documents. At Closing, Buyer shall deliver or cause to be
delivered to Seller:
(i) the certified copies of resolutions authorizing its
execution, delivery and performance of this Agreement, including the
consummation of the transactions contemplated hereby;
(ii) the certificate described in Section 12.1; and
(iii) such documents and instruments of assumption as may be
necessary to assume the Assumed Obligations; and
(iv) the Purchase Price in accordance with Section 3.1 hereof.
ARTICLE 15: SURVIVAL; INDEMNIFICATION.
--------------------------
15.1. Survival. The covenants, agreements, representations and
warranties in this Agreement shall survive Closing for a period of twelve (12)
months from the Closing Date whereupon they shall expire and be of no further
force or effect, except those under (i) this Article 15 that relate to Damages
(defined below) for which written notice is given by the indemnified party to
the indemnifying party prior to the expiration, which shall survive until
resolved and (ii) Sections 2.1 (Assumed Obligations), 3.2 (Adjustments), 3.3
(Allocation), 8.1 (Accounts Receivable), 13.1 (Expenses) and 17.1 (Casualty
Loss), and indemnification obligations with respect to such provisions, which
shall survive until performed.
15.2. Indemnification.
(a) From and after the Closing, Seller shall defend, indemnify
and hold harmless Buyer from and against any and all losses, costs, damages,
actions, suits, claims, demands, judgments, liabilities and expenses, including
reasonable attorneys' fees and expenses ("Damages") incurred by Buyer arising
out of or resulting from: (i) any breach or default by Seller under this
Agreement or any Seller Ancillary Agreements; (ii) the Retained Obligations; or
(iii) the business or operation of the Stations before Closing; provided,
however, that (i) Seller shall have no liability to Buyer hereunder until
Buyer's aggregate Damages exceed $500,000 and, once exceeded, Seller's liability
shall be for all such Damages
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(except as provided in the following clause), and (ii) the maximum liability of
Seller hereunder shall be an amount equal to 20% of the Purchase Price.
(b) From and after the Closing, Buyer shall defend, indemnify
and hold harmless Seller from and against any and all Damages incurred by Seller
arising out of or resulting from: (i) any breach or default by Buyer under this
Agreement or any Buyer Ancillary Agreements; (ii) the Assumed Obligations; or
(iii) the business or operation of the Stations after Closing.
15.3. Procedures. The indemnified party shall give prompt written
notice to the indemnifying party of any demand, suit, claim or assertion of
liability by third parties or other circumstances that could give rise to an
indemnification obligation hereunder against the indemnifying party (a "Claim"),
but a failure to give such notice or delaying such notice shall not affect the
indemnified party's right to indemnification and the indemnifying party's
obligation to indemnify as set forth in this Agreement, except to the extent the
indemnifying party's ability to remedy, contest, defend or settle with respect
to such Claim is thereby prejudiced. The obligations and liabilities of the
parties with respect to any Claim shall be subject to the following additional
terms and conditions:
(a) The indemnifying party shall have the right to undertake,
by counsel or other representatives of its own choosing, the defense or
opposition to such Claim.
(b) In the event that the indemnifying party shall elect not
to undertake such defense or opposition, or, within twenty (20) days after
written notice (which shall include sufficient description of background
information explaining the basis for such Claim) of any such Claim from the
indemnified party, the indemnifying party shall fail to undertake to defend or
oppose, the indemnified party (upon further written notice to the indemnifying
party) shall have the right to undertake the defense, opposition, compromise or
settlement of such Claim, by counsel or other representatives of its own
choosing, on behalf of and for the account and risk of the indemnifying party
(subject to the right of the indemnifying party to assume defense of or
opposition to such Claim at any time prior to settlement, compromise or final
determination thereof).
(c) Anything herein to the contrary notwithstanding: (i) the
indemnified party shall have the right, at its own cost and expense, to
participate in the defense, opposition, compromise or settlement of the Claim;
(ii) the indemnifying party shall not, without the indemnified party's written
consent, settle or compromise any Claim or consent to entry of any judgment
which does not include as an unconditional term thereof the giving by the
claimant or the plaintiff to the indemnified party of a release from all
liability in respect of such Claim; and (iii) in the event that the indemnifying
party undertakes defense of or opposition to any Claim, the indemnified party,
by counsel or other representative of its own choosing and at its sole cost and
expense, shall have the right to consult with the indemnifying party and its
counsel or other representatives concerning such Claim and the indemnifying
party and the indemnified party and their respective counsel or other
representatives shall cooperate in good faith with respect to such Claim.
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(d) All claims not disputed shall be paid by the indemnifying
party within thirty (30) days after receiving notice of the Claim. "Disputed
Claims" shall mean claims for Damages by an indemnified party which the
indemnifying party objects to in writing within thirty (30) days after receiving
notice of the Claim. In the event there is a Disputed Claim with respect to any
Damages, the indemnifying party shall be required to pay the indemnified party
the amount of such Damages for which the indemnifying party has, pursuant to a
final determination, been found liable within ten (10) days after there is a
final determination with respect to such Disputed Claim. A final determination
of a Disputed Claim shall be (i) a judgment of any court determining the
validity of a Disputed Claim, if no appeal is pending from such judgment and if
the time to appeal therefrom has elapsed; (ii) an award of any arbitration
determining the validity of such disputed claim, if there is not pending any
motion to set aside such award and if the time within which to move to set aside
such award has elapsed; (iii) a written termination of the dispute with respect
to such claim signed by the parties thereto or their attorneys; (iv) a written
acknowledgment of the indemnifying party that it no longer disputes the validity
of such claim; or (v) such other evidence of final determination of a disputed
claim as shall be acceptable to the parties.
ARTICLE 16: TERMINATION
-----------
16.1. Termination. This Agreement may be terminated at any time prior
to Closing as follows:
(a) by mutual written consent of Buyer and Seller;
(b) by written notice of Buyer to Seller if Seller (i) does
not satisfy the conditions or perform the obligations to be satisfied or
performed by it on the Closing Date; or (ii) otherwise breaches in any material
respect any of its representations or warranties or defaults in any material
respect in the performance of any of its covenants or agreements herein
contained and such breach or default is not cured within the Cure Period
(defined below);
(c) by written notice of Seller to Buyer if Buyer (i) does not
satisfy the conditions or perform the obligations to be satisfied or performed
by it on the Closing Date; or (ii) otherwise breaches in any material respect
any of its representations or warranties or defaults in any material respect in
the performance of any of its covenants or agreements herein contained and such
breach or default is not cured within the Cure Period (defined below);
(d) by written notice of Buyer to Seller, or by Seller to
Buyer, if the FCC denies the FCC Application;
(e) by written notice of Seller to Buyer if the Closing shall
not have been consummated on or before the date four months after the date of
this Agreement and Seller determines in good faith that FCC Consent or HSR
Clearance will not be obtained on or before March 31, 2001;
-19-
<PAGE> 20
(f) by written notice of Buyer to Seller if the Closing shall
not have been consummated on or before the date nine months after the date of
this Agreement and Buyer determines in good faith that FCC Consent or HSR
Clearance will not be obtained on or before March 31, 2001;
(g) by written notice of Seller to Buyer or Buyer to Seller if
the Closing is not consummated on or before March 31, 2001; or
(h) by written notice of Seller to Buyer if the AMFM Agreement
is terminated or expires.
The term "Cure Period" as used herein means a period commencing the
date Buyer or Seller receives from the other written notice of breach or default
hereunder and continuing until the earlier of (i) thirty (30) days thereafter or
(ii) the Closing Date; provided, however, that if the breach or default cannot
reasonably be cured within such period but can be cured before the Closing Date,
and if diligent efforts to cure promptly commence, then the Cure Period shall
continue as long as such diligent efforts to cure continue, but not beyond the
Closing Date. Except as set forth below, the termination of this Agreement shall
not relieve any party of any liability for breach or default under this
Agreement prior to the date of termination. Notwithstanding anything contained
herein to the contrary, Section 13.1 shall survive any termination of this
Agreement.
16.2. Remedies. The parties recognize that if either party refuses to
consummate the Closing pursuant to the provisions of this Agreement or either
party otherwise breaches or defaults such that the Closing has not occurred
("Breaching Party"), monetary damages alone will not be adequate to compensate
the non-breaching party ("Non-Breaching Party") for its injury. Such
Non-Breaching Party shall therefore be entitled to obtain specific performance
of the terms of this Agreement (without being required to prove actual damages,
post bond or furnish other security) in lieu of, and not in addition to, any
other remedies, including but not limited to monetary damages, that may be
available to it; provided however, that Seller may elect to recover liquidated
damages in lieu of obtaining specific performance. If any action is brought by
the Non-Breaching Party to enforce this Agreement, the Breaching Party shall
waive the defense that there is an adequate remedy at law. In the event of a
default by the Breaching Party which results in the filing of a lawsuit for
damages, specific performance, or other remedy, the Non-Breaching Party shall be
entitled to reimbursement by the Breaching Party of reasonable legal fees and
expenses incurred by the Non-Breaching Party, provided that the Non-Breaching
Party is successful in such lawsuit.
16.3. Liquidated Damages. If Seller terminates this Agreement pursuant
to Section 16.1(c)(i) due to Buyer's failure to consummate the Closing on the
Closing Date or if this Agreement is otherwise terminated by Seller pursuant to
Section 16.1(c), then Buyer shall pay Seller as liquidated damages an amount
equal to 20% of the Purchase Price. If elected by and paid to Seller, such
liquidated damage payment shall be Seller's sole remedy hereunder. It is
understood and agreed that such liquidated damages amount represents Buyer's and
Seller's reasonable estimate of actual damages and does not constitute a
penalty.
-20-
<PAGE> 21
ARTICLE 17: MISCELLANEOUS PROVISIONS
------------------------
17.1. Casualty Loss. In the event any loss or damage of the Station
Assets exists on the Closing Date, Buyer and Seller shall consummate the Closing
and after Closing the parties shall cooperate to repair or replace (as
appropriate under the circumstances) the lost or damaged items at Seller's
reasonable expense.
17.2. Further Assurances. After the Closing, Seller shall from time to
time, at the request of and without further cost or expense to Buyer, execute
and deliver such other instruments of conveyance and transfer and take such
other actions as may reasonably be requested in order to more effectively
consummate the transactions contemplated hereby to vest in Buyer good title to
the Station Assets, and Buyer shall from time to time, at the request of and
without further cost or expense to Seller, execute and deliver such other
instruments and take such other actions as may reasonably be requested in order
more effectively to relieve Seller of any obligations being assumed by Buyer
hereunder.
17.3. Assignment. Except as set forth in Sections 10.5 (1031 Exchange)
and 10.6 (Trust), neither party may assign this Agreement without the prior
written consent of the other party hereto, provided that Buyer may assign its
right to acquire one or more Stations to one or more Affiliates of Buyer if such
assignment does not delay the governmental consents contemplated by Article 5
(or otherwise delay Closing), the representations made by it under this
Agreement are true with respect to the assignee(s), the assigning party gives
Seller prior written notice thereof, and the assignee(s) deliver to Seller a
written assumption hereof. No such assignment shall relieve Buyer of any
obligation or liability under this Agreement. With respect to any permitted
assignment, the parties shall take all such actions as are reasonably necessary
to effectuate such assignment, including but not limited to cooperating in any
appropriate filings with the FCC or other governmental authorities. All
covenants, agreements, statements, representations, warranties and indemnities
in this Agreement by and on behalf of any of the parties hereto shall bind and
inure to the benefit of their respective successors and permitted assigns of the
parties hereto.
17.4. Amendments. No amendment, waiver of compliance with any provision
or condition hereof or consent pursuant to this Agreement shall be effective
unless evidenced by an instrument in writing signed by the party against whom
enforcement of any waiver, amendment, change, extension or discharge is sought.
17.5. Headings; Affiliates. The headings set forth in this Agreement
are for convenience only and will not control or affect the meaning or
construction of the provisions of this Agreement. As used herein, the term
"Affiliate" means an entity controlling, controlled by or under common control
with any other entity.
17.6. Governing Law. The construction and performance of this Agreement
shall be governed by the laws of the State of New York without giving effect to
the choice of law
-21-
<PAGE> 22
provisions thereof. Each party irrevocably waives all right to trial by jury in
any legal proceeding arising out of this Agreement.
17.7. Notices. Any notice, demand or request required or permitted to
be given under the provisions of this Agreement shall be in writing, including
by facsimile, and shall be deemed to have been received on the date of personal
delivery, on the third day after deposit in the U.S. mail if mailed by
registered or certified mail, postage prepaid and return receipt requested, on
the day after delivery to a nationally recognized overnight courier service if
sent by an overnight delivery service for next morning delivery or when
delivered by facsimile transmission, and shall be addressed as follows (or to
such other address as any party may request by written notice):
if to Seller: c/o Clear Channel Broadcasting, Inc.
200 Concord Plaza, Suite 600
San Antonio, Texas 78216
Attention: President
Facsimile: (210) 822-2299
with a copy (which shall not
constitute notice) to: Wiley, Rein & Fielding
1776 K Street, N.W.
Washington, D.C. 20006
Attention: Richard J. Bodorff, Esq.
Facsimile: (202) 719-7049
if to Buyer: Infinity Broadcasting Corporation
40 West 57th Street
14th Floor
New York, NY 10019
Attention: Mr. Farid Suleman
Fax: (212) 314-9336
with a copy (which shall not
constitute notice) to: Leventhal, Senter & Lerman, P.L.L.C.
2000 K Street, N.W., Suite 600
Washington, D.C. 20006
Attn: Steven A. Lerman, Esq.
Fax: (202) 293-7783
Stephen A. Hildebrandt, Esq.
Infinity Broadcasting Corporation
10220 River Road, Suite 305
Potomac, MD 20854
Fax: 301-983-6439
-22-
<PAGE> 23
17.8. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which together
will constitute one and the same instrument.
17.9. No Third Party Beneficiaries. Nothing herein expressed or implied
is intended or shall be construed to confer upon or give to any person or entity
other than the parties hereto and their successors or permitted assigns, any
rights or remedies under or by reason of this Agreement. Without limiting the
foregoing, no third party rights are created by the provisions of Section 10.4
or Article 15.
17.10. Severability. The parties agree that if one or more provisions
contained in this Agreement shall be deemed or held to be invalid, illegal or
unenforceable in any respect under any applicable law, this Agreement shall be
construed with the invalid, illegal or unenforceable provision deleted, and the
validity, legality and enforceability of the remaining provisions contained
herein shall not be affected or impaired thereby.
17.11. Entire Agreement. This Agreement embodies the entire agreement
and understanding of the parties hereto and supersedes any and all prior
agreements, arrangements and understandings relating to the matters provided for
herein. This Agreement does not supersede any confidentiality agreement relating
to the Stations other than any non-solicitation provision contained therein.
[SIGNATURE PAGE FOLLOWS]
-23-
<PAGE> 24
SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT
------------------------------------------
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
BUYER: CBS RADIO, INC.
By: /s/ FARID SULEMAN
-----------------------------------
Name: Farid Suleman
Title: Executive Vice President -
Chief Financial Officer
SELLER:
CLEAR CHANNEL BROADCASTING, INC. AMFM SAN DIEGO, INC.
CLEAR CHANNEL BROADCASTING
LICENSES, INC.
By: /s/ MARK P. MAYS By: /s/ WILLIAM S. BANOWSKY, JR.
----------------------------------- -----------------------------------
Name: Mark P. Mays Name: William S. Banowsky, Jr.
Title: President Title: Executive Vice President
CAPSTAR TX LIMITED PARTNERSHIP AMFM HOUSTON, INC.
By: /s/ WILLIAM S. BANOWSKY, JR. By: /s/ WILLIAM S. BANOWSKY, JR.
----------------------------------- -----------------------------------
Name: William S. Banowsky, Jr. Name: William S. Banowsky, Jr.
Title: Executive Vice President Title: Executive Vice President
AMFM OHIO, INC. AMFM RADIO LICENSES, LLC
By: /s/ WILLIAM S. BANOWSKY, JR. By: /s/ WILLIAM S. BANOWSKY, JR.
----------------------------------- -----------------------------------
Name: William S. Banowsky, Jr. Name: William S. Banowsky, Jr.
Title: Executive Vice President Title: Executive Vice President
CLEVELAND RADIO LICENSES LLC ZEBRA BROADCASTING CORPORATION
By: /s/ WILLIAM S. BANOWSKY, JR. By: /s/ WILLIAM S. BANOWSKY, JR.
----------------------------------- -----------------------------------
Name: William S. Banowsky, Jr. Name: William S. Banowsky, Jr.
Title: Executive Vice President Title: Executive Vice President
<PAGE> 25
SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT
------------------------------------------
(CONTINUED)
SELLER: CAPSTAR RADIO OPERATING COMPANY
By: /s/ WILLIAM S. BANOWSKY, JR.
-----------------------------------
Name: William S. Banowsky, Jr.
Title: Executive Vice President
<PAGE> 26
Schedules
- ---------
1.1(a) - FCC Licenses
1.1(b) - Tangible Personal Property
1.1(c) - Station Contracts
1.1(d) - Intangible Property
1.1(f) - Real Property
1.2(h) - Excluded Assets
Exhibit
- -------
A - Form of Lease
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
Subsidiary companies of the Registrant as of March 1, 2000 are listed below.
With respect to the companies named, all voting securities are owned directly or
indirectly by the Registrant, except where otherwise indicated.
<TABLE>
<CAPTION>
INCORPORATED OWNED BY
UNDER IMMEDIATE
NAME LAWS OF PARENT
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Infinity Broadcasting Corporation Delaware 65.20
Infinity Media Corporation(1) Delaware 100.00
TDI Worldwide, Inc.(2) Delaware 100.00
TDI Metro Limited Ireland 100.00
Metro Poster Advertising Ltd. Ireland 100.00
Roadshow Advertising Ltd. Ireland 100.00
TDI Holdings Limited(3) UK 100.00
LDI Limited UK 100.00
TDI Advertising Limited(4) UK 100.00
TDI Mail Holdings Limited(5) Northern Ireland 75.00
Infinity Outdoor, Inc.(6) Delaware 100.00
Mediacom, Inc. Canada 100.00
Outdoor Systems Mexico, S.A. de C.V.(7) Mexico 100.00
Spark Network Services, Inc. Delaware 100.00
CBS Radio Inc.(8) Delaware 100.00
Radio Data Group, Inc. Virginia 56.00
- -----------------------------------------------------------------------------------------------
</TABLE>
(1) Infinity Media Corporation is also the parent company of 54 wholly-owned
subsidiaries which consist primarily of radio stations operations, all of
which are incorporated in the United States.
(2) TDI Worldwide, Inc. is also the parent company of six wholly-owned outdoor
and transit advertising companies and franchises, all of which are
incorporated in the United States.
(3) TDI Holdings Limited is also the parent company of five wholly-owned
subsidiaries which consist primarily of outdoor and transit advertising
operations, all of which are incorporated in the Netherlands.
(4) TDI Advertising Limited is also the parent company of six wholly-owned
outdoor and transit advertising companies and franchises, all of which are
incorporated in the United Kingdom.
(5) TDI Mail Holdings Limited is also the parent company of three wholly-owned
outdoor and transit advertising companies, of which 2 are incorporated in
the United Kingdom and one in the U.S. Virgin Islands.
(6) Infinity Outdoor, Inc. is also the parent company of 16 wholly-owned outdoor
advertising companies, all of which are incorporated in the United States.
(7) Outdoor Systems Mexico, S.A. de C.V. is also the parent company of three
wholly-owned outdoor advertising companies, all of which are incorporated in
Mexico.
(8) CBS Radio Inc. is also the parent company of 15 wholly-owned subsidiaries,
which consist primarily of radio station operations, all of which are
incorporated in the United States.
<PAGE> 1
EXHIBIT 23(A)
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in each prospectus constituting
part of the Registration Statements on Form S-8 (No. 333-74387, 333-75837,
333-75841, 333-75847, 333-89403 and 333-88363) of Infinity Broadcasting
Corporation of our report dated January 25, 2000, except as to Note 17, which is
as of March 21, 2000, appearing on page 26 of this Form 10-K. We also consent to
the incorporation by reference of our report on the financial statement
schedule, which appears on page 51 of this Form 10-K.
/s/ KPMG LLP
KPMG LLP
New York, New York
March 27, 2000
<PAGE> 1
Exhibit 24
POWER OF ATTORNEY
--------------------
KNOW ALL MEN BY THESE PRESENTS that the undersigned director and/or
officer of INFINITY BROADCASTING CORPORATION, a Delaware corporation (the
"Corporation"), which is about to file with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Exchange
Act of 1934, as amended, its Annual Report on Form 10-K, pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, for the fiscal year ended
December 31, 1999, hereby constitutes and appoints Mel Karmazin and Farid
Suleman, his/her true and lawful attorneys-in-fact and agents, and each of them,
with full power to act without the others, for him/her and in his/her name,
place and stead, in any and all capacities, to sign the Annual Report on Form
10-K and any and all amendments thereto, with power where appropriate to affix
the corporate seal of said Corporation thereto and to attest said seal, and to
file said Form 10-K and any and all other documents in connection therewith,
with the Securities and Exchange Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises as fully to all intents and purposes as he/she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly signed this Power of
Attorney this 27th day of March, 2000.
/s/ George H. Conrades
----------------------
<PAGE> 2
POWER OF ATTORNEY
--------------------
KNOW ALL MEN BY THESE PRESENTS that the undersigned director and/or
officer of INFINITY BROADCASTING CORPORATION, a Delaware corporation (the
"Corporation"), which is about to file with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Exchange
Act of 1934, as amended, its Annual Report on Form 10-K, pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, for the fiscal year ended
December 31, 1999, hereby constitutes and appoints Mel Karmazin and Farid
Suleman, his/her true and lawful attorneys-in-fact and agents, and each of them,
with full power to act without the others, for him/her and in his/her name,
place and stead, in any and all capacities, to sign the Annual Report on Form
10-K and any and all amendments thereto, with power where appropriate to affix
the corporate seal of said Corporation thereto and to attest said seal, and to
file said Form 10-K and any and all other documents in connection therewith,
with the Securities and Exchange Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises as fully to all intents and purposes as he/she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly signed this Power of
Attorney this 27th day of March, 2000.
/s/ Bruce S. Gordon
-------------------
<PAGE> 3
POWER OF ATTORNEY
--------------------
KNOW ALL MEN BY THESE PRESENTS that the undersigned director and/or
officer of INFINITY BROADCASTING CORPORATION, a Delaware corporation (the
"Corporation"), which is about to file with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Exchange
Act of 1934, as amended, its Annual Report on Form 10-K, pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, for the fiscal year ended
December 31, 1999, hereby constitutes and appoints Mel Karmazin and Farid
Suleman, his/her true and lawful attorneys-in-fact and agents, and each of them,
with full power to act without the others, for him/her and in his/her name,
place and stead, in any and all capacities, to sign the Annual Report on Form
10-K and any and all amendments thereto, with power where appropriate to affix
the corporate seal of said Corporation thereto and to attest said seal, and to
file said Form 10-K and any and all other documents in connection therewith,
with the Securities and Exchange Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises as fully to all intents and purposes as he/she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly signed this Power of
Attorney this 27th day of March, 2000.
/s/ William S. Levine
---------------------
<PAGE> 4
POWER OF ATTORNEY
--------------------
KNOW ALL MEN BY THESE PRESENTS that the undersigned director and/or
officer of INFINITY BROADCASTING CORPORATION, a Delaware corporation (the
"Corporation"), which is about to file with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Exchange
Act of 1934, as amended, its Annual Report on Form 10-K, pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, for the fiscal year ended
December 31, 1999, hereby constitutes and appoints Mel Karmazin and Farid
Suleman, his/her true and lawful attorneys-in-fact and agents, and each of them,
with full power to act without the others, for him/her and in his/her name,
place and stead, in any and all capacities, to sign the Annual Report on Form
10-K and any and all amendments thereto, with power where appropriate to affix
the corporate seal of said Corporation thereto and to attest said seal, and to
file said Form 10-K and any and all other documents in connection therewith,
with the Securities and Exchange Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises as fully to all intents and purposes as he/she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly signed this Power of
Attorney this 27th day of March, 2000.
/s/ Arturo R. Moreno
--------------------
<PAGE> 5
POWER OF ATTORNEY
--------------------
KNOW ALL MEN BY THESE PRESENTS that the undersigned director and/or
officer of INFINITY BROADCASTING CORPORATION, a Delaware corporation (the
"Corporation"), which is about to file with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Exchange
Act of 1934, as amended, its Annual Report on Form 10-K, pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, for the fiscal year ended
December 31, 1999, hereby constitutes and appoints Mel Karmazin and Farid
Suleman, his/her true and lawful attorneys-in-fact and agents, and each of them,
with full power to act without the others, for him/her and in his/her name,
place and stead, in any and all capacities, to sign the Annual Report on Form
10-K and any and all amendments thereto, with power where appropriate to affix
the corporate seal of said Corporation thereto and to attest said seal, and to
file said Form 10-K and any and all other documents in connection therewith,
with the Securities and Exchange Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises as fully to all intents and purposes as he/she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly signed this Power of
Attorney this 27th day of March, 2000.
/s/ Mel Karmazin
----------------
<PAGE> 6
POWER OF ATTORNEY
--------------------
KNOW ALL MEN BY THESE PRESENTS that the undersigned director and/or
officer of INFINITY BROADCASTING CORPORATION, a Delaware corporation (the
"Corporation"), which is about to file with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Exchange
Act of 1934, as amended, its Annual Report on Form 10-K, pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, for the fiscal year ended
December 31, 1999, hereby constitutes and appoints Mel Karmazin and Farid
Suleman, his/her true and lawful attorneys-in-fact and agents, and each of them,
with full power to act without the others, for him/her and in his/her name,
place and stead, in any and all capacities, to sign the Annual Report on Form
10-K and any and all amendments thereto, with power where appropriate to affix
the corporate seal of said Corporation thereto and to attest said seal, and to
file said Form 10-K and any and all other documents in connection therewith,
with the Securities and Exchange Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises as fully to all intents and purposes as he/she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly signed this Power of
Attorney this 27th day of March, 2000.
/s/ Richard R. Pivirotto
-------------------------
<PAGE> 7
POWER OF ATTORNEY
--------------------
KNOW ALL MEN BY THESE PRESENTS that the undersigned director and/or
officer of INFINITY BROADCASTING CORPORATION, a Delaware corporation (the
"Corporation"), which is about to file with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Exchange
Act of 1934, as amended, its Annual Report on Form 10-K, pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, for the fiscal year ended
December 31, 1999, hereby constitutes and appoints Mel Karmazin and Farid
Suleman, his/her true and lawful attorneys-in-fact and agents, and each of them,
with full power to act without the others, for him/her and in his/her name,
place and stead, in any and all capacities, to sign the Annual Report on Form
10-K and any and all amendments thereto, with power where appropriate to affix
the corporate seal of said Corporation thereto and to attest said seal, and to
file said Form 10-K and any and all other documents in connection therewith,
with the Securities and Exchange Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises as fully to all intents and purposes as he/she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly signed this Power of
Attorney this 27th day of March, 2000.
/s/ Jeffrey Sherman
-------------------
<PAGE> 8
POWER OF ATTORNEY
--------------------
KNOW ALL MEN BY THESE PRESENTS that the undersigned director and/or
officer of INFINITY BROADCASTING CORPORATION, a Delaware corporation (the
"Corporation"), which is about to file with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Exchange
Act of 1934, as amended, its Annual Report on Form 10-K, pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, for the fiscal year ended
December 31, 1999, hereby constitutes and appoints Mel Karmazin and Farid
Suleman, his/her true and lawful attorneys-in-fact and agents, and each of them,
with full power to act without the others, for him/her and in his/her name,
place and stead, in any and all capacities, to sign the Annual Report on Form
10-K and any and all amendments thereto, with power where appropriate to affix
the corporate seal of said Corporation thereto and to attest said seal, and to
file said Form 10-K and any and all other documents in connection therewith,
with the Securities and Exchange Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises as fully to all intents and purposes as he/she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly signed this Power of
Attorney this 27th day of March, 2000.
/s/ Paula Stern
---------------
<PAGE> 9
POWER OF ATTORNEY
--------------------
KNOW ALL MEN BY THESE PRESENTS that the undersigned director and/or
officer of INFINITY BROADCASTING CORPORATION, a Delaware corporation (the
"Corporation"), which is about to file with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Exchange
Act of 1934, as amended, its Annual Report on Form 10-K, pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, for the fiscal year ended
December 31, 1999, hereby constitutes and appoints Mel Karmazin and Farid
Suleman, his/her true and lawful attorneys-in-fact and agents, and each of them,
with full power to act without the others, for him/her and in his/her name,
place and stead, in any and all capacities, to sign the Annual Report on Form
10-K and any and all amendments thereto, with power where appropriate to affix
the corporate seal of said Corporation thereto and to attest said seal, and to
file said Form 10-K and any and all other documents in connection therewith,
with the Securities and Exchange Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises as fully to all intents and purposes as he/she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly signed this Power of
Attorney this 27th day of March, 2000.
/s/ Farid Suleman
-----------------
<PAGE> 10
POWER OF ATTORNEY
--------------------
KNOW ALL MEN BY THESE PRESENTS that the undersigned director and/or
officer of INFINITY BROADCASTING CORPORATION, a Delaware corporation (the
"Corporation"), which is about to file with the Securities and Exchange
Commission, Washington, D.C., under the provisions of the Securities Exchange
Act of 1934, as amended, its Annual Report on Form 10-K, pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934, for the fiscal year ended
December 31, 1999, hereby constitutes and appoints Mel Karmazin and Farid
Suleman, his/her true and lawful attorneys-in-fact and agents, and each of them,
with full power to act without the others, for him/her and in his/her name,
place and stead, in any and all capacities, to sign the Annual Report on Form
10-K and any and all amendments thereto, with power where appropriate to affix
the corporate seal of said Corporation thereto and to attest said seal, and to
file said Form 10-K and any and all other documents in connection therewith,
with the Securities and Exchange Commission, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform any and all acts and things requisite and necessary to be done in
and about the premises as fully to all intents and purposes as he/she might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has duly signed this Power of
Attorney this 27th day of March, 2000.
/s/ Robert D. Walter
--------------------
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