<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended September 30, 1999
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from
Commission file number 0-30242
LAMAR ADVERTISING COMPANY
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 72-1449411
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
5551 Corporate Blvd.,
Baton Rouge, LA 70808
(Address of principal (Zip Code)
executive officers)
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Registrant's telephone number, including area code (225) 926-1000
Indicate by check mark 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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
Outstanding as of
Class November 10, 1999
--------- -----------------
<S> <C>
Class A Common Stock, $.001 par value 70,400,889
Class B Common Stock, $.001 par value 17,449,997
</TABLE>
<PAGE> 2
EXPLANATORY NOTE REGARDING
CORPORATE REORGANIZATION
OF LAMAR ADVERTISING COMPANY
On July 20, 1999, Lamar Advertising Company completed a corporate reorganization
to create a new holding company structure. The reorganization was accomplished
through a merger under section 251(g) of the Delaware General Corporation Law.
At the effective time of the merger, all stockholders of Lamar Advertising
Company became stockholders in a new holding company and Lamar Advertising
Company became a wholly-owned subsidiary of the new holding company. The new
holding company took the Lamar Advertising Company name and the old Lamar
Advertising Company was renamed Lamar Media Corp. In the merger, all outstanding
shares of old Lamar Advertising Company's capital stock were converted into
shares of the new holding company with the same voting powers, designations,
preferences and rights, and the same qualifications, restrictions and
limitations, as the shares of old Lamar Advertising Company. Following the
restructuring, the Class A common stock of the new holding company trades under
the symbol "LAMR" on the Nasdaq National Market with the same CUSIP number as
the old Lamar Advertising Company's Class A common stock.
In this quarterly report, "Lamar," the "company," "we," "us" and "our" refer to
Lamar Advertising Company and its consolidated subsidiaries with respect to
periods following the reorganization and to old Lamar Advertising company and
its consolidated subsidiaries with respect to periods prior to the
reorganization, except where we make it clear that we are only referring to
Lamar Advertising Company or a particular subsidiary.
<PAGE> 3
CONTENTS
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Page
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets as of
September 30, 1999 and December 31, 1998 . . . . . . . . . . . . 1
Condensed Consolidated Statements of Operations
for the three months ended September 30, 1999 and
September 30, 1998 and nine months ended September
30, 1999 and September 30, 1998 . . . . . . . . . . . . . . . . 2
Condensed Consolidated Statements of Comprehensive
Income (Loss) for the three months ended September
30, 1999 and September 30, 1998 and nine months
ended September 30, 1999 and September 30, 1998 . . . . . . . . 3
Condensed Consolidated Statements of Cash Flows
for the nine months ended September 30, 1999 and
September 30, 1998 . . . . . . . . . . . . . . . . . . . . . 4 - 5
Notes to Condensed Consolidated Financial
Statements . . . . . . . . . . . . . . . . . . . . . . . . .6 - 10
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . .11 - 14
ITEM 3. Quantitative and Qualitative Disclosures About
Market Risks . . . . . . . . . . . . . . . . . . . . . . . 14 - 15
ITEM 4. Submission of Matters to a Vote of Security Holders . . . . . . 15
PART II - OTHER INFORMATION
ITEM 2. Changes in Securities and Use of Proceeds . . . . . . . . . . . 15
ITEM 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . 15
ITEM 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . 15 - 19
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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<PAGE> 4
PART I - FINANCIAL INFORMATION
ITEM 1.- FINANCIAL STATEMENTS
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- ------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 10,778 $ 128,597
Receivables, net 84,294 40,380
Prepaid expenses 22,235 12,346
Other current assets 18,431 1,736
---------- ----------
Total current assets 135,738 183,059
---------- ----------
Property, plant and equipment 1,410,561 661,324
Less accumulated depreciation and amortization (215,240) (153,972)
---------- ----------
Net property, plant and equipment 1,195,321 507,352
---------- ----------
Intangible assets 1,881,450 705,934
Other assets - non-current 18,034 17,032
---------- ----------
Total assets $3,230,543 $1,413,377
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 9,806 $ 4,258
Accrued expenses 70,608 25,912
Current maturities of long-term debt 4,670 49,079
Deferred income 13,178 9,589
---------- ----------
Total current liabilities 98,262 88,838
Long-term debt 1,593,690 827,453
Deferred tax liability 124,364 25,613
Deferred income 1,224 1,293
Other liabilities 4,732 3,401
---------- ----------
Total liabilities 1,822,272 946,598
---------- ----------
Series AA preferred stock, par value $.001, $63.80 cumulative dividends,
authorized 1,000,000 shares; 5,719.49 shares issued and outstanding at
September 30, 1999 -- --
Class A preferred stock, par value $638, $63.80 cumulative dividends,
authorized 10,000 shares; 0 and 5,719.49 shares issued and outstanding
at September 30, 1999, and December 31, 1998, respectively -- 3,649
Class A common stock, $.001 par value, authorized
125,000,000 shares; issued and outstanding 70,365,850 shares and 43,392,876
shares at September 30, 1999, and December 31, 1998, respectively 70 43
Class B common stock, $.001 par value, authorized 37,500,000 shares; issued
and outstanding 17,449,997 and 17,699,997 shares at September 30, 1999,
and December 31, 1998, respectively 18 18
Additional paid-in capital 1,470,291 505,644
Accumulated deficit (62,108) (42,575)
---------- ----------
Stockholders' equity 1,408,271 466,779
---------- ----------
Total liabilities and stockholders' equity $3,230,543 $1,413,377
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements
-1-
<PAGE> 5
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
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<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues $ 111,039 $ 73,528 $ 294,614 $ 201,600
----------- ----------- ----------- -----------
Operating expenses
Direct advertising expenses 33,236 22,257 93,481 64,696
Selling, general and administrative expenses 23,172 14,954 64,025 43,178
Depreciation and amortization 40,738 20,375 104,951 57,471
----------- ----------- ----------- -----------
97,146 57,586 262,457 165,345
----------- ----------- ----------- -----------
Operating income 13,893 15,942 32,157 36,255
----------- ----------- ----------- -----------
Other expense (income)
Interest income (112) (123) (1,067) (359)
Interest expense 21,092 12,116 57,471 39,357
(Gain) loss on disposition of assets (5,189) 81 (5,666) 473
----------- ----------- ----------- -----------
15,791 12,074 50,738 39,471
----------- ----------- ----------- -----------
Earnings (loss) before income taxes, extraordinary
item and cumulative effect of a change in
accounting principle (1,898) 3,868 (18,581) (3,216)
Income tax expense (benefit) 1,404 2,239 (362) 816
----------- ----------- ----------- -----------
Earnings (loss) before extraordinary item and
cumulative effect of a change in accounting
principle (3,302) 1,629 (18,219) (4,032)
----------- ----------- ----------- -----------
Extraordinary item - loss on debt extinguishment
net of tax benefit of $117 (182) -- (182) --
----------- ----------- ----------- -----------
Earnings (loss) before cumulative effect of a
change in accounting principle (3,484) 1,629 (18,401) (4,032)
----------- ----------- ----------- -----------
Cumulative effect of a change in accounting
principle -- -- (767) --
----------- ----------- ----------- -----------
Net earnings (loss) (3,484) 1,629 (19,168) (4,032)
Preferred stock dividends 91 91 365 365
----------- ----------- ----------- -----------
Net earnings (loss) applicable to common stock $ (3,575) $ 1,538 (19,533) (4,397)
=========== =========== =========== ===========
Earnings (loss) per common share - basic and diluted:
Earnings (loss) before extraordinary item and
accounting change $ (.05) $ .03 (.30) (.09)
Extraordinary Item - loss on debt extinguishment -- -- -- --
Cumulative effect of a change in accounting
principle -- -- (.01) --
----------- ----------- ----------- -----------
Net earnings (loss) $ (.05) $ .03 $ (.31) $ (.09)
=========== =========== =========== ===========
Weighted average common shares outstanding 65,953,441 54,005,114 62,792,352 50,076,742
Incremental common shares from dilutive stock
options -- 596,604 -- --
Incremental common shares from convertible debt -- -- -- --
----------- ----------- ----------- -----------
Weighted average common shares assuming dilution 65,953,441 54,601,718 62,792,352 50,076,742
=========== =========== =========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements
-2-
<PAGE> 6
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
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<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net earnings (loss) applicable to
common stock $ (3,575) $ 1,538 $(19,533) $ (4,397)
Other comprehensive income (loss) -
unrealized loss on investment securities (net
of deferred tax benefit of $217 for the nine
months ended September 30, 1998) -- -- -- 354
---------- -------- -------- ----------
Comprehensive income (loss) $ (3,575) $ 1,538 $(19,533) $ (4,043)
========== ======== ======== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements
-3-
<PAGE> 7
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1999 1998
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (19,168) $ (4,032)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Depreciation and amortization 104,951 57,471
Cumulative effect of a change in accounting
principle 767 --
(Gain) loss on disposition of assets (5,666) 473
Deferred taxes (9,765) (2,548)
Provision for doubtful accounts 2,114 1,265
Changes in operating assets and liabilities:
Decrease (Increase) in:
Receivables (8,866) (1,520)
Prepaid expenses 445 (714)
Other assets 3,558 978
Increase (Decrease) in:
Trade accounts payable 2,022 770
Accrued expenses 149 1,288
Other liabilities 18 (144)
Deferred income (5,248) 2,252
--------- ---------
Net cash provided by operating
activities 65,311 55,539
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in notes receivable (1,587) (280)
Acquisition of new markets (831,681) (220,780)
Capital expenditures (53,435) (40,420)
Proceeds from disposition of assets 3,943 1,419
--------- ---------
Net cash used in investing activities (882,760) (260,061)
</TABLE>
(Continued)
-4-
<PAGE> 8
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
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<CAPTION>
Nine Months Ended
September 30,
1999 1998
---- ----
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CASH FLOWS FROM FINANCING ACTIVITIES:
Debt issuance costs (12,507) (2,503)
Net proceeds from issuance of common stock 3,948 181,450
Proceeds from issuance of notes payable -- 70
Principal payments on long-term debt (78,040) (4,152)
Net proceeds from note offering 279,594 --
Net borrowings under credit agreements 507,000 29,000
Dividends (365) (365)
--------- ---------
Net cash provided by financing activities 699,630 203,500
Net decrease in cash and cash equivalents (117,819) (1,022)
Cash and cash equivalents at beginning
of period 128,597 7,246
--------- ---------
Cash and cash equivalents at end of period $ 10,778 $ 6,224
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest $ 56,183 $ 37,328
========= =========
Cash paid for state and federal income taxes $ 6,500 $ 6,129
========= =========
Common stock issuance related to acquisitions $ 952,255 $ 2,505
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements
-5-
<PAGE> 9
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
1. Significant Accounting Policies
General
Lamar Advertising Company is principally a holding company ("Holdings") and
conducts its operations principally through its wholly-owned subsidiary Lamar
Media Corp. ("Lamar Media"). Holdings was incorporated in July, 1999 and became
the parent of Lamar Media pursuant to the reorganization described in Note 5.
References herein to the "Company" refer to Holdings and its subsidiaries, with
respect to periods following the reorganization and to Lamar Media, (formerly
known as Lamar Advertising Company) and its subsidiaries, with respect to
periods prior to the reorganization. Prior to the formation of Holdings, the
consolidated financial statements of the Company represented accounts of Lamar
Media and its subsidiaries.
The information included in the foregoing interim financial statements is
unaudited. In the opinion of management, all adjustments, consisting of normal
recurring adjustments, necessary for a fair presentation of the Company's
financial position and results of operations for the interim periods presented
have been reflected herein. The results of operations for interim periods are
not necessarily indicative of the results to be expected for the entire year.
These condensed consolidated financial statements should be read in conjunction
with the Company's consolidated financial statements and the notes thereto
included in the Company's Annual Report on Form 10-K.
Earnings Per Share
Earnings per share are computed in accordance with SFAS No. 128, "Earnings Per
Share." The calculations of basic earnings per share excludes dilution and is
computed by dividing income available to common shareholders by the weighted
average number of common shares outstanding for the period. Diluted earnings per
share reflects the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock
that then shared in the earnings of the Company. The following adjustments were
excluded from the calculation of diluted earnings per share because of their
anti-dilutive effect:
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<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Income impact of convertible securities $ 1,261 $ -- $ 1,261 $ --
========== ======== ========== ==========
Incremental shares from stock options 689,430 -- 558,280 564,937
Incremental shares from convertible debt 3,378,375 -- 1,138,500 --
---------- -------- ---------- ----------
Dilutive potential common shares 4,067,805 -- 1,696,780 564,937
========== ======== ========== ==========
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<PAGE> 10
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
Reclassifications
Certain amounts in the prior year's consolidated financial statements have been
reclassified to conform with the current year presentation. These
reclassifications had no effect on previously reported net earnings.
New Accounting Pronouncements
In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position ("SOP") 98-5, Reporting on the Costs of Start-Up
Activities. SOP 98-5 is effective for financial statements for fiscal years
beginning after December 15, 1998, and requires that the costs of start-up
activities, including organizational costs, be expensed as incurred. The effect
of SOP 98-5 is recorded as a cumulative effect of a change in accounting
principle as described in Accounting Principles Board Opinion No. 20 "Accounting
Changes".
2. Acquisitions
On January 5, 1999, the Company purchased all of the outdoor advertising assets
of American Displays, Inc. for a cash purchase price of approximately $14,500.
On February 1, 1999, the Company purchased all of the outdoor advertising assets
of KJS, LLC for a cash purchase price of $40,500.
On April 1, 1999, the Company purchased all of the assets of Frank Hardie, Inc.
for a cash purchase price of approximately $20,300.
On June 1, 1999, the Company purchased the assets of Vivid, Inc. for a cash
purchase price of approximately $22,100.
On September 15, 1999, Lamar Media Corp. purchased the capital stock of
Chancellor Media Outdoor Corporation and Chancellor Media Whiteco Outdoor
Corporation, ("Chancellor Outdoor") for a combination of approximately $700,000
in cash and 26,227,273 shares of Class A common stock valued at approximately
$947,000. The stock purchase agreement also contains a post-closing adjustment
in the event that the net working capital of Chancellor Outdoor as shown on the
closing balance sheet is greater or less than $12,000. As of September 30, 1999,
the estimated working capital adjustment to be paid by the Company is $33,053.
During the nine months ended September 30, 1999, the company completed 45
additional acquisitions of outdoor advertising and transit assets for an
aggregate cash purchase price of approximately $61,000 and the issuance of
135,734 shares of Class A common stock valued at approximately $5,300.
-7-
<PAGE> 11
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
Each of these acquisitions were accounted for under the purchase method of
accounting, and, accordingly, the accompanying financial statements include the
results of operations of each acquired entity from the date of acquisition. The
purchase price has been allocated to assets acquired and liabilities assumed
based on fair market value at the dates of acquisition. The following is a
summary of the allocation of the purchase price in the above transactions.
<TABLE>
<CAPTION>
Property
Current Plant & Other Other Current Long-term
Assets Equipment Goodwill Intangibles Assets Liabilities Liabilities
------------- ---------- ---------- ----------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
American Displays 87 899 10,532 3,277 -- (284) --
KJS, LLC 46 9,468 30,543 4,489 -- (2,079) (1,921)
Frank Hardie 187 6,595 10,451 3,630 -- (525) --
Vivid, Inc. 357 8,402 9,830 4,085 -- (593)
Chancellor 55,997 642,210 784,513 293,748 169 (19,829) (106,102)
Other 265 16,098 46,835 6,472 -- (1,271) (1,880)
------------- ---------- ---------- ---------- --------- ----------- ------------
56,939 683,672 892,704 315,701 169 (24,581) (109,903)
============= ========== ========== ========== ========= =========== ============
</TABLE>
Summarized below are certain unaudited pro forma statements of operations data
as if each of the above acquisitions and the acquisitions occurring in 1998,
which were fully described in the Company's December 31, 1998 Annual Report on
Form 10-K, had been consummated as of January 1, 1998. This pro forma
information does not purport to represent what the Company's results of
operations actually would have been had such transactions occurred on the date
specified or to project the Company's results of operations for any future
periods.
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<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues, net $ 156,025 $ 146,722 $ 452,063 $ 429,994
========= ========= ========= =========
Loss before extraordinary items $ (17,481) $ (21,683) $ (67,602) $ (70,580)
========= ========= ========= =========
Net loss applicable to
common stock $ (17,754) $ (21,774) $ (68,916) $ (70,945)
========= ========= ========= =========
Net loss per common share - basic $ (0.20) $ (0.40) $ (0.79) $ (1.41)
========= ========= ========= =========
Net loss per common share - diluted $ (0.20) $ (0.40) $ (0.79) $ (1.41)
========= ========= ========= =========
</TABLE>
-8-
<PAGE> 12
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
3. Long-term debt
In August 1999, the Company replaced its existing bank credit facility with a
new bank credit facility under which The Chase Manhattan Bank serves as
administrative agent. The new $1,000,000 bank credit facility consists of (1) a
$350,000 revolving bank credit facility and (2) a $650,000 term facility with
two tranches, a $450,000 Term A facility and a $200,000 Term B facility. As a
result of the holding company reorganization completed on July 20, 1999 and
explained in footnote 5, the existing bank credit facility and the new bank
credit facility are obligations of Lamar Media Corp., a wholly owned subsidiary,
and not Lamar Advertising Company. As of September 30, 1999, the Company had
borrowings under this agreement of $757,000.
On August 10, 1999, Lamar Advertising Company, the new holding company,
completed an offering of $287,500 5 1/4% Convertible Notes due 2006. The net
proceeds of approximately $279,594 of the convertible notes were used to pay
down existing bank debt.
In connection with the reorganization of Lamar Advertising Company into a new
holding company structure, Lamar Media Corp. (formerly known as Lamar
Advertising Company) made a change of control tender offer to the holders of its
9 1/4% Senior Subordinated Notes due 2007 in aggregate principal amount of
approximately $103,900. Pursuant to the change of control tender offer and in
accordance with the Indenture, Lamar Media Corp. offered to repurchase the Notes
for 101% of the principal amount plus accrued interest. A total of $29,876
aggregate principal amount of Notes were tendered for payment on August 19,
1999, and the related 1% prepayment penalty is reflected as an extraordinary
item in the Company's income statement, net of tax.
The Company's obligations with respect to its publicly issued notes are not
guaranteed by the Company's direct or indirect wholly-owned subsidiaries.
Certain obligations of the Company's wholly-owned subsidiary, Lamar Media Corp.
are guaranteed by its subsidiaries. For a detailed description of these
guarantees see Lamar Media Corp.'s quarterly report on Form 10-Q.
4. Preferred Stock
On July 16, 1999, the Board of Directors amended the Preferred Stock of the
Company by designating 5,720 shares of the 1,000,000 shares of previously
undesignated Preferred Stock, par value $.001 as "Series AA Preferred Stock".
The previously issued Class A Preferred Stock par value $638 was exchanged for
the new Series AA Preferred Stock. The new Series AA Preferred Stock have the
same liquidation preferences, dividends and other rights as the previously
issued Class A Preferred Stock. The new shares of Series AA Preferred Stock,
however, are entitled to one vote per share.
5. New Holding Company
On July 20, 1999, the Company reorganized into a new holding company structure.
As a result of this reorganization (1) the former Lamar Advertising Company
became a wholly owned subsidiary of a newly formed holding company, (2) the name
of the former Lamar Advertising Company was changed to Lamar Media Corp., (3)
the name of the new holding company became Lamar Advertising Company, (4) the
outstanding shares of capital stock of the former Lamar Advertising Company,
including the Class A common
-9-
<PAGE> 13
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
stock, were automatically converted, on a share for share basis, into identical
shares of capital stock of the new holding company and (5) the Class A common
stock of the new holding company commenced trading on the Nasdaq National Market
under the symbol "LAMR" instead of the Class A common stock of the former Lamar
Advertising Company. In addition, following the holding company reorganization,
substantially all of the former Lamar Advertising Company's debt obligations,
including the bank credit facility and other long-term debt remained the
obligations of Lamar Media Corp. Under Delaware law, the reorganization did not
require the approval of the stockholders of the former Lamar Advertising
Company. The purpose of the reorganization was to provide Lamar Advertising
Company with a more flexible capital structure and to enhance its financing
options. The business operations of the former Lamar Advertising Company and its
subsidiaries will not change as a result of the reorganization.
-10-
<PAGE> 14
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is a discussion of the consolidated financial condition and
results of operations of the Company for the nine month and three month periods
ended September 30, 1999 and 1998. This discussion should be read in conjunction
with the consolidated financial statements of the Company and the related notes.
The following discussion is a summary of the key factors management considers
necessary in reviewing the Company's results of operations, liquidity and
capital resources. The future operating results of the Company may differ
materially from the results described below. For a discussion of certain factors
which may affect the Company's future operating performance, please refer to
Exhibit 99.1 hereto entitled "Factors Affecting Future Operating Results".
RESULTS OF OPERATIONS
Nine Months Ended September 30, 1999 Compared to Nine Months Ended September 30,
1998
Net revenues increased $93.0 million or 46.1% to $294.6 million for the nine
months ended September 30, 1999 as compared to the same period in 1998. This
increase was attributable to the Company's acquisitions during 1998 and 1999 and
internal growth within the Company's existing markets.
Operating expenses, exclusive of depreciation and amortization, increased $49.6
million or 46.0% for the nine months ended September 30, 1999 as compared to the
same period in 1998. This was primarily the result of the additional operating
expenses related to the operations of acquired outdoor advertising assets and
the continued development of the logo sign program.
Depreciation and amortization expense increased $47.5 million or 82.6% from
$57.5 million for the nine months ended September 30, 1998 to $105.0 million for
the nine months ended September 30, 1999 as a result of an increase in
capitalized assets resulting from the Company's recent acquisition activity.
Due to the above factors, operating income decreased $4.1 million or 11.3% to
$32.2 million for nine months ended September 30, 1999 from $36.3 million for
the same period in 1998.
Interest income increased $.7 million as a result of earnings on excess cash
investments made during the nine months ended September 30, 1999 as compared to
the same period in 1998 due to proceeds from a public offering of the Company's
Class A common stock in December, 1998. Interest expense increased $18.1 million
from $39.4 million for the nine months ended September 30, 1998 to $57.5 million
for the same period in 1999 as a result of additional borrowings under the
Company's bank credit facility to fund increased acquisition activity and the
issuance of $287.5 million convertible notes in August 1999.
There was an income tax benefit of $.4 million for the nine months ended
September 30, 1999 as compared to an income tax expense of $.8 million for the
same period in 1998. The effective tax rate for the nine months ended September
30, 1999 is approximately 2.0% which is less than statutory rates due to
permanent differences resulting from non-deductible amortization of goodwill.
-11-
<PAGE> 15
An extraordinary loss on debt extinguishment of $.2 million was incurred during
the nine months ended September 30, 1999, as a result of the extinguishment of a
portion of the Company's 9 1/4% Senior Subordinated notes due 2007 in connection
with a change of control tender offer in July, 1999.
Due to the adoption of SOP 98-5 "Reporting on the Costs of Start-Up Activities"
which requires costs of start-up activities and organization costs to be
expensed as incurred, the Company recognized an expense of $.8 million as a
cumulative effect of a change in accounting principle. This expense is a one
time adjustment to recognize start-up activities and organization costs that
were capitalized in prior periods.
As a result of the above factors, the Company recognized a net loss for the nine
months ended September 30, 1999 of $19.2 million, as compared to a net loss of
$4.0 million for the same period in 1998.
Three Months Ended September 30, 1999 Compared to Three Months Ended
September 30, 1998
Revenues for the three months ended September 30, 1999 increased $37.5 million
or 51.0% to $111.0 million from $73.5 million for the same period in 1998.
Operating expenses, exclusive of depreciation and amortization, for the three
months ended September 30, 1999 increased $19.2 million or 51.6% over the same
period in 1998.
Depreciation and amortization expense increased $20.3 million or 99.9% from
$20.4 million for three months ended September 30, 1998 to $40.7 million for the
three months ended September 30, 1999.
Operating income decreased $2.0 million or 12.9% to $13.9 million for the three
months ended September 30, 1999 as compared to $15.9 million for the same period
in 1998.
Interest expense increased $9.0 million from $12.1 million for the three months
ended September 30, 1998 to $21.1 million for the same period in 1999.
The Company recognized a net loss for the three months ended September 30, 1999
of $3.5 million.
The results for the three months ended September 30, 1999 were affected by the
same factors as the nine months ended September 30, 1999. Reference is made to
the discussion of the nine month results.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically satisfied its working capital requirements with
cash from operations and revolving credit borrowings. Its acquisitions have been
financed primarily with borrowed funds and the issuance of debt and equity
securities.
During the nine months ended September 30, 1999, the Company financed its
acquisition activity of approximately $1.8 billion with remaining proceeds from
the December, 1998 equity offering, borrowings under the Company's bank credit
facility and the issuance of approximately 26.4 million shares of common stock.
At September 30, 1999, following these acquisitions, the Company had $243
million available under the revolving bank credit facility.
The Company's net cash provided by operating activities increased $9.8 million
from $55.5 million for the nine months ended September 30, 1998 to $65.3 million
for the nine months ended September 30, 1999 due primarily to an increase in
noncash items of $35.7 million, which includes an increase in depreciation and
amortization of $47.5 million offset by an increase in gain on disposition of
assets of $6.1 million and a decrease
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<PAGE> 16
in deferred taxes of $7.2 million. The increase in noncash items was offset by a
decrease in net earnings of $15.1 million, an increase in receivables of $7.3
million and a decrease in deferred income of $7.5 million. Net cash used in
investing activities increased $622.7 million from $260.1 million for the nine
months ended September 30, 1998 to $882.8 million for the same period in 1999.
This increase was due to a $610.9 million increase in acquisition of outdoor
advertising assets and an increase in capital expenditures of $13.0 million. Net
cash provided by financing activities for the nine months ended September 30,
1999 is $699.6 million due to $507.0 million in net borrowings under credit
agreements which was used primarily to finance acquisitions, $279.6 million in
net proceeds from the Company's August 1999 offering of 5 1/4% Convertible Notes
due 2006, and $3.9 million in net proceeds from issuance of common stock under
the Company's 1996 Equity Incentive Plan offset by $78.0 million in principal
payments on long-term debt which consists of scheduled debt service and the
payment of approximately $45.0 million in notes to the three principal
shareholders of Outdoor Communications, Inc. which was purchased by the Company
in October, 1998, and $12.5 million in debt issuance costs primarily related to
the new bank credit agreement.
In August 1999, Lamar Media Corp. entered into a new bank credit agreement,
replacing its existing bank credit facility, with The Chase Manhattan Bank
serving as administrative agent. The new $1 billion bank credit facility
consists of (1) a $350 million revolving bank credit facility, (2) a $650
million term facility with two tranches, a $450 million Term A facility and a
$200 million Term B facility. In addition, the new bank credit facility provides
for an uncommitted $400 million incremental facility available at the discretion
of the lenders. As a result of the holding company reorganization completed on
July 20, 1999 and explained in footnote 5, the new bank credit facility is an
obligation of Lamar Media Corp., a wholly owned subsidiary, and not Lamar
Advertising Company.
In August 1999 the Company completed an offering of $287.5 million of 5 1/4%
Convertible Notes due 2006. The net proceeds of approximately $279.6 million of
the convertible notes were used to pay existing bank debt. The convertible notes
are convertible into Lamar Advertising Company Class A common stock at an
initial conversion price of $46.25 per share.
On September 15, 1999, the Company financed the cash portion of the purchase
price for the acquisition of Chancellor Outdoor with a $50.0 million draw under
the revolving credit facility and a $650.0 million draw under Lamar Media's term
facility. The Company also issued 26,227,273 shares of the Company's Class A
common stock.
Elimination of Tobacco Advertising
By the end of April, 1999, the Company had removed all of its outdoor
advertising of tobacco products in connection with settlements the states had
reached with the U.S. tobacco companies. Because of these settlements, the
Company's tobacco revenues as a percentage of consolidated net revenue have
declined from 7% for the 12 months ended December 31, 1998 to 3% for the nine
months ended September 30, 1999. When displays formerly occupied by tobacco
advertisers have become available in the recent past, the Company has been able
to attract substitute advertising for the unoccupied space on comparable or more
favorable terms. While both of these trends are positive, the Company cannot
guarantee that it will be able to attract substitute advertising to occupy the
displays which will become unoccupied, or that substitute advertisers will pay
rates as favorable to the Company as those paid by tobacco advertisers. If the
Company is unable to continue to replace tobacco advertising, the resulting
increase in available inventory could cause the Company to reduce its rates or
limit the Company's ability to raise rates. In addition, the Company cannot
guarantee that substitute advertisers will pay rates as favorable to the Company
as those paid by tobacco advertisers.
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<PAGE> 17
Impact of Year 2000
The year 2000 issue is the result of the development of computer programs and
systems using two digits rather than four digits to define the applicable year.
Computer programs and equipment with time-sensitive software may recognize the
date using "00" as the year 1900 rather than the year 2000. The year 2000 date
recognition problem could cause the Company's computer systems to fail,
resulting in miscalculations and incorrect data causing disruption to business
operations.
The Company has conducted an assessment of its software and related systems and
believes they are year 2000 compliant. The Company's year 2000 effort also
included communication with significant third party vendors and customers to
determine the extent to which the Company's systems are vulnerable to those
parties' failure to reach year 2000 compliance.
The Company cannot assure you that the Company's customers, suppliers and other
third parties that the Company deals with are or will be year 2000 compliant in
a timely manner. Interruptions in services provided to the Company or in the
purchases made by these third parties could also disrupt the Company's
operations. Parties affected by a disruption in the Company's operations and
services could make claims or bring lawsuits against the Company. Depending upon
the extent and duration of any disruptions caused by the year 2000 problem and
the specific services affected, these disruptions could have an adverse affect
on the Company's business.
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
The Company is exposed to interest rate risk in connection with variable rate
debt instruments issued by the Company. The Company does not enter into market
risk sensitive instruments for trading purposes. The information below
summarizes the Company's interest rate risk associated with its principal
variable rate debt instruments outstanding at September 30, 1999.
Loans under Lamar Media's bank credit facility bear interest at variable rates
equal to the Chase Prime Rate or LIBOR plus the applicable margin. Because the
Chase Prime Rate or LIBOR may increase or decrease at any time, the Company is
exposed to market risk as a result of the impact that changes in these base
rates may have on the interest rate applicable to borrowings under the bank
credit facility. Increases in the interest rates applicable to borrowings under
the bank credit facility would result in increased interest expense and a
reduction in the Company's net income and after tax cash flow.
At September 30, 1999, there was approximately $757 million of aggregate
indebtedness outstanding under Lamar Media's bank credit facility, or
approximately 47.5% of the Company's outstanding long-term debt on that date,
bearing interest at variable rates. The aggregate interest expense for the nine
months ended September 30, 1999 with respect to borrowings under the bank credit
facility was $14.5 million, and the weighted average interest rate applicable to
borrowings under these credit facilities during the nine months ended September
30, 1999 was 6.9%. Assuming that the weighted average interest rate was
200-basis points higher (that is 8.9% rather than 6.9%), then the Company's 1999
interest expense would have been approximately $4.2 million higher resulting in
a $2.5 million decrease in the Company's nine months ended September 30, 1999
net income and after tax cash flow.
The Company attempts to mitigate the interest rate risk resulting from its
variable interest rate long-term debt instruments by also issuing fixed rate
long-term debt
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<PAGE> 18
instruments and maintaining a balance over time between the amount of the
Company's variable rate and fixed rate indebtedness. In addition, the Company
has the capability under the bank credit facility to fix the interest rates
applicable to its borrowings at an amount equal to LIBOR plus the applicable
margin for periods of up to twelve months, which would allow the Company to
mitigate the impact of short-term fluctuations in market interest rates. In the
event of an increase in interest rates, the Company may take further actions to
mitigate its exposure. The Company cannot guarantee, however, that the actions
that it may take to mitigate this risk will be feasible or that, if these
actions are taken, that they will be effective.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
A written consent of stockholders was executed on September 14, 1999 by The
Reilly Family Limited Partnership (the "RFLP") in lieu of a special meeting of
the Company's stockholders to approve the issuance of the Company's Class A
common stock in connection with the purchase by Lamar Media of all of the
outstanding common stock of Chancellor Outdoor for a combination of $700 million
in cash and 26,227,273 shares of the Company's Class A common stock. The RFLP
holds all of the Class B common stock of the Company which represented
approximately 80% of the voting power of the Company at the time the consent was
executed. The Company furnished information regarding this transaction in a
Definitive Information Statement pursuant to Section 14(c) of the Securities
Exchange Act of 1934 which was distributed to its stockholders and filed with
the Commission on August 13, 1999.
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
See Item 1, Financial Statements, Note 5, which is
incorporated herein by reference.
ITEM 5. OTHER INFORMATION.
The annual meeting of stockholders of the Company will be held
on Thursday, May 25, 2000.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
Exhibit 2.1 Agreement and Plan of Merger dated as of July 20,
1999, among the Company, Lamar Media and Lamar
Holdings Merge Co. Previously filed as Exhibit 2.1
to the Company's Current Report on Form 8-K filed on
July 22, 1999 (File No. 0-30242) and incorporated
herein by reference.
Exhibit 3.1 Certificate of Incorporation of Lamar New Holding
Co. Previously filed as exhibit 3.1 to the Company's
Quarterly Report on Form 10-Q for the period ended
June 30, 1999 (File No. 0-20833) filed on August 16,
1999 and incorporated herein by reference.
Exhibit 3.2 Certificate of Amendment of Certificate of
Incorporation of Lamar New Holding Co. (whereby the
name of Lamar New Holding
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<PAGE> 19
Co. was changed to Lamar Advertising Company).
Previously filed as exhibit 3.2 to the Company's
Quarterly Report on Form 10-Q for the period ended
June 30, 1999 (File No. 0-20833) filed on August 16,
1999 and incorporated herein by reference.
Exhibit 3.3 Amended and Restated Bylaws. Previously filed as
exhibit 3.3 to the Company's Quarterly Report on
Form 10-Q for the period ended June 30, 1999 (File
No. 0-20833) filed on August 16, 1999 and
incorporated herein by reference.
Exhibit 4.1 Supplemental Indenture to the Indenture dated
November 15, 1996 among Lamar Media Corp., certain
of its subsidiaries and State Street Bank and Trust
Company, as Trustee, dated July 20, 1999. Filed
herewith.
Exhibit 4.2 Supplemental Indenture to the Indenture dated
September 25, 1997 among Lamar Media Corp., certain
of its subsidiaries and State Street Bank and Trust
Company, as Trustee, dated September 15, 1999. Filed
herewith.
Exhibit 4.3 Supplemental Indenture to the Indenture dated August
15, 1997 among Outdoor Communications, Inc., certain
of its subsidiaries and First Union National Bank,
as Trustee, dated September 15, 1999. Filed
herewith.
Exhibit 4.4 Supplemental Indenture to the Indenture dated
September 25, 1997 among Lamar Media Corp., certain
of its subsidiaries and State Street Bank and Trust
Company, as Trustee, dated July 20, 1999. Filed
herewith.
Exhibit 4.5 Supplemental Indenture to the Indenture dated August
15, 1997 among Outdoor Communications, Inc., certain
of its subsidiaries and First Union National Bank,
as Trustee, dated July 20, 1999. Filed herewith.
Exhibit 4.6 Supplemental Indenture to the Indenture dated
November 15, 1996 among Lamar Media Corp., certain
of its subsidiaries and State Street Bank and Trust
Company, as Trustee, dated September 15, 1999. Filed
herewith.
Exhibit 4.7 Supplemental Indentures to the Indenture dated
September 25, 1997 among the Company, certain of its
subsidiaries and State Street Bank and Trust
Company, as Trustee. Filed herewith.
Exhibit 4.8 Supplemental Indentures to the Indenture dated
November 15, 1996 among the Company, certain of its
subsidiaries and State Street Bank and Trust
Company, as Trustee. Filed herewith.
Exhibit 4.9 Supplemental Indentures to the Indenture dated
August 15, 1997 among Outdoor Communications, Inc.,
certain of its subsidiaries and First Union National
Bank, as Trustee. Filed herewith.
Exhibit 10.1 Bank Credit Agreement dated August 13, 1999, between
Lamar Media Corp., certain of its subsidiaries, the
lenders party thereto and The Chase Manhattan Bank,
as administrative agent. Filed herewith.
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<PAGE> 20
Exhibit 10.2 Stockholders Agreement dated as of September 15,
1999 by and among the Company, Chancellor Media
Corporation of Los Angeles, Chancellor Mezzanine
Holdings Corporation and the Reilly Family Limited
Partnership. Filed herewith.
Exhibit 10.3 Registration Rights Agreement dated as of September
15, 1999 among the Company, Chancellor Media
Corporation of Los Angeles and Chancellor Mezzanine
Holdings Corporation. Filed herewith.
Exhibit 10.4 Assumption Agreement dated as of July 20, 1999 by
and among the Company, Lamar Media Corp., and the
direct and indirect subsidiaries of such
corporations. Filed herewith.
Exhibit 27.1 Financial Data Schedule. Filed herewith.
Exhibit 99.1 Factors Affecting Future Operating Results. Filed
herewith.
(b) Reports on Form 8-K
Reports on Form 8-K were filed with the Commission during the
third quarter of 1999 to report the following items as of the
dates indicated:
On July 7, 1999, the Company filed a report on Form 8-K to
furnish Financial Statements and Pro Forma Financial
Statements for Chancellor Media Outdoor Corporation
("Chancellor Outdoor") and its predecessor companies, the
outdoor advertising division of Whiteco Industries, Inc.
("Whiteco"), Martin Media L.P. ("Martin Media") and Martin &
MacFarlane, Inc. ("Martin & MacFarlane"), which the Company
acquired as of September 15, 1999. The Company filed as
exhibits (1) the consolidated balance sheets of Chancellor
Outdoor as of December 31, 1998 and March 31, 1999 and
consolidated statements of operations, equity and cash flows
for the period from July 22, 1998 to December 31, 1998 and the
three months ended March 31, 1999 (2) the statements of
income, divisional equity and cash flows of Whiteco for the
eleven months ended November 30, 1998; balance sheets of
Whiteco as of December 31, 1996 and 1997; and statements of
income and cash flows for the years ended December 31, 1995,
1996, and 1997 (3) the statements of operations, partners'
capital and cash flows of Martin Media for the seven months
ended July 31, 1998; balance sheets of Martin Media as of
December 31, 1996 and 1997; and statements of operations,
partners' capital (deficit) and cash flows of Martin Media for
each of the years ended December 31, 1995, 1996 and 1997 (4)
the statements of operations, retained earnings and cash flows
of Martin & MacFarlane for the seven months ended July 31,
1998; balance sheets of Martin & MacFarlane as of December 31,
1996 and 1997; statements of income, retained earnings and
cash flows for the six-month period ended December 31, 1995
and each of the years ended December 31,1996 and 1997; balance
sheet of Martin & MacFarlane as of June 30, 1995; and
statements of income, retained earnings and cash flows of
Martin & MacFarlane for the year ended June 30, 1995. The
Company also filed as exhibits unaudited pro forma condensed
consolidated statements of operations of the Company for the
year ended December 31, 1998 and the three months ended March
31, 1999; and unaudited pro forma condensed consolidated
balance sheet of the Company as of March 31, 1999.
On July 22, 1999, the Company filed a report on Form 8-K in
order to furnish certain exhibits related to the Company's
reorganization. The Company filed an Agreement and Plan of
Merger dated as of July 20, 1999
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<PAGE> 21
among the Company, Lamar New Holding Co., and Lamar Holdings
Merge Co. as exhibit 2.1, and a press release issued by the
registrant on July 21, 1999 as exhibit 99.1.
On July 26, 1999, the Company filed a report on Form 8-K/A to
correct a typographical error in "Item 5. Other Events" in the
8-K originally filed on July 22, 1999.
On July 28, 1999, the Company filed a report on Form 8-K
announcing that it had commenced a public offering of
$250,000,000 of convertible notes and filed the related press
release as exhibit 99.1.
On August 3, 1999, the Company filed a report on Form 8-K
announcing its operating results for the second quarter ended
June 30, 1999 and filed the related press release as exhibit
99.1.
On August 5, 1999, the Company filed a report on Form 8-K
announcing that it had agreed to sell $250,000,000 of
Convertible Notes through Goldman Sachs & Co., Deutsche Banc
Alex. Brown, Morgan Stanley Dean Witter and Salomon Smith
Barney as underwriters and filed the related press release as
exhibit 99.1.
On August 6, 1999, the Company filed two reports on Form 8-K
in order to furnish certain exhibits for incorporation by
reference into two Registration Statements on Form S-3 of the
Company previously filed with Securities and Exchange
Commission (File Nos. 333-71929 and 333-50559), which
Registration Statements were declared effective by the
Commission on February 12, 1999 and April 28, 1998,
respectively. The Company filed with respect to each
Registration Statement (i) an Underwriting Agreement dated
August 4, 1999 among the Company, Goldman, Sachs & Co.,
Deutsche Bank Securities Inc., Morgan Stanley & Co.
Incorporated and Salomon Smith Barney Inc, (ii) an opinion of
Palmer & Dodge LLP, counsel to the Company, regarding the
validity of certain convertible notes to be sold by the
Company pursuant to such Underwriting Agreement and shares of
the Company's Class A Common Stock, $.001 par value per share
issuable upon conversion of such notes; (iii) an opinion of
Sullivan & Cromwell, counsel to the Underwriters, regarding
the validity of the securities to be sold by the Company
pursuant to such Underwriting Agreement; (iv) a Form of
Indenture to be dated as of August 10,1999 between the
Company and State Street Bank and Trust Company, as Trustee;
(v) a Form of First Supplemental Indenture to be dated as of
August 10, 1999 between the Company and State Street Bank and
Trust Company, as Trustee; and (vi) a Statement of
Eligibility of Trustee on Form T-1 by State Street Bank and
Trust Company.
On August 10, 1999, the Company filed a report on Form 8-K
announcing that it had completed the sale of $250,000,000 of
Convertible Notes through Goldman Sachs & Co., Deutsche Banc
Alex. Brown, Morgan Stanley Dean Witter and Salomon Smith
Barney as underwriters and filed the related press release as
exhibit 99.1.
On August 17, 1999, the Company filed a report on Form 8-K
announcing that it had completed the sale of an additional
$37,500,000 principal amount of convertible notes in a public
offering pursuant to the exercise of the underwriters'
overallotment option and filed the related press release as
exhibit 99.1.
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<PAGE> 22
On August 20, 1999, the Company filed a report on Form 8-K
announcing that as a result of the holding company
reorganization on July 20, 1999, the Company is a successor
issuer to Old Lamar Advertising, and pursuant to Rule
12g-3(a) of the Securities Exchange Act of 1934, the Class A
common stock of the Company is deemed to be registered under
Section 12(g) of the Securities Exchange Act of 1934 instead
of the Class A common stock of Old Lamar Advertising. "Old
Lamar Advertising Company" refers to the company which was
formerly known as "Lamar Advertising Company" prior to the
holding company reorganization and which changed its name to
"Lamar Media Corp." in connection with the holding company
reorganization.
On August 25, 1999, the Company filed a report on Form 8-K
announcing that in connection with the reorganization of
Lamar Advertising Company into a new holding company
structure, Lamar Media Corp. (formerly known as Lamar
Advertising Company) made a change of control tender offer to
the holders of its 9 1/4% Senior Subordinated Notes due 2007
in aggregate principal amount of approximately $103,900,000
issued pursuant to an Indenture dated August 15, 1997, by and
among Outdoor Communications, Inc., a company acquired by
Lamar whose obligations under the Notes were assumed, certain
guarantors under the Indenture and the First Union National
Bank as Trustee. Pursuant to the change of control tender
offer and in accordance with the Indenture, Lamar Media Corp.
offered to repurchase the Notes for 101% of the principal
amount plus accrued interest up to but excluding the payment
date of August 19, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
LAMAR ADVERTISING COMPANY
DATED: November 11, 1999 BY: /s/ Keith Istre
------------------------------
Keith A. Istre
Chief Financial and Accounting
Officer and Director
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<PAGE> 23
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
2.1 Agreement and Plan of Merger dated as of July 20, 1999, among
the Company, Lamar Media and Lamar Holdings Merge Co.
previously filed as Exhibit 2.1 to the Company's Current
Report on Form 8-K filed on July 22, 1999 (File No. 0-30242)
and incorporated herein by reference.
3.1 Certificate of Incorporation of Lamar New Holding Co.
Previously filed as exhibit 3.1 to the Company's Quarterly
Report on Form 10-Q for the period ended June 30, 1999 (File
No. 0-20833) filed on August 16, 1999 and incorporated herein
by reference.
3.2 Certificate of Amendment of Certificate of Incorporation of
Lamar New Holding Co. (whereby the name of Lamar New Holding
Co. was changed to Lamar Advertising Company). Previously
filed as exhibit 3.2 to the Company's Quarterly Report on
Form 10-Q for the period ended June 30, 1999 (File No.
0-20833) filed on August 16, 1999 and incorporated herein by
reference.
3.3 Amended and Restated Bylaws. Previously filed as exhibit 3.3
to the Company's Quarterly Report on Form 10-Q for the period
ended June 30, 1999 (File No. 0-20833) filed on August 16,
1999 and incorporated herein by reference.
4.1 Supplemental Indenture to the Indenture dated November 15,
1996 among Lamar Media Corp., certain of its subsidiaries and
State Street Bank and Trust Company, as Trustee, dated July
20, 1999. Filed herewith.
4.2 Supplemental Indenture to the Indenture dated September 25,
1997 among Lamar Media Corp., certain of its subsidiaries and
State Street Bank and Trust Company, as Trustee, dated
September 15, 1999. Filed herewith.
4.3 Supplemental Indenture to the Indenture dated August 15, 1997
among Outdoor Communications, Inc., certain of its
subsidiaries and First Union National Bank, as Trustee, dated
September 15, 1999. Filed herewith.
4.4 Supplemental Indenture to the Indenture dated September 25,
1997 among Lamar Media Corp., certain of its subsidiaries and
State Street Bank and Trust Company, as Trustee, dated July
20, 1999. Filed herewith.
4.5 Supplemental Indenture to the Indenture dated August 15, 1997
among Outdoor Communications, Inc., certain of its
subsidiaries and First Union National Bank, as Trustee, dated
July 20, 1999. Filed herewith.
4.6 Supplemental Indenture to the Indenture dated November 15,
1996 among Lamar Media Corp., certain of its subsidiaries and
State Street Bank and Trust Company, as Trustee, dated
September 15, 1999. Filed herewith.
</TABLE>
<PAGE> 24
<TABLE>
<S> <C>
4.7 Supplemental Indentures to the Indenture dated September 25,
1997 among the Company, certain of its subsidiaries and State
Street Bank and Trust Company, as Trustee. Filed herewith.
4.8 Supplemental Indentures to the Indenture dated November 15,
1996 among the Company, certain of its subsidiaries and State
Street Bank and Trust Company, as Trustee. Filed herewith.
4.9 Supplemental Indentures to the Indenture dated August 15,
1997 among Outdoor Communications, Inc., certain of its
subsidiaries and First Union National Bank, as Trustee. Filed
herewith.
10.1 Bank Credit Agreement dated August 13, 1999, between Lamar
Media Corp., certain of its subsidiaries, the lenders party
thereto and The Chase Manhattan Bank, as administrative
agent. Filed herewith.
10.2 Stockholders Agreement dated as of September 15,
1999 by and among the Company, Chancellor Media
Corporation of Los Angeles, Chancellor Mezzanine
Holdings Corporation and the Reilly Family Limited
Partnership. Filed herewith.
10.3 Registration Rights Agreement dated as of September
15, 1999 among the Company, Chancellor Media
Corporation of Los Angeles and Chancellor Mezzanine
Holdings Corporation. Filed herewith.
10.4 Assumption Agreement dated as of July 20, 1999 by
and among the Company, Lamar Media Corp., and the
direct and indirect subsidiaries of such
corporations. Filed herewith.
27.1 Financial Data Schedule. Filed herewith.
99.1 Factors Affecting Future Operating Results. Filed
herewith.
</TABLE>
<PAGE> 1
EXHIBIT 4.1
LAMAR MEDIA CORP.
SUPPLEMENTAL INDENTURE
THIS SUPPLEMENTAL INDENTURE dated as of July 20, 1999, is delivered
pursuant to Section 5.01 of the Indenture dated as of November 15, 1996 (as
heretofore or hereafter modified and supplemented and in effect from time to
time, (the "1996 Indenture") among LAMAR ADVERTISING COMPANY. ("the Company"), a
Delaware corporation, certain of its subsidiaries ("Guarantors") and STATE
STREET BANK & TRUST COMPANY, a trust company organized under the laws of the
Commonwealth of Massachusetts, as Trustee ("Trustee") (all terms used herein
without definition having the meanings ascribed to them in the 1996 Indenture).
The undersigned hereby agrees that:
1. Lamar Advertising Company has caused Lamar Holdings Merge Co. to
merge into Lamar Advertising Company under the laws of the State of Delaware
("Merger") and incident thereto caused the name of Lamar Advertising Company to
be changed to Lamar Media Corp.
2. Lamar Media Corp., being the Surviving Entity under the Merger as
provided under the 1996 Indenture, continues to be a corporation organized and
existing under the laws of the State of Delaware.
3. The Surviving Entity ratifies and confirms its obligations as the
"Company" under the 1996 Indenture and the securities issued thereunder.
4. Lamar Media Corp. hereby represents and warrants that the
representations and warranties set forth in the 1996 Indenture as amended by
this Supplemental Indenture are correct on and as of the date hereof.
5. The Guarantors of the Indenture, being the subsidiaries of the
Surviving Entities listed below, hereby confirm and ratify their Guarantees of
the 1996 Indenture and the Securities issued thereunder and acknowledge that
their Guarantees will continue to apply to the obligations of the Company under
the 1996 Indenture.
6. All notices, requests and other communications provided for in the
1996 Indenture should be delivered to the respective parties hereto at the
following address:
1
<PAGE> 2
Lamar Media Corp.
Attn: Mr. Keith A. Istre
Vice President - Finance
P.O. Box 66338
Baton Rouge, LA 70896
7. A counterpart of this Supplemental Indenture may be attached to any
counterpart of the 1996 Indenture.
8. This Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned has caused this Supplemental
Indenture to be duly executed as of the day and year first above written.
Guarantors:
LAMAR MEDIA CORP.
INTERSTATE LOGOS, INC.
THE LAMAR CORPORATION
LAMAR ADVERTISING OF MOBILE, INC.
LAMAR ADVERTISING OF COLORADO
SPRINGS, INC.
LAMAR ADVERTISING OF SOUTH
MISSISSIPPI, INC.
LAMAR ADVERTISING OF JACKSON, INC.
LAMAR TEXAS GENERAL PARTNER, INC.
LAMAR ADVERTISING OF SOUTH
GEORGIA, INC.
TLC PROPERTIES, INC.
TLC PROPERTIES, II, INC.
LAMAR PENSACOLA TRANSIT, INC.
LAMAR ADVERTISING OF
YOUNGSTOWN, INC.
NEBRASKA LOGOS, INC.
OKLAHOMA LOGO SIGNS, INC.
MISSOURI LOGOS, INC.
OHIO LOGOS, INC.
UTAH LOGOS, INC.
TEXAS LOGOS, INC.
MISSISSIPPI LOGOS, INC.
GEORGIA LOGOS, INC.
SOUTH CAROLINA LOGOS, INC.
VIRGINIA LOGOS, INC.
MINNESOTA LOGOS, INC.
MICHIGAN LOGOS, INC.
NEW JERSEY LOGOS, INC.
2
<PAGE> 3
FLORIDA LOGOS, INC.
KENTUCKY LOGOS, INC.
NEVADA LOGOS, INC.
TENNESSEE LOGOS, INC.
KANSAS LOGOS, INC.
COLORADO LOGOS, INC.
NEW MEXICO LOGOS, INC.
LAMAR ADVERTISING OF HUNTINGTON-
BRIDGEPORT, INC.
LAMAR ADVERTISING OF PENN, INC.
LAMAR ADVERTISING OF
MISSOURI, INC.
LAMAR ADVERTISING OF
MICHIGAN, INC.
LAMAR ELECTRICAL, INC.
LAMAR ADVERTISING OF
SOUTH DAKOTA, INC.
LAMAR ADVERTISING OF WEST VIRGINIA, INC.
LAMAR ADVERTISING OF
ASHLAND, INC.
AMERICAN SIGNS, INC.
LAMAR OCI NORTH CORPORATION
LAMAR OCI SOUTH CORPORATION
LAMAR ADVERTISING OF
GREENVILLE, INC.
LAMAR ROBINSON, INC.
LAMAR ADVERTISING OF
KENTUCKY, INC.
LAMAR ADVERTISING OF ROLAND, INC.
By: /s/ Keith Istre
------------------------------------------
Keith Istre, Vice President - Financial
3
<PAGE> 4
LAMAR TEXAS LIMITED
PARTNERSHIP By Lamar Texas
General Partner, Inc.
Its general partner
By: /s/ Keith Istre
------------------------------------------
Keith Istre, Vice-President-Financial
LAMAR TENNESSEE, L.L.C.
By The Lamar Corporation, its manager
By: /s/ Keith Istre
------------------------------------------
Keith Istre, Vice-President-Financial
LAMAR AIR, L.L.C.
By The Lamar Corporation, its manager
By: /s/ Keith Istre
------------------------------------------
Keith Istre, Vice-President-Financial
TLC PROPERTIES, L.L.C.
By TLC Properties, Inc., its manager
By: /s/ Keith Istre
------------------------------------------
Keith Istre, Vice-President-Financial
Attest:
By: /s/ James McIlwain
------------------------------------------
James McIlwain, Secretary
Accepted:
STATE STREET BANK & TRUST COMPANY, as Trustee
By: /s/ Andrew Sinasky
------------------------------------------
Title: Assistant Vice President
---------------------------------------
4
<PAGE> 1
EXHIBIT 4.2
SUPPLEMENTAL INDENTURE
OF
GUARANTORS
THIS SUPPLEMENTAL INDENTURE dated as of September 15, 1999, is
delivered pursuant to Section 10.04 of the Indenture dated as of September 25,
1997 (as heretofore or hereafter modified and supplemented and in effect from
time to time, the "Indenture") among LAMAR MEDIA CORP., a Delaware corporation,
certain of its subsidiaries ("Guarantors") and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts banking corporation, as Trustee ("Trustee") (all terms
used herein without definition having the meanings ascribed to them in the
Indenture).
The undersigned hereby agree that:
1. The undersigned are Guarantors under the Indenture with all of the
rights and obligations of Guarantors thereunder.
2. The undersigned hereby grants, ratifies and confirms the guarantee
provided for by Article Ten of the Indenture to guarantee unconditionally,
jointly and severally with the other Guarantors, to each Holder of a Note
authenticated and delivered by the Trustee, and to the Trustee on behalf of such
Holder, the due and punctual payment of the principal of (and premium, if any)
and interest on such Note when and as the same shall become due and payable.
3. The undersigned hereby represents and warrants that the
representations and warranties set forth in the Indenture, to the extent
relating to the undersigned as Guarantor, are correct on and as of the date
hereof.
4. All notices, requests and other communications provided for in the
Indenture should be delivered to the undersigned at the address specified in
Section 12.02 of the Indenture.
5. A counterpart of this Supplemental Indenture may be attached to any
counterpart of the Indenture.
6. This Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of New York.
1
<PAGE> 2
IN WITNESS WHEREOF, the undersigned has caused this Supplemental
Indenture to be duly executed as of the day and year first above written.
Guarantors:
LAMAR MW SIGN CORP.
LAMAR MARTIN CORPORATION
LAMAR NEVADA SIGN
CORPORATION
LAMAR OUTDOOR CORPORATION
LAMAR WHITECO OUTDOOR
CORPORATION
DOWLING COMPANY, INCORPORATED
HARDIN DEVELOPMENT CORPORATION
LINDSAY OUTDOOR ADVERTISING INC
PARSONS DEVELOPMENT COMPANY
REVOLUTION OUTDOOR ADVERTISING,
INC.
SCENIC OUTDOOR MARKETING &
CONSULTING INC.
WESTERN POSTER SERVICE, INC.
By: /s/ Keith A. Istre
----------------------------------------
Keith A. Istre
Vice President - Finance and
Chief Financial Officer
LAMAR WEST, L.P.
By: Lamar MW Sign Corp.,
Its General Partner
By: /s/ Keith A. Istre
----------------------------------------
Keith A. Istre
Vice President - Finance and
Chief Financial Officer
2
<PAGE> 3
OUTDOOR PROMOTIONS WEST, LLC
TRANSIT AMERICA LAS VEGAS, L.L.C.
TRIUMPH OUTDOOR LOUISIANA, LLC
TRIUMPH OUTDOOR RHODE ISLAND, LLC
By: Triumph Outdoor Holdings, LLC, its manager
By: Lamar Outdoor Corporation, its manager
By: /s/ Keith A. Istre
----------------------------------------
Keith A. Istre
Vice President - Finance and
Chief Financial Officer
TRIUMPH OUTDOOR HOLDINGS, LLC
By: Lamar Outdoor Corporation, its manager
By: /s/ Keith A. Istre
----------------------------------------
Keith A. Istre
Vice President - Finance and
Chief Financial Officer
Attest:
By: /s/ James R. McIlwain
----------------------------------
James R. McIlwain, Secretary
Accepted:
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ Andrew Sinasky
----------------------------------
Title: Assistant Vice President
-------------------------------
3
<PAGE> 1
EXHIBIT 4.3
SUPPLEMENTAL INDENTURE
TO INDENTURE DATED AUGUST 15, 1997
THIS SUPPLEMENTAL INDENTURE dated as of September 15, 1999, is
delivered pursuant to Section 4.11 of the Indenture dated as of August 15, 1997
(as heretofore or hereafter modified and supplemented and in effect from time to
time, the "1997 Indenture") among OUTDOOR COMMUNICATIONS, INC., a Delaware
corporation, certain of its subsidiaries (the "Guarantors") and FIRST UNION
NATIONAL BANK, a national banking corporation, as Trustee (the "Trustee") (all
terms used herein without definition having the meanings ascribed to them in the
1997 Indenture).
The undersigned hereby agree that:
1. The undersigned are Guarantors under the 1997 Indenture with all of
the rights and obligations of the Guarantors thereunder.
2. The undersigned have granted, ratified and confirmed, in the form
and substance of Exhibit B to the 1997 Indenture, the Guarantee provided for by
Article XI of the 1997 Indenture.
3. The undersigned hereby represent and warrant that the
representations and warranties set forth in the 1997 Indenture, to the extent
relating to the undersigned as Guarantors, are correct on and as of the date
hereof.
4. All notices, requests and other communications provided for in the
1997 Indenture should be delivered to the undersigned at the following address:
Keith A. Istre
Vice President - Finance and
Chief Financial Officer
Lamar Media Corp. and its Subsidiaries
5551 Corporate Blvd.
Baton Rouge, LA 70808
5. A counterpart of this Supplemental Indenture may be attached to any
counterpart of the 1997 Indenture.
6. This Supplemental Indenture shall be governed by and construed in
accordance with the internal laws of the State of New York.
<PAGE> 2
IN WITNESS WHEREOF, the undersigned have caused this Supplemental
Indenture to be duly executed as of the day and year first above written.
Guarantors:
LAMAR MW SIGN CORPORATION
LAMAR MARTIN CORPORATION
LAMAR NEVADA SIGN CORPORATION
LAMAR OUTDOOR CORPORATION
LAMAR WHITECO OUTDOOR
CORPORATION
DOWLING COMPANY, INCORPORATED
HARDIN DEVELOPMENT CORPORATION
LINDSAY OUTDOOR ADVERTISING INC
PARSONS DEVELOPMENT COMPANY
REVOLUTION OUTDOOR ADVERTISING,
INC.
SCENIC OUTDOOR MARKETING &
CONSULTING INC.
WESTERN POSTER SERVICE, INC.
By: /s/ Keith A. Istre
------------------------------------------
Keith A. Istre
Vice President - Finance and
Chief Financial Officer
LAMAR WEST, L.P.
By: Lamar MW Sign Corporation,
Its General Partner
By: /s/ Keith A. Istre
------------------------------------------
Keith A. Istre
Vice President - Finance and
Chief Financial Officer
2
<PAGE> 3
OUTDOOR PROMOTIONS WEST, LLC
TRANSIT AMERICA LAS VEGAS, L.L.C.
TRIUMPH OUTDOOR LOUISIANA, LLC
TRIUMPH OUTDOOR RHODE ISLAND, LLC
By: Triumph Outdoor Holdings, LLC, its manager
By: Lamar Outdoor Corporation, its manager
By: /s/ Keith A. Istre
------------------------------------------
Keith A. Istre
Vice President - Finance and
Chief Financial Officer
TRIUMPH OUTDOOR HOLDINGS, LLC
By: Lamar Outdoor Corporation, its manager
By: /s/ Keith A. Istre
------------------------------------------
Keith A. Istre
Vice President - Finance and
Chief Financial Officer
Attest:
By: /s/ James R. McIlwain
---------------------------------------------------
James R. McIlwain, Secretary
Accepted:
FIRST UNION NATIONAL BANK,
as Trustee
By: /s/ Josie Gonot
---------------------------------------------------
Title: Assistant Vice President Corporate Trust Group
------------------------------------------------
3
<PAGE> 1
EXHIBIT 4.4
LAMAR MEDIA CORP.
SUPPLEMENTAL INDENTURE
THIS SUPPLEMENTAL INDENTURE dated as of July 20, 1999, is delivered
pursuant to Section 5.01 of the Indenture dated as of September 25, 1997 (as
heretofore or hereafter modified and supplemented and in effect from time to
time, (the "1997 Indenture") among LAMAR ADVERTISING COMPANY. ("the Company"), a
Delaware corporation, certain of its subsidiaries ("Guarantors") and STATE
STREET BANK & TRUST COMPANY, a trust company organized under the laws of the
Commonwealth of Massachusetts, as Trustee ("Trustee") (all terms used herein
without definition having the meanings ascribed to them in the 1997 Indenture).
The undersigned hereby agrees that:
1. Lamar Advertising Company has caused a subsidiary, Lamar Holdings
Merge Co., to merge into Lamar Advertising Company under the laws of the State
of Delaware ("Merger") and incident thereto caused the name of Lamar Advertising
Company to be changed to Lamar Media Corp.
2. Lamar Media Corp., being the Surviving Entity under the Merger as
provided under the 1997 Indenture, continues to be a corporation organized and
existing under the laws of the State of Delaware.
3. The Surviving Entity ratifies and confirms its obligations as the
"Company" under the 1997 Indenture and the securities issued thereunder.
4. Lamar Media Corp. hereby represents and warrants that the
representations and warranties set forth in the 1997 Indenture as amended by
this Supplemental Indenture are correct on and as of the date hereof.
5. The Guarantors of the Indenture, being the Subsidiaries of the
Surviving Entity listed below, hereby confirm and ratify their Guarantees of the
1997 Indenture and the Securities issued thereunder and acknowledge that their
Guarantees will continue to apply to the obligations of the Company under the
1997 Indenture.
6. All notices, requests and other communications provided for in the
1997 Indenture should be delivered to the respective parties hereto at the
following address:
1
<PAGE> 2
Lamar Media Corp.
Attn: Mr. Keith A. Istre
Vice President - Finance
P.O. Box 66338
Baton Rouge, LA 70896
7. A counterpart of this Supplemental Indenture may be attached to any
counterpart of the 1997 Indenture.
8. This Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned has caused this Supplemental
Indenture to be duly executed as of the day and year first above written.
Guarantors:
LAMAR MEDIA CORP.
INTERSTATE LOGOS, INC.
THE LAMAR CORPORATION
LAMAR ADVERTISING OF MOBILE, INC.
LAMAR ADVERTISING OF COLORADO
SPRINGS, INC.
LAMAR ADVERTISING OF SOUTH
MISSISSIPPI, INC.
LAMAR ADVERTISING OF JACKSON, INC.
LAMAR TEXAS GENERAL PARTNER, INC.
LAMAR ADVERTISING OF SOUTH
GEORGIA, INC.
TLC PROPERTIES, INC.
TLC PROPERTIES, II, INC.
LAMAR PENSACOLA TRANSIT, INC.
LAMAR ADVERTISING OF
YOUNGSTOWN, INC.
NEBRASKA LOGOS, INC.
OKLAHOMA LOGO SIGNS, INC.
MISSOURI LOGOS, INC.
OHIO LOGOS, INC.
UTAH LOGOS, INC.
TEXAS LOGOS, INC.
MISSISSIPPI LOGOS, INC.
GEORGIA LOGOS, INC.
SOUTH CAROLINA LOGOS, INC.
VIRGINIA LOGOS, INC.
MINNESOTA LOGOS, INC.
MICHIGAN LOGOS, INC.
NEW JERSEY LOGOS, INC.
2
<PAGE> 3
FLORIDA LOGOS, INC.
KENTUCKY LOGOS, INC.
NEVADA LOGOS, INC.
TENNESSEE LOGOS, INC.
KANSAS LOGOS, INC.
COLORADO LOGOS, INC.
NEW MEXICO LOGOS, INC.
LAMAR ADVERTISING OF HUNTINGTON-
BRIDGEPORT, INC.
LAMAR ADVERTISING OF PENN, INC.
LAMAR ADVERTISING OF
MISSOURI, INC.
LAMAR ADVERTISING OF
MICHIGAN, INC.
LAMAR ELECTRICAL, INC.
LAMAR ADVERTISING OF
SOUTH DAKOTA, INC.
LAMAR ADVERTISING OF WEST VIRGINIA, INC.
LAMAR ADVERTISING OF
ASHLAND, INC.
AMERICAN SIGNS, INC.
LAMAR OCI NORTH CORPORATION
LAMAR OCI SOUTH CORPORATION
LAMAR ADVERTISING OF
GREENVILLE, INC.
LAMAR ROBINSON, INC.
LAMAR ADVERTISING OF
KENTUCKY, INC.
LAMAR ADVERTISING OF ROLAND, INC.
By: /s/ Keith Istre
-----------------------------------------
Keith Istre, Vice-President-Financial
3
<PAGE> 4
LAMAR TEXAS LIMITED PARTNERSHIP
By Lamar Texas
General Partner, Inc.
Its general partner
By: /s/ Keith Istre
------------------------------------------
Keith Istre, Vice-President-Financial
LAMAR TENNESSEE, L.L.C.
By The Lamar Corporation, its manager
By: /s/ Keith Istre
------------------------------------------
Keith Istre, Vice-President-Financial
LAMAR AIR, L.L.C.
By The Lamar Corporation, its manager
By: /s/ Keith Istre
------------------------------------------
Keith Istre, Vice-President-Financial
TLC PROPERTIES, L.L.C.
By TLC Properties, Inc., its manager
By: /s/ Keith Istre
------------------------------------------
Keith Istre, Vice-President-Financial
Attest:
By: /s/ James McIlwain
------------------------------------------
James McIlwain, Secretary
Accepted:
STATE STREET BANK & TRUST COMPANY, as Trustee
By: /s/ Andrew Sinasky
----------------------------------------------
Title: Assistant Vice President
-------------------------------------------
4
<PAGE> 1
EXHIBIT 4.5
LAMAR MEDIA CORP.
SUPPLEMENTAL INDENTURE
THIS SUPPLEMENTAL INDENTURE dated as of July 20, 1999, is delivered
pursuant to Section 5.1 of the Indenture dated as of August 15, 1997 (as
heretofore or hereafter modified and supplemented and in effect from time to
time, (the "1997 Indenture") among OUTDOOR COMMUNICATIONS, INC. ("the Company"),
a Delaware corporation, certain of its subsidiaries ("Guarantors") and FIRST
UNION NATIONAL BANK, a national banking corporation, as Trustee ("Trustee") (all
terms used herein without definition having the meanings ascribed to them in the
1997 Indenture).
The undersigned hereby agrees that:
1. Lamar Advertising Company has caused a subsidiary, Lamar Holdings
Merge Co. to merge into Lamar Advertising Company under the laws of the State of
Delaware ("Merger") and incident thereto caused the name of Lamar Advertising
Company to be changed to Lamar Media Corp.
2. Lamar Media Corp., being the Surviving Entity under the Merger as
provided under the 1997 Indenture, continues to be a corporation organized and
existing under the laws of the State of Delaware.
3. The Surviving Entity ratifies and confirms its obligations as the
"Company" under the 1997 Indenture and the securities issued thereunder.
4. Lamar Media Corp. hereby represents and warrants that the
representations and warranties set forth in the 1997 Indenture as amended by
this Supplemental Indenture are correct on and as of the date hereof.
5. The Guarantors of the Indenture, being the Subsidiaries of the
Surviving Entity listed below, hereby confirm and ratify their Guarantees of the
1997 Indenture and the Securities issued thereunder and acknowledge that their
Guarantees will continue to apply to the obligations of the Company under the
1997 Indenture.
6. All notices, requests and other communications provided for in the
1997 Indenture should be delivered to the respective parties hereto at the
following address:
<PAGE> 2
Lamar Media Corp.
Attn: Mr. Keith A. Istre
Vice President - Finance
P.O. Box 66338
Baton Rouge, LA 70896
7. A counterpart of this Supplemental Indenture may be attached to any
counterpart of the 1997 Indenture.
8. This Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned has caused this Supplemental
Indenture to be duly executed as of the day and year first above written.
Guarantors:
LAMAR MEDIA CORP.
INTERSTATE LOGOS, INC.
THE LAMAR CORPORATION
LAMAR ADVERTISING OF MOBILE, INC.
LAMAR ADVERTISING OF COLORADO
SPRINGS, INC.
LAMAR ADVERTISING OF SOUTH
MISSISSIPPI, INC.
LAMAR ADVERTISING OF JACKSON, INC.
LAMAR TEXAS GENERAL PARTNER, INC.
LAMAR ADVERTISING OF SOUTH
GEORGIA, INC.
TLC PROPERTIES, INC.
TLC PROPERTIES, II, INC.
LAMAR PENSACOLA TRANSIT, INC.
LAMAR ADVERTISING OF
YOUNGSTOWN, INC.
NEBRASKA LOGOS, INC.
OKLAHOMA LOGO SIGNS, INC.
MISSOURI LOGOS, INC.
OHIO LOGOS, INC.
UTAH LOGOS, INC.
TEXAS LOGOS, INC.
MISSISSIPPI LOGOS, INC.
GEORGIA LOGOS, INC.
SOUTH CAROLINA LOGOS, INC.
VIRGINIA LOGOS, INC.
MINNESOTA LOGOS, INC.
MICHIGAN LOGOS, INC.
NEW JERSEY LOGOS, INC.
2
<PAGE> 3
FLORIDA LOGOS, INC.
KENTUCKY LOGOS, INC.
NEVADA LOGOS, INC.
TENNESSEE LOGOS, INC.
KANSAS LOGOS, INC.
COLORADO LOGOS, INC.
NEW MEXICO LOGOS, INC.
LAMAR ADVERTISING OF HUNTINGTON-
BRIDGEPORT, INC.
LAMAR ADVERTISING OF PENN, INC.
LAMAR ADVERTISING OF
MISSOURI, INC.
LAMAR ADVERTISING OF
MICHIGAN, INC.
LAMAR ELECTRICAL, INC.
LAMAR ADVERTISING OF
SOUTH DAKOTA, INC.
LAMAR ADVERTISING OF WEST VIRGINIA, INC.
LAMAR ADVERTISING OF
ASHLAND, INC.
AMERICAN SIGNS, INC.
LAMAR OCI NORTH CORPORATION
LAMAR OCI SOUTH CORPORATION
LAMAR ADVERTISING OF
GREENVILLE, INC.
LAMAR ROBINSON, INC.
LAMAR ADVERTISING OF
KENTUCKY, INC.
LAMAR ADVERTISING OF ROLAND, INC.
By: /s/ Keith A. Istre
-------------------------------------------
Keith Istre, Vice - President - Financial
3
<PAGE> 4
LAMAR TEXAS LIMITED PARTNERSHIP
By Lamar Texas General Partner, Inc.
Its general partner
By: /s/ Keith A. Istre
--------------------------------------------
Keith Istre, Vice - President - Financial
LAMAR TENNESSEE, L.L.C.
By The Lamar Corporation, its manager
By: /s/ Keith A. Istre
--------------------------------------------
Keith Istre, Vice - President - Financial
LAMAR AIR, L.L.C.
By The Lamar Corporation, its manager
By: /s/ Keith A. Istre
--------------------------------------------
Keith Istre, Vice - President - Financial
TLC PROPERTIES, L.L.C.
By TLC Properties, Inc., its manager
By: /s/ Keith A. Istre
--------------------------------------------
Keith Istre, Vice - President - Financial
Attest:
By: /s/ James McIlwain
--------------------------------------------
James McIlwain, Secretary
Accepted:
FIRST UNION NATIONAL BANK, as Trustee
By: /s/ Josie Gonot
---------------------------------------------------
Title: Assistant Vice President Corporate Trust Group
------------------------------------------------
4
<PAGE> 1
EXHIBIT 4.6
SUPPLEMENTAL INDENTURE
OF
GUARANTORS
THIS SUPPLEMENTAL INDENTURE dated as of September 15, 1999 is delivered
pursuant to Section 10.04 of the Indenture dated as of November 15, 1996 (as
heretofore or hereafter modified and supplemented and in effect from time to
time, the "Indenture") among LAMAR MEDIA CORP., a Delaware corporation, certain
of its subsidiaries ("Guarantors") and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts banking corporation, as Trustee ("Trustee") (all terms used herein
without definition having the meanings ascribed to them in the Indenture).
The undersigned hereby agree that:
1. The undersigned are Guarantors under the Indenture with all of the
rights and obligations of a Guarantor thereunder.
2. The undersigned hereby grant, ratify and confirm the guarantee
provided for by Article Ten of the Indenture to guarantee unconditionally,
jointly and severally with the other Guarantors, to each Holder of a Note
authenticated and delivered by the Trustee, and to the Trustee on behalf of such
Holder, the due and punctual payment of the principal of (and premium, if any)
and interest on such Note when and as the same shall become due and payable.
3. The undersigned hereby represent and warrant that the
representations and warranties set forth in the Indenture, to the extent
relating to the undersigned as Guarantors, are correct on and as of the date
hereof.
4. All notices, requests and other communications provided for in the
Indenture should be delivered to the undersigned at the address specified in
Section 12.02 of the Indenture.
5. A counterpart of this Supplemental Indenture may be attached to any
counterpart of the Indenture.
6. This Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of New York.
1
<PAGE> 2
IN WITNESS WHEREOF, the undersigned have caused this Supplemental
Indenture to be duly executed as of the day and year first above written.
Guarantors:
LAMAR MW SIGN CORPORATION
LAMAR MARTIN CORPORATION
LAMAR NEVADA SIGN
CORPORATION
LAMAR OUTDOOR CORPORATION
LAMAR WHITECO OUTDOOR
CORPORATION
DOWLING COMPANY, INCORPORATED
HARDIN DEVELOPMENT CORPORATION
LINDSAY OUTDOOR ADVERTISING INC.
PARSONS DEVELOPMENT COMPANY
REVOLUTION OUTDOOR ADVERTISING,
INC.
SCENIC OUTDOOR MARKETING &
CONSULTING, INC.
WESTERN POSTER SERVICE, INC.
By: /s/ Keith A. Istre
----------------------------------------
Keith A. Istre
Vice President - Finance and Chief
Financial Office
LAMAR WEST, L.P.
By: Lamar MW Sign Corporation,
Its General Partner
By: /s/ Keith A. Istre
----------------------------------------
Keith A. Istre
Vice President - Finance and Chief
Financial Officer
2
<PAGE> 3
OUTDOOR PROMOTIONS WEST, LLC
TRANSIT AMERICA LAS VEGAS, L.L.C.
TRIUMPH OUTDOOR LOUISIANA, LLC
TRIUMPH OUTDOOR RHODE ISLAND, LLC
By: Triumph Outdoor Holdings, LLC, its manager
By: Lamar Outdoor Corporation, its manager
By: /s/ Keith A. Istre
----------------------------------------
Keith A. Istre
Vice President - Finance and
Chief Financial Officer
TRIUMPH OUTDOOR HOLDINGS, LLC
By: Lamar Outdoor Corporation, its manager
By: /s/ Keith A. Istre
----------------------------------------
Keith A. Istre
Vice President - Finance and
Chief Financial Officer
Attest:
By: /s/ James R. McIlwain
--------------------------------------
James R. McIlwain, Secretary
Accepted:
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ Andrew Sinasky
--------------------------------------
Title: Assistant Vice President
-----------------------------------
3
<PAGE> 1
EXHIBIT 4.7
SUPPLEMENTAL INDENTURE
THIS SUPPLEMENTAL INDENTURE dated as of December 15, 1997, is delivered
pursuant to Section 10.04 of the Indenture dated as of September 25, 1997 (as
heretofore or hereafter modified and supplemented and in effect from time to
time, the "Indenture") among LAMAR ADVERTISING COMPANY, a Delaware corporation,
certain of its subsidiaries ("Guarantors") and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts banking corporation, as Trustee ("Trustee") (all terms
used herein without definition having the meanings ascribed to them in the
Indenture).
The undersigned hereby agrees that:
1. The undersigned is a Guarantor under the Indenture with all of the
rights and obligations of a Guarantor thereunder.
2. The undersigned hereby grants, ratifies and confirms the guarantee
provided for by Article Ten of the Indenture to guarantee unconditionally,
jointly and severally with the other Guarantors, to each Holder of a Note
authenticated and delivered by the Trustee, and to the Trustee on behalf of such
Holder, the due and punctual payment of the principal of (and premium, if any)
and interest on such Note when and as the same shall become due and payable.
3. The undersigned hereby represents and warrants that the
representations and warranties set forth in the Indenture, to the extent
relating to the undersigned as Guarantor, are correct on and as of the date
hereof.
4. All notices, requests and other communications provided for in the
Indenture should be delivered to the undersigned at the address specified in
Section 12.02 of the Indenture.
5. A counterpart of this Supplemental Indenture may be attached to any
counterpart of the Indenture.
6. This Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of New York.
<PAGE> 2
IN WITNESS WHEREOF, the undersigned has caused this Supplemental
Indenture to be duly executed as of the day and year first above written.
Guarantor:
TLC PROPERTIES, L.L.C.
By: /s/ Keith A. Istre
-----------------------------------------
Keith A. Istre, Vice President and
Chief Financial Officer
Attest:
By: /s/ Charles W. Lamar, III
---------------------------------------
Charles W. Lamar, III, Secretary
Accepted:
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ Andrew M. Sinasky
---------------------------------------
Title: Assistant Vice President
------------------------------------
2
<PAGE> 3
SCHEDULE OF ADDITIONAL SUBSIDIARY GUARANTORS
<TABLE>
<CAPTION>
Guarantor Execution Date
--------- --------------
<S> <C>
Lamar Advertising of South Dakota, Inc. 1/07/98
Lamar Advertising of West Virginia, Inc. 7/28/98
Lamar Advertising of Ashland, Inc. 8/28/98
American Signs, Inc. 9/01/98
Lamar Robinson, Inc. 12/01/98
Lamar Advertising of Kentucky, Inc. 2/01/99
Lamar Advertising of Roland, Inc. 3/01/99
Colorado Logos, Inc. 5/27/99
Lamar Tennessee, L.L.C. 6/29/99
New Mexico Logos, Inc. 7/02/99
</TABLE>
3
<PAGE> 1
EXHIBIT 4.8
SUPPLEMENTAL INDENTURE
THIS SUPPLEMENTAL INDENTURE dated as of December 10, 1996, is delivered
pursuant to Section 10.04 of the Indenture dated as of November 15, 1996 (as
heretofore or hereafter modified and supplemented and in effect from time to
time, the "Indenture") among LAMAR ADVERTISING COMPANY, a Delaware corporation,
certain of its subsidiaries ("Guarantors") and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts banking corporation, as Trustee ("Trustee") (all terms
used herein without definition having the meanings ascribed to them in the
Indenture).
The undersigned hereby agrees that:
1. The undersigned are Guarantors under the Indenture with all of the
rights and obligations of a Guarantor thereunder.
2. The undersigned hereby grant, ratify and confirm the guarantee
provided for by Article Ten of the Indenture to guarantee unconditionally,
jointly and severally with the other Guarantors, to each Holder of a Note
authenticated and delivered by the Trustee, and to the Trustee on behalf of such
Holder, the due and punctual payment of the principal of (and premium, if any)
and interest on such Note when and as the same shall become due and payable.
3. The undersigned hereby represent and warrant that the
representations and warranties set forth in the Indenture, to the extent
relating to the undersigned as Guarantors, are correct on and as of the date
hereof.
4. All notices, requests and other communications provided for in the
Indenture should be delivered to the undersigned at the address specified in
Section 12.02 of the Indenture.
5. A counterpart of this Supplemental Indenture may be attached to any
counterpart of the Indenture.
6. This Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned has caused this Supplemental
Indenture to be duly executed as of the day and year first above written.
Guarantors:
KENTUCKY LOGOS, INC.
By: /s/ Thomas Everett Stewart, Jr.
--------------------------------------
Name: Thomas Everett Stewart, Jr.
Title: President
<PAGE> 2
NEVADA LOGOS, INC.
By: /s/ Thomas Everett Stewart, Jr.
--------------------------------------
Name: Thomas Everett Stewart, Jr.
Title: President
CANADIAN TODS LIMITED
By: /s/ Thomas Everett Stewart, Jr.
--------------------------------------
Name: Thomas Everett Stewart, Jr.
Title: President
FLORIDA LOGOS, INC.
By: /s/ Thomas Everett Stewart, Jr.
--------------------------------------
Name: Thomas Everett Stewart, Jr.
Title: President
Attest:
By: /s/ Charles W. Lamar, III
---------------------------------------
Charles W. Lamar, III, Secretary
Accepted:
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ Andrew M. Sinasky
------------------------------------
Title: Assistant Vice President
2
<PAGE> 3
SCHEDULE OF ADDITIONAL SUBSIDIARY GUARANTORS
<TABLE>
<CAPTION>
Guarantor Execution Date
--------- --------------
<S> <C>
Lamar Advertising of Penn, Inc. 4/01/97
Lamar Advertising of Huntington-Bridgeport, Inc. 5/16/97
Lamar Advertising of Missouri, Inc. 6/27/97
Lamar Advertising of Michigan, Inc. 8/15/97
Lamar Electrical, Inc. 8/28/97
TLC Properties, L.L.C. 12/15/97
Lamar Advertising of South Dakota, Inc. 1/07/98
Lamar Advertising of West Virginia, Inc. 7/28/98
Lamar Advertising of Ashland, Inc. 8/28/98
American Signs, Inc. 9/01/98
Lamar Robinson, Inc. 12/01/98
Lamar Advertising of Kentucky, Inc. 2/01/98
Lamar Advertising of Roland, Inc. 3/01/98
Colorado Logos, Inc. 5/27/99
Lamar Tennessee, L.L.C. 6/29/99
New Mexico Logos, Inc. 7/02/99
</TABLE>
3
<PAGE> 1
EXHIBIT 4.9
SUPPLEMENTAL INDENTURE
TO INDENTURE DATED AUGUST 15, 1997
THIS SUPPLEMENTAL INDENTURE dated as of December 1, 1998, is delivered
pursuant to Section 4.11 of the Indenture dated as of August 15, 1997 (as
heretofore or hereafter modified and supplemented and in effect from time to
time, the "1997 Indenture") among OUTDOOR COMMUNICATIONS, INC., a Delaware
corporation, certain of its subsidiaries (the "Guarantors") and FIRST UNION
NATIONAL BANK, a national banking corporation, as Trustee (the "Trustee") (all
terms used herein without definition having the meanings ascribed to them in the
1997 Indenture).
The undersigned hereby agrees that:
1. The undersigned are Guarantors under the 1997 Indenture with all of
the rights and obligations of the Guarantors thereunder.
2. The undersigned have granted, ratified and confirmed, in the form
and substance of Exhibit B to the 1997 Indenture, the Guarantee provided for by
Article XI of the 1997 Indenture.
3. The undersigned hereby represent and warrant that the
representations and warranties set forth in the 1997 Indenture, to the extent
relating to the undersigned as Guarantors, are correct on and as of the date
hereof.
4. All notices, requests and other communications provided for in the
1997 Indenture should be delivered to the undersigned at the following address:
Keith A. Istre
Vice President - Finance and
Chief Financial Officer
Lamar Advertising Company and its Subsidiaries
5551 Corporate Blvd.
Baton Rouge, LA 70808
5. A counterpart of this Supplemental Indenture may be attached to any
counterpart of the 1997 Indenture.
6. This Supplemental Indenture shall be governed by and construed in
accordance with the internal laws of the State of New York.
<PAGE> 2
IN WITNESS WHEREOF, the undersigned have caused this Supplemental
Indenture to be duly executed as of the day and year first above written.
Guarantors:
LAMAR ROBINSON, INC.
By: /s/ Kevin P. Reilly, Jr.
----------------------------------------
Kevin P. Reilly, Jr., President
Attest:
By: /s/ Charles W. Lamar, III
------------------------------------
Charles W. Lamar, III, Secretary
Accepted:
FIRST UNION NATIONAL BANK,
as Trustee
By: /s/ Shawn K. Bednasek
------------------------------------
Title: Vice President
---------------------------------
2
<PAGE> 3
SCHEDULE OF ADDITIONAL SUBSIDIARY GUARANTORS
<TABLE>
<CAPTION>
Guarantor Execution Date
--------- --------------
<S> <C>
Lamar Advertising of Kentucky, Inc. 2/01/99
Lamar Advertising of Roland, Inc. 3/01/99
Colorado Logos, Inc. 5/27/99
Lamar Tennessee, L.L.C. 6/29/99
New Mexico Logos, Inc. 7/02/99
</TABLE>
3
<PAGE> 1
EXHIBIT 10.1
================================================================================
LAMAR MEDIA CORP.
(formerly known as Lamar Advertising Company)
-----------------------------
CREDIT AGREEMENT
Dated as of August 13, 1999
------------------------------
CHASE SECURITIES INC.
as Lead Arranger and Book Manager
THE CHASE MANHATTAN BANK
as Administrative Agent
FLEET BANK, FIRST UNION NATIONAL BANK
and THE FIRST NATIONAL BANK OF CHICAGO
as Co-Documentation Agents
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
Definitions
SECTION 1.01. Defined Terms.............................................................................1
SECTION 1.02. Classification of Loans and Borrowings...................................................24
SECTION 1.03. Terms Generally..........................................................................24
SECTION 1.04. Accounting Terms; GAAP...................................................................24
SECTION 1.05. Subsidiaries; Designation of Unrestricted Subsidiaries...................................25
ARTICLE II
The Credits
SECTION 2.01. Commitments..............................................................................26
SECTION 2.02. Loans and Borrowings.....................................................................27
SECTION 2.03. Requests for Borrowings..................................................................28
SECTION 2.04. Letters of Credit........................................................................29
SECTION 2.05. Funding of Borrowings....................................................................33
SECTION 2.06. Interest Elections.......................................................................33
SECTION 2.07. Termination and Reduction of Commitments.................................................35
SECTION 2.08. Repayment of Loans; Evidence of Debt.....................................................36
SECTION 2.09. Prepayment of Loans......................................................................39
SECTION 2.10. Fees.....................................................................................42
SECTION 2.11. Interest.................................................................................44
SECTION 2.12. Alternate Rate of Interest...............................................................44
SECTION 2.13. Increased Costs..........................................................................45
SECTION 2.14. Break Funding Payments...................................................................46
SECTION 2.15. Taxes....................................................................................47
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing Of Set-Offs..............................48
SECTION 2.17. Mitigation Obligations; Replacement of Lenders...........................................50
ARTICLE III
Guarantee by Subsidiary Guarantors
SECTION 3.01. The Guarantee............................................................................51
SECTION 3.02. Obligations Unconditional................................................................51
SECTION 3.03. Reinstatement............................................................................52
SECTION 3.04. Subrogation..............................................................................52
SECTION 3.05. Remedies.................................................................................52
SECTION 3.06. Instrument for the Payment of Money......................................................52
</TABLE>
(i)
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 3.07. Continuing Guarantee.....................................................................53
SECTION 3.08. Rights of Contribution...................................................................53
SECTION 3.09. General Limitation on Guarantee Obligations..............................................53
ARTICLE IV
Representations and Warranties
SECTION 4.01. Organization; Powers.....................................................................54
SECTION 4.02. Authorization; Enforceability............................................................54
SECTION 4.03. Governmental Approvals; No Conflicts.....................................................54
SECTION 4.04. Financial Condition; No Material Adverse Change; Year 2000 Issues........................55
SECTION 4.05. Properties...............................................................................56
SECTION 4.06. Litigation and Environmental Matters.....................................................57
SECTION 4.07. Compliance with Laws and Agreements......................................................57
SECTION 4.08. Investment and Holding Company Status....................................................57
SECTION 4.09. Taxes....................................................................................57
SECTION 4.10. ERISA....................................................................................57
SECTION 4.11. Disclosure...............................................................................58
SECTION 4.12. Capitalization...........................................................................58
SECTION 4.13. Material Agreements and Liens............................................................58
SECTION 4.14. Subsidiaries, Etc........................................................................59
SECTION 4.15. Chancellor Acquisition...................................................................59
SECTION 4.16. Senior Notes Indenture...................................................................60
ARTICLE V
Conditions
SECTION 5.01. Effective Date...........................................................................60
SECTION 5.02. Incremental Loan Borrowings..............................................................63
SECTION 5.03. Each Extension of Credit.................................................................63
ARTICLE VI
Affirmative Covenants
SECTION 6.01. Financial Statements and Other Information...............................................64
SECTION 6.02. Notices of Material Events...............................................................66
SECTION 6.03. Existence; Conduct of Business...........................................................67
SECTION 6.04. Payment of Obligations...................................................................67
SECTION 6.05. Maintenance of Properties; Insurance.....................................................67
SECTION 6.06. Books and Records; Inspection Rights.....................................................67
SECTION 6.07. Fiscal Year..............................................................................67
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 6.08. Compliance with Laws.....................................................................68
SECTION 6.09. Use of Proceeds..........................................................................68
SECTION 6.10. Certain Obligations Respecting Restricted Subsidiaries and
Collateral Security..............................................................68
ARTICLE VII
Negative Covenants
SECTION 7.01. Indebtedness.............................................................................69
SECTION 7.02. Liens....................................................................................70
SECTION 7.03. Contingent Liabilities; Surety Bonds.....................................................72
SECTION 7.04. Fundamental Changes......................................................................72
SECTION 7.05. Investments, Loans, Advances, Guarantees and Acquisitions; Hedging
Agreements.......................................................................74
SECTION 7.06. Dividend Payments........................................................................75
SECTION 7.07. Transactions with Affiliates.............................................................76
SECTION 7.08. Restrictive Agreements...................................................................77
SECTION 7.09. Certain Financial Covenants..............................................................78
SECTION 7.10. Lines of Business........................................................................79
SECTION 7.11. Subordinated Indebtedness................................................................79
SECTION 7.12. Modifications of Certain Documents.......................................................79
ARTICLE VIII
Events of Default....................................................80
ARTICLE IX
The Administrative Agent.............................................83
ARTICLE X
Miscellaneous
SECTION 10.01. Notices.................................................................................85
SECTION 10.02. Waivers; Amendments.....................................................................86
SECTION 10.03. Expenses; Indemnity; Damage Waiver......................................................88
SECTION 10.04. Successors and Assigns..................................................................89
SECTION 10.05. Survival................................................................................92
SECTION 10.06. Counterparts; Integration; Effectiveness................................................93
SECTION 10.07. Severability............................................................................93
SECTION 10.08. Right of Setoff.........................................................................93
SECTION 10.09. Governing Law; Jurisdiction; Consent to Service of Process..............................94
</TABLE>
(iii)
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 10.10. WAIVER OF JURY TRIAL....................................................................94
SECTION 10.11. Headings................................................................................95
SECTION 10.12. Release of Collateral and Guarantees....................................................95
SECTION 10.13. Successor Facility......................................................................95
SECTION 10.14. Existing Credit Agreement...............................................................95
</TABLE>
SCHEDULES:
Schedule 2.01 -- Commitments
Schedule 4.06 -- Disclosed Matters
Schedule 4.11 -- Supplemental Disclosure
Schedule 4.13 -- Material Agreements and Liens
Schedule 4.14 -- Subsidiaries
Schedule 7.01 -- Existing Indebtedness
Schedule 7.02 -- Existing Liens
Schedule 7.03 -- Existing Guarantees
Schedule 7.07 -- Certain Existing Affiliate Transactions
Schedule 7.08 -- Existing Restrictions
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Opinion of Counsel to the Credit Parties
Exhibit C -- Form of Opinion of Special Counsel
Exhibit D-1 -- Form of Pledge Agreement
Exhibit D-2 -- Form of Holdings Guaranty and Pledge Agreement
Exhibit E -- Form of Joinder Agreement
(iv)
<PAGE> 6
CREDIT AGREEMENT dated as of August 13, 1999 between LAMAR
MEDIA CORP., the SUBSIDIARY GUARANTORS party hereto, the LENDERS party hereto
and THE CHASE MANHATTAN BANK, as Administrative Agent.
The Borrower, the Subsidiary Guarantors, the lenders named
therein (including certain of the Lenders hereunder) and The Chase Manhattan
Bank, as Administrative Agent, are party to an Amended and Restated Credit
Agreement dated as of July 16, 1998 (the "Existing Credit Agreement"). The
Borrower has requested the Lenders to extend credit, by means of loans and
letters of credit, in an aggregate amount up to but not exceeding $1,000,000,000
(which amount may, in the circumstances hereinafter provided, be increased to
$1,400,000,000) to (i) enable the Borrower to consummate the Chancellor
Acquisition (as defined herein), (ii) refinance indebtedness outstanding under
the Existing Credit Agreement, and (iii) provide funds for future acquisitions
and the general corporate purposes of the Borrower and its Restricted
Subsidiaries (as defined herein). The Lenders are willing to extend such credit
upon the terms and conditions of this Agreement and, accordingly, the parties
hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. DEFINED TERMS. As used in this Agreement, the
following terms have the meanings specified below:
"Acquisition" means any transaction, or any series of related
transactions, consummated after the date hereof, by which (i) the Borrower
and/or any of its Subsidiaries acquires the business of, or all or substantially
all of the assets of, any firm, corporation or division thereof located in a
specific geographic area or areas, whether through purchase of assets, purchase
of stock, merger or otherwise or (ii) any Person that was not theretofore a
Subsidiary of the Borrower becomes a Subsidiary of the Borrower.
"Adjusted Base Rate" means, for any day, a rate per annum
equal to the greater of (a) the Prime Rate in effect on such day, (b) the Base
CD Rate in effect on such day plus 1% and (c) the Federal Funds Effective Rate
in effect on such day plus 1/2 of 1%. Any change in the Adjusted Base Rate due
to a change in the Prime Rate, the Base CD Rate or the Federal Funds Effective
Rate shall be effective from and including the effective date of such change in
the Prime Rate, Base CD Rate or the Federal Funds Effective Rate, respectively.
"Adjusted LIBO Rate" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means The Chase Manhattan Bank in its
capacity as administrative agent for the Lenders hereunder.
Credit Agreement
<PAGE> 7
- 2 -
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
Notwithstanding the foregoing, (a) no individual shall be an Affiliate of the
Borrower or any of its Restricted Subsidiaries solely by reason of his or her
being a director, officer or employee of the Borrower or any of its Restricted
Subsidiaries and (b) none of the Subsidiary Guarantors shall be Affiliates of
the Borrower or any of its Restricted Subsidiaries.
"Applicable Percentage" means (a) with respect to any
Revolving Credit Lender for purposes of Section 2.04, the percentage of the
total Revolving Credit Commitments represented by such Lender's Revolving Credit
Commitment, (b) with respect to any Lender in respect of any indemnity claim
under Section 10.03(c) relating to the Administrative Agent under this
Agreement, the percentage of the total Commitments or Loans of all Classes
hereunder represented by the aggregate amount of such Lender's Commitment or
Loans of all Classes hereunder.
"Applicable Margin" means (a) for any Type of Revolving Credit
Loans or Tranche A Term Loans, the respective rates indicated below for Loans of
such Type based upon the Total Debt Ratio as at the last day of the fiscal
quarter most recently ended as to which the Borrower has delivered financial
statements pursuant to Section 6.01 (or, prior to the delivery of the first of
such statements after the Effective Date, upon the Total Debt Ratio set forth in
the certificate of a Financial Officer delivered pursuant to Section 5.01(k));
(b) for Tranche B Term Loans, (i) 1.25% in the case of Adjusted Base Rate Loans,
and (ii) 2.25% in the case of Eurodollar Loans; and (c) for any Type of
Incremental Loans of any Series, such rates of interest as shall be agreed upon
at the time Incremental Loan Commitments of such Series are established:
Credit Agreement
<PAGE> 8
- 3 -
<TABLE>
<CAPTION>
Range Applicable Margin (% p.a.)
of -----------------------------------------------
Total Debt Ratio Base Rate Loans Eurodollar Loans
---------------- --------------- ----------------
<S> <C> <C>
Greater than or equal
to 5.50 to 1
.75% 2.00%
Less than 5.50 to 1 and
greater than or equal to
5.00 to 1
.50% 1.75%
Less than 5.00 to 1 and
greater than or equal to
4.50 to 1
.25% 1.50%
Less than 4.50 to 1 and
greater than or equal to
4.00 to 1
.00% 1.25%
Less than 4.00 to 1
.00% 1.00%
</TABLE>
Each change in the "Applicable Margin" based upon any change
in the Total Debt Ratio shall become effective for purposes of the accrual of
interest hereunder (including in respect of all then-outstanding Loans) on the
date three Business Days after the delivery to the Administrative Agent of the
financial statements of the Borrower for the most recently ended fiscal quarter
pursuant to Section 6.01, and shall remain effective for such purpose until
three Business Days after the next delivery of such financial statements to the
Administrative Agent hereunder.
Notwithstanding the foregoing, in the event the Borrower
consummates any Acquisition or Disposition for aggregate consideration of
$25,000,000 or more, the Borrower shall forthwith deliver to the Administrative
Agent a certificate of a Financial Officer, in form and detail satisfactory to
the Administrative Agent, setting forth a redetermination of the Total Debt
Ratio reflecting such Acquisition or Disposition, and on the date three Business
Days after the delivery of such certificate, the Applicable Margin shall be
adjusted to give effect to such redetermination of the Total Debt Ratio.
Anything in this Agreement to the contrary notwithstanding,
the Applicable Margin shall be the highest rates provided for above if the
certificate of a Financial Officer shall not be delivered by the times provided
in Section 6.01 or within three Business Days after the occurrence of any
Acquisition or Disposition described above (but only, in the case of this
paragraph, with respect to periods prior to the delivery of such certificate).
"Approved Fund" means, with respect to any Lender that is a
fund that invests in commercial loans, any other fund that invests in commercial
loans and is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such investment advisor.
Credit Agreement
<PAGE> 9
- 4 -
"Assessment Rate" means, for any day, the annual assessment
rate in effect on such day that is payable by a member of the Bank Insurance
Fund classified as "well-capitalized" and within supervisory subgroup "B" (or a
comparable successor risk classification) within the meaning of 12 C.F.R. Part
327 (or any successor provision) to the Federal Deposit Insurance Corporation
for insurance by such Corporation of time deposits made in dollars at the
offices of such member in the United States; provided that if, as a result of
any change in any law, rule or regulation, it is no longer possible to determine
the Assessment Rate as aforesaid, then the Assessment Rate shall be such annual
rate as shall be determined by the Administrative Agent to be representative of
the cost of such insurance to the Lenders.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 10.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"Base CD Rate" means the sum of (a) the Three-Month Secondary
CD Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Base Rate", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted Base Rate.
"Basic Documents" means the Loan Documents, the Senior
Subordinated Notes Indenture and the New Senior Subordinated Notes Indenture (or
any applicable governing agreement for any Refunding Indebtedness) and the
Senior Secured Notes (and any related agreement).
"Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrower" means Lamar Media Corp. (formally known as Lamar
Advertising Company), a Delaware corporation.
"Borrowing" means Loans of a particular Class of the same
Type, made, converted or continued on the same date and, in the case of
Eurodollar Loans, as to which a single Interest Period is in effect.
"Borrowing Request" means a request by the Borrower for a
Borrowing in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed; provided 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 U.S. dollar deposits in the London interbank
market.
Credit Agreement
<PAGE> 10
- 5 -
"Capital Expenditures" means, for any period, the sum for the
Borrower or any of its Restricted Subsidiaries (determined on a consolidated
basis without duplication in accordance with GAAP) of the aggregate amount of
expenditures (including the aggregate amount of Capital Lease Obligations
incurred during such period) made to acquire or construct fixed assets, plant
and equipment (including renewals, improvements and replacements, but excluding
repairs) during such period computed in accordance with GAAP; provided that such
term shall not include any such expenditures in connection with any Acquisition
or any replacement or repair of Property affected by a Casualty Event.
"Capital Lease Obligations" of any Person means 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 the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Casualty Event" means, with respect to any Property of any
Person, any loss of or damage to, or any condemnation or other taking of, such
Property for which such Person or any of its Subsidiaries receives insurance
proceeds, or proceeds of a condemnation award or other compensation.
"Chancellor" means, collectively, Chancellor Media Outdoor
Corporation, a Delaware corporation, and Chancellor Media Whiteco Outdoor
Corporation, a Delaware Corporation.
"Chancellor Acquisition" means the Acquisition of Chancellor
by the Borrower pursuant to the Chancellor Acquisition Agreement, consisting of
the purchase by the Borrower of the shares of capital stock of Chancellor Media
Outdoor Corporation from Chancellor Media Corporation of Los Angeles, and of the
shares of capital stock of Chancellor Media Whiteco Outdoor Corporation from
Chancellor Mezzanine Holdings Corporation.
"Chancellor Acquisition Agreement" means the Amended and
Restated Stock Purchase Agreement dated as of July 12, 1999 between the
Borrower, as purchaser, and Chancellor Mezzanine Holdings Corporation and
Chancellor Media Corporation of Los Angeles, as sellers.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
the Issuing Lender (or, for purposes of Section 2.13(b), by any lending office
of such Lender or by such Lender's or the Issuing Lender's holding company, if
any) with any request, guideline or directive (whether or not having the force
of law) of any Governmental Authority made or issued after the date of this
Agreement.
"Chase" means The Chase Manhattan Bank, a New York banking
corporation.
Credit Agreement
<PAGE> 11
- 6 -
"Class", when used in reference to any Loan, Borrowing or
Commitment, refers to whether such Loan, the Loans comprising such Borrowing or
the Loans that a Lender holding such Commitment is obligated to make, are
Revolving Credit Loans, Tranche A Term Loans, Tranche B Term Loans, or
Incremental Loans.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Commitments" means the Revolving Credit Commitments, Tranche
A Commitments, Tranche B Commitments and Incremental Loan Commitments, as
applicable.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Confidential Information Memorandum" means the Confidential
Information Memorandum dated July, 1999 with respect to the syndication of the
credit facilities provided herein.
"Credit Parties" means, collectively, Holdings, the Borrower
and the Subsidiary Guarantors.
"Debt Service" means, for any period, the sum, for Holdings
and the Borrower and its Restricted Subsidiaries (determined on a consolidated
basis without duplication in accordance with GAAP), of the following: (a) the
amount, if any, by which the aggregate principal amount of Revolving Credit
Loans outstanding hereunder at the beginning of such period shall exceed the
aggregate amount of the Revolving Credit Commitments scheduled to be in effect
at the end of such period after giving effect to any reductions of such
Commitments scheduled to occur during such period pursuant to Section 2.07 plus
(b) all regularly scheduled payments or regularly scheduled mandatory
prepayments of principal of any other Indebtedness (including the Tranche A Term
Loans, the Tranche B Term Loans and the Incremental Loans and the principal
component of any payments in respect of Capital Lease Obligations, but excluding
any prepayments pursuant to Section 2.09) made during such period plus (c) all
Interest Expense for such period.
"Default" means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings
and the environmental matters disclosed in Schedule 4.06.
"Disposition" means any sale, assignment, transfer or other
disposition of any property (whether now owned or hereafter acquired) by the
Borrower or any of its Restricted Subsidiaries to any other Person excluding any
sale, assignment, transfer or other disposition of (i) any property sold or
disposed of in the ordinary course of business and on ordinary business terms,
(ii) any obsolete or worn-out tools and equipment no longer used or useful in
the business
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of the Borrower and its Restricted Subsidiaries and (iii) any Collateral under
and as defined in the Pledge Agreement pursuant to an exercise of remedies by
the Administrative Agent under Section 5.05 thereof.
"Disposition Investment" means, with respect to any
Disposition, any promissory notes or other evidences of indebtedness or
Investments received by the Borrower or any of its Restricted Subsidiaries in
connection with such Disposition.
"Dividend Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of capital stock of the Borrower, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such shares of capital stock of the Borrower (and including
also any payments to any Person, such as "phantom stock" payments, where the
amount thereof is calculated with reference to the fair market or equity value
of the Borrower or any of its Subsidiaries), but excluding dividends payable
solely in shares of common stock of the Borrower.
"EBITDA" means, for any period, operating income for the
Borrower and its Restricted Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP) for such period (calculated before
taxes, Interest Expense, depreciation, amortization and any other non-cash
income or charges accrued for such period and (except to the extent received or
paid in cash by the Borrower or any of its Restricted Subsidiaries) income or
loss attributable to equity in Affiliates for such period) excluding any
extraordinary and unusual gains or losses during such period and excluding the
proceeds of any Casualty Events and Dispositions.
Notwithstanding the foregoing, except as otherwise provided in
Section 7.04(f), if during any period for which EBITDA is being determined the
Borrower shall have consummated any Acquisition (including the Chancellor
Acquisition) or Disposition then, for all purposes of this Agreement (other than
for purposes of the definition of Excess Cash Flow), EBITDA shall be determined
on a pro forma basis as if such Acquisition or Disposition had been made or
consummated on the first day of such period.
"Effective Date" means the date on which the conditions
specified in Section 5.01 are satisfied (or waived in accordance with Section
10.02).
"Environmental Laws" means all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or
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disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"Equity Hedging Arrangement" means any agreement or other
arrangement pursuant to which the Borrower or any of its Restricted Subsidiaries
shall agree to purchase shares of capital stock of the Borrower from another
Person at a fixed price or formula (or to make payments to another Person
calculated with reference to the price of any such shares), whether such
agreement or other arrangement arises in connection with an acquisition of a
business or property, an employee benefit plan, a hedging transaction or
otherwise.
"Equity Rights" means, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including any stockholders' or voting trust agreements) for the
issuance or sale of, or securities convertible into, any additional shares of
capital stock of any class, or partnership or other ownership interests of any
type in, such Person.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived), (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived, (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan, (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan, (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan, (f)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan, or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
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"Event of Default" has the meaning assigned to such term in
Article VIII.
"Excess Cash Flow" means, for any period, the excess of (a)
EBITDA for such period over (b) the sum of (i) Debt Service for such period
(other than the portion thereof attributable to Holdings) plus (ii) the
aggregate amount of all Capital Expenditures and cash payments made by the
Borrower and its Restricted Subsidiaries in respect of any Acquisitions made by
the Borrower and its Restricted Subsidiaries during such period plus (iii) the
aggregate amount paid, or required to be paid, in cash in respect of income,
franchise, real estate and other like taxes for such period (to the extent not
deducted in determining EBITDA for such period) plus (iv) the aggregate amount
of prepayments of Term Loans and Incremental Loans made during such period
pursuant to Section 2.09(a) (other than that portion, if any, of such
prepayments applied to installments of the Term Loans and Incremental Loans
falling due in such period) and the aggregate amount of voluntary reductions of
Revolving Credit Commitments made during such period pursuant to Section
2.07(c).
"Excluded Taxes" means, with respect to the Administrative
Agent, any Lender, the Issuing Lender or any other recipient of any payment to
be made by or on account of any obligation of the Borrower hereunder, (a)
income, net worth or franchise taxes imposed on (or measured by) its net income
or net worth by the United States of America, or by the jurisdiction under the
laws of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable lending office is
located or in which it is taxable solely on account of some connection other
than the execution, delivery or performance of this Agreement or the receipt of
income hereunder, (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which the
Borrower is located and (c) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Borrower under Section 2.17(b)), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party to this Agreement or is attributable to
such Foreign Lender's failure or inability to comply with Section 2.15(e),
except to the extent that such Foreign Lender's assignor (if any) was entitled,
at the time of assignment, to receive additional amounts from the Borrower with
respect to such withholding tax pursuant to Section 2.15(a).
"Existing Credit Agreement" has the meaning assigned to such
term in the preamble to this Agreement.
"Federal Funds Effective Rate" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of l%) 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 that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or controller of the Borrower, as the
case may be.
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"Fixed Charges Ratio" means, as at any date, the ratio of (a)
EBITDA for the period of four consecutive fiscal quarters ending on or most
recently ended prior to such date to (b) the sum for Holdings and the Borrower
and its Restricted Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (i) all Debt Service for
such period plus (ii) the aggregate amount of all Capital Expenditures made
during such period plus (iii) the aggregate amount paid, or required to be paid,
in cash in respect of income, franchise, real estate and other like taxes for
such period (to the extent not deducted in determining EBITDA for such period).
"Foreign Lender" means any Lender that is organized under the
laws of a jurisdiction other than that in which the Borrower is located. For
purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"Foreign Subsidiary" means any Subsidiary of the Borrower
organized in a jurisdiction other than the United States of America, any State
thereof, or the District of Columbia.
"GAAP" means generally accepted accounting principles in the
United States of America.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" means a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of, or
otherwise to be or become contingently liable under or with respect to, the
Indebtedness, other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other distributions upon
the stock or equity interests of any Person, or an agreement to purchase, sell
or lease (as lessee or lessor) property, products, materials, supplies or
services primarily for the purpose of enabling a debtor to make payment of such
debtor's obligations or an agreement to assure a creditor against loss, and
including, without limitation, causing a bank or other financial institution to
issue a letter of credit or other similar instrument for the benefit of another
Person, but excluding endorsements for collection or deposit in the ordinary
course of business. The terms "Guarantee" and "Guaranteed" used as a verb shall
have a correlative meaning.
"Hazardous Materials" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
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"Hedging Agreement" means any interest rate protection
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price hedging
arrangement.
"Holdings" means Lamar Advertising Company, a Delaware
corporation of which the Borrower is a Wholly Owned Subsidiary.
"Holdings Guaranty and Pledge Agreement" means a Guaranty and
Pledge Agreement substantially in the form of Exhibit D-2 between Holdings and
the Administrative Agent.
"Holdings Indenture" means the Indenture pursuant to which the
Senior Notes have been issued.
"Inactive Subsidiary" means, as at any date, any Subsidiary of
the Borrower that, as at the end of and for the quarterly accounting period
ending on or most recently ended prior to such date, shall have less than $1,000
in assets.
"Incremental Loan" has the meaning assigned to such term in
Section 2.01(d).
"Incremental Loan Commitment" means, with respect to each
Lender, the amount of the offer of such Lender to make Incremental Loans of any
Series that is accepted by the Borrower in accordance with the provisions of
Section 2.01(d), as such amount may be (a) reduced from time to time pursuant to
Sections 2.07 and 2.09 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 10.04. The aggregate
amount of the Incremental Loan Commitments of all Series shall not exceed
$400,000,000.
"Incremental Loan Commitment Termination Date" means the
Quarterly Date falling on or nearest to December 31, 2001.
"Incremental Loan Lenders" means, in respect of any Series of
Incremental Loans, (a) initially, the Lenders whose offers to make Incremental
Loans of such Series shall have been accepted by the Borrower in accordance with
the provisions of Section 2.01(d) and (b) thereafter, the Lenders from time to
time holding Incremental Loans of such Series and/or Incremental Loan
Commitments of such Series after giving effect to any assignments thereof
permitted by Section 10.04.
"Indebtedness" means, for any Person: (a) obligations created,
issued or incurred by such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of Property to another Person
subject to an understanding or agreement, contingent or otherwise, to repurchase
such Property from such Person); (b) obligations of such Person to pay the
deferred purchase or acquisition price of Property or services, other than trade
accounts payable (other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business so long as such trade accounts are
payable within 120 days of the date the respective goods are delivered or the
respective services are rendered; (c) Indebtedness of others secured by a Lien
on the Property of such Person, whether or not the respective indebtedness so
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secured has been assumed by such Person; (d) obligations of such Person in
respect of letters of credit or similar instruments issued or accepted by banks
and other financial institutions for account of such Person; (e) Capital Lease
Obligations of such Person; (f) Indebtedness of others Guaranteed by such
Person; and (g) obligations under Equity Hedging Arrangements (and, for purposes
hereof, the amount of Indebtedness under an Equity Hedging Arrangement shall be
deemed to be equal to the aggregate maximum contingent or potential liability
under such Equity Hedging Arrangement). The Indebtedness of any Person shall
include the Indebtedness of any other entity (including any partnership in which
such Person is a general partner) to the extent such Person is liable therefor
as a result of such Person's ownership interest in or other relationship with
such entity, except to the extent the terms of such Indebtedness provide that
such Person is not liable therefor.
Notwithstanding the foregoing, the following items shall not
be deemed "Indebtedness" for purposes hereof: (i) obligations under Hedging
Agreements; (ii) obligations in respect of Surety Bonds (other than letters of
credit supporting obligations in respect of Surety Bonds, as to which clause
(iii) below shall apply, and other than Surety Bonds supporting obligations that
would otherwise constitute Indebtedness under this definition) to the extent
that the aggregate amount of all such obligations does not exceed $40,000,000;
and (iii) obligations in respect of the undrawn face amount of letters of credit
(other than letters of credit supporting obligations that would otherwise
constitute Indebtedness under this definition) to the extent that the aggregate
amount of all such obligations does not exceed $10,000,000.
"Indemnified Taxes" means all Taxes other than (a) Excluded
Taxes and Other Taxes and (b) amounts constituting penalties or interest imposed
with respect to Excluded Taxes or Other Taxes.
"Interest Coverage Ratio" means, as at any date, the ratio of
(a) EBITDA for the period of four consecutive fiscal quarters ending on or most
recently ended prior to such date to (b) Interest Expense for such period.
"Interest Election Request" means a request by the Borrower to
convert or continue a Borrowing in accordance with Section 2.06.
"Interest Expense" means, for any period, the sum, for
Holdings and the Borrower and its Restricted Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP), of the
following: (a) all interest in respect of Indebtedness accrued or capitalized
during such period (whether or not actually paid during such period) plus (b)
the net amounts payable (or minus the net amounts receivable) under Hedging
Agreements accrued during such period (whether or not actually paid or received
during such period) including, without limitation, fees, but excluding
reimbursement of legal fees and other similar transaction costs and excluding
payments required by reason of the early termination of Hedging Agreements in
effect on the date hereof plus (c) all fees, including letter of credit fees and
expenses, incurred hereunder after the Effective Date.
Notwithstanding the foregoing, if during any period for which
Interest Expense is being determined the Borrower shall have consummated any
Acquisition (including the Chancellor Acquisition) or Disposition then, for all
purposes of this Agreement (other than for
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purposes of the definition of Excess Cash Flow), Interest Expense shall be
determined on a pro forma basis as if such Acquisition or Disposition (and any
Indebtedness incurred by the Borrower or any of its Restricted Subsidiaries in
connection with such Acquisition or repaid as a result of such Disposition) had
been made or consummated (and such Indebtedness incurred or repaid) on the first
day of such period.
"Interest Payment Date" means (a) with respect to any Base
Rate Loan, each Quarterly Date and (b) with respect to any Eurodollar Loan, the
last Business Day of the Interest Period applicable to the Borrowing of which
such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest
Period of more than three months' duration, each Business Day prior to the last
day of such Interest Period that occurs at intervals of three months' duration
after the first day of such Interest Period.
"Interest Period" means with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months (or, with the consent of each Lender of the relevant Class, nine or
twelve months) thereafter, as the Borrower may elect; provided, 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 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) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing. Notwithstanding the foregoing,
(v) if any Interest Period for any Revolving Credit Borrowing
would otherwise end after the Revolving Credit Termination Date, such
Interest Period shall end on the Revolving Credit Termination Date,
(w) no Interest Period for any Revolving Credit Borrowing may
commence before and end after any Revolving Credit Commitment Reduction
Date unless, after giving effect thereto (and taking into account any
then-outstanding Letters of Credit), the aggregate principal amount of
Revolving Credit Loans having Interest Periods that end after such
Revolving Credit Commitment Reduction Date shall be equal to or less
than the aggregate principal amount of Revolving Credit Loans scheduled
to be outstanding after giving effect to the payments of principal
required to be made on such Revolving Credit Commitment Reduction Date,
(x) no Interest Period for any Term Loan Borrowing may
commence before and end after any Principal Payment Date unless, after
giving effect thereto, the aggregate principal amount of Term Loans
having Interest Periods that end after such Principal Payment Date
shall be equal to or less than the aggregate principal amount of Term
Loans scheduled to be outstanding after giving effect to the payments
of principal required to be made on such Principal Payment Date,
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(y) no Interest Period for any Incremental Loan Borrowing of
any Series may commence before and end after any Principal Payment Date
unless, after giving effect thereto, the aggregate principal amount of
the Incremental Loans of such Series having Interest Periods that end
after such Principal Payment Date shall be equal to or less than the
aggregate principal amount of the Incremental Loans of such Series
scheduled to be outstanding after giving effect to the payments of
principal required to be made on such Principal Payment Date, and
(z) notwithstanding the foregoing clauses (v), (w), (x) and
(y), no Interest Period shall have a duration of less than one month
and, if the Interest Period for any Eurodollar Loan would otherwise be
a shorter period, such Loan shall not be available hereunder as a
Eurodollar Loan for such period.
"Investment" means, for any Person: (a) the acquisition
(whether for cash, Property, services or securities or otherwise) of capital
stock, bonds, notes, debentures, partnership or other ownership interests or
other securities of, or capital contribution to, any other Person or any
agreement to make any such acquisition or capital contribution (including,
without limitation, any "short sale" or any sale of any securities at a time
when such securities are not owned by the Person entering into such short sale);
(b) the making of any deposit with, or advance, loan or other extension of
credit to, any other Person (including the purchase of Property from another
Person subject to an understanding or agreement, contingent or otherwise, to
resell such Property to such Person, but excluding any such advance, loan or
extension of credit having a term not exceeding 180 days representing the
purchase price of inventory or supplies sold by such Person in the ordinary
course of business); or (c) the entering into of any Guarantee of, or other
contingent obligation with respect to, Indebtedness or other liability of any
other Person and (without duplication) any amount committed to be advanced, lent
or extended to such Person.
Notwithstanding the foregoing, the following items shall not
be deemed "Investments" for purposes hereof: (i) Capital Expenditures, (ii)
Acquisitions and (iii) obligations (including, without limitation, deposits) in
connection with Surety Bonds.
"Issuing Lender" means The Chase Manhattan Bank, in its
capacity as the issuer of Letters of Credit hereunder.
"Joinder Agreement" means a Joinder Agreement substantially in
the form of Exhibit E.
"LC Disbursement" means a payment made by the Issuing Lender
pursuant to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Revolving Credit
Lender at any time shall be its Applicable Percentage of the total LC Exposure
at such time.
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"Lenders" means the Persons listed on Schedule 2.01 and any
other Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"Letter of Credit" means any letter of credit issued pursuant
to this Agreement.
"LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, the rate appearing on Page 3750 of the Telerate Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to U.S. dollar deposits in the London interbank
market) at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for U.S. dollar deposits with
a maturity comparable to such Interest Period. In the event that such rate is
not available at such time for any reason, then the "LIBO Rate" with respect to
such Eurodollar Borrowing for such Interest Period shall be the rate at which
U.S. dollar deposits of $5,000,000, and for a maturity comparable to such
Interest Period, are offered by the principal London office of the
Administrative Agent in 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.
"Lien" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention agreement
(other than an operating lease) (or any financing lease having substantially the
same economic effect as any of the foregoing) relating to such asset and (c) in
the case of securities, any purchase option, call or similar right of a third
party with respect to such securities.
"Loan Documents" means this Agreement, any promissory notes
evidencing Loans hereunder and the Security Documents.
"Loans" means the loans made by the Lenders to the Borrower
pursuant to this Agreement.
"Material Adverse Effect" means a material adverse effect on
(a) the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and its Restricted Subsidiaries (or of the Borrower
and all of its Subsidiaries) taken as a whole, (b) the ability of any Credit
Party to perform any of its obligations under this Agreement or the other Loan
Documents or (c) the rights of or benefits available to the Lenders under this
Agreement and the other Loan Documents.
"Material Indebtedness" means Indebtedness (other than the
Loans or Letters of Credit), or obligations in respect of one or more Hedging
Agreements, of any one or more of Holdings, the Borrower or any of its
Restricted Subsidiaries in an aggregate principal amount exceeding $10,000,000.
For purposes of determining Material Indebtedness, the "principal amount" of the
obligations of any Person in respect of any Hedging Agreement at any time shall
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be the maximum aggregate amount (giving effect to any netting agreements) that
such Person would be required to pay if such Hedging Agreement were terminated
at such time.
"Missouri Partnership" means Missouri Logos, a Missouri
general partnership, in which MIL is a general partner.
"MIL" means Missouri Logos, Inc., a Wholly Owned Subsidiary of
Interstate Logos, Inc., a Wholly Owned Subsidiary of the Borrower.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Available Proceeds" means:
(i) in the case of any Disposition, the amount of Net Cash
Payments received in connection with such Disposition; and
(ii) in the case of any Casualty Event, the aggregate amount
of proceeds of insurance, condemnation awards and other compensation
received by the Borrower and its Restricted Subsidiaries in respect of
such Casualty Event net of (A) reasonable expenses incurred by the
Borrower and its Restricted Subsidiaries in connection therewith and
(B) contractually required repayments of Indebtedness to the extent
secured by a Lien on such property and any income and transfer taxes
payable by the Borrower or any of its Restricted Subsidiaries in
respect of such Casualty Event.
"Net Cash Payments" means, with respect to any Disposition,
the aggregate amount of all cash payments received by the Borrower and its
Restricted Subsidiaries directly or indirectly in connection with such
Disposition, whether at the time of such Disposition or after such Disposition
under deferred payment arrangements or Investments entered into or received in
connection with such Disposition (including, without limitation, Disposition
Investments); provided that
(a) Net Cash Payments shall be net of (i) the amount of any
legal, title, transfer and recording tax expenses, commissions and
other fees and expenses payable by the Borrower and its Restricted
Subsidiaries in connection with such Disposition and (ii) any Federal,
state and local income or other taxes estimated to be payable by the
Borrower and its Restricted Subsidiaries as a result of such
Disposition, but only to the extent that such estimated taxes are in
fact paid to the relevant Federal, state or local governmental
authority within twelve months of the date of such Disposition; and
(b) Net Cash Payments shall be net of any repayments by the
Borrower or any of its Restricted Subsidiaries of Indebtedness to the
extent that (i) such Indebtedness is secured by a Lien on the property
that is the subject of such Disposition and (ii) the transferee of (or
holder of a Lien on) such property requires that such Indebtedness be
repaid as a condition to the purchase of such property.
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"New Senior Subordinated Notes" means the notes issued after
the date hereof in accordance with the requirements of Section 7.01(b).
"New Senior Subordinated Notes Indentures" means the
Indentures pursuant to which New Senior Subordinated Notes are issued.
"Obligors" means, collectively, the Borrower and the
Subsidiary Guarantors.
"OCI" means Outdoor Communications Inc., a Delaware
corporation.
"OCI Credit Agreement" means the Credit Agreement dated as of
August 15, 1997 among OCI, certain subsidiaries of OCI, certain lenders party
thereto, and Chase, as Administrative Agent.
"OCI Indenture" means the Indenture dated as of August 15,
1997 between OCI, OCI (N) Corp., OCI (S) Corp. and OCIH LLC, as Guarantors, and
First Union National Bank, as Trustee.
"OCI Subordinated Indebtedness" means Indebtedness in respect
of the OCI Subordinated Notes.
"OCI Subordinated Notes" means the 9-1/4% Senior Subordinated
Notes due 2007 issued under the OCI Indenture in the original principal amount
of $105,000,000.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement and the other
Loan Documents, provided that there shall be excluded from "Other Taxes" all
Excluded Taxes.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
(b) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from Standard and
Poor's Ratings Service or from Moody's Investors Service, Inc.;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any domestic office of
any commercial bank organized under the laws of the United States of
America or any State thereof which has a combined capital and surplus
and undivided profits of not less than $250,000,000; and
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(d) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria
described in clause (c) above.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreement" means a Pledge Agreement substantially in
the form of Exhibit D-1 between the Obligors and the Administrative Agent.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by The Chase Manhattan Bank, as its prime rate in
effect at its principal office in New York City; each change in the Prime Rate
shall be effective from and including the date such change is publicly announced
as being effective.
"Principal Payment Dates" means (i) the Quarterly Dates
falling on or nearest to March 31, June 30, September 31 and December 31 of each
year, commencing with September 30, 2001 through and including June 30, 2006 and
(ii) March 1, 2006 and August 1, 2006 (or, if such day is not a Business Day,
the next preceding Business Day).
"Property" means any right or interest in or to property of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Qualified Holdings Obligations" means, collectively,
obligations of the following categories incurred from time to time by Holdings
on behalf of the Borrower and its Subsidiaries: (i) directors' fees, and fees,
costs and expenses in respect of professional and related services which may be
rendered to the Borrower and its Subsidiaries from time to time, including the
fees and expenses of accountants, lawyers, investment bankers and other
consultants retained in connection with matters affecting the Borrower and its
Subsidiaries collectively, (ii) premiums, fees and expenses in connection with
insurance policies and employee benefit programs (including workmen's
compensation) maintained on behalf of the Borrower or any of its Subsidiaries,
(iii) fees, costs and expenses incurred in connection with acquisitions and
financings, including banking and underwriting fees (including underwriters
discounts) and (iv) fees, costs and expenses in connection with the purchase by
the Borrower and its Subsidiaries of data communications services.
"Qualified Reilly Partnership" means any general or limited
partnership, all of the partnership interests of which are owned by (a) Kevin P.
Reilly, Sr., (b) his wife, (c) his children, (d) his grandchildren, or (e)
trusts of which he, his wife, his children and his grandchildren are the sole
beneficiaries and for which one or more of such individuals are the sole
trustee(s).
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"Quarterly Dates" means the last Business Day of March, June,
September and December in each year, the first of which shall be the first such
day after the date of this Agreement.
"Refunding Indebtedness" has the meaning assigned to such term
in Section 7.01(c).
"Register" has the meaning assigned to such term in Section
10.04.
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Loans,
LC Exposure and unused Commitments representing at least a majority of the sum
of the total Loans, LC Exposure and unused Commitments at such time. References
herein to the "Required Revolving Credit Lenders", "Required Tranche A Lenders",
"Required Tranche B Lenders" and "Required Incremental Loan Lenders" of any
Series, shall refer to the Lenders of such Class holding at least a majority of
the sum of the total Loans, LC Exposure (if applicable) and unused Commitments
of such Class at such time.
"Restricted Subsidiary" means any Subsidiary of the Borrower
other than an Unrestricted Subsidiary.
"Reserved Commitment Amount" has the meaning assigned to such
term in Section 2.01(a).
"Revolving Credit Availability Period" means the period from
and including the Effective Date to but excluding the earlier of (a) the
Revolving Credit Termination Date and (b) the date of termination of the
Revolving Credit Commitments.
"Revolving Credit Commitment" means, with respect to each
Lender, the commitment of such Lender to make Revolving Credit Loans and to
acquire participations in Letters of Credit hereunder, as such commitment may be
(a) reduced from time to time pursuant to Sections 2.07 and 2.09 and (b) reduced
or increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.04. The initial amount of each Lender's Revolving Credit
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Revolving Credit
Commitment, as applicable. The aggregate original amount of the Revolving Credit
Commitments is $350,000,000.
"Revolving Credit Commitment Reduction Dates" means the
Quarterly Dates falling on or nearest to March 31, June 30, September 30 and
December 31 of each year, commencing with March 31, 2002 through and including
December 31, 2005, provided that the final Revolving Credit Commitment Reduction
Date shall occur on March 1, 2006 (or, if such day is not a Business Day, the
next preceding Business Day).
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"Revolving Credit Exposure" means, with respect to any
Revolving Credit Lender at any time, the sum of the outstanding principal amount
of such Lender's Revolving Credit Loans and its LC Exposure at such time.
"Revolving Credit Lender" means (a) initially, a Lender that
has a Revolving Credit Commitment set forth opposite its name on Schedule 2.01
and (b) thereafter, the Lenders from time to time holding Revolving Credit Loans
and Revolving Credit Commitments, after giving effect to any assignments thereof
permitted by Section 10.04.
"Revolving Credit Loan" means a Loan made pursuant to Section
2.01(a) that utilizes the Revolving Credit Commitment.
"Revolving Credit Termination Date" means March 1, 2006 (or,
if such day is not a Business Day, the next preceding Business Day).
"Security Documents" means the Pledge Agreement, the Holdings
Guaranty and Pledge Agreement and all Uniform Commercial Code financing
statements required by the Pledge Agreement and the Holdings Guaranty and Pledge
Agreement to be filed with respect to the security interests created pursuant
thereto.
"Senior Debt Ratio" means, as at any date, the ratio of (a)
all Indebtedness (other than Subordinated Indebtedness) of the Borrower and its
Restricted Subsidiaries (determined on a consolidated basis without duplication
in accordance with GAAP) on such date to (b) EBITDA for the period of four
consecutive quarters ending on or most recently ended prior to such date.
"Senior Notes" means the 5-1/4% Convertible Notes due
September 15, 2006, issued by Holdings pursuant to an Indenture dated as of
August 10, 1999 between Holdings and State Street Bank and Trust Company, as
trustee, in an original aggregate maximum face amount equal to $287,500,000.
"Senior Secured Notes" means the Borrower's 11% Senior Notes
issued pursuant to a Second Supplemental Indenture in the form of an Amended and
Restated Indenture dated as of November 8, 1996, amending and restating in its
entirety the Borrower's 11% Senior Secured Notes due May 15, 2003 issued on May
13, 1993 in an original aggregate face amount equal to $100,000,000 (of which
not more than $1,172,000 are outstanding on the date hereof).
"Senior Subordinated Notes" means, collectively, (a) the
9-5/8% Senior Subordinated Notes due 2006 of the Borrower in the original
principal amount of $255,000,000 and (b) the 8-5/8% Senior Subordinated Notes
due 2007 of the Borrower in the original principal amount of $200,000,000.
"Senior Subordinated Notes Indenture" means the Indentures
pursuant to which the Senior Subordinated Notes have been issued.
"Series" has the meaning assigned to such term in Section
2.01(d).
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"Significant Subsidiary Guarantor" means, as at any date, any
Subsidiary Guarantor having assets with a fair market value of $40,000,000 or
more.
"Special Counsel" means Milbank, Tweed, Hadley & McCloy LLP,
in its capacity as special counsel to The Chase Manhattan Bank, as
Administrative Agent of the credit facilities contemplated hereby.
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is
subject (a) with respect to the Base CD Rate, for new negotiable nonpersonal
time deposits in dollars of over $100,000 with maturities approximately equal to
three months and (b) with respect to the Adjusted LIBO Rate, for eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Board). Such reserve percentages shall include those imposed pursuant to
such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"Subordinated Indebtedness" means, collectively, (i)
Indebtedness in respect of the Senior Subordinated Notes and the New Senior
Subordinated Notes (and, effective upon any extension, renewal, refunding or
replacement of any of the Senior Subordinated Notes as contemplated in Section
7.01(c), any Refunding Indebtedness), (ii) the 8% Series A Unsecured
Subordinated Discount Debentures of the Borrower due 2001 (of which $1,273,134
are outstanding on the date hereof) and (iii) the 8% unsecured Subordinated
Notes of the Borrower due 2006 (of which $14,666,665 are outstanding on the date
hereof).
"Subsidiary" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership interests
representing more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent. References herein to
"Subsidiaries" shall, unless the context requires otherwise, be deemed to be
references to Subsidiaries of the Borrower.
"Subsidiary Guarantors" means the Persons listed under the
caption "SUBSIDIARY GUARANTORS" on the signature pages hereto or which become a
party hereto as a "Subsidiary Guarantor" hereunder pursuant to any Joinder
Agreement.
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"Surety Bonds" means surety or other similar bonds required to
be posted by the Borrower and its Restricted Subsidiaries in the ordinary course
of their respective businesses or posted on behalf of Affiliates in the ordinary
course of their respective businesses.
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Term Loans" means, collectively, the Tranche A Term Loans and
the Tranche B Term Loans.
"Three-Month Secondary CD Rate" means, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day is not a Business Day, the next preceding
Business Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current practices
of the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day), or, if such rate is not so reported on such
day or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center banks
in New York City received at approximately 10:00 a.m., New York City time, on
such day (or, if such day is not a Business Day, on the next preceding Business
Day) by the Administrative Agent from three negotiable certificate of deposit
dealers of recognized standing selected by it.
"Total Debt Ratio" means, as at any date, the ratio of (a) all
Indebtedness of Holdings and the Borrower and its Restricted Subsidiaries
(determined on a consolidated basis without duplication in accordance with GAAP)
on such date to (b) EBITDA for the period of four consecutive fiscal quarters
ending on or most recently ended prior to such date.
"Tranche A Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make Tranche A Term Loans on the Effective
Date, expressed as an amount representing the maximum aggregate principal amount
of the Tranche A Term Loans to be made by such Lender hereunder, as such
commitment may be (a) reduced from time to time pursuant to Sections 2.07 and
2.09 and (b) reduced or increased from time to time pursuant to assignments by
or to such Lender pursuant to Section 10.04. The initial amount of each Lender's
Tranche A Commitment is set forth on Schedule 2.01, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Tranche A
Commitment, as applicable. The aggregate original amount of the Tranche A
Commitments is $450,000,000.
"Tranche A Lender" means (a) initially, a Lender that has a
Tranche A Commitment set forth opposite its name on Schedule 2.01 and (b)
thereafter, the Lenders from time to time holding Tranche A Term Loans and
Tranche A Commitments, after giving effect to any assignments thereof permitted
by Section 10.04.
"Tranche A Maturity Date" means March 1, 2006.
"Tranche A Term Loan" means a Loan made pursuant to Section
2.01(b) that utilizes the Tranche A Commitment.
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"Tranche B Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make Tranche B Term Loans on the Effective
Date, expressed as an amount representing the maximum aggregate principal amount
of the Tranche B Term Loans to be made by such Lender hereunder, as such
commitment may be (a) reduced from time to time pursuant to Sections 2.07 and
2.09 and (b) reduced or increased from time to time pursuant to assignments by
or to such Lender pursuant to Section 10.04. The initial amount of each Lender's
Tranche B Commitment is set forth on Schedule 2.01, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Tranche B
Commitment, as applicable. The aggregate original amount of the Tranche B
Commitments is $200,000,000.
"Tranche B Lender" means (a) initially, a Lender that has a
Tranche B Commitment set forth opposite its name on Schedule 2.01 and (b)
thereafter, the Lenders from time to time holding Tranche B Term Loans and
Tranche B Commitments, after giving effect to any assignments thereof permitted
by Section 10.04.
"Tranche B Maturity Date" means August 1, 2006.
"Tranche B Term Loan" means a Loan made pursuant to Section
2.01(c) that utilizes the Tranche B Commitment.
"Transactions" means (a) with respect to the Borrower, the
execution, delivery and performance by the Borrower of the Loan Documents to
which it is a party, the borrowing of Loans and the use of the proceeds thereof,
and the issuance of Letters of Credit hereunder and (b) with respect to any
Credit Party (other than the Borrower), the execution, delivery and performance
by such Credit Party of the Loan Documents to which it is a party.
"Type", when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Adjusted Base Rate.
"Unrestricted Subsidiaries" means any Subsidiary of the
Borrower that (a) shall have been designated as an "Unrestricted Subsidiary" in
accordance with the provisions of Section 1.05 and (b) any Subsidiary of an
Unrestricted Subsidiary.
"U.S. dollars" or "$" refers to lawful money of the United
States of America.
"Wholly Owned Subsidiary" means, with respect to any Person at
any date, any corporation, limited liability company, partnership, association
or other entity of which securities or other ownership interests representing
100% of the equity or ordinary voting power (other than directors' qualifying
shares) or, in the case of a partnership, 100% of the general partnership
interests are, as of such date, directly or indirectly owned, controlled or held
by such Person or one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such Person. The term
"Wholly Owned Restricted Subsidiary" shall refer to any Restricted Subsidiary
that is also a Wholly Owned Subsidiary.
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"Withdrawal Liability" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS. For
purposes of this Agreement, Loans may be classified and referred to by Class
(e.g., a "Revolving Credit Loan", "Tranche A Term Loan", "Tranche B Term Loan"
or "Incremental Loan") or by Type (e.g., a "Base Rate Loan", or a "Eurodollar
Loan") or by Class and Type (e.g., a "Eurodollar Revolving Credit Loan" or a
"Base Rate Revolving Credit Loan"); each Series of Incremental Loans shall be
deemed a separate Class of Loans hereunder. In similar fashion, (i) Borrowings
may be classified and referred to by Class, by Type and by Class and Type, and
(ii) Commitments may be classified and referred to by Class; each Series of
Incremental Loan Borrowings and Incremental Loan Commitments shall be deemed a
separate Borrowing and Commitment hereunder.
SECTION 1.03. TERMS GENERALLY. The definitions of terms herein
shall apply equally to 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 be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. ACCOUNTING TERMS; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
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SECTION 1.05. SUBSIDIARIES; DESIGNATION OF UNRESTRICTED
SUBSIDIARIES. The Borrower may at any time designate any of its Subsidiaries
(including any newly acquired or newly formed Subsidiary) to be an "Unrestricted
Subsidiary" for purposes of this Agreement, by delivering to the Administrative
Agent a certificate of a Financial Officer (and the Administrative Agent shall
promptly forward a copy of such certificate to each Lender) attaching a copy of
a resolution of its Board of Directors (or authorized subcommittee thereof)
setting forth such designation and stating that the conditions set forth in this
Section 1.05 have been satisfied with respect to such designation, provided that
no such designation shall be effective unless (x) at the time of such
designation and after giving effect thereto, no Default or Event of Default
shall have occurred and be continuing and (y) at the time of such designation
and at all times thereafter:
(a) except as permitted under Section 7.03, no portion of the
Indebtedness or any other obligation (contingent or otherwise) of such
Unrestricted Subsidiary (other than obligations in respect of
performance and surety bonds and in respect of reimbursement
obligations for undrawn letters of credit supporting insurance
arrangement and performance and surety bonds, each incurred in the
ordinary course of business and not as part of a financing transaction
(collectively, "Permitted Unrestricted Subsidiary Obligations")) (A) is
guaranteed by the Borrower or any Restricted Subsidiary or (B) is
recourse to or obligates the Borrower or any Restricted Subsidiary of
the Borrower, directly or indirectly, contingently or otherwise, to
satisfaction thereof,
(b) such Unrestricted Subsidiary has no Indebtedness or any
other obligation (other than Permitted Unrestricted Subsidiary
Obligations) that, if in default in any respect (including a payment
default), would permit (upon notice, lapse of time or both) any holder
of any other Indebtedness of the Borrower or its Restricted
Subsidiaries to declare a default on such other Indebtedness or cause
the payment thereof to be accelerated or payable prior to its stated
maturity and
(c) such Subsidiary is an "Unrestricted Subsidiary" under the
Senior Subordinated Notes Indentures and New Senior Subordinated Notes
Indentures.
Notwithstanding the foregoing, the Borrower shall be entitled to designate any
Subsidiary as an Unrestricted Subsidiary hereunder even though such Subsidiary
shall, at the time of such designation, be obligated with respect to Guarantees
under the Senior Subordinated Notes Indenture or any New Senior Subordinated
Notes Indenture, provided that at the time of such designation, (i) the Borrower
is taking such action as is necessary to cause such Subsidiary to be released
from such Guarantees and (ii) such designation shall not become effective until
such time as such release shall be obtained.
Any designation of a Subsidiary as an Unrestricted Subsidiary
shall be deemed an Investment in an amount equal to the fair market value of
such Subsidiary (as determined in good faith by the board of directors of the
Borrower) and any such designation shall be permitted only if it complies with
the provisions of Section 7.05. Any designation of an Unrestricted Subsidiary as
a Restricted Subsidiary shall be deemed an Acquisition of such Unrestricted
Subsidiary and shall be permitted only to the extent permitted as an Acquisition
under Section 7.04(e). The Borrower shall give the Administrative Agent and each
Lender prompt notice of
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each resolution adopted by the Board of Directors (or authorized subcommittee
thereof) of the Borrower under this Section 1.05 designating any Subsidiary as
an Unrestricted Subsidiary (and notice of each designation of an Unrestricted
Subsidiary as a Restricted Subsidiary), together with a copy of each such
resolution adopted.
ARTICLE II
The Credits
SECTION 2.01. COMMITMENTS.
(a) Revolving Credit Loans. Subject to the terms and
conditions set forth herein, each Revolving Credit Lender agrees to make
Revolving Credit Loans to the Borrower from time to time during the Revolving
Credit Availability Period in an aggregate principal amount that will not result
in such Lender's Revolving Credit Loans exceeding such Lender's Revolving Credit
Commitment, provided that the total Revolving Credit Exposure shall not at any
time exceed the total Revolving Credit Commitments. Within the foregoing limits
and subject to the terms and conditions set forth herein, the Borrower may
borrow, prepay and reborrow Revolving Credit Loans.
Proceeds of Revolving Credit Loans shall be available for any
use permitted under the applicable provisions of Section 6.09, provided that, in
the event that, as contemplated by Section 2.09(b)(ii), the Borrower shall
prepay Revolving Credit Loans from the proceeds of a Disposition hereunder, then
an amount of Revolving Credit Commitments, as specified by the Borrower pursuant
to the next sentence, equal to the amount of such prepayment (herein the
"Reserved Commitment Amount") shall be reserved and shall not be available for
borrowings hereunder except and to the extent that the proceeds of such
borrowings are to be applied to make Capital Expenditures or Acquisitions
permitted hereunder, or to make prepayments of Loans under Section
2.09(b)(ii)(z)(B). The Borrower agrees, upon the occasion of any Borrowing of
Revolving Credit Loans hereunder that is to constitute a utilization of any
Reserved Commitment Amount, to advise the Administrative Agent in writing of
such fact at the time of such Borrowing, identifying the amount of such
Borrowing that is to constitute such utilization, the Capital Expenditure or
Acquisition in respect of which the proceeds of such Borrowing are to be applied
and the reduced Reserved Commitment Amount to be in effect after giving effect
to such Borrowing.
(b) Tranche A Term Loans. Subject to the terms and conditions
set forth herein, each Tranche A Lender agrees to make Tranche A Term Loans to
the Borrower on the Effective Date in an aggregate principal amount up to but
not exceeding its Tranche A Commitment. Tranche A Term Loans that are prepaid
may not be reborrowed.
(c) Tranche B Term Loans. Subject to the terms and conditions
set forth herein, each Tranche B Lender agrees to make Tranche B Term Loans to
the Borrower on the Effective Date, in an aggregate principal amount up to but
not exceeding its Tranche B Commitment. Tranche B Term Loans that are prepaid
may not be reborrowed.
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(d) Incremental Loans. In addition to Borrowings of Revolving
Credit Loans and Term Loans pursuant to paragraphs (a), (b) and (c) above, at
any time and from time to time prior to the Incremental Loan Commitment
Termination Date, the Borrower may request that the Lenders offer to enter into
commitments to make additional term loans (each such loan being herein called an
"Incremental Loan") under this paragraph (d). In the event that one or more of
the Lenders offer, in their sole discretion, to enter into such commitments, and
such Lenders and the Borrower agree as to the amount of such commitments that
shall be allocated to the respective Lenders making such offers and the fees (if
any) to be payable by the Borrower in connection therewith, such Lenders shall
become obligated to make Incremental Loans under this Agreement in an amount
equal to the amount of their respective Incremental Loan Commitments. The
Incremental Loans to be made pursuant to any such agreement between the Borrower
and one or more Lenders in response to any such request by the Borrower shall be
deemed to be a separate "Series" of Incremental Loans for all purposes of this
Agreement. Anything herein to the contrary notwithstanding, (i) the minimum
aggregate principal amount of Incremental Loan Commitments entered into pursuant
to any such request (and, accordingly, the minimum aggregate principal amount of
any Series of Incremental Loans) shall be $10,000,000 and (ii) the aggregate
principal amount of all Incremental Loan Commitments and Incremental Loans shall
not exceed $400,000,000.
Following the acceptance by the Borrower of the offers made by
any one or more Lenders to make any Series of Incremental Loans pursuant to the
foregoing provisions of this paragraph (d), each Incremental Loan Lender in
respect of such Series of Incremental Loans severally agrees, on the terms and
conditions of this Agreement, to make such Incremental Loans to the Borrower in
Dollars during the period from and including the date of such acceptance to but
excluding the Incremental Loan Commitment Termination Date in an aggregate
principal amount up to but not exceeding the amount of the Incremental Loan
Commitment of such Incremental Loan Lender in respect of such Series as in
effect from time to time. Thereafter, subject to the terms and conditions of
this Agreement, the Borrower may convert Incremental Loans of such Series of one
Type into Incremental Loans of such Series of another Type (as provided in
Section 2.06) or continue Incremental Loans of such Series of one Type as
Incremental Loans of such Series of the same Type (as provided in Section 2.06).
Incremental Loans of any Series that are prepaid may not be reborrowed as
Incremental Loans of the same Series.
Proceeds of Incremental Loans shall be available for any use
permitted under the applicable provisions of Section 6.09.
SECTION 2.02. LOANS AND BORROWINGS.
(a) Obligations Several. Each Loan of a particular Class (and,
in the case of Incremental Loans, of a particular Series) shall be made as part
of a Borrowing consisting of Loans of such Class (and, if applicable, of such
Series) made by the Lenders ratably in accordance with their respective
Commitments of such Class (and, if applicable, of such Series). The failure of
any Lender to make any Loan required to be made by it shall not relieve any
other Lender of its obligations hereunder; provided that the Commitments of the
Lenders are several and no Lender shall be responsible for any other Lender's
failure to make Loans as required.
Credit Agreement
<PAGE> 33
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(b) Type of Loans. Subject to Section 2.12, each Borrowing
shall be comprised entirely of Base Rate Loans or Eurodollar Loans as the
Borrower may request in accordance herewith. Each Lender at its option may 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 Borrower to repay such Loan in accordance with
the terms of this Agreement.
(c) Minimum Amounts. At the commencement of each Interest
Period for a Eurodollar Borrowing, such Borrowing shall be in an aggregate
amount at least equal to $2,000,000 or any greater multiple of $1,000,000. At
the time that each Base Rate Borrowing is made, such Borrowing shall be in an
aggregate amount that is at least equal to $500,000 or any greater multiple of
$500,000; provided that (i) a Base Rate Borrowing of Loans of any Class may be
in an aggregate amount that is equal to the entire unused balance of the total
Commitments of such Class (or, in the case of an Incremental Loan Commitment of
any Series, in an aggregate amount that is equal to the entire unused balance of
the total Commitments of such Series) and (ii) a Revolving Credit Base Rate
Borrowing may be in an amount that is required to finance the reimbursement of
an LC Disbursement as contemplated by Section 2.04(e). Borrowings of more than
one Type and Class may be outstanding at the same time; provided that there
shall not at any time be more than a total of ten Eurodollar Borrowings
outstanding.
SECTION 2.03. REQUESTS FOR BORROWINGS. To request a Borrowing,
the Borrower shall notify the Administrative Agent of such request by telephone
(a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before the date of the proposed Borrowing or (b)
in the case of a Base Rate Borrowing, not later than 11:00 a.m., New York City
time, one Business Day before the date of the proposed Borrowing; provided that
any such notice of a Revolving Credit Base Rate Borrowing to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.04(e) may be
given not later than 10:00 a.m., New York City time, on the date of the proposed
Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall
be confirmed promptly by hand delivery or telecopy to the Administrative Agent
of a written Borrowing Request in a form approved by the Administrative Agent
and signed by the Borrower. Each such telephonic and written Borrowing Request
shall specify the following information in compliance with Section 2.02:
(i) whether the requested Borrowing is to be a Revolving
Credit Borrowing, a Tranche A Borrowing, a Tranche B Borrowing, or an
Incremental Loan Borrowing (including, if applicable, the respective
Series of Incremental Loans to which such Borrowing relates);
(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a Business
Day;
(iv) whether such Borrowing is to be a Base Rate Borrowing or
a Eurodollar Borrowing;
Credit Agreement
<PAGE> 34
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(v) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; and
(vi) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the
requirements of Section 2.05.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be a Base Rate Borrowing. If no Interest Period is specified
with respect to any requested Eurodollar Borrowing, then the Borrower shall be
deemed to have selected an Interest Period of one month's duration. Promptly
following receipt of a Borrowing Request in accordance with this Section 2.03,
the Administrative Agent shall advise each Lender of the details thereof and of
the amount of such Lender's Loan to be made as part of the requested Borrowing.
Anything herein to the contrary notwithstanding, the initial
Borrowing hereunder shall be a Base Rate Borrowing.
SECTION 2.04. LETTERS OF CREDIT.
(a) General. Subject to the terms and conditions set forth
herein, in addition to the Revolving Credit Loans provided for in Section
2.01(a), the Borrower may request the issuance of Letters of Credit for its own
account by the Issuing Lender, in a form reasonably acceptable to the Issuing
Lender, at any time and from time to time during the Revolving Credit
Availability Period. Letters of Credit issued hereunder shall constitute
utilization of the Revolving Credit Commitments. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by the Borrower to, or entered into by the Borrower with, the Issuing
Lender relating to any Letter of Credit, the terms and conditions of this
Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Lender) to the
Issuing Lender and the Administrative Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice requesting
the issuance of a Letter of Credit, or identifying the Letter of Credit to be
amended, renewed or extended, the date of issuance, amendment, renewal or
extension, the date on which such Letter of Credit is to expire (which shall
comply with paragraph (c) of this Section 2.04), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the Issuing Lender, the Borrower also shall submit a
letter of credit application on the Issuing Lender's standard form in connection
with any request for a Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if (and upon issuance, amendment, renewal or
extension of each Letter of Credit the Borrower shall be deemed to represent and
warrant that), after giving effect to such issuance, amendment, renewal or
extension (i) the aggregate LC Exposure of the Issuing Lender (determined for
these purposes without giving effect to the
Credit Agreement
<PAGE> 35
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participations therein of the Revolving Credit Lenders pursuant to paragraph (d)
of this Section 2.04) shall not exceed $50,000,000 and (ii) the total Revolving
Credit Exposure shall not exceed the total Revolving Credit Commitments.
(c) Expiration Date. Each Letter of Credit shall expire
(without giving effect to any extension thereof by reason of an interruption of
business) at or prior to the close of business on the earlier of (i) the date
two years after the date of the issuance of such Letter of Credit (or, in the
case of any renewal or extension thereof, two years after such renewal or
extension) and (ii) the date that is five Business Days prior to the Revolving
Credit Termination Date, provided that any such Letter of Credit may provide for
automatic extensions thereof to a date not later than one year beyond the
current expiration date, so long as such extended expiration date is not later
than the date five Business Days prior to the Revolving Credit Termination Date.
(d) Participations. By the issuance of a Letter of Credit (or
an amendment to a Letter of Credit increasing the amount thereof) by the Issuing
Lender, and without any further action on the part of the Issuing Lender, the
Issuing Lender hereby grants to each Revolving Credit Lender, and each Revolving
Lender hereby acquires from the Issuing Lender, a participation in such Letter
of Credit equal to such Revolving Credit Lender's Applicable Percentage of the
aggregate amount available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each Revolving Credit Lender
hereby absolutely and unconditionally agrees to pay to the Administrative Agent,
for the account of the Issuing Lender, such Revolving Credit Lender's Applicable
Percentage of each LC Disbursement made by the Issuing Lender and not reimbursed
by the Borrower on the date due as provided in paragraph (e) of this Section
2.04, or of any reimbursement payment required to be refunded to the Borrower
for any reason. Each Revolving Credit Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Lender shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse the
Issuing Lender in respect of such LC Disbursement by paying to the
Administrative Agent an amount equal to such LC Disbursement not later than
12:00 noon, New York City time, on (i) the Business Day that the Borrower
receives notice of such LC Disbursement, if such notice is received prior to
10:00 a.m., New York City time, or (ii) the Business Day immediately following
the day that the Borrower receives such notice, if such notice is not received
prior to such time, provided that, if such LC Disbursement is not less than
$500,000, the Borrower may, subject to the conditions to borrowing set forth
herein, request in accordance with Section 2.03 that such payment be financed
with a Revolving Credit Base Rate Borrowing in an equivalent amount and, to the
extent so financed, the Borrower's obligation to make such payment shall be
discharged and replaced by the resulting Revolving Credit Base Rate Borrowing.
If the Borrower fails to make such payment when due, the
Administrative Agent shall notify each Revolving Credit Lender of the applicable
LC Disbursement, the payment then
Credit Agreement
<PAGE> 36
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due from the Borrower in respect thereof and such Revolving Credit Lender's
Applicable Percentage thereof. Promptly following receipt of such notice, each
Revolving Credit Lender shall pay to the Administrative Agent its Applicable
Percentage of the payment then due from the Borrower, in the same manner as
provided in Section 2.05 with respect to Revolving Credit Loans made by such
Lender (and Section 2.05 shall apply, mutatis mutandis, to the payment
obligations of the Revolving Credit Lenders), and the Administrative Agent shall
promptly pay to the Issuing Lender the amounts so received by it from the
Revolving Credit Lenders. Promptly following receipt by the Administrative Agent
of any payment from the Borrower pursuant to this paragraph, the Administrative
Agent shall distribute such payment to the Issuing Lender or, to the extent that
the Revolving Credit Lenders have made payments pursuant to this paragraph to
reimburse the Issuing Lender, then to such Lenders and the Issuing Lender as
their interests may appear. Any payment made by a Revolving Credit Lender
pursuant to this paragraph to reimburse the Issuing Lender for any LC
Disbursement shall not constitute a Loan and shall not relieve the Borrower of
its obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to
reimburse LC Disbursements as provided in paragraph (e) of this Section 2.04
shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Letter of Credit, or any term or provision therein, (ii)
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, (iii) payment by the Issuing Lender under a
Letter of Credit against presentation of a draft or other document that does not
comply strictly with the terms of such Letter of Credit and (iv) any other event
or circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section 2.04, constitute a legal or
equitable discharge of the Borrower's obligations hereunder.
Neither the Administrative Agent, the Lenders nor the Issuing
Lender, nor any of their Related Parties, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit by the Issuing Lender or any payment or failure to make any
payment thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the Issuing Lender;
provided that the foregoing shall not be construed to excuse the Issuing Lender
from liability to the Borrower to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the Issuing Lender's gross negligence or willful misconduct
when determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that:
(i) the Issuing Lender may accept documents that appear on
their face to be in substantial compliance with the terms of a Letter
of Credit without responsibility for
Credit Agreement
<PAGE> 37
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further investigation, regardless of any notice or information to the
contrary, and may make payment upon presentation of documents that
appear on their face to be in substantial compliance with the terms of
such Letter of Credit;
(ii) the Issuing Lender shall have the right, in its sole
discretion, to decline to accept such documents and to make such
payment if such documents are not in strict compliance with the terms
of such Letter of Credit; and
(iii) this sentence shall establish the standard of care to be
exercised by the Issuing Lender when determining whether drafts and
other documents presented under a Letter of Credit comply with the
terms thereof (and the parties hereto hereby waive, to the extent
permitted by applicable law, any standard of care inconsistent with the
foregoing).
(g) Disbursement Procedures. The Issuing Lender shall,
promptly following its receipt thereof, examine all documents purporting to
represent a demand for payment under any Letter of Credit. The Issuing Lender
shall promptly notify the Administrative Agent and the Borrower by telephone
(confirmed by telecopy) of such demand for payment and whether the Issuing
Lender has made or will make an LC Disbursement thereunder; provided that any
failure to give or delay in giving such notice shall not relieve the Borrower of
its obligation to reimburse the Issuing Lender and the Revolving Credit Lenders
with respect to any such LC Disbursement.
(h) Interim Interest. If the Issuing Lender shall make any LC
Disbursement in respect of any Letter of Credit, then, unless the Borrower shall
reimburse such LC Disbursement in full on the date such LC Disbursement is made,
the unpaid amount thereof shall bear interest, for each day from and including
the date such LC Disbursement is made to but excluding the date that the
Borrower reimburses such LC Disbursement, at the rate per annum then applicable
to Revolving Credit Base Rate Loans; provided that, if the Borrower fails to
reimburse such LC Disbursement when due pursuant to paragraph (e) of this
Section 2.04, then Section 2.11(c) shall apply. Interest accrued pursuant to
this paragraph shall be for the account of the Issuing Lender, except that
interest accrued on and after the date of payment by any Revolving Credit Lender
pursuant to paragraph (e) of this Section 2.04 to reimburse the Issuing Lender
shall be for the account of such Lender to the extent of such payment.
(i) Cash Collateralization. If either (i) an Event of Default
shall occur and be continuing and the Borrower receives notice from the
Administrative Agent or the Required Revolving Credit Lenders demanding the
deposit of cash collateral pursuant to this paragraph, or (ii) the Borrower
shall be required to provide cover for LC Exposure pursuant to Section 2.08 or
2.09(b), the Borrower shall immediately deposit into the Collateral Account
under and as defined in the Pledge Agreement an amount in cash equal to, in the
case of an Event of Default, the LC Exposure as of such date plus any accrued
and unpaid interest thereon and, in the case of cover pursuant to Section 2.08
or 2.09(b), the amount required under Section 2.08 or 2.09(b), as the case may
be; provided that the obligation to deposit such cash collateral shall become
effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to any Credit Party described in clause (g) or (h)
of Article VIII. Such deposit shall be held by the
Credit Agreement
<PAGE> 38
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Administrative Agent as collateral in the first instance for the LC Exposure
under this Agreement and thereafter for the payment of any other obligations of
the Obligors hereunder.
(j) Existing Letters of Credit. There is outstanding on the
date hereof pursuant to the Existing Credit Agreement one or more letters of
credit issued by Chase (as the "Issuing Lender" thereunder) for the account of
the Borrower. Upon the Effective Date each of such letters of credit is hereby
designated a "Letter of Credit" under and for all purposes of this Agreement. In
that connection, the Borrower hereby represents and warrants to the Issuing
Lender, each Revolving Credit Lender and the Administrative Agent that each such
letter of credit satisfies the requirements of this Section 2.04 (including
paragraph (c) above).
SECTION 2.05. FUNDING OF BORROWINGS.
(a) Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 12:00 noon, New York City time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders.
The Administrative Agent will make such Loans available to the Borrower by
promptly crediting the amounts so received, in like funds, to an account of the
Borrower maintained with the Administrative Agent in New York City and
designated by the Borrower in the applicable Borrowing Request; provided that
Revolving Credit Base Rate Loans made to finance the reimbursement of an LC
Disbursement under any Letter of Credit as provided in Section 2.04(e) shall be
remitted by the Administrative Agent to the Issuing Lender.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
2.05 and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
the Federal Funds Effective Rate. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
SECTION 2.06. INTEREST ELECTIONS.
(a) Each Borrowing initially shall be of the Type specified in
the applicable Borrowing Request and, in the case of a Eurodollar Borrowing,
shall have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Borrower may elect to convert such Borrowing to a different Type
or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may
elect Interest Periods therefor, all as provided in this Section 2.06. The
Borrower may elect different options for continuations and conversions with
respect to different portions of the affected Borrowing, in which case each such
portion shall be allocated
Credit Agreement
<PAGE> 39
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ratably among the Lenders holding the Loans comprising such Borrowing, and the
Loans comprising each such portion shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section 2.06, the
Borrower shall notify the Administrative Agent of such election by telephone by
the time that a Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Borrowing of the Type resulting from such election to
be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request
applies (including, if applicable, the respective Series of Incremental
Loans to which such Interest Election Request relates) and, if
different options for continuations or conversions are being elected
with respect to different portions thereof, the portions thereof to be
allocated to each resulting Borrowing (in which case the information to
be specified pursuant to clauses (iii) and (iv) below shall be
specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be a Base Rate
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each affected Lender of the
details thereof and of such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to a Base Rate Borrowing. Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
Borrower, then, so long as an Event of Default is continuing (i) no outstanding
Borrowing may be converted to or continued as a Eurodollar
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Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted
to a Base Rate Borrowing at the end of the Interest Period applicable thereto.
SECTION 2.07. TERMINATION AND REDUCTION OF COMMITMENTS.
(a) Unless previously terminated, (i) the Revolving Credit
Commitments shall terminate at the close of business on the Revolving Credit
Termination Date, (ii) the Tranche A Commitment and the Tranche B Commitment
shall terminate on the Effective Date and (iii) the Incremental Loan Commitments
shall terminate on the Incremental Loan Commitment Termination Date.
(b) The aggregate amount of the Revolving Credit Commitments
shall be automatically reduced at the close of business on each Revolving Credit
Commitment Reduction Date set forth in column (A) below to the amount set forth
in column (B) below opposite such Revolving Credit Commitment Reduction Date:
<TABLE>
<CAPTION>
(A) (B)
Revolving Credit Revolving Credit
Commitment Reduction Commitment Reduced
Date Falling on or to the Following
Nearest to: Amounts
-------------------- ------------------
<S> <C>
March 31, 2002 $341,250,000
June 30, 2002 $332,500,000
September 30, 2002 $323,750,000
December 31, 2002 $315,000,000
March 31, 2003 $306,250,000
June 30, 2003 $297,500,000
September 30, 2003 $288,750,000
December 31, 2003 $280,000,000
March 31, 2004 $253,750,000
June 30, 2004 $227,500,000
September 30, 2004 $201,250,000
December 31, 2004 $175,000,000
March 31, 2005 $144,375,000
June 30, 2005 $113,750,000
September 30, 2005 $ 83,125,000
December 31, 2005 $ 52,500,000
March 1, 2006 $0
</TABLE>
(c) The Borrower may at any time terminate, or from time to
time reduce, the Commitments of any Class (including the Commitments of any
Series of Incremental Loans); provided that (i) each reduction of the
Commitments of such Class shall be in an amount that is
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<PAGE> 41
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at least equal to $3,000,000 or any greater multiple of $1,000,000, (ii) the
Borrower shall not terminate or reduce the Commitments of such Class if, after
giving effect to any concurrent prepayment of Loans in accordance with Section
2.09, the outstanding Loans of such Class would exceed the total Commitments of
such Class and (iii) the Borrower shall not terminate or reduce the Revolving
Credit Commitments if, after giving effect to any concurrent prepayment of the
Loans in accordance with Section 2.09, the total Revolving Credit Exposures
would exceed the total Revolving Credit Commitments.
(d) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce Commitments under paragraph (c) of this Section
2.07 at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section 2.07 shall be irrevocable; provided that a
notice of termination of Commitments delivered by the Borrower may state that
such notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of Commitments shall be
permanent. Each reduction of Commitments of any Class shall be made ratably
among the Lenders in accordance with their respective Commitments of such Class.
SECTION 2.08. REPAYMENT OF LOANS; EVIDENCE OF DEBT.
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Revolving Credit Lender the then
unpaid principal amount of such Lender's Revolving Credit Loans on the Revolving
Credit Termination Date. In addition, if following any Revolving Credit
Commitment Reduction Date the aggregate principal amount of the Revolving Credit
Exposure shall exceed the Revolving Credit Commitments, the Borrower shall pay
Revolving Credit Loans (and/or provide cover for LC Exposure as specified in
Section 2.04(i)) in an aggregate amount equal to such excess.
(b) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of the Tranche A Lenders the outstanding
principal amount of the Tranche A Term Loans on each Principal Payment Date set
forth below in the aggregate principal amount set forth opposite such Principal
Payment Date:
<TABLE>
<CAPTION>
Principal Payment Date Principal Amount
---------------------- ----------------
<S> <C>
September 30, 2001 $22,500,000
December 31, 2001 $22,500,000
March 31, 2002 $11,250,000
June 30, 2002 $11,250,000
September 30, 2002 $11,250,000
December 31, 2002 $11,250,000
</TABLE>
Credit Agreement
<PAGE> 42
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<TABLE>
<S> <C>
March 31, 2003 $22,500,000
June 30, 2003 $22,500,000
September 30, 2003 $22,500,000
December 31, 2003 $22,500,000
March 31, 2004 $28,125,000
June 30, 2004 $28,125,000
September 30, 2004 $28,125,000
December 31, 2004 $28,125,000
March 31, 2005 $31,500,000
June 30, 2005 $31,500,000
September 30, 2005 $31,500,000
December 31, 2005 $31,500,000
March 1, 2006 $31,500,000
</TABLE>
If the initial aggregate amount of the Tranche A Commitments exceeds the
aggregate principal amount of Tranche A Term Loans that are outstanding on the
Effective Date, then the scheduled repayments of Borrowings to be made pursuant
to this Section shall be reduced ratably by an aggregate amount equal to such
excess. To the extent not previously paid, all Tranche A Term Loans shall be due
and payable on the Tranche A Maturity Date.
(c) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of the Tranche B Lenders the outstanding
principal amount of the Tranche B Term Loans on each Principal Payment Date set
forth below in the aggregate principal amount set forth opposite such Principal
Payment Date:
<TABLE>
<CAPTION>
Principal Payment Date Principal Amount
---------------------- ----------------
<S> <C>
September 30, 2001 $500,000
December 31, 2001 $500,000
March 31, 2002 $500,000
June 30, 2002 $500,000
September 30, 2002 $500,000
December 31, 2002 $500,000
March 31, 2003 $500,000
June 30, 2003 $500,000
September 30, 2003 $500,000
December 31, 2003 $500,000
</TABLE>
Credit Agreement
<PAGE> 43
- 38 -
<TABLE>
<S> <C>
March 31, 2004 $500,000
June 30, 2004 $500,000
September 30, 2004 $500,000
December 31, 2004 $500,000
March 31, 2005 $500,000
June 30, 2005 $500,000
September 30, 2005 $500,000
December 31, 2005 $500,000
March 31, 2006 $500,000
June 30, 2006 $500,000
August 1, 2006 $190,000,000
</TABLE>
If the initial aggregate amount of the Tranche B Commitments exceeds the
aggregate principal amount of Tranche B Term Loans that are outstanding on the
Effective Date, then the scheduled repayments of Borrowings to be made pursuant
to this Section shall be reduced ratably by an aggregate amount equal to such
excess. To the extent not previously paid, all Tranche B Term Loans shall be due
and payable on the Tranche B Maturity Date.
(d) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of the Incremental Loan Lenders of any
Series the principal of the Incremental Loans of such Series in consecutive
quarterly installments on such dates and in such amounts as shall be agreed upon
between the Borrower and such Lenders at the time the Incremental Loan
Commitments of such Series are established, provided that in no event shall the
average life to maturity (determined in accordance with GAAP) of the Incremental
Loans of any Series be earlier than the average life to maturity (so determined)
of the Tranche A Loans.
(e) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(f) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof (and, in the case of Incremental Loans, the respective Series thereof)
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(g) The entries made in the accounts maintained pursuant to
paragraph (e) or (f) of this Section 2.08 shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided 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 obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
Credit Agreement
<PAGE> 44
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(h) Any Lender may request that Loans made by it be evidenced
by a promissory note. In such event, the Borrower shall prepare, execute and
deliver to such Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns) and
in a form approved by the Administrative Agent. Thereafter, the Loans evidenced
by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 10.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.09. PREPAYMENT OF LOANS.
(a) Optional Prepayments. The Borrower shall have the right at
any time and from time to time to prepay any Borrowing in whole or in part,
subject to prior notice in accordance with paragraph (d) of this Section 2.09.
Each prepayment of Term Loans or Incremental Loans shall be applied to the Term
Loans and Incremental Loans ratably in accordance with the respective
outstanding principal amounts of such Term Loans and Incremental Loans (and, in
the case of Incremental Loans, to all Series thereof ratably in accordance with
the respective outstanding principal amounts of such Series), and to the
installments thereof due on the two Quarterly Dates immediately following the
date of such prepayment, in direct order of maturity, and, thereafter, pro rata
in accordance with the respective aggregate principal amounts of the Term Loans
and Incremental Loans outstanding on the date of such prepayment.
(b) Mandatory Prepayments. The Borrower shall make prepayments
of the Loans hereunder as follows:
(i) Casualty Events. Upon the date 270 days following the
receipt by the Borrower or any of its Subsidiaries of the proceeds of
insurance, condemnation award or other compensation in respect of any
Casualty Event affecting any property of the Borrower or any of its
Restricted Subsidiaries (or upon such earlier date as the Borrower or
such Restricted Subsidiary, as the case may be, shall have determined
not to repair or replace the property affected by such Casualty Event),
the Borrower shall prepay the Loans (and/or provide cover for LC
Exposure as specified in Section 2.04(i)) in an aggregate amount, if
any, equal to 100% of the Net Available Proceeds of such Casualty Event
not theretofore applied or committed to be applied to the repair or
replacement of such property (it being understood that if Net Available
Proceeds committed to be applied are not in fact applied within twelve
months of the respective Casualty Event, then such Proceeds shall be
applied to the prepayment of Loans and cover for LC Exposure as
provided in this clause (i) at the expiration of such twelve-month
period), such prepayment and reduction to be effected in each case in
the manner and to the extent specified in clause (iv) of this Section
2.09(b).
(ii) Sale of Assets. Without limiting the obligation of the
Borrower to obtain the consent of the Required Lenders to any
Disposition not otherwise permitted hereunder, the Borrower agrees, on
or prior to the occurrence of any Disposition, to deliver to the
Administrative Agent a statement certified by a Financial Officer, in
form and detail
Credit Agreement
<PAGE> 45
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reasonably satisfactory to the Administrative Agent, of the estimated
amount of the Net Cash Payments of such Disposition that will (on the
date of such Disposition) be received by the Borrower or any of its
Subsidiaries in cash and, unless the Borrower shall elect to reinvest
such Net Cash Payments as provided below, the Borrower will prepay the
Loans hereunder (and provide cover for LC Exposure as specified in
Section 2.04(i)) as follows:
(w) upon the date of such Disposition, in an
aggregate amount equal to 100% of such estimated amount of the
Net Cash Payments of such Disposition, to the extent received
by the Borrower or any of its Subsidiaries in cash on the date
of such Disposition; and
(x) thereafter, quarterly, on the date of the
delivery by the Borrower to the Administrative Agent pursuant
to Section 6.01 of the financial statements for any quarterly
fiscal period or fiscal year, to the extent the Borrower or
any of its Subsidiaries shall receive Net Cash Payments during
the quarterly fiscal period ending on the date of such
financial statements in cash under deferred payment
arrangements or Disposition Investments entered into or
received in connection with any Disposition, an amount equal
to (A) 100% of the aggregate amount of such Net Cash Payments
minus (B) any transaction expenses associated with
Dispositions and not previously deducted in the determination
of Net Cash Payments plus (or minus, as the case may be) (C)
any other adjustment received or paid by the Borrower or any
of its Subsidiaries pursuant to the respective agreements
giving rise to Dispositions and not previously taken into
account in the determination of the Net Cash Payments of
Dispositions, provided that if prior to the date upon which
the Borrower would otherwise be required to make a prepayment
under this clause (x) with respect to any quarterly fiscal
period the aggregate amount of such Net Cash Payments (after
giving effect to the adjustments provided for in this clause
(x)) shall exceed $5,000,000, then the Borrower shall within
three Business Days make a prepayment under this clause (x) in
an amount equal to such required prepayment.
Prepayments of Loans (and cover for LC Exposure) shall be effected in
each case in the manner and to the extent specified in clause (iv) of
this Section 2.09(b).
Notwithstanding the foregoing, the Borrower shall not be
required to make a prepayment (or provide cover) pursuant to this
Section 2.09(b)(ii) with respect to the Net Cash Payments from any
Disposition in the event that the Borrower advises the Administrative
Agent at the time a prepayment is required to be made under the
foregoing clauses (w) or (x) that it intends to reinvest such Net Cash
Payments into assets reasonably related to the outdoor advertising,
out-of-home media and logo signage business pursuant to one or more
Capital Expenditures or Acquisitions permitted hereunder, so long as:
(y) such Net Cash Payments are either (A) placed by
the Borrower into a segregated deposit account pending such
reinvestment or (B) applied by the Borrower to the prepayment
of Revolving Credit Loans hereunder (in which event the
Borrower agrees to advise the Administrative Agent in writing
at the time of
Credit Agreement
<PAGE> 46
- 41 -
such prepayment of Revolving Credit Loans that such
prepayment is being made from the proceeds of a Disposition
and that, as contemplated by the second paragraph of Section
2.01(a), a portion of the Revolving Credit Commitments equal
to the amount of such prepayment gives rise to a Reserved
Commitment Amount that shall be available hereunder only for
purposes of making Capital Expenditures or Acquisitions
permitted hereunder or to make prepayments of Loans under
clause (z)(B) below), and
(z) the Net Cash Payments from any Disposition are in
fact so reinvested within 180 days of such Disposition (it
being understood that, in the event Net Cash Payments from
more than one Disposition are deposited into a segregated
deposit account or applied to the prepayment of Revolving
Credit Loans as provided in clause (y) above, such Net Cash
Payments shall be deemed to be applied (or, as the case may
be, Revolving Credit Loans utilizing the Reserved Commitment
Amount shall be deemed to be made) in the same order in which
such Dispositions occurred and, accordingly, (A) any such Net
Cash Payments so held for more than 180 days shall be
forthwith applied to the prepayment of Loans (and cover for LC
Exposure) as provided in clause (iv) of this Section 2.09(b)
and (B) any Reserved Commitment Amount that remains so
unutilized for 180 days shall be utilized through the
borrowing by the Borrower of Revolving Credit Loans the
proceeds of which shall be applied to the prepayment of Loans
(and cover for LC Exposure) as provided in clause (iv) of this
Section 2.09(b)).
In the event that any Reserved Commitment Amount with respect
to any Disposition shall remain unutilized for 180 days and the
Borrower shall for any reason not borrow Revolving Credit Loans the
proceeds of which are applied to the prepayment of Loans (and cover for
LC Exposure) as provided above in this clause (ii), the Revolving
Credit Lenders agree (which agreement shall be absolute and
unconditional, regardless of whether or not the conditions to a
borrowing of Revolving Credit Loans hereunder shall have been satisfied
and regardless of the occurrence or continuance of any Event of
Default, including any Event of Default described in paragraphs (g) or
(h) of Article VIII) to purchase participations in the Loans of the
Term Loan Lenders and Incremental Loan Lenders in amounts equivalent to
the amount of the respective prepayments that each of such Lenders
would have received had such borrowing of Revolving Credit Loans
occurred as provided above.
Anything herein to the contrary notwithstanding, the Borrower
shall not be required to make any prepayment pursuant to this clause
(ii) with respect to the first $10,000,000 of Net Cash Payments.
(iii) Change of Control. Upon the occurrence of any "Change of
Control" under and as defined in the Senior Subordinated Notes
Indenture or New Senior Subordinated Notes Indenture (or any similar
provision in the applicable governing agreement for any Refunding
Indebtedness), the Borrower shall prepay the Loans hereunder (and
provide cover for LC Exposure as specified in Section 2.04(i)), and the
Commitments hereunder shall be automatically terminated.
Credit Agreement
<PAGE> 47
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(iv) Application. Upon the occurrence of any of the events
described in the above paragraphs of this Section 2.09(b), the amount
of the required prepayment shall be applied first, to the prepayment of
the Term Loans and Incremental Loans, in each case ratably in
accordance with the respective then-outstanding aggregate amounts of
such Loans, and second, after the prepayment in full of the Term Loans
and Incremental Loans, to the repayment of the Revolving Credit Loans,
without reduction of Revolving Credit Commitments. Each such prepayment
of the Term Loans and Incremental Loans shall be applied ratably to the
installments thereof.
Notwithstanding the foregoing, to the extent that at the time of any prepayment
described above there are Tranche A Term Loans outstanding, any Tranche B Term
Lender may, by notice to the Borrower and the Administrative Agent, decline all
or any portion (in a minimum amount at least equal to $1,000,000) of the
prepayment to which it would otherwise be entitled, provided that the portion of
such prepayment so declined by any such Tranche B Term Lender shall be applied
to the prepayment of the Tranche A Term Loans.
(c) Mandatory Prepayments -- Outstandings Exceeding
Commitments. The Borrower shall prepay the Revolving Credit Loans (and/or
provide cover for the LC Exposure as specified in Section 2.04(i)) in the event
that the aggregate amount of the Revolving Credit Exposure shall at any time
exceed the aggregate amount of the Revolving Commitments.
(d) Notification of Prepayments. The Borrower shall notify the
Administrative Agent by telephone (confirmed by telecopy) of any prepayment
hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later
than 11:00 a.m., New York City time, three Business Days before the date of
prepayment or (ii) in the case of prepayment of a Base Rate Borrowing, not later
than 11:00 a.m., New York City time, one Business Day before the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof to
be prepaid; provided that, if a notice of prepayment is given in connection with
a conditional notice of termination of Commitments as contemplated by Section
2.07, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.07. Promptly following
receipt of any such notice relating to a Borrowing of a particular Class, the
Administrative Agent shall advise the Lenders holding Loans of such Class of the
contents thereof. Each partial prepayment of any Borrowing under paragraph (a)
of this Section 2.09 shall be in an amount that would be permitted in the case
of an advance of a Borrowing of the same Type as provided in Section 2.02.
(e) Prepayments Accompanied by Interest. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.11.
SECTION 2.10. FEES.
(a) The Borrower agrees to pay to the Administrative Agent for
the account of each Lender a commitment fee, which shall accrue at a rate per
annum equal to 0.375% on the daily average unused amount of the Revolving Credit
Commitments and Term Loan Commitments of such Lender during the period from and
including the date hereof to but excluding the date on which such Revolving
Credit Commitment or Term Loan Commitment
Credit Agreement
<PAGE> 48
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terminates. Accrued commitment fees shall be payable in arrears on each
Quarterly Date and, in respect of any Revolving Credit Commitments or Term Loan
Commitments, on the date such Revolving Credit Commitments or Term Loan
Commitments terminate, commencing on the first such date to occur after the date
hereof. All commitment fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).
(b) The Borrower agrees to pay with respect to Letters of
Credit outstanding hereunder the following fees:
(i) to the Administrative Agent for the account of each
Revolving Credit Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at a rate per
annum equal to the Applicable Margin used in determining interest on
Revolving Credit Eurodollar Loans on the average daily amount of such
Lender's LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such
Lender's Revolving Credit Commitment terminates and the date on which
there shall no longer be any Letters of Credit outstanding hereunder,
and
(ii) to the Issuing Lender (x) a fronting fee, which shall
accrue at the rate of 3/16 of 1% per annum on the average daily amount
of the LC Exposure of the Issuing Lender (determined for these purposes
without giving effect to the participations therein of the Revolving
Credit Lenders pursuant to paragraph (d) of Section 2.04, and excluding
any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but
excluding the later of the date of termination of the Revolving Credit
Commitments and the date on which there shall no longer be any Letters
of Credit of the Issuing Lender outstanding hereunder, and (y) the
Issuing Lender's standard fees with respect to the issuance, amendment,
renewal or extension of any Letter of Credit or processing of drawings
thereunder.
Accrued participation fees and fronting fees shall be payable in arrears on each
Quarterly Date and on the date the Revolving Credit Commitments terminate,
commencing on the first such date to occur after the date hereof, provided that
any such fees accruing after the date on which the Revolving Credit Commitments
terminate shall be payable on demand. All participation fees and fronting fees
shall be computed on the basis of a year of 360 days and shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day).
(c) The Borrower agrees to pay to the Administrative Agent,
for its own account, fees payable in the amounts and at the times separately
agreed in writing between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent for distribution to
the Lenders entitled thereto. Fees paid shall not be refundable under any
circumstances, absent manifest error in the determination thereof.
Credit Agreement
<PAGE> 49
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SECTION 2.11. INTEREST.
(a) The Loans comprising each Base Rate Borrowing shall bear
interest at a rate per annum equal to the Adjusted Base Rate plus the Applicable
Margin.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at a rate per annum equal to the Adjusted LIBO Rate for the Interest
Period in effect for such Borrowing plus the Applicable Margin.
(c) Notwithstanding the foregoing, (i) except as otherwise
provided in clause (ii) below, during the period when any Default shall have
occurred and be continuing for a period of 90 or more days (and the
Administrative Agent, acting on the instructions of the Required Lenders, shall
have notified the Borrower that the provisions of this clause (i) shall apply),
the principal of all Loans hereunder shall bear interest, after as well as
before judgment, at a rate per annum equal to the Adjusted Base Rate plus the
Applicable Margin for Base Rate Loans plus 2% and (ii) if any principal on any
Loan payable by the Borrower hereunder is not paid when due, whether at stated
maturity, upon acceleration or otherwise, such principal shall bear interest,
after as well as before judgment, at a rate per annum equal to the Adjusted Base
Rate plus the Applicable Margin for Base Rate Loans plus 2%.
(d) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan; provided that (i) interest accrued
pursuant to paragraph (c) of this Section 2.11 shall be payable on demand, (ii)
in the event of any repayment or prepayment of any Eurodollar Loan (or the
repayment or prepayment in full of the Term Loans or Incremental Loans), accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment, (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion, (iv) all accrued interest on Revolving Credit Loans shall be payable
upon termination of the Revolving Credit Commitments.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Adjusted
Base Rate at times when the Adjusted Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Adjusted Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
SECTION 2.12. ALTERNATE RATE OF INTEREST. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO
Rate, as applicable, for such Interest Period; or
Credit Agreement
<PAGE> 50
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(b) if such Borrowing is of a particular Class of Loans
(including of a particular Series of Incremental Loans), the
Administrative Agent is advised by the Required Revolving Credit
Lenders, the Required Tranche A Lenders, the Required Tranche B Lenders
or the Required Incremental Loan Lenders of such Series, as the case
may be, that the Adjusted LIBO Rate or the LIBO Rate, as applicable,
for such Interest Period will not adequately and fairly reflect the
cost to such Lenders of making or maintaining their Loans of such Class
included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
affected Lenders by telephone or telecopy as promptly as practicable thereafter
and, until the Administrative Agent notifies the Borrower and such Lenders that
the circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any such Borrowing to, or
continuation of any such Borrowing as, a Eurodollar Borrowing shall be
ineffective and (ii) if any Borrowing Request requests a Eurodollar Borrowing,
such Borrowing shall be made as a Base Rate Borrowing.
SECTION 2.13. INCREASED COSTS.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing
Lender; or
(ii) impose on any Lender or the Issuing Lender or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
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 of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Lender of participating in, issuing or maintaining any Letter of Credit
or to reduce the amount of any sum received or receivable by such Lender or the
Issuing Lender hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Lender, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing
Lender, as the case may be, for such additional costs incurred or reduction
suffered.
(b) If any Lender or the Issuing Lender reasonably determines
that any Change in Law regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender's or the Issuing Lender's
capital or on the capital of such Lender's or the Issuing Lender's holding
company, if any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued the Issuing Lender, to a level below that which such Lender or the
Issuing Lender or such Lender's or the Issuing Lender's holding company could
have achieved but for such Change in Law (taking into consideration such
Lender's or the Issuing Lender's policies and the policies of such Lender's or
the Issuing Lender's holding company with respect to capital adequacy), then
from time to time
Credit Agreement
<PAGE> 51
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the Borrower will pay to such Lender or the Issuing Lender, as the case may be,
such additional amount or amounts as will compensate such Lender or the Issuing
Lender, or such Lender's or the Issuing Lender's holding company, for any such
reduction suffered.
(c) A certificate of a Lender or the Issuing Lender setting
forth the amount or amounts necessary to compensate such Lender or the Issuing
Lender or its holding company, as the case may be, as specified in paragraph (a)
or (b) of this Section 2.13 shall be delivered to the Borrower and shall be
conclusive so long as it reflects a reasonable basis for the calculation of the
amounts set forth therein and does not contain any manifest error. The Borrower
shall pay such Lender or the Issuing Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing
Lender to demand compensation pursuant to this Section 2.13 shall not constitute
a waiver of such Lender's or the Issuing Lender's right to demand such
compensation; provided that the Borrower shall not be required to compensate a
Lender or the Issuing Lender pursuant to this Section 2.13 for any increased
costs or reductions incurred more than six months prior to the date that such
Lender or the Issuing Lender, as the case may be, notifies the Borrower of the
Change in Law giving rise to such increased costs or reductions and of such
Lender's or the Issuing Lender's intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the six-month period referred to above shall
be extended to include the period of retroactive effect thereof.
SECTION 2.14. BREAK FUNDING PAYMENTS. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice is permitted to be revocable
and is revoked in accordance herewith) or (d) the assignment of any Eurodollar
Loan other than on the last day of the Interest Period applicable thereto as a
result of a request by the Borrower pursuant to Section 2.17, then, in any such
event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event.
In the case of a Eurodollar Loan, the loss to any Lender
attributable to any such event shall be deemed to include an amount determined
by such Lender to be equal to the excess, if any, of
(i) the amount of interest that such Lender would pay for a
deposit equal to the principal amount of such Loan for the period from
the date of such payment, conversion, failure or assignment to the last
day of the then current Interest Period for such Loan (or, in the case
of a failure to borrow, convert or continue, the duration of the
Interest Period that would have resulted from such borrowing,
conversion or continuation) if the interest rate payable on such
deposit were equal to the Adjusted LIBO Rate for such Interest Period,
over
Credit Agreement
<PAGE> 52
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(ii) the amount of interest that such Lender would earn on
such principal amount for such period if such Lender were to invest
such principal amount for such period at the interest rate that would
be bid by such Lender (or an affiliate of such Lender) for U.S. dollar
deposits from other banks in the eurodollar market at the commencement
of such period.
A certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section 2.14 shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
SECTION 2.15. TAXES
(a) Any and all payments by or on account of any obligation of
the Borrower hereunder shall be made free and clear of and without deduction for
any Indemnified Taxes or Other Taxes; provided that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.15) the Administrative Agent, Lender or the Issuing Lender
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions
and (iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent,
each Lender and the Issuing Lender, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section 2.15) paid by the Administrative Agent, such
Lender or the Issuing Lender, as the case may be (and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto during the
period prior to the Borrower making the payment demanded under this paragraph
(c)), whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender or the Issuing Lender, or by the Administrative Agent on
its own behalf or on behalf of a Lender or the Issuing Lender, shall be
conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver
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to the Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law or reasonably requested by the Borrower, such
properly completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a reduced rate.
SECTION 2.16. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING
OF SET-OFFS.
(a) The Borrower shall make each payment required to be made
by it hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or under Section 2.13, 2.14 or 2.15, or otherwise) prior to 12:00
noon, New York City time, on the date when due, in immediately available funds,
without set-off or counterclaim. Any amounts received after such time on any
date may, in the discretion of the Administrative Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
such of its offices in New York City as shall be notified to the relevant
parties from time to time, except payments to be made directly to the Issuing
Lender as expressly provided herein and except that payments pursuant to
Sections 2.13, 2.14, 2.15 and 10.03 shall be made directly to the Persons
entitled thereto. The Administrative Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate recipient
promptly following receipt thereof, and the Borrower shall have no liability in
the event timely or correct distribution of such payments is not so made. If any
payment hereunder shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day, and, in the case
of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments hereunder shall be made in U.S. dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, to pay interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, to pay principal and
unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.
(c) Except to the extent otherwise provided herein: (i) each
borrowing of Loans of a particular Class (including of a particular Series of
Incremental Loans) from the Lenders under Section 2.01 shall be made from the
relevant Lenders, each payment of commitment fee under Section 2.10 in respect
of Commitments of a particular Class (including of a particular Series of
Incremental Loans) shall be made for account of the relevant Lenders, and each
termination or reduction of the amount of the Commitments of a particular Class
(including of a particular Series of Incremental Loans) under Section 2.07 shall
be applied to the respective Commitments of such Class of the relevant Lenders,
pro rata according to the amounts of their respective Commitments of such Class;
(ii) Eurodollar Loans of any Class (including of a particular Series of
Incremental Loans) having the same Interest Period shall be allocated pro rata
among the relevant Lenders according to the amounts of their Commitments of such
Class (in the case of the making of Loans) or their respective Loans of such
Class (in the case of
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conversions and continuations of Loans); (iii) each payment or prepayment by the
Borrower of principal of Loans of a particular Class (including of a particular
Series of Incremental Loans) shall be made for account of the relevant Lenders
pro rata in accordance with the respective unpaid principal amounts of the Loans
of such Class held by them; (iv) each payment by the Borrower of interest on
Loans of a particular Class (including of a particular Series of Incremental
Loans) shall be made for account of the relevant Lenders pro rata in accordance
with the amounts of interest on such Loans then due and payable to the
respective Lenders; and (v) each payment by the Borrower of participation fees
in respect of Letters of Credit shall be made for the account of the Revolving
Credit Lenders pro rata in accordance with the amount of participation fees then
due and payable to the Revolving Credit Lenders.
(d) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans (or participations in LC Disbursements) of any
Class resulting in such Lender receiving payment of a greater proportion of the
aggregate principal amount of its Loans (and participations in LC Disbursements)
of such Class and accrued interest thereon than the proportion of such amounts
received by any other Lender of any other Class, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations in the
Loans (and LC Disbursements) of the other Lenders to the extent necessary so
that the benefit of such payments shall be shared by all the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans (and participations in LC Disbursements); provided that
(i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest, unless the Lender from which such payment is received is required to
pay interest thereon, in which case each Lender returning funds to such Lender
shall pay its pro rata share of such interest, and (ii) the provisions of this
paragraph shall not be construed to apply to any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans (or participations in LC Disbursements) to any assignee or participant,
other than to any Credit Party or any subsidiary or Affiliate thereof (as to
which the provisions of this paragraph shall apply). The Borrower consents to
the foregoing and agrees, to the extent it may effectively do so under
applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.
(e) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Lender
entitled thereto (the "Applicable Recipient") hereunder that the Borrower will
not make such payment, the Administrative Agent may assume that the Borrower has
made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Applicable Recipient the amount due. In such
event, if the Borrower has not in fact made such payment, then each Applicable
Recipient severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Applicable Recipient with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
Federal Funds Effective Rate.
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(f) If any Lender shall fail to make any payment required to
be made by it pursuant to Section 2.04(d), 2.04(e), 2.05(b) or 2.16(e), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender's obligations under
such Section until all such unsatisfied obligations are fully paid.
SECTION 2.17. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) If any Lender requests compensation under Section 2.13, or
if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations, hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.13 or 2.15, as the case may be,
in the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.13, or
if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 10.04), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Credit Commitment is being assigned, the Issuing Lender), which
consents shall not unreasonably be withheld or delayed, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans (and participations in LC Disbursements), accrued interest thereon,
accrued fees and all other amounts payable to it hereunder, from the assignee
(to the extent of such outstanding principal and accrued interest and fees) or
the Borrower (in the case of all other amounts) and (iii) in the case of any
such assignment resulting from a claim for compensation under Section 2.13 or
payments required to be made pursuant to Section 2.15, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.
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ARTICLE III
Guarantee by Subsidiary Guarantors
SECTION 3.01. THE GUARANTEE. Each Subsidiary Guarantor hereby
jointly and severally guarantees to each Lender, the Issuing Lender and the
Administrative Agent and their respective successors and assigns the prompt
payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the principal of and interest on the Loans made by the Lenders to
the Borrower, all LC Disbursements and all other amounts from time to time owing
to the Lenders, the Issuing Lender or the Administrative Agent by the Borrower
hereunder or under any other Loan Document, and all obligations of the Borrower
to any Lender under any Hedging Agreement, in each case strictly in accordance
with the terms thereof (such obligations being herein collectively called the
"Guaranteed Obligations"). Each Subsidiary Guarantor hereby further agrees that
if the Borrower shall fail to pay in full when due (whether at stated maturity,
by acceleration or otherwise) any of the Guaranteed Obligations, each Subsidiary
Guarantor will promptly pay the same, without any demand or notice whatsoever,
and that in the case of any extension of time of payment or renewal of any of
the Guaranteed Obligations, the same will be promptly paid in full when due
(whether at extended maturity, by acceleration or otherwise) in accordance with
the terms of such extension or renewal.
SECTION 3.02. OBLIGATIONS UNCONDITIONAL. The obligations of
each Subsidiary Guarantor under Section 3.01 are absolute and unconditional
irrespective of the value, genuineness, validity, regularity or enforceability
of this Agreement, the other Loan Documents or any other agreement or instrument
referred to herein or therein, or any substitution, release or exchange of any
other guarantee of or security for any of the Guaranteed Obligations, and, to
the fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
Section 3.02 that the obligations of the Subsidiary Guarantors hereunder shall
be absolute and unconditional under any and all circumstances. Without limiting
the generality of the foregoing, it is agreed that the occurrence of any one or
more of the following shall not alter or impair the liability of the Subsidiary
Guarantors hereunder which shall remain absolute and unconditional as described
above:
(i) at any time or from time to time, without notice to such
Subsidiary Guarantors, the time for any performance of or compliance
with any of the Guaranteed Obligations shall be extended, or such
performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions hereof
or of the other Loan Documents or any other agreement or instrument
referred to herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall
be accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right hereunder or under
the other Loan Documents or any other agreement or instrument referred
to herein or therein shall be waived or any other guarantee of any of
the Guaranteed Obligations or any security therefor shall be released
or exchanged in whole or in part or otherwise dealt with; or
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(iv) any lien or security interest granted to, or in favor of,
the Administrative Agent, the Issuing Lender or any Lender or Lenders
as security for any of the Guaranteed Obligations shall fail to be
perfected.
The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement that the
Administrative Agent, the Issuing Lender or any Lender exhaust any right, power
or remedy or proceed against the Borrower hereunder or under the other Loan
Documents or any other agreement or instrument referred to herein or therein, or
against any other Person under any other guarantee of, or security for, any of
the Guaranteed Obligations.
SECTION 3.03. REINSTATEMENT. The obligations of each
Subsidiary Guarantor under this Article III shall be automatically reinstated if
and to the extent that for any reason any payment by or on behalf of the
Borrower in respect of the Guaranteed Obligations is rescinded or must be
otherwise restored by any holder of any of the Guaranteed Obligations, whether
as a result of any proceedings in bankruptcy or reorganization or otherwise, and
each of the Subsidiary Guarantors agrees that it will indemnify the
Administrative Agent, the Issuing Lender and each Lender on demand for all
reasonable costs and expenses (including fees of counsel) incurred by the
Administrative Agent, any Lender or the Issuing Lender in connection with such
rescission or restoration, including any such costs and expenses incurred in
defending against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.
SECTION 3.04. SUBROGATION. Each Subsidiary Guarantor hereby
waives all rights of subrogation or contribution, whether arising by contract or
operation of law (including, without limitation, any such right arising under
the Federal Bankruptcy Code of 1978, as amended) or otherwise by reason of any
payment by it pursuant to the provisions of this Article III and further agrees
with the Borrower for the benefit of each of its creditors (including, without
limitation, the Issuing Lender, each Lender and the Administrative Agent) that
any such payment by it shall constitute a contribution of capital by such
Subsidiary Guarantor to the Borrower.
SECTION 3.05. REMEDIES. Each Subsidiary Guarantor agrees that,
as between such Subsidiary Guarantor and the Lenders, the obligations of the
Borrower hereunder may be declared to be forthwith due and payable as provided
in Article VIII or Section 2.04(i), as applicable (and shall be deemed to have
become automatically due and payable in the circumstances provided in Article
VIII or Section 2.04(i), as applicable) for purposes of Section 3.01
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable) as
against the Borrower and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the Borrower) shall forthwith
become due and payable by such Subsidiary Guarantor for purposes of Section
3.01.
SECTION 3.06. INSTRUMENT FOR THE PAYMENT OF MONEY. Each
Subsidiary Guarantor hereby acknowledges that the guarantee in this Article III
constitutes an instrument for the payment of money, and consents and agrees that
the Issuing Lender, any
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Lender or the Administrative Agent, at its sole option, in the event of a
dispute by the Subsidiary Guarantors in the payment of any moneys due hereunder,
shall have the right to bring motion-action under New York CPLR Section 3213.
SECTION 3.07. CONTINUING GUARANTEE. The guarantee in this
Article III is a continuing guarantee, and shall apply to all Guaranteed
Obligations whenever arising.
SECTION 3.08. RIGHTS OF CONTRIBUTION. The Subsidiary
Guarantors hereby agree, as between themselves, that if any Subsidiary Guarantor
shall become an Excess Funding Guarantor (as defined below) by reason of the
payment by such Subsidiary Guarantor of any Guaranteed Obligations, each other
Subsidiary Guarantor shall, on demand of such Excess Funding Guarantor (but
subject to the next sentence), pay to such Excess Funding Guarantor an amount
equal to such Subsidiary Guarantor's Pro Rata Share (as defined below and
determined, for this purpose, without reference to the properties, debts and
liabilities of such Excess Funding Guarantor) of the Excess Payment (as defined
below) in respect of such Guaranteed Obligations. The payment obligation of a
Subsidiary Guarantor to any Excess Funding Guarantor under this Section 3.08
shall be subordinate and subject in right of payment to the prior payment in
full of the obligations of such Subsidiary Guarantor under the other provisions
of this Article III and such Excess Funding Guarantor shall not exercise any
right or remedy with respect to such excess until payment and satisfaction in
full of all of such obligations.
For purposes of this Section 3.08, (i) "Excess Funding
Guarantor" means, in respect of any Guaranteed Obligations, a Subsidiary
Guarantor that has paid an amount in excess of its Pro Rata Share of such
Guaranteed Obligations, (ii) "Excess Payment" means, in respect of any
Guaranteed Obligations, the amount paid by an Excess Funding Guarantor in excess
of its Pro Rata Share of such Guaranteed Obligations and (iii) "Pro Rata Share"
means, for any Subsidiary Guarantor, the ratio (expressed as a percentage) of
(x) the amount by which the aggregate present fair saleable value of all
properties of such Subsidiary Guarantor (excluding any shares of stock of, or
ownership interest in, any other Subsidiary Guarantor) exceeds the amount of all
the debts and liabilities of such Subsidiary Guarantor (including contingent,
subordinated, unmatured and unliquidated liabilities, but excluding the
obligations of such Subsidiary Guarantor hereunder and any obligations of any
other Subsidiary Guarantor that have been Guaranteed by such Subsidiary
Guarantor) to (y) the amount by which the aggregate fair saleable value of all
properties of all of the Obligors exceeds the amount of all the debts and
liabilities (including contingent, subordinated, unmatured and unliquidated
liabilities, but excluding the obligations of the Obligors hereunder and under
the other Loan Documents) of all of the Obligors, determined (A) with respect to
any Subsidiary Guarantor that is a party hereto on the Effective Date, as of the
Effective Date and (B) with respect to any other Subsidiary Guarantor, as of the
date such Subsidiary Guarantor becomes a Subsidiary Guarantor hereunder.
SECTION 3.09. GENERAL LIMITATION ON GUARANTEE OBLIGATIONS. In
any action or proceeding involving any state corporate law, or any state or
Federal bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of any Subsidiary Guarantor under
Section 3.01 would otherwise, taking into account the provisions of Section
3.08, be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
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its liability under Section 3.01, then, notwithstanding any other provision
hereof to the contrary, the amount of such liability shall, without any further
action by such Subsidiary Guarantor, any Lender, the Administrative Agent or any
other Person, be automatically limited and reduced to the highest amount that is
valid and enforceable and not subordinated to the claims of other creditors as
determined in such action or proceeding.
ARTICLE IV
Representations and Warranties
The Borrower and each Subsidiary Guarantor represents and
warrants to the Lenders and the Administrative Agent, as to itself and each of
its Subsidiaries, that:
SECTION 4.01. ORGANIZATION; POWERS. The Borrower and each of
its Subsidiaries is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization. The Borrower and each of its
Subsidiaries has all requisite power and authority under its organizational
documents to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 4.02. AUTHORIZATION; ENFORCEABILITY. The Transactions
are within the corporate power of each Credit Party and have been duly
authorized by all necessary corporate and, if required, stockholder action on
the part of such Credit Party. This Agreement has been duly executed and
delivered by each Obligor and constitutes a legal, valid and binding obligation
of such Obligor, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
SECTION 4.03. GOVERNMENTAL APPROVALS; NO CONFLICTS. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority or any other
Person, except for approvals in connection with the Chancellor Acquisition each
of which will, prior to the Effective Date, have been duly obtained and all
waiting periods in connection therewith will have lapsed, (b) will not violate
any applicable law, policy or regulation or the charter, by-laws or other
organizational documents of any Credit Party or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon any Credit Party, or any of its
assets, or give rise to a right thereunder to require any payment to be made by
any Credit Party, and (d) except for the Liens created by the Security
Documents, will not result in the creation or imposition of any Lien on any
asset of the Credit Parties.
Without limiting the generality of the foregoing, if, after
giving effect to any Borrowing, or any issuance, amendment, renewal or extension
of any Letter of Credit, the sum of the aggregate amount of the Revolving Credit
Exposure plus the aggregate outstanding amount
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of Term Loans and Incremental Loans is greater than $200,000,000, the Borrower
will be in compliance with the provisions of Section 4.8 of the OCI Indenture.
SECTION 4.04. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE;
YEAR 2000 ISSUES.
(a) Financial Statements. The Borrower has heretofore
delivered to the Lenders the following financial statements:
(i) the audited consolidated balance sheet and statements of
earnings (loss), stockholders' deficit and cash flows of the Borrower
and its Subsidiaries (and, separately stated, of the Borrower and its
Restricted Subsidiaries) as of and for the fiscal year ended December
31, 1998, reported on by KPMG Peat Marwick LLP, independent public
accountants;
(ii) the unaudited consolidated balance sheet and statements
of earnings (loss), stockholders' deficit and cash flows of the
Borrower and its Subsidiaries (and, separately stated, of the Borrower
and its Restricted Subsidiaries) as of and for the three-month period
ended March 31, 1999, certified by a Financial Officer of the Borrower;
(iii) the audited consolidated balance sheets and statement of
operations of Chancellor Media Outdoor Corporation for the period from
July 22, 1998 through December 31, 1998 reported on by
PricewaterhouseCoopers LLP, and the unaudited consolidated balance
sheet and statement of operations of Chancellor Media Outdoor
Corporation for the three-month period ended March 31, 1999;
(iv) the unaudited consolidated balance sheet of Chancellor
Media Outdoor Corporation as of March 31, 1999, which has been adjusted
to give effect to the Preliminary Transactions under and as defined in
the Chancellor Acquisition Agreement, and the unaudited consolidated
statement of operations of Chancellor Media Outdoor Corporation for the
twelve month period ended March 31, 1999, which has been adjusted to
give effect to such Preliminary Transactions as if such Preliminary
Transactions had been consummated on April 1, 1998; and
(v) the pro forma statement of earnings (loss) of the Borrower
and its Restricted Subsidiaries as of and for the fiscal year ended
December 31, 1998 and for the three month period ended March 31, 1999,
and the pro forma balance sheet of the Borrower and its Restricted
Subsidiaries as of March 31, 1999, each of which financial statements
have been prepared under the assumption that the Chancellor Acquisition
had been consummated on January 1, 1998.
Such financial statements present fairly, in all material respects, (i) in the
case of the financial statements referred to in clauses (i) through (iv) above,
the respective consolidated actual financial condition of the respective
entities as at said respective dates and the consolidated and unconsolidated
results of their operations for the fiscal periods ended on said respective
dates, all in accordance with generally accepted accounting principles and
practices applied on a consistent basis, subject, in the case of unaudited
financial statements, to the absence of footnotes and year-end
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audit adjustments and (ii) in the case of the financial statements referred to
in clause (v) above, the pro forma financial condition of the Borrower and its
Restricted Subsidiaries as at March 31, 1999, and the consolidated and
unconsolidated results of their operations for the respective fiscal periods
ended on March 31, 1999, based on generally accepted accounting principles and
practices applied on a consistent basis, subject, in the case of unaudited
financial statements, to the absence of footnotes and year-end audit
adjustments. None of said entities has on the date hereof any material
contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in said pro
forma balance sheet as at March 31, 1999 referred to in clause (v) above. Since
December 31, 1998, there has been no material adverse change in the business,
assets, operations, prospects or condition, financial or otherwise, of the
Borrower and its Restricted Subsidiaries taken as a whole from that set forth in
said pro forma consolidated financial statements referred to in clause (v)
above.
(b) Year 2000 Issues. Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (i) the computer systems
of the Borrower and its Subsidiaries and (ii) equipment containing embedded
microchips (including systems and equipment supplied by others or with which the
systems of the Borrower and its Subsidiaries interface) and the testing of all
such systems and equipment, as so reprogrammed, will be completed by November
30, 1999. The cost to the Borrower and its Subsidiaries of such reprogramming
and testing and of the reasonably foreseeable consequences of year 2000 to the
Borrower and its Subsidiaries (including reprogramming errors and the failure of
others' systems or equipment) will not result in a Default or a Material Adverse
Effect. Except for such of the reprogramming referred to in the preceding
sentence as may be necessary, the computer and management information systems of
the Borrower and its Subsidiaries are and, with ordinary course upgrading and
maintenance, will continue for the term of this Agreement to be, sufficient to
permit the Borrower and its Subsidiaries to conduct its business without a
Material Adverse Effect.
SECTION 4.05. PROPERTIES.
(a) Properties Generally. Each of the Borrower and its
Restricted Subsidiaries has good title to, or valid leasehold interests in, all
its real and personal property material to its business, except for minor
defects in title that do not interfere with its ability to conduct its business
as currently conducted or to utilize such properties for their intended
purposes.
(b) Intellectual Property. Each of the Borrower and its
Restricted Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, patents and other intellectual property material to its business,
and the use thereof by the Borrower and its Subsidiaries does not infringe upon
the rights of any other Person, except for any such infringements that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
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SECTION 4.06. LITIGATION AND ENVIRONMENTAL MATTERS.
(a) Litigation. There are no actions, suits or proceedings by
or before any arbitrator or Governmental Authority pending against or, to the
knowledge of any of the Credit Parties, threatened against or affecting the
Borrower or any of its Subsidiaries (i) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve
any of the Basic Documents or the Transactions.
(b) Environmental Matters. Except for the Disclosed Matters
and except with respect to any other matters that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect, none of the Borrower nor any of its Subsidiaries (i) has failed to
comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii) has
become subject to any Environmental Liability, (iii) has received notice of any
claim with respect to any Environmental Liability or any inquiry, allegation,
notice or other communication from any Governmental Authority concerning its
compliance with any Environmental Law or (iv) knows of any basis for any
Environmental Liability.
(c) No Change in Disclosed Matters. Since the date of this
Agreement, there has been no change in the status of the Disclosed Matters that,
individually or in the aggregate, has resulted in, or materially increased the
likelihood of, a Material Adverse Effect.
SECTION 4.07. COMPLIANCE WITH LAWS AND AGREEMENTS. Each of the
Borrower and its Subsidiaries is in compliance with all laws, regulations,
policies and orders of any Governmental Authority applicable to it or its
property and all indentures, agreements and other instruments binding upon it or
its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 4.08. INVESTMENT AND HOLDING COMPANY STATUS. No Credit
Party nor any of their respective subsidiaries is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940,
as amended, or (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935, as amended.
SECTION 4.09. TAXES. Each of the Credit Parties and their
respective Subsidiaries has timely filed or caused to be filed all Tax returns
and reports required to have been filed and has paid or caused to be paid all
Taxes required to have been paid by it, except (a) Taxes that are being
contested in good faith by appropriate proceedings and for which such Credit
Party has set aside on its books adequate reserves with respect thereto in
accordance with GAAP or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 4.10. ERISA. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse
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Effect. The present value of all accumulated benefit obligations under each Plan
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $1,000,000 the fair
market value of the assets of such Plan, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed by more than $1,000,000 the fair market value of the assets
of all such underfunded Plans.
SECTION 4.11. DISCLOSURE. The Credit Parties have disclosed to
the Lenders all agreements, instruments and corporate or other restrictions to
which any Credit Party is subject, and all other matters known to any Credit
Party, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. The information, reports, financial
statements, exhibits and schedules furnished in writing by or on behalf of the
Credit Parties to the Administrative Agent or any Lender in connection with the
negotiation, preparation or delivery of this Agreement and the other Basic
Documents (including, without limitation, the information set forth in the
Confidential Information Memorandum and the information set forth in Schedule
4.11) or delivered pursuant hereto or thereto, when taken as a whole do not
contain any untrue statement of material fact or omit to state any material fact
necessary to make the statements herein or therein, in light of the
circumstances under which they were made, not misleading. All written
information furnished after the date hereof by the Borrower and its Subsidiaries
to the Administrative Agent and the Lenders in connection with this Agreement
and the other Basic Documents and the transactions contemplated hereby and
thereby will be true, complete and accurate in every material respect, or (in
the case of projections) based on reasonable estimates, on the date as of which
such information is stated or certified. There is no fact known to the Borrower
that could reasonably be expected to have a Material Adverse Effect that has not
been disclosed herein, in the other Basic Documents or in a report, financial
statement, exhibit, schedule, disclosure letter or other writing furnished to
the Lenders for use in connection with the transactions contemplated hereby or
thereby.
SECTION 4.12. CAPITALIZATION. The authorized capital stock of
the Borrower consists, on the date hereof, of an aggregate of 3,000 shares of
common stock, with par value of $0.01 per share, of which, as of the date
hereof, 100 shares are duly and validly issued and outstanding, each of which
shares is fully paid and nonassessable and all of which are held beneficially
and of record by Holdings. As of the date hereof, (x) there are no outstanding
Equity Rights with respect to the Borrower and (y) there are no outstanding
obligations of the Borrower or any of its Subsidiaries to repurchase, redeem, or
otherwise acquire any shares of capital stock of the Borrower nor are there any
outstanding obligations of the Borrower or any of its Subsidiaries to make
payments to any Person, such as "phantom stock" payments, where the amount
thereof is calculated with reference to the fair market value or equity value of
the Borrower or any of its Subsidiaries.
SECTION 4.13. MATERIAL AGREEMENTS AND LIENS.
(a) Indebtedness. Schedule 4.13 hereto is a complete and
correct list, as of the date of this Agreement (and as of the date of the
Chancellor Acquisition, giving effect thereto),
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of each credit agreement, loan agreement, indenture, guarantee, letter of credit
or other arrangement (other than this Agreement or the Existing Credit
Agreement) providing for or otherwise relating to any Indebtedness or any
extension of credit (or commitment for any extension of credit) to, or guarantee
by, the Borrower or any of its Subsidiaries the aggregate principal or face
amount of which equals or exceeds (or may equal or exceed) $1,000,000, and the
aggregate principal or face amount outstanding or that may become outstanding
under each such arrangement is correctly described in Schedule 4.13.
(b) Liens. Schedule 4.13 hereto is a complete and correct
list, as of the date of this Agreement (and as of the date of the Chancellor
Acquisition, giving effect thereto), of each Lien securing Indebtedness of any
Person the aggregate principal or face amount of which equals or exceeds (or may
equal or exceed) $1,000,000 and covering any property of the Borrower or any of
its Subsidiaries, and the aggregate Indebtedness secured (or which may be
secured) by each such Lien and the Property covered by each such Lien is
correctly described in Schedule 4.13.
SECTION 4.14. SUBSIDIARIES, ETC.
(a) Subsidiaries. Set forth in Schedule 4.14 is a complete and
correct list of all of the Subsidiaries of the Credit Parties as of the date
hereof (and that will be acquired pursuant to the Chancellor Acquisition)
together with, for each such Subsidiary, (i) the jurisdiction of organization of
such Subsidiary, (ii) each Person holding ownership interests in such
Subsidiary, (iii) the nature of the ownership interests held by each such Person
and the percentage of ownership of such Subsidiary represented by such ownership
interests and (iv) whether such Subsidiary is a Restricted Subsidiary or
Unrestricted Subsidiary. Except as disclosed in Schedule 4.14, (i) each Credit
Party and its respective Subsidiaries owns (and, in the case of any Subsidiary
acquired pursuant to the Chancellor Acquisition, will own), free and clear of
Liens (other than Liens created pursuant to the Security Documents), and has
(and will have) the unencumbered right to vote, all outstanding ownership
interests in each Person shown to be held by it in Schedule 4.14, (y) all of the
issued and outstanding capital stock of each such Person organized as a
corporation is validly issued, fully paid and nonassessable and (z) there are no
outstanding Equity Rights with respect to such Person. Each Subsidiary
identified on said Schedule 4.14 as an "Unrestricted Subsidiary" qualifies as an
Unrestricted Subsidiary under the criteria therefor set forth in Section 1.05.
(b) No Restrictions. Except as set forth in Schedule 4.14, as
of the date of this Agreement (and, in the case of any Subsidiary acquired in
the Chancellor Acquisition, as of the date of the Chancellor Acquisition), none
of the Restricted Subsidiaries of the Borrower is (or will be) subject to any
indenture, agreement, instrument or other arrangement containing any provision
of the type described in Section 7.08, other than any such provision the effect
of which has been unconditionally, irrevocably and permanently waived and other
than the prohibition on the sale, transfer, assignment, mortgage, pledge,
encumbrance or other disposition by MIL of its interest in the Missouri
Partnership.
SECTION 4.15. Chancellor Acquisition. The Borrower has
heretofore delivered to the Administrative Agent a true and complete copy of the
Chancellor Acquisition Agreement
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(including all modifications and supplements thereto); the Chancellor
Acquisition Agreement has been duly executed and delivered by each party thereto
and is in full force and effect and none of the parties thereto is in default of
any of its obligations thereunder. Each of the representations and warranties
set forth in Section 2.21 of the Chancellor Acquisition Agreement as in effect
on the date hereof will be true and complete on and as of the consummation of
the Chancellor Acquisition.
SECTION 4.16. Senior Notes Indenture. The Borrower has
heretofore delivered to the Administrative Agent a true and complete copy of the
Holdings Indenture and the related prospectus (including all modifications and
supplements thereto); the Holdings Indenture has been duly executed and
delivered by each party thereto and is in full force and effect and none of the
parties thereto is in default of any of its obligations thereunder.
ARTICLE V
Conditions
SECTION 5.01. EFFECTIVE DATE. The obligations of the Lenders
to make Loans, and of the Issuing Lender to issue Letters of Credit, hereunder
shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section 10.02):
(a) Counterparts of Agreement. The Administrative Agent (or
Special Counsel) shall have received from each party hereto either (i)
a counterpart of this Agreement signed on behalf of such party or (ii)
written evidence satisfactory to the Administrative Agent (which may
include telecopy transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of this Agreement.
(b) Opinion of Counsel to Credit Parties. The Administrative
Agent (or Special Counsel) shall have received a favorable written
opinion (addressed to the Administrative Agent and the Lenders and
dated the Effective Date) of Kean, Miller, Hawthorne, D'Armond, McCowan
& Jarman, L.L.P., counsel to the Credit Parties, substantially in the
form of Exhibit B, and covering such matters relating to the Credit
Parties, this Agreement, the other Loan Documents or the Transactions
as the Required Lenders shall request (and each Credit Party hereby
requests such counsel to deliver such opinion).
(c) Opinion of Special Counsel. The Administrative Agent shall
have received a favorable written legal opinion (addressed to the
Administrative Agent and the Lenders and dated the Effective Date) of
Special Counsel, substantially in the form of Exhibit C (and the
Administrative Agent requests Special Counsel to deliver such opinion).
(d) Corporate Matters. The Administrative Agent (or Special
Counsel) shall have received such documents and certificates as the
Administrative Agent or Special Counsel may reasonably request relating
to the organization, existence and good standing of each Credit Party,
the authorization of the Transactions and any other legal matters
relating to the Credit Parties, this Agreement, the other Loan
Documents or the Transactions, all in form and substance reasonably
satisfactory to the Administrative Agent and its counsel.
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(e) Financial Officer Certificate. The Administrative Agent
(or Special Counsel) shall have received a certificate, dated the
Effective Date and signed by the President, a Vice President or a
Financial Officer of the Borrower, confirming compliance with the
conditions set forth in paragraphs (a) and (b) of Section 5.03.
(f) Notes. The Administrative Agent (or Special Counsel) shall
have received for each Lender that shall have requested a promissory
note, a duly completed and executed promissory note for such Lender.
(g) Pledge Agreement. The Administrative Agent (or Special
Counsel) shall have received (i) from each Obligor a counterpart of the
Pledge Agreement signed on behalf of such Obligor and (ii) to the
extent not previously delivered under the Existing Credit Agreement,
the stock certificates identified under the name of such Obligor in
Annex 1 thereto, accompanied by undated stock powers executed in blank.
In addition, each Obligor shall have taken such other action
(including, to the extent not previously effected under the Existing
Credit Agreement, delivering to the Administrative Agent for filing,
appropriately completed and duly executed copies of Uniform Commercial
Code financing statements) as the Administrative Agent shall have
requested in order to perfect the security interests created pursuant
to the Pledge Agreement.
(h) Holdings Guaranty and Pledge Agreement. The Administrative
Agent (or Special Counsel) shall have received (i) from Holdings a
counterpart of the Holdings Guaranty and Pledge Agreement signed on
behalf of Holdings and (ii) to the extent not previously delivered
under the Existing Credit Agreement, the stock certificates for the
Borrower identified in Annex 1 thereto, accompanied by undated stock
powers executed in blank. In addition, Holdings shall have taken such
other action (including, to the extent not previously effected under
the Existing Credit Agreement, delivering to the Administrative Agent
for filing, appropriately completed and duly executed copies of Uniform
Commercial Code financing statements) as the Administrative Agent shall
have requested in order to perfect the security interests created
pursuant to the Holdings Guaranty and Pledge Agreement.
(i) Solvency Certificate. The Administrative Agent shall have
received a certificate from a Financial Officer of the Borrower to the
effect that, as of the Effective Date and after giving effect to
Chancellor Acquisition, the initial Loans hereunder and to the other
Transactions:
(i) the aggregate value of all properties of the
Borrower and its Subsidiaries at their present fair saleable
value (i.e., the amount that may be realized within a
reasonable time, considered to be six months to one year,
either through collection or sale at the regular market value,
conceiving the latter as the amount that could be obtained for
the property in question within such period by a capable and
diligent businessman from an interested buyer who is willing
to purchase under ordinary selling conditions), exceed the
amount of all the debts and liabilities (including contingent,
subordinated, unmatured and unliquidated liabilities) of the
Borrower and its Subsidiaries,
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(ii) the Borrower and its Subsidiaries will not, on a
consolidated basis, have an unreasonably small capital with
which to conduct their business operations as heretofore
conducted and
(iii) the Borrower and its Subsidiaries will have, on
a consolidated basis, sufficient cash flow to enable them to
pay their debts as they mature.
Such certificate shall include a statement to the effect that the
financial projections and underlying assumptions contained in such
analysis are, fair and reasonable and accurately computed.
(j) Insurance. The Administrative Agent shall have received a
certificate of a Financial Officer setting forth the insurance obtained
by the Borrower in accordance with the requirements of Section 6.05 and
stating that such insurance is in full force and effect and that all
premiums then due and payable thereon have been paid.
(k) Total Debt Ratio. The Administrative Agent shall have
received a certificate of a Financial Officer, in form and detail
satisfactory to the Administrative Agent, setting forth the Total Debt
Ratio as at the Effective Date (which shall in any event be less than
6.00 to 1).
(l) Repayment of Indebtedness under Existing Credit Agreement.
The Borrower shall have repaid in full the principal of and interest on
all of the "Loans" outstanding under the Existing Credit Agreement and
all commitments under the Existing Credit Agreement shall have been
terminated.
(m) Consummation of Chancellor Acquisition. The Administrative
Agent shall have received a certificate of a senior financial officer
of the Borrower providing evidence that the Chancellor Acquisition
shall have been (or shall be concurrently with the making of the
initial Loans hereunder on the Effective Date) consummated in all
material respects (i) in accordance with the terms of the Chancellor
Acquisition Agreement as in effect on the date hereof (except for any
material modifications, supplements or waivers thereof, or written
consents or determinations made by the parties thereto, that shall be
satisfactory to the Administrative Agent) and (ii) to the satisfaction
of the Administrative Agent.
(n) Release and Payment of Certain Chancellor Obligations. The
Administrative Agent shall have received evidence that any Indebtedness
of Chancellor or any of its Subsidiaries not permitted under Section
7.01 shall have been paid in full (or arrangements for such payment
satisfactory to the Administrative Agent shall have been made) and
that, to the extent any of the assets of Chancellor or any of its
Subsidiaries are subject to Liens not permitted under Section 7.02,
such Liens shall have been released (or arrangements for such release
satisfactory to the Administrative Agent shall have been made).
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(o) Other Documents. The Administrative Agent shall have
received such other documents as the Administrative Agent or any Lender
or Special Counsel shall have reasonably requested.
(p) Fees and Expenses. The Administrative Agent shall have
received all fees and other amounts due and payable on or prior to the
Effective Date, including, to the extent invoiced, reimbursement or
payment of all out-of-pocket expenses required to be reimbursed or paid
by the Borrower hereunder.
The Administrative Agent shall notify the Borrower and the
Lenders of the Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans, and
of the Issuing Lender to issue Letters of Credit, hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 10.02) at or prior to 12:00 p.m., New York City time, on
November 30, 1999 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).
SECTION 5.02. INCREMENTAL LOAN BORROWINGS. The obligation of
each Incremental Loan Lender to make an Incremental Loan on the occasion of any
Borrowing is subject to the receipt by the Administrative Agent of evidence
satisfactory to it that after giving effect to such Borrowing and the other
transactions that are to occur on the date of such Borrowing (under the
assumption that such Borrowing and such other transactions had been consummated
on the first day of the respective periods for which calculations are to be made
under the covenants set forth in Section 7.09), the Borrower would have been in
compliance with the applicable provisions of Section 7.09, and a Financial
Officer shall have delivered a certificate to the foregoing effect to the
Administrative Agent.
SECTION 5.03. EACH EXTENSION OF CREDIT. The obligation of each
Lender to make a Loan on the occasion of any Borrowing, and of the Issuing
Lender to issue, amend, renew or extend any Letter of Credit, is subject to the
satisfaction of the following conditions:
(a) Representations and Warranties. The representations and
warranties of each Credit Party set forth in this Agreement and the
other Loan Documents shall be true and correct on and as of the date of
such Borrowing, or (as applicable) the date of issuance, amendment,
renewal or extension of such Letter of Credit, both before and after
giving effect thereto and to the use of the proceeds thereof (or, if
any such representation or warranty is expressly stated to have been
made as of a specific date, such representation or warranty shall be
true and correct as of such specific date).
(b) No Defaults. At the time of and immediately after giving
effect to such Borrowing, or (as applicable) the date of issuance,
amendment, renewal or extension of such Letter of Credit, no Default
shall have occurred and be continuing.
(c) Consummation of Acquisition. To the extent that the
proceeds of such Loans are being applied to finance in whole or in part
any Acquisition that is not permitted under Section 7.04(e) (and that,
therefore, is being consummated with the consent of the
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Required Lenders), evidence that such Acquisition shall have been (or
shall be simultaneously) consummated in all material respects in
accordance with the terms of the respective acquisition agreement (it
being understood that any modifications, supplements or waivers
thereof, or written consents or determinations made by the parties
thereto, that shall affect in any material respect the provisions of
such acquisition shall have been consented to by the Required Lenders),
and the Administrative Agent shall have received a certificate of a
Financial Officer to such effect and to the effect that attached
thereto are true and complete copies of the documents delivered in
connection with the closing of such Acquisition. In addition, the
Administrative Agent shall have received copies of the legal opinions
delivered to the Borrower pursuant to such acquisition agreement in
connection with such Acquisition.
Each Borrowing Request, or request for issuance, amendment, renewal or extension
of a Letter of Credit, shall be deemed to constitute a representation and
warranty by the Borrower (both as of the date of such Borrowing Request, or
request for issuance, amendment, renewal or extension, and as of the date of the
related Borrowing or issuance, amendment, renewal or extension) as to the
matters specified in paragraphs (a) and (b) of this Section 5.03.
ARTICLE VI
Affirmative Covenants
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, each Obligor covenants and
agrees with the Lenders that:
SECTION 6.01. FINANCIAL STATEMENTS AND OTHER INFORMATION. The
Borrower will furnish to the Administrative Agent and each Lender:
(a) as soon as available and in any event within 90 days after
the end of each fiscal year of the Borrower:
(i) consolidated and consolidating statements of
income, retained earnings and cash flows of the Borrower and
its Subsidiaries (and, separately stated, of the Borrower and
its Restricted Subsidiaries) for such fiscal year and the
related consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries (and, separately stated, of the
Borrower and its Restricted Subsidiaries) as at the end of
such fiscal year, setting forth in each case in comparative
form the corresponding consolidated and consolidating figures
for the preceding fiscal year,
(ii) an opinion of independent certified public
accountants of recognized national standing (without a "going
concern" or like qualification or exception and without any
qualification or exception as to the scope of such audit)
stating that said consolidated financial statements referred
to in the preceding clause (i)
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fairly present the consolidated financial condition and
results of operations of the Borrower and its Subsidiaries
(and of the Borrower and its Restricted Subsidiaries, as the
case may be) as at the end of, and for, such fiscal year in
accordance with generally accepted accounting principles, and
a statement of such accountants to the effect that, in making
the examination necessary for their opinion, nothing came to
their attention that caused them to believe that the Borrower
was not in compliance with Section 7.09, insofar as such
Section relates to accounting matters, and
(iii) a certificate of a Financial Officer stating
that said consolidating financial statements referred to in
the preceding clause (i) fairly present the respective
individual unconsolidated financial condition and results of
operations of the Borrower and of each of its Subsidiaries, in
each case in accordance with generally accepted accounting
principles, consistently applied, as at the end of, and for,
such fiscal year;
(b) as soon as available and in any event within 60 days after
the end of each of the first three quarterly fiscal periods of each
fiscal year of the Borrower:
(i) consolidated and consolidating statements of
income, retained earnings and cash flows of the Borrower and
its Subsidiaries (and, separately stated, of the Borrower and
its Restricted 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 and
consolidating balance sheets of the Borrower and its
Subsidiaries (and, separately stated, of the Borrower and its
Restricted Subsidiaries) as at the end of such period, setting
forth in each case in comparative form the corresponding
consolidated and consolidating figures for the corresponding
period in the preceding fiscal year (except that, in the case
of balance sheets, such comparison shall be to the last day of
the prior fiscal year),
(ii) a certificate of a Financial Officer, which
certificate shall state that said consolidated financial
statements referred to in the preceding clause (i) fairly
present the consolidated financial condition and results of
operations of the Borrower and its Subsidiaries (and of the
Borrower and its Restricted Subsidiaries, as the case may be)
and that said consolidating financial statements referred to
in the preceding clause (i) fairly present the respective
individual unconsolidated financial condition and results of
operations of the Borrower and of each of its Subsidiaries, in
each case in accordance with generally accepted accounting
principles, consistently applied, as at the end of, and for,
such period (subject to normal year-end audit adjustments);
(c) concurrently with any delivery of financial statements
under clause (a) or (b) above, a certificate of a Financial Officer (i)
certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or
proposed to be taken with respect thereto, (ii) setting forth
reasonably detailed calculations demonstrating compliance with Section
7.06 and 7.09 and (iii) stating whether any change in GAAP or in the
application thereof has occurred since the date of
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the audited financial statements referred to in Section 4.04 and, if
any such change has occurred, specifying the effect of such change on
the financial statements accompanying such certificate;
(d) concurrently with any delivery of financial statements
under clause (a) above, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial
statements of any Default (which certificate may be limited to the
extent required by accounting rules or guidelines);
(e) promptly after the same become publicly available, copies
of all registration statements, regular periodic reports and press
releases filed by the Borrower or any Subsidiary with the Securities
and Exchange Commission, or any Governmental Authority succeeding to
any or all of the functions of said Commission, or with any national
securities exchange;
(f) promptly upon the mailing thereof to the shareholders of
the Borrower generally or to the holders of the Senior Subordinated
Notes or the New Senior Subordinated Notes (or any Refunding
Indebtedness) or Senior Secured Notes generally, copies of all
financial statements, reports and proxy statements so mailed; and
(g) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Borrower or any Subsidiary, or compliance with the
terms of this Agreement, as the Administrative Agent or any Lender may
reasonably request.
In addition, the Borrower will arrange a meeting with the Lenders at a site
reasonably convenient to the parties and acceptable to the Administrative Agent,
at least once during each fiscal year (but in any event with a period of no more
than fifteen months between meetings), at which the Borrower will report upon
its financial condition, business and operations and have senior officers
available to answer questions of the Lenders regarding such financial condition,
business and operations.
SECTION 6.02. NOTICES OF MATERIAL EVENTS. The Borrower will
furnish to the Administrative Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against or affecting the Borrower or any Affiliate thereof that, if
adversely determined, could reasonably be expected to result in a
Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Borrower and its Subsidiaries in
an aggregate amount exceeding $5,000,000; and
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(d) any other development that results in, or could reasonably
be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section 6.02 shall be accompanied by a
statement of a Financial Officer or other executive officer of the Borrower
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.
SECTION 6.03. EXISTENCE; CONDUCT OF BUSINESS. The Borrower
will, and will cause each of its Restricted Subsidiaries to, do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and the rights, licenses, permits, privileges and franchises
material to the conduct of its business; provided that the foregoing shall not
prohibit any merger, consolidation, liquidation or dissolution permitted under
Section 7.04.
SECTION 6.04. PAYMENT OF OBLIGATIONS. The Borrower will, and
will cause each of its Subsidiaries to, pay its obligations, including Tax
liabilities, that, if not paid, could result in a Material Adverse Effect before
the same shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (b)
the Borrower or such Subsidiary has set aside on its books adequate reserves
with respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 6.05. MAINTENANCE OF PROPERTIES; INSURANCE. The
Borrower will, and will cause each of its Restricted Subsidiaries to, (a) keep
and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted, and (b) maintain,
with financially sound and reputable insurance companies, insurance in such
amounts and against such risks as are customarily maintained by companies
engaged in the same or similar businesses operating in the same or similar
locations.
SECTION 6.06. BOOKS AND RECORDS; INSPECTION RIGHTS. The
Borrower will, and will cause each of its Restricted Subsidiaries to, keep
proper books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its Restricted
Subsidiaries to, permit any representatives designated by the Administrative
Agent or any Lender, upon reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested.
The Borrower, in consultation with the Administrative Agent, will arrange for a
meeting to be held at least once every year with the Lenders hereunder at which
the business and operations of the Borrower and its Restricted Subsidiaries are
discussed.
SECTION 6.07. FISCAL YEAR. To enable the ready and consistent
determination of compliance with the covenants set forth in Section 7 hereof,
the Borrower and its Subsidiaries will not change the last day of their fiscal
year from December 31 of each year, or the last day of the first three fiscal
quarters in each of its fiscal years from March 31, June 30 and September 30,
respectively.
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SECTION 6.08. COMPLIANCE WITH LAWS. The Borrower will, and
will cause each of its Restricted Subsidiaries to, comply with all laws, rules,
regulations and orders of any Governmental Authority (including Environmental
Laws) applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 6.09. USE OF PROCEEDS. The proceeds of the Term Loans
will be used only (i) to enable the Borrower to consummate the Chancellor
Acquisition, (ii) to refinance Indebtedness outstanding under the Existing
Credit Agreement, and (iii) for fees and expenses related to the transactions
referred to in the foregoing clauses (i) and (ii). The proceeds of the Revolving
Loans will be used only (i) to enable the Borrower to consummate Acquisitions
(including the Chancellor Acquisition), (ii) for capital expenditures, (iii) to
repurchase OCI Subordinated Notes as contemplated by Section 7.11(ii) and (iv)
for the general corporate purposes of the Borrower and its Restricted
Subsidiaries in the ordinary course of business. The proceeds of the Incremental
Loans will be used only for (i) Acquisitions and (ii) the general corporate
purposes of the Borrower and its Restricted Subsidiaries in the ordinary course
of business. No part of any Loan will be used, whether directly or indirectly,
for any purpose that entails a violation of any of the Regulations of the Board,
including Regulations U and X.
SECTION 6.10. CERTAIN OBLIGATIONS RESPECTING RESTRICTED
SUBSIDIARIES AND COLLATERAL SECURITY.
(a) Subsidiary Guarantors. In the event that the Borrower
shall form or acquire any new Subsidiary (other than an Unrestricted Subsidiary
or an Inactive Subsidiary) after the date hereof, the Borrower will, and will
cause each of its Restricted Subsidiaries to, cause such new Subsidiary within
five Business Days of such formation or acquisition:
(i) to execute and deliver to the Administrative Agent a
Joinder Agreement (and thereby to become a party to this Agreement, as
a "Subsidiary Guarantor" hereunder, and to the Pledge Agreement, as a
"Securing Party" thereunder) and to pledge and grant to the
Administrative Agent for the benefit of the Lenders hereunder a
security interest in any property owned by it that is of the type
included in the definition of "Collateral" under the Pledge Agreement;
(ii) to take such action (including delivering such shares of
stock and executing and delivering such Uniform Commercial Code
financing statements) as shall be necessary to create and perfect valid
and enforceable first priority Liens consistent with the provisions of
the Pledge Agreement on such Collateral under the Pledge Agreement; and
(iii) to deliver such proof of corporate action, incumbency of
officers and other documents as is consistent with those delivered by
each Subsidiary Guarantor pursuant to Section 5.01 upon the Effective
Date or as the Administrative Agent shall have reasonably requested.
Without limiting the generality of the foregoing, the Borrower
shall cause any Subsidiary that becomes a guarantor in respect of any Senior
Subordinated Notes or New Senior
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Subordinated Notes (or in respect of any Refunding Indebtedness), to immediately
become a Subsidiary Guarantor hereunder in compliance with the provisions of the
preceding paragraph, whether or not such Subsidiary is otherwise required to be
a Subsidiary Guarantor hereunder.
(b) Ownership of Restricted Subsidiaries. The Borrower will,
and will cause each of its Restricted Subsidiaries to, take such action from
time to time as shall be necessary to ensure that the percentage of the equity
capital of any class or character owned by it in any Restricted Subsidiary on
the date hereof (or, in the case of any newly formed or newly acquired
Subsidiary, on the date of formation or acquisition) is not at any time
decreased, other than by reason of transfers to the Borrower or another
Restricted Subsidiary. In the event that any additional shares of stock shall be
issued by any Restricted Subsidiary, the respective holder of such shares of
stock shall forthwith deliver to the Administrative Agent pursuant to the Pledge
Agreement the certificates evidencing such shares of stock, accompanied by
undated stock powers executed in blank and to take such other action as the
Administrative Agent shall request to perfect the security interest created
therein pursuant to the Pledge Agreement.
ARTICLE VII
Negative Covenants
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full and all Letters of Credit shall have expired or terminated and all
LC Disbursements shall have been reimbursed, each Obligor covenants and agrees
with the Lenders that:
SECTION 7.01. INDEBTEDNESS. The Borrower will not, and will
not permit any Restricted Subsidiary to, create, incur, assume or permit to
exist any Indebtedness, except:
(a) Indebtedness created hereunder;
(b) Indebtedness in respect of notes issued by the Borrower
after the date hereof so long as (i) no Default exists at the time of
such issuance or would result therefrom, (ii) such Indebtedness (and
any Guarantees of Subsidiaries in respect of such Indebtedness) is
subordinated upon terms no less favorable (from the standpoint of the
holders of "Senior Indebtedness" under and as defined in the Senior
Subordinated Notes Indentures) than the terms of subordination set
forth in the Senior Subordinated Notes Indentures, (iii) the scheduled
amortization of such notes (whether by sinking fund payments, mandatory
redemptions or repurchases or otherwise) shall not be earlier than the
later of six months after the maturity date for the Incremental Loans
and the maturity date of the then latest-maturing Senior Subordinated
Notes or any other New Senior Subordinated Notes, (iv) the covenants,
events of default and mandatory prepayment requirements (whether by
sinking fund payments, mandatory redemptions or repurchases or
otherwise) of the Refunding Indebtedness are not more restrictive than
the corresponding provisions of the Senior Subordinated Notes
Indentures, (v) after giving effect to the issuance of such notes the
Borrower shall be in compliance with Section 7.09 (the determination of
such compliance to be calculated on a pro forma basis as if such notes
had been issued as of the first day of the period of four fiscal
quarters most recently
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ended prior to the date of such issuance) and (vi) the Borrower
furnishes to the Administrative Agent on the date of such issuance a
certificate of a Financial Officer demonstrating in reasonable detail
compliance with the foregoing conditions;
(c) Indebtedness existing on the date hereof and set forth in
Schedule 7.01 and (x) in the case of any such Indebtedness (other than
the Senior Subordinated Notes and the OCI Subordinated Notes), any
extension, renewal, refunding or replacement of such Indebtedness that
does not increase the principal amount of such Indebtedness outstanding
on the date hereof and (y) in the case of the Senior Subordinated Notes
or the OCI Subordinated Notes, (A) any extension or renewal thereof so
long as such Senior Subordinated Notes or OCI Subordinated Notes (the
"Refunding Indebtedness"), as so extended or renewed, would have been
permitted to be issued on the date of such extension or renewal under
paragraph (b) above and (B) any refunding or replacement thereof from
the proceeds of New Senior Subordinated Notes issued in accordance with
paragraph (b) above that does not increase the principal amount of such
Indebtedness outstanding on the date of such refunding or replacement,
provided that this clause (c) shall not, after the Closing Date, permit
any such Indebtedness identified on said schedule that is to be paid on
the Closing Date;
(d) Indebtedness of the Borrower to any Restricted Subsidiary
and of any Restricted Subsidiary to the Borrower or any other
Restricted Subsidiary;
(e) Guarantees permitted under Section 7.03;
(f) Indebtedness of the Borrower under Equity Hedging
Arrangements, so long as the aggregate maximum contingent or potential
liability thereunder shall not on any date exceed $12,000,000 minus the
aggregate amount in fact paid by the Borrower under all Equity Hedging
Arrangements during the period commencing on the date hereof and ending
on such date; and
(g) additional Indebtedness of the Borrower or any Restricted
Subsidiary (determined on a consolidated basis without duplication in
accordance with GAAP) in an aggregate principal amount up to but not
exceeding $65,000,000 at any one time outstanding.
SECTION 7.02. LIENS. The Borrower will not, and will not
permit any Restricted Subsidiary to, create, incur, assume or permit to exist
any Lien on any Property or asset now owned or hereafter acquired by it, or
assign or sell any income or revenues (including accounts receivable) or rights
in respect of any thereof, except:
(a) Liens created under the Security Documents;
(b) any Lien on any property or asset of the Borrower or any
Restricted Subsidiary existing on the date hereof and set forth in
Schedule 7.02, provided that (i) such Lien shall not apply to any other
property or asset of the Borrower or any Restricted Subsidiary and (ii)
such Lien shall secure only those obligations which it
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secures on the date hereof and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof;
(c) Liens imposed by any Governmental Authority for taxes,
assessments or charges not yet due or (in the case of property taxes
and assessments not exceeding $500,000 in the aggregate more than 90
days overdue) or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are
maintained on the books of the Borrower or the affected Restricted
Subsidiaries, as the case may be, in accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens, and vendors' Liens imposed by statute
or common law not securing the repayment of Indebtedness, arising in
the ordinary course of business which are not overdue for a period of
more than 60 days or which are being contested in good faith and by
appropriate proceedings and Liens securing judgments (including,
without limitation, pre-judgment attachments) but only to the extent
for an amount and for a period not resulting in an Event of Default
under Section 8(j) hereof;
(e) pledges or deposits under worker's compensation,
unemployment insurance and other social security legislation;
(f) deposits to secure the performance of bids, tenders, trade
contracts (other than for borrowed money), leases (other than capital
leases), statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the ordinary
course of business;
(g) 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 which, in the aggregate, are not material in amount, and which
do not, in the aggregate, materially detract from the value of the
Property of the Borrower and its Restricted Subsidiaries or interfere
with the ordinary conduct of the business of the Borrower or any of its
Restricted Subsidiaries;
(h) additional Liens upon real and/or personal Property
created after the date hereof provided that the aggregate amount of
obligations secured thereby shall not exceed $20,000,000;
(i) Liens consisting of bankers' liens and rights of setoff,
in each case, arising by operation of law, and Liens on documents
presented in letters of credit drawings; and
(j) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Restricted Subsidiary, provided that
(i) such Liens secure Indebtedness permitted by Section 7.01(g), (ii)
such Liens and the Indebtedness secured thereby are incurred prior to
or within 90 days after such acquisition or the completion of such
construction or improvement, (iii) the Indebtedness secured thereby
does not exceed the cost of acquiring, constructing or improving such
fixed or capital assets and (iv) such
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security interests shall not apply to any other property or assets of
the Borrower or any Restricted Subsidiary.
SECTION 7.03. CONTINGENT LIABILITIES; SURETY BONDS.
(a) Contingent Liabilities. The Borrower will not, and will
not permit any Restricted Subsidiary to, Guarantee the Indebtedness or other
obligations of any Person, or Guarantee the payment of dividends or other
distributions upon the stock of, or the earnings of, any Person, except:
(i) endorsements of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(ii) Guarantees by the Borrower of Indebtedness of any
Subsidiary and by any Restricted Subsidiary of Indebtedness of the
Borrower or any other Subsidiary, provided that the aggregate amount of
such Guarantees by the Borrower and its Restricted Subsidiaries of
obligations of Unrestricted Subsidiaries, together with any Investments
permitted under Section 7.05(a)(i), shall not exceed $100,000,000;
(iii) Guarantees in effect on the date hereof which are
disclosed in Schedule 7.03, any replacements thereof in amounts not
exceeding such Guarantees and any additions thereto, provided the
additions thereto do not exceed $10,000,000 outstanding in the
aggregate;
(iv) Surety Bonds, subject, however, to the limits set forth
in Section 7.03(b);
(v) all transactions with or for the benefit of Affiliates
that are expressly permitted under the proviso in Section 7.07; and
(vi) obligations in respect of Letters of Credit.
(b) Surety Bonds. The Borrower shall not, and shall not permit
any Restricted Subsidiary to, create, incur or suffer to exist any obligations
(contingent or otherwise) with respect to any Surety Bonds on behalf of
Affiliates in an aggregate face amount (as to the Borrower and the Restricted
Subsidiaries taken together) exceeding $25,000,000 at any time outstanding.
SECTION 7.04. FUNDAMENTAL CHANGES. The Borrower will not, nor
will it permit any of its Restricted Subsidiaries to, enter into any transaction
of merger or consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution). The Borrower will not, nor
will it permit any of its Restricted Subsidiaries to, acquire any business or
property from, or capital stock of, or be a party to any acquisition of, any
Person except for purchases of inventory and other property to be sold or used
in the ordinary course of business, Investments permitted under Section 7.05 and
Capital Expenditures. The Borrower will not, nor will it permit any of its
Restricted Subsidiaries to, convey, sell, lease, transfer or otherwise dispose
of, in one transaction or a series of transactions, any part of its business or
property, whether now owned or hereafter acquired (including, without
limitation,
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receivables and leasehold interests, but excluding (x) obsolete or worn-out
property, tools or equipment no longer used or useful in its business and (y)
any inventory or other property sold or disposed of in the ordinary course of
business and on ordinary business terms).
Notwithstanding the foregoing provisions of this Section 7.04:
(a) any Restricted Subsidiary may be merged or consolidated
with or into any other Restricted Subsidiary; provided that if any such
transaction shall be between a Restricted Subsidiary and a Wholly Owned
Restricted Subsidiary of the Borrower, the Wholly Owned Restricted
Subsidiary shall be the continuing or surviving corporation;
(b) any Restricted Subsidiary may sell, lease, transfer or
otherwise dispose of any or all of its property (upon voluntary
liquidation or otherwise) to any Wholly Owned Restricted Subsidiary of
the Borrower;
(c) the capital stock of any Restricted Subsidiary may be
sold, transferred or otherwise disposed of to the Borrower or any
Wholly Owned Restricted Subsidiary of the Borrower;
(d) the Borrower or any of its Restricted Subsidiaries may
sell assets (including, without limitation, capital stock issued by any
of their respective Subsidiaries) for fair market value provided that
(i) the aggregate amount of Disposition Investments and other non-cash
proceeds (valued at the fair market value thereof determined in good
faith by the Board of Directors of the Borrower) received by the seller
in the sale of any asset shall not exceed 15% of the total sales price
for such asset (including (A) the amount of liabilities, if any,
assumed as a portion of the sales price and (B) the amount of any
repayment by the seller of the principal of Indebtedness to the extent
that (X) such Indebtedness is secured by a Lien on such asset and (Y)
the seller is required by the transferee of (or holder of a Lien on)
such assets to repay such principal as a condition to the purchase of
such asset) and (ii) no more than 10% of EBITDA for any fiscal year of
the Borrower shall be attributable to all such assets so sold in the
following fiscal year of the Borrower;
(e) the Borrower or any Wholly Owned Restricted Subsidiary of
the Borrower may acquire any business, and the related assets, of any
other Person including of an Unrestricted Subsidiary (whether by way of
purchase of assets or stock, by merger or consolidation or otherwise),
so long as:
(i) such Acquisition (if by purchase of assets,
merger or consolidation) shall be effected in such manner so
that the acquired business, and the related assets, are owned
either by the Borrower or a Wholly Owned Restricted Subsidiary
of the Borrower and, if effected by merger or consolidation
involving the Borrower, the Borrower shall be the continuing
or surviving entity and, if effected by merger or
consolidation involving a Wholly Owned Restricted Subsidiary
of the Borrower, such Wholly Owned Restricted Subsidiary shall
be the continuing or surviving entity;
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(ii) such Acquisition (if by purchase of stock) shall
be effected in such manner so that the acquired entity becomes
a Wholly Owned Restricted Subsidiary of the Borrower;
(iii) after giving effect to such Acquisition the
Borrower shall be in compliance with Section 7.09 (the
determination of such compliance to be calculated on a pro
forma basis, as at the end of and for the period of four
fiscal quarters most recently ended prior to the date of such
Acquisition for which financial statements of the Borrower and
its Restricted Subsidiaries are available, under the
assumption that such Acquisition shall have occurred, and any
Indebtedness in connection therewith shall have been incurred,
at the beginning of the applicable period, and under the
assumption that interest for such period had been equal to the
actual weighted average interest rate in effect for the Loans
hereunder on the date of such Acquisition) and, in the event
that the aggregate amount of expenditures in respect of such
Acquisition shall exceed $10,000,000, the Borrower shall have
delivered to the Administrative Agent a certificate of a
Financial Officer showing calculations in reasonable detail to
demonstrate compliance with this subclause (iii); and
(iv) immediately prior to such Acquisition and after
giving effect thereto, no Default shall have occurred and be
continuing; and
(f) the Borrower and its Restricted Subsidiaries may dispose
of any one or more outdoor properties in exchange for one or more other
outdoor properties (including logo signage businesses), so long as the
percentage of the aggregate EBITDA attributable to the properties so
disposed of during any single fiscal year does not exceed 10% of the
aggregate EBITDA of the Borrower and its Restricted Subsidiaries for
the most recently-ended fiscal year (such EBITDA to be determined for
these purposes without giving effect to the last paragraph of the
definition of such term in Section 1.01).
SECTION 7.05. INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND
ACQUISITIONS; HEDGING AGREEMENTS.
(a) Investments, Etc. The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, make or permit to remain
outstanding any Investment, except:
(i) Investments by the Borrower and its Restricted
Subsidiaries in Subsidiaries and by any Restricted Subsidiary in the
Borrower (including Guarantees by the Borrower of Indebtedness of any
Subsidiary and by any Restricted Subsidiary of Indebtedness of the
Borrower or any other Subsidiary), provided that the aggregate amount
of any such Investments (including Guarantees) by the Borrower and its
Restricted Subsidiaries in Unrestricted Subsidiaries after the date
hereof (net of returns on such Investments after the date hereof) shall
not exceed $100,000,000 and no such Investment may be made at any time
that a Default exists or if a Default would result therefrom;
(ii) Permitted Investments;
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(iii) operating deposit accounts with banks;
(iv) Disposition Investments received in connection with any
Disposition permitted under Section 7.04(d) or any Disposition to which
the Lenders shall have consented in accordance with Section 10.02;
(v) Investments in Affiliates not exceeding $15,000,000 at any
one time outstanding;
(vi) Investments in Affiliates described in, and permitted by,
Section 7.07 (other than clause (iii) of the proviso to Section 7.07);
and
(vii) additional Investments in Persons that are not
Affiliates up to but not exceeding $150,000,000 in the aggregate at any
one time outstanding, provided that no such Investment may be made at
any time that a Default exists or if a Default would result therefrom.
(b) Hedging Agreements. The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, enter into any Hedging Agreement,
other than Hedging Agreements entered into in the ordinary course of business to
hedge or mitigate risks to which the Borrower or any Restricted Subsidiary is
exposed in the conduct of its business or the management of its liabilities.
SECTION 7.06. DIVIDEND PAYMENTS. The Borrower will not, nor
will it permit any of its Restricted Subsidiaries to, declare or make any
Dividend Payment at any time; provided, however, that the Borrower may declare
and make Dividend Payments in cash (including, without limitation, Dividend
Payments to Affiliates), subject to the satisfaction of each of the following
conditions on the date of such Dividend Payment and after giving effect thereto:
(i) no Default shall have occurred and be continuing (except
that to the extent the Dividend Payments made during any single fiscal
year do not exceed $500,000, such Dividend Payments may be made
notwithstanding that a Default under Section 8(c) or 8(d) exists, so
long as no other Default shall have occurred and be continuing); and
(ii) the aggregate amount of Dividend Payments made during any
fiscal year shall not exceed the greater of (A) $500,000 and (B) the
lesser of (x) 50% of Excess Cash Flow for the immediately preceding
fiscal year and (y) $20,000,000.
Notwithstanding the foregoing, (w) the Borrower may make
Dividend Payments consisting of the retirement of employee stock options and
other Equity Rights upon the death, retirement or termination of employment of
officers and employees in an aggregate amount in any fiscal year not exceeding
$1,000,000, so long as at the time thereof and after giving effect thereto, no
Default shall have occurred and be continuing, (x) the Borrower may enter into
Equity Hedging Arrangements, so long as the aggregate maximum contingent or
potential liability thereunder shall not on any date exceed $12,000,000 minus
the aggregate amount in fact paid by the Borrower under all Equity Hedging
Arrangements during the period commencing on
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the date hereof and ending on such date, (y) the Borrower may make Dividend
Payments in amounts necessary to enable Holdings to pay accrued interest on the
Senior Notes, so long as (A) at the time of such Dividend Payment and after
giving effect thereto no Event of Default shall have occurred and be continuing
and (B) after giving effect to such Dividend Payment, the Borrower would be in
pro forma compliance with the provisions of Section 7.09 (as if such Dividend
Payment had been made on the first date of the relevant period for which each of
the ratios therein referred to is being determined) and (z) the Borrower may
make Dividend Payments in an aggregate amount up $12,500,000 during any single
fiscal year to enable Holdings to make payments in respect of Qualified Holdings
Obligations.
Nothing herein shall be deemed to prohibit the payment of any
dividend or distribution by any Subsidiary of the Borrower so long as such
dividends or distributions are declared and paid ratably to the shareholders,
partners and other equity holders of such Subsidiary.
SECTION 7.07. TRANSACTIONS WITH AFFILIATES. Except as
expressly permitted by this Agreement, the Borrower will not, nor will it permit
any of its Restricted Subsidiaries to, directly or indirectly (a) make any
Investment in an Affiliate; (b) transfer, sell, lease, assign or otherwise
dispose of any property to an Affiliate unless such transaction is effected in
the ordinary course of business and the fair market value of such property
transferred, sold, leased, assigned or otherwise disposed of in any transaction
or series of related transactions is less than or equal to $250,000; (c) merge
into or consolidate with an Affiliate, or purchase or acquire property from an
Affiliate unless such purchase or acquisition is effected in the ordinary course
of business, the fair market value of such property purchased or acquired in any
transaction or series of related transactions is less than or equal to $250,000
and the consideration paid in connection therewith does not exceed fair market
value; or (d) enter into any other transaction directly or indirectly with or
for the benefit of an Affiliate (including, without limitation, guarantees and
assumptions of obligations of an Affiliate) unless such transaction is effected
in the ordinary course of business, the goods, services, obligations or other
consideration that is the subject of such transaction has a fair market value
(or other appropriate value determined by reference to similar transactions
conducted on an arms' length basis) less than or equal to $250,000 and the
consideration received (or paid) by the Borrower or the relevant Restricted
Subsidiary, as the case may be, is not less than (if received) or more than (if
paid) the consideration that would be received or paid, as the case may be, in a
comparable transaction effected on an arms' length basis with a Person that is
not an Affiliate; provided that:
(i) any Affiliate who is an individual may serve as a
director, officer, employee or consultant of the Borrower or any of its
Restricted Subsidiaries and receive reasonable compensation for his or
her services in such capacity;
(ii) the Borrower and its Restricted Subsidiaries may engage
in and continue the transactions with or for the benefit of Affiliates
which are described in Schedule 7.07;
(iii) the Borrower and its Restricted Subsidiaries may make
Acquisitions of Affiliates so long as (x) the consideration paid in
connection therewith does not exceed fair market value, as determined
by the disinterested members of the board of directors of the Borrower,
(y) in the case of Acquisitions involving consideration valued in
excess of
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$1,000,000, the Borrower or Restricted Subsidiary, as the case may be,
shall have delivered a certificate of an independent appraiser to such
effect and (z) the aggregate amount of consideration for all such
Acquisitions after the date hereof does not exceed $10,000,000;
(iv) the Borrower and its Restricted Subsidiaries may enter
into and be obligated with respect to site leases (and renewals and
extensions thereof) entered into in the ordinary course of business, so
long as the Affiliates benefiting from such site leases pay (or
reimburse the Borrower or the Restricted Subsidiaries for) their fair
share of the expenses thereunder and such site leases are otherwise no
less favorable to the Borrower and its Restricted Subsidiaries than a
comparable transaction effected on an arms' length basis with a Person
that is not an Affiliate; and
(v) the Borrower and its Restricted Subsidiaries may enter
into and continue agreements to provide management services to
Affiliates, warehouse leases and contracts for the sale of outdoor
advertising services, in the form customarily entered into, and Surety
Bond and insurance programs, in each case referred to in this clause
(v) in the ordinary course of business and in which Affiliates are
co-obligors and co-beneficiaries, provided that all such Affiliates
agree to reimburse the Borrower and each Restricted Subsidiary for
their fair share of rent, premiums, deposits and other payments
required to be made under any such agreement or program.
SECTION 7.08. RESTRICTIVE AGREEMENTS. The Borrower will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon (a) the
ability of the Borrower or any Restricted Subsidiary to create, incur or permit
to exist any Lien upon any of its property or assets, or (b) the ability of any
Restricted Subsidiary to pay dividends or other distributions with respect to
any shares of its capital stock or to make or repay loans or advances to the
Borrower or any other Restricted Subsidiary or to Guarantee Indebtedness of the
Borrower or any other Restricted Subsidiary; provided that (i) the foregoing
shall not apply to restrictions and conditions imposed by law or by this
Agreement, (ii) the foregoing shall not apply to restrictions and conditions
imposed by the Senior Subordinated Notes Indentures, any New Senior Subordinated
Notes Indenture, the OCI Indenture or any indenture pursuant to which the
refunding or replacement of Indebtedness in respect of the Senior Subordinated
Notes or OCI Subordinated Notes occurs in accordance with the terms of this
Agreement, (iii) the foregoing shall not apply to restrictions and conditions
existing on the date hereof identified on Schedule 7.08 (but shall apply to any
extension or renewal of, or any amendment or modification expanding the scope
of, any such restriction or condition), (iv) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to the
sale of a Restricted Subsidiary pending such sale, provided such restrictions
and conditions apply only to the Restricted Subsidiary that is to be sold and
such sale is permitted hereunder, (v) clause (a) of the foregoing shall not
apply to restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (vi) clause
(a) of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof.
Credit Agreement
<PAGE> 83
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SECTION 7.09. CERTAIN FINANCIAL COVENANTS.
(a) Total Debt Ratio. The Borrower will not permit the Total
Debt Ratio at any time during any period below to exceed the ratio set opposite
such period below:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
From the Effective Date
through December 30, 2000 6.25 to 1
From December 31, 2000
through December 30, 2001 6.00 to 1
From December 31, 2001
through December 30, 2002 5.75 to 1
From December 31, 2002
and at all times thereafter 5.50 to 1
</TABLE>
(b) Senior Debt Ratio. The Borrower will not permit the Senior
Debt Ratio at any time during the period below to exceed the ratio set opposite
such period below:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
From the Effective Date
through December 30, 2000 4.50 to 1
From December 31, 2000
through December 30, 2001 4.00 to 1
From December 31, 2001
through December 30, 2002 3.50 to 1
From December 31, 2002
and at all times thereafter 3.00 to 1
</TABLE>
Credit Agreement
<PAGE> 84
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(c) Interest Coverage Ratio. The Borrower will not permit the
Interest Coverage Ratio at any time during the period below to be less than the
ratio set opposite such period below:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
From the Effective Date
through December 30, 2000 1.80 to 1
From December 31, 2000
through December 30, 2001 2.00 to 1
From December 31, 2001
and at all times thereafter 2.20 to 1
</TABLE>
(d) Fixed Charges Ratio. The Borrower will not permit the
Fixed Charges Ratio as at the last day of any fiscal quarter to be less than
1.05 to 1.
SECTION 7.10. LINES OF BUSINESS. Neither the Borrower nor any
of its Subsidiaries shall engage to any substantial extent in any line or lines
of business activity which would cause earnings from outdoor advertising,
out-of-home media, logo signage and other activities reasonably ancillary
thereto to constitute less than 80% of EBITDA for any period.
SECTION 7.11. SUBORDINATED INDEBTEDNESS. Except as permitted
by Section 7.01(c), the Borrower will not, nor will it permit any of its
Restricted Subsidiaries to, purchase, redeem, retire or otherwise acquire for
value, or set apart any money for a sinking, defeasance or other analogous fund
for the purchase, redemption, retirement or other acquisition of, or make any
voluntary payment or prepayment of the principal of or interest on, or any other
amount owing in respect of, any Subordinated Indebtedness, except for (i)
regularly scheduled payments or prepayments of principal and interest in respect
thereof required pursuant to the instruments evidencing such Subordinated
Indebtedness and (ii) any repurchase of OCI Subordinated Notes pursuant to the
"Change of Control" offer required to be made under the OCI Indenture as a
result of the Borrower becoming a Subsidiary of Holdings.
SECTION 7.12. MODIFICATIONS OF CERTAIN DOCUMENTS. The Borrower
will not, and will not permit any of its Restricted Subsidiaries to, consent to
any modification, supplement or waiver of any of the documents or agreements
evidencing or governing any Senior Subordinated Notes or OCI Subordinated Notes
or (after the issuance thereof in accordance with the requirements of Section
7.01(b)) any New Senior Subordinated Notes without the prior consent of the
Required Lenders, provided that, subject to the last paragraph of Section
6.10(a), the Borrower may supplement the Senior Subordinated Notes Indentures,
the OCI Indenture or the New Senior Subordinated Notes Indentures in order to
add or delete Subsidiaries as guarantors thereunder as required or permitted by
the terms thereof without the prior consent of the Required Lenders. Without
limiting the generality of the foregoing, except for Guarantees by Restricted
Subsidiaries of the Borrower required by the Senior Subordinated Notes
Indentures, the OCI Indenture or the New Senior Subordinated Notes Indentures,
as the case may be, the Borrower
Credit Agreement
<PAGE> 85
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will not permit any Restricted Subsidiary to Guarantee any other Subordinated
Indebtedness without the prior consent of the Required Lenders.
In addition, the Borrower will not consent to any
modification, supplement or waiver of Article 9 of the Chancellor Acquisition
Agreement, or any other provision of the Chancellor Acquisition Agreement that
would materially adversely affect the Lenders, without the prior consent of the
Required Lenders.
ARTICLE VIII
Events of Default
If any of the following events ("Events of Default") shall
occur:
(a) the Borrower shall fail to pay any principal of, or
interest on, any Loan or any reimbursement obligation in respect of any
LC Disbursement, or any fee or other amount payable under this
Agreement, when and as the same shall become due and payable, whether
at the due date thereof or at a date fixed for prepayment thereof or
otherwise;
(b) any representation or warranty made or deemed made by or
on behalf of any Credit Party in or in connection with this Agreement,
any of the other Basic Documents or any amendment or modification
hereof or thereof, or in any report, certificate, financial statement
or other document furnished pursuant to or in connection with this
Agreement, any of the other Basic Documents or any amendment or
modification hereof or thereof shall prove to have been incorrect when
made or deemed made in any material respect;
(c) the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 6.02, 6.03 (with
respect to the Borrower's existence), 6.09 or 6.10 or in Article VII
(other than Section 7.07 or 7.10); or Holdings shall fail to observe or
perform any covenant set forth in Article V of the Holdings Guaranty
and Pledge Agreement;
(d) the Borrower or any of its Subsidiaries shall fail to
observe or perform any covenant, condition or agreement contained in
this Agreement (other than those specified in clause (a), (b) or (c) of
this Article) or any other Loan Document, and such failure shall
continue unremedied for a period of 30 days after notice thereof from
the Administrative Agent (given at the request of any Lender) to the
Borrower;
(e) Holdings, the Borrower or any of its Restricted
Subsidiaries shall fail to make any payment (whether of principal or
interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable;
(f) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of any Material
Credit Agreement
<PAGE> 86
- 81 -
Indebtedness or any trustee or agent on its or their behalf to cause
any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (f) shall not apply to secured
Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower or any of its
Restricted Subsidiaries or the debts of any of them, or of a
substantial part of the assets of any of them, under any Federal, state
or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the
Borrower or any of its Restricted Subsidiaries or for a substantial
part of the assets of any of them, and, in any such case, such
proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(h) the Borrower or any of its Restricted Subsidiaries shall
(i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition
described in clause (g) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any of its
Restricted Subsidiaries or for a substantial part of the assets of any
of them, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;
(i) the Borrower or any of its Restricted Subsidiaries shall
become unable, admit its inability in writing or fail generally to pay
its debts as they become due;
(j) a final judgment or judgments for the payment of money in
excess of $4,000,000 in the aggregate for the Borrower and its
Restricted Subsidiaries (exclusive of judgment amounts fully covered by
insurance where the insurer has admitted liability in respect of such
judgment) or in excess of $25,000,000 in the aggregate for the Borrower
and its Restricted Subsidiaries (regardless of insurance coverage)
shall be rendered by one or more courts, administrative tribunals or
other bodies having jurisdiction against the Borrower or any of its
Restricted Subsidiaries and the same shall not be discharged (or
provision shall not be made for such discharge), or a stay of execution
thereof shall not be procured, within 60 days from the date of entry
thereof and the Borrower or the relevant Restricted 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;
Credit Agreement
<PAGE> 87
- 82 -
(k) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in a
Material Adverse Effect;
(l) A reasonable basis shall exist for the assertion against
the Borrower or any of its Subsidiaries of (or there shall have been
asserted against the Borrower or any of its Subsidiaries) claims or
liabilities, whether accrued, absolute or contingent, based on or
arising from the generation, storage, transport, handling or disposal
of Hazardous Materials by the Borrower or any of its Subsidiaries or
Affiliates, or any predecessor in interest of the Borrower or any of
its Subsidiaries or Affiliates, or relating to any site or facility
owned, operated or leased by the Borrower or any of its Subsidiaries or
Affiliates, which claims or liabilities (insofar as they are payable by
the Borrower or any of its Subsidiaries but after deducting any portion
thereof which is reasonably expected to be paid by other creditworthy
Persons jointly and severally liable therefor), in the judgment of the
Required Lenders are reasonably likely to be determined adversely to
the Borrower or any of its Subsidiaries, and the amount thereof is,
singly or in the aggregate, reasonably likely to have a Material
Adverse Effect;
(m) any of the following events shall occur and be continuing:
(i) the Borrower shall cease to be a Wholly Owned
Subsidiary of Holdings;
(ii) the capital stock of Holdings owned directly or
indirectly by Charles W. Lamar, III or Kevin P. Reilly, Sr.,
either of their wives, children, grandchildren, trusts of
which either of them, their wives, children and grandchildren
are the sole beneficiaries and for which one or more of such
individuals are the sole trustee(s) and any Qualified Reilly
Partnership shall (on a fully diluted basis after giving
effect to the exercise of any outstanding rights or options to
acquire capital stock of the Borrower) cease to constitute at
least such percentage of the aggregate voting stock of
Holdings as is sufficient at all times to elect a majority of
the Board of Directors of Holdings;
(iii) any Person or group (within the meaning of the
Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on
the date hereof), other than Charles W. Lamar, III or Kevin P.
Reilly, Sr. and any of the other permitted holders referred to
in clause (ii) above, shall acquire or own, directly or
indirectly, beneficially or of record, shares representing
more than 20% of the ordinary voting power represented by the
issued and outstanding voting capital stock of Holdings, or
(y) acquire direct or indirect Control of Holdings; or
(iv) a majority of the seats (other than vacant
seats) on the board of directors of Holdings shall be occupied
by Persons who were neither (x) nominated by the board of
directors of Holdings nor (y) appointed by directors so
nominated;
Credit Agreement
<PAGE> 88
- 83 -
(n) Any of the following shall occur: (i) the Liens created by
the Pledge Agreement or the Holdings Guaranty and Pledge Agreement
shall at any time (other than by reason of the Administrative Agent
relinquishing possession of certificates evidencing shares of stock of
Subsidiaries pledged thereunder) cease to constitute valid and
perfected Liens on the Collateral (as defined therein) intended to be
covered thereby; (ii) except for expiration in accordance with its
terms, the Pledge Agreement or Holdings Guaranty and Pledge Agreement
shall for whatever reason be terminated, or shall cease to be in full
force and effect; or (iii) the enforceability of the Pledge Agreement
or Holdings Guaranty and Pledge Agreement shall be contested by any
Credit Party party thereto; or
(o) Holdings or any Subsidiary Guarantor shall assert that its
obligations hereunder or under the Security Documents shall be invalid
or unenforceable;
then, and in every such event (other than an event with respect to the Borrower
described in clause (g) or (h) of this Article), 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 the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower; and in case of any
event with respect to the Borrower described in clause (g) or (h) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower.
ARTICLE IX
The Administrative Agent
Each of the Lenders and the Issuing Lender hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms of this Agreement and the
other Loan Documents, together with such actions and powers as are reasonably
incidental thereto.
Chase shall have the same rights and powers in its capacity as
a Lender hereunder as any other Lender and may exercise the same as though Chase
were not the Administrative Agent, and Chase and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
any Credit Party or any Subsidiary or other Affiliate of any thereof as if it
were not the Administrative Agent hereunder.
Credit Agreement
<PAGE> 89
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The Administrative Agent shall not have any duties or
obligations except those expressly set forth in this Agreement and the other
Loan Documents. Without limiting the generality of the foregoing, (a) the
Administrative Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing, (b) the
Administrative Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by this Agreement and the other Loan Documents that the
Administrative Agent is required to exercise in writing by the Required Lenders,
and (c) except as expressly set forth herein and in the other Loan Documents,
the Administrative Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to any Credit Party
or any of their respective Subsidiaries that is communicated to or obtained by
Chase or any of its Affiliates in any capacity. The Administrative Agent shall
not be liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders or, if provided herein, with the consent or at
the request of the Required Revolving Credit Lenders, the Required Tranche A
Lenders, Required Tranche B Lenders or the Required Incremental Loan Lenders, or
in the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall not be deemed to have knowledge of any Default unless
and until written notice thereof is given to the Administrative Agent by the
Borrower or a Lender, and the Administrative Agent shall not be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement or the other Loan
Documents, (ii) the contents of any certificate, report or other document
delivered hereunder or under any of the other Loan Documents or in connection
herewith of therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or in any
other Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, the other Loan Documents or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article V or elsewhere herein, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent.
The Administrative Agent shall not, except to the extent
expressly instructed by the Required Lenders with respect to collateral security
under the Security Documents, be required to initiate or conduct any litigation
or collection proceedings hereunder or under any other Loan Document.
The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
The Administrative Agent may perform any and all of its
duties, and exercise its rights and powers, by or through any one or more
sub-agents appointed by the Administrative Agent. The Administrative Agent and
any such sub-agent may perform any and all its duties and
Credit Agreement
<PAGE> 90
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exercise its rights and powers through its Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of the Administrative Agent and any such sub-agent, and
shall apply to its activities in connection with the syndication of the credit
facilities provided for herein as well as activities as the Administrative
Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent, as provided in this paragraph, the Administrative Agent
may resign at any time by notifying the Lenders, the Issuing Lender and the
Borrower. Upon any such resignation, the Required Lenders shall have the right,
in consultation with the Borrower, to appoint a successor Administrative Agent.
If no successor shall have been so appointed and shall have accepted such
appointment within 30 days after such retiring Administrative Agent gives notice
of its resignation, then such retiring Administrative Agent may, on behalf of
the Lenders and the Issuing Lender, appoint a successor Administrative Agent,
which shall be a bank with an office in New York, New York, or an Affiliate of
any such bank. Upon the acceptance of its appointment as Administrative Agent,
by a successor, 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 and under the other Loan Documents. The fees payable by
the Borrower to a successor Administrative Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrower and such
successor. After an Administrative Agent's resignation hereunder, the provisions
of this Article and Section 10.03 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.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent, the Issuing Lender or any other
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 also acknowledges that it will, independently and without reliance upon
the Administrative Agent, the Issuing Lender or any other 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 and the other Loan Documents, any related agreement or any
document furnished hereunder or thereunder.
ARTICLE X
Miscellaneous
SECTION 10.01. NOTICES. Except in the case of notices and
other communications expressly permitted to be given by telephone, all notices
and other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at 5551 Corporate Boulevard,
Baton Rouge, Louisiana, 70896, Attention of Keith Istre (Telecopy No.
(504) 923-0658);
Credit Agreement
<PAGE> 91
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(b) if to the Administrative Agent, to The Chase Manhattan
Bank, Loan and Agency Services Group, One Chase Manhattan Plaza, New
York, New York 10081, Attention of Janet Belden (Telecopy No. (212)
552-5658), with a copy to The Chase Manhattan Bank, 270 Park Avenue,
New York, New York 10017, Attention of William Rottino (Telecopy No
(212) 270-1204); and
(c) if to any Lender (including to Chase in its capacity as
the Issuing Lender), to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. 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.
SECTION 10.02. WAIVERS; AMENDMENTS.
(a) Waivers. No failure or delay by the Administrative Agent,
the Issuing Lender or any Lender in exercising any right or power 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
Administrative Agent, the Issuing Lender and the Lenders hereunder are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or consent to any
departure by any Credit Party therefrom shall in any event be effective unless
the same shall be permitted by paragraph (b) of this Section 10.02, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. Without limiting the generality of the foregoing,
the making of a Loan or issuance of a Letter of Credit shall not be construed as
a waiver of any Default, regardless of whether the Administrative Agent, any
Lender or the Issuing Lender may have had notice or knowledge of such Default at
the time.
(b) Amendments. Neither this Agreement nor any provision
hereof may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Borrower and the Required Lenders or
by the Borrower and the Administrative Agent with the consent of the Required
Lenders; provided that no such agreement shall:
(i) increase the Commitment of any Lender without the written
consent of such Lender;
(ii) reduce the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected
thereby;
(iii) postpone the scheduled date of payment of the principal
amount of any Loan or LC Disbursement, or any interest thereon, or any
fees payable hereunder, or reduce the amount of, waive or excuse any
such payment, or postpone the scheduled date of expiration or reduction
of any Commitment, or postpone the ultimate expiration date of
Credit Agreement
<PAGE> 92
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any Letter of Credit beyond the Revolving Credit Termination Date,
without the written consent of each Lender affected thereby;
(iv) change Section 2.16(b), (c) or (d) in a manner that would
alter the pro rata sharing of payments required thereby, without in
each case the written consent of each Lender;
(v) alter the manner in which payments or prepayments of
principal, interest or other amounts hereunder shall be applied between
or among the Lenders or Classes of Loans without the written consent of
the Required Lenders of each Class affected thereby;
(vi) change any of the provisions of this Section 10.02 or the
percentage in the definition of "Required Lenders" without the written
consent of each Lender; or
(vii) release any Significant Subsidiary Guarantor from its
obligations in respect of its Guarantee under Article III, without the
written consent of each Lender, except in connection with the
disposition of all of the shares of capital stock of a Subsidiary
Guarantor in a transaction permitted hereunder or as to which the
Required Lenders have consented;
provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent or the Issuing Lender hereunder
without the prior written consent of the Administrative Agent or the Issuing
Lender, as the case may be.
Anything in this Agreement to the contrary notwithstanding, no
waiver or modification of any provision of this Agreement that has the effect
(either immediately or at some later time) of enabling the Borrower to satisfy a
condition precedent to the making of Revolving Credit Loans shall be effective
against the Lenders of any Class unless the Required Lenders of such Class shall
have concurred with such waiver or modification, and no waiver or modification
of any provision of this Agreement or any other Loan Document that could
reasonably be expected to adversely affect the Lenders of any Class shall be
effective against the Lenders of such Class unless the Required Lenders of such
Class shall have concurred with such waiver or modification.
(c) Pledge Agreements. Neither the Pledge Agreement or the
Holdings Guaranty and Pledge Agreement, nor any provision thereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Credit Parties party thereto, and by the Administrative
Agent with the consent of the Required Lenders, provided that, without the prior
consent of each Lender, the Administrative Agent shall not (except as provided
herein or in the Pledge Agreement) release all or any substantial part of the
collateral or otherwise terminate all or any substantial part of the Liens under
the Pledge Agreement or the Holdings Guaranty and Pledge Agreement, agree to
additional obligations being secured by all or any substantial part of such
collateral (unless the Lien for such additional obligations shall be junior to
the Lien in favor of the other obligations secured by the Pledge Agreement or
the Holdings Guaranty and Pledge Agreement, in which event the Administrative
Agent may consent to such junior Lien provided that it obtains the consent of
the Required Lenders thereto),
Credit Agreement
<PAGE> 93
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alter the relative priorities of the obligations entitled to the benefits of the
Liens created under the Pledge Agreement or the Holdings Guaranty and Pledge
Agreement with respect to all or any substantial part of such collateral, except
that no such consent shall be required, and the Administrative Agent is hereby
authorized, to release any Lien covering property that is the subject of either
a disposition of property permitted hereunder or a disposition to which the
Required Lenders have consented. Nothing in this Section 10.02(c) shall be
deemed to limit the provisions of Section 10.12.
SECTION 10.03. EXPENSES; INDEMNITY; DAMAGE WAIVER.
(a) Expenses. The Obligors jointly and severally agree to pay,
or reimburse the Administrative Agent or Lenders for paying, (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of Special Counsel, in
connection with the syndication of the credit facilities provided for herein,
the preparation of this Agreement and the other Loan Documents or any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all out-of-pocket expenses incurred by the Issuing Lender in
connection with the issuance, amendment, renewal or extension of any Letter of
Credit or any demand for payment thereunder, (iii) all out-of-pocket expenses
incurred by the Administrative Agent, the Issuing Lender or any Lender,
including the fees, charges and disbursements of any counsel for such
Administrative Agent, Issuing Lender or Lender, in connection with the
enforcement or protection of its rights in connection with this Agreement and
the other Loan Documents, including its rights under this Section 10.03, or in
connection with the Loans made or Letters of Credit issued hereunder, including
in connection with any workout, restructuring or negotiations in respect
thereof, and (iv) all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of this Agreement or any of the other Loan Documents or any other
document referred to herein or therein and all costs, expenses, taxes,
assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated by
any Security Document or any other document referred to therein.
(b) Indemnification by Credit Parties. The Obligors jointly
and severally agree to indemnify the Administrative Agent, the Issuing Lender
and each Lender, and each Related Party of any of the foregoing Persons (each
such Person being called an "Indemnitee") against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, the other Loan Documents or any agreement or instrument contemplated
hereby, the performance by the parties hereto and thereto of their respective
obligations hereunder or thereunder or the consummation of the Transactions or
any other transactions contemplated hereby or thereby, (ii) any Loan or Letter
of Credit or the use of the proceeds therefrom (including any refusal by the
Issuing Lender to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with
the terms of such Letter of Credit), (iii) any actual or alleged presence or
release of Hazardous Materials on or from any property owned or operated by any
Credit Party
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or any of their subsidiaries, or any Environmental Liability related in any way
to any Credit Party or any of their subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee.
(c) Indemnification by Lenders. To the extent that the
Obligors fail to pay any amount required to be paid by them to the
Administrative Agent under paragraph (a) or (b) of this Section 10.03, each
Lender severally agrees to pay to the Administrative Agent such Lender's
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent in its capacity as such. To the extent that the
Obligors fail to pay any amount required to be paid by them to the Issuing
Lender under paragraph (a) or (b) of this Section 10.03, each Revolving Credit
Lender severally agrees to pay to the Issuing Lender such Lender's Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the Issuing
Lender in its capacity as such.
(d) Waiver of Indirect or Consequential Damages, Etc. To the
extent permitted by applicable law, none of the Obligors shall assert, and each
Obligor hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, the other Loan Documents or any agreement or instrument
contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit
or the use of the proceeds thereof.
(e) Payment upon Demand. All amounts due under this Section
10.03 shall be payable promptly after written demand therefor.
SECTION 10.04. SUCCESSORS AND ASSIGNS.
(a) Successors Generally. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that no Obligor may
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of each Lender (and any attempted assignment or
transfer by any Obligor without such consent shall be null and void). Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent, the
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Issuing Lender and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) Assignments by Lenders. Any Lender may assign to one or
more assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it); provided that
(i) except in the case of an assignment to a Lender or an
Affiliate (or Approved Fund) of a Lender, the Administrative Agent
(and, in the case of an assignment of all or a portion of a Commitment
or any Lender's obligations in respect of its LC Exposure, the Issuing
Lender) and the Borrower must give their prior written consent to such
assignment (which consent in each case shall not be unreasonably
withheld);
(ii) except in the case of an assignment to a Lender or an
Affiliate (or Approved Fund) of a Lender or an assignment of the entire
remaining amount of the assigning Lender's Commitment, the amount of
the Commitment 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 $5,000,000 unless each of the Borrower and the
Administrative Agent otherwise consent,
(iii) each partial assignment of any Class of Commitments or
Loans shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations of such Class of Commitments
or Loans under this Agreement,
(iv) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Acceptance, together with
a processing and recordation fee of $3,500, and
(v) the assignee, if it shall not be a Lender, shall deliver
to the Administrative Agent an Administrative Questionnaire;
provided further that any consent of the Borrower otherwise required under this
paragraph shall not be required if an Event of Default under clause (a), (g) or
(h) of Article VIII has occurred and is continuing.
Upon acceptance and recording pursuant to paragraph (d) of
this Section 10.04, from and after the effective date specified in each
Assignment and Acceptance, 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 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 of the 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
2.13, 2.14, 2.15 and 10.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph (b)
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (e) of
this Section.
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Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender") may grant to a special purpose vehicle (an "SPC")
of such Granting Lender, identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Borrower, the option to
provide to the Borrower all or any part of any Loan that such Granting Lender
would otherwise be obligated to make to the Borrower pursuant to Section 2.01,
provided that (i) nothing herein shall constitute a commitment to make any Loan
by an SPC 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 Lender shall be
obligated to make such Loan pursuant to the terms hereof. The making of a Loan
by an SPC hereunder shall utilize the Commitment of the Granting Lender to the
same extent, and as if, such Loan were made by the Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any payment under this
Agreement for which a Lender would otherwise be liable, for so long as, and to
the extent, the related Granting Lender makes such payment. In furtherance of
the foregoing, each party hereto hereby agrees that, prior to the date that is
one year and one day after the payment in full of all outstanding 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 or similar proceedings under the laws of
the United States or any State thereof arising out of any claim against such SPC
under this Agreement. In addition, notwithstanding anything to the contrary
contained in this Section 10.04, any SPC may with notice to, but without the
prior written consent of, the Borrower or the Administrative Agent and without
paying any processing fee therefor, assign all or a portion of its interests in
any Loans to its Granting Lender or to any financial institutions providing
liquidity and/or credit support (if any) with respect to commercial paper issued
by such SPC to fund such Loans and such SPC may disclose on a confidential
basis, confidential information with respect to the Borrower and its
Subsidiaries to any rating agency, commercial paper dealer or provider of a
surety, guarantee or credit liquidity enhancement to such SPC.
(c) Register. The Administrative Agent, acting for this
purpose as an agent of the 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
Commitment of, and principal amount of the Loans and LC Disbursements owing to,
each Lender pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent, the Issuing Lender 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, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower, the
Issuing Lender and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(d) Effectiveness of Assignments. Upon its receipt of a duly
completed Assignment and Acceptance executed by an assigning Lender and an
assignee, the assignee's completed Administrative Questionnaire (unless the
assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in paragraph (b) of this Section 10.04 and any written consent
to such assignment required by paragraph (b) of this Section 10.04, the
Administrative Agent shall accept such Assignment and Acceptance and record the
information
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contained therein in the Register. No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the Register as provided in
this paragraph.
(e) Participations. Any Lender may, without the consent of the
Borrower, the Administrative Agent or the Issuing Lender, sell participations to
one or more banks or other entities (a "Participant") in all or a portion of
such Lender's rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it); provided 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 and (iii) the Borrower, the Administrative
Agent, the Issuing Lender 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. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 10.02(b), or the first proviso to
Section 10.02(c), that affects such Participant. Subject to paragraph (f) of
this Section 10.04, the Borrower agrees that each Participant shall be entitled
to the benefits of Sections 2.13, 2.14 and 2.15 to the same extent as if it were
a Lender and had acquired its interest by assignment pursuant to paragraph (b)
of this Section 10.04.
(f) Limitation on Rights of Participants. A Participant shall
not be entitled to receive any greater payment under Section 2.13 or 2.15 than
the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 2.15 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 2.15(e) as though it were a
Lender.
(g) Pledges. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any such pledge or assignment to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such assignee for such Lender as a party hereto.
(h) No Assignments to Borrower and Affiliates. Anything in
this Section 10.04 to the contrary notwithstanding, no Lender may assign or
participate any interest in any Loan held by it hereunder to the Borrower or any
Affiliates or Subsidiaries of the Borrower without the prior consent of each
Lender.
SECTION 10.05. SURVIVAL. All covenants, agreements,
representations and warranties made by the Credit Parties herein and in the
other Loan Documents, and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement and the other Loan Documents,
shall be considered to have been relied upon by the other parties
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<PAGE> 98
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hereto and shall survive the execution and delivery of this Agreement and the
other Loan Documents and the making of any Loans and issuance of any Letters of
Credit, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent, the Issuing Lender or
any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect so long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement or the other Loan Documents is outstanding and unpaid or any Letter of
Credit is outstanding and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.13, 2.14, 2.15 and 10.03 and Article IX
shall survive and remain in full force and effect regardless of the consummation
of the transactions contemplated hereby, the repayment of the Loans, the
expiration or termination of the Letters of Credit and the Commitments or the
termination of this Agreement or any other Loan Document or any provision hereof
or thereof.
SECTION 10.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 5.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 10.07. SEVERABILITY. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.08. RIGHT OF SETOFF. If an Event of Default shall
have occurred and be continuing, 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 Lender
to or for the credit or the account of the Borrower or any Subsidiary Guarantor
against any of and all the obligations of the Borrower or any Subsidiary
Guarantor now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section 10.08 are in addition to any other rights and remedies
(including other rights of setoff) which such Lender may have.
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SECTION 10.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE
OF PROCESS.
(a) Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of New York.
(b) Submission to Jurisdiction. Each party hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State of New York sitting
in New York County and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents, 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. Nothing in this
Agreement shall affect any right that the Administrative Agent, the Issuing
Lender or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement against any Obligor or its properties in the courts
of any jurisdiction.
(c) Waiver of Venue. Each party hereto 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 or
the other Loan Documents in any court referred to in paragraph (b) of this
Section 10.09. 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.
(d) Service of Process. Each party to this Agreement
irrevocably consents to service of process in the manner provided for notices in
Section 10.01. 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 10.10. 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 ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). 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 10.10.
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SECTION 10.11. 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 shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 10.12. RELEASE OF COLLATERAL AND GUARANTEES. The
Administrative Agent and the Lenders agree that if all of the capital stock of
any Subsidiary that is owned by the Borrower and its Subsidiaries is sold to any
Person as permitted by the terms of this Agreement and the Pledge Agreement, or
if any Subsidiary is merged or consolidated with or into any other Person as
permitted by the terms of this Agreement and such Subsidiary is not the
continuing or surviving corporation, or if any Restricted Subsidiary is
designated as an Unrestricted Subsidiary in accordance with the requirements of
Section 1.05, the Administrative Agent shall, upon request of the Borrower (and
upon the receipt by the Administrative Agent of such evidence as the
Administrative Agent or any Lender may reasonably request to establish that such
sale, merger, consolidation or designation is permitted by the terms of this
Agreement), terminate the Guarantee of such Subsidiary under Article III and
authorize the Administrative Agent to release the Lien created by the Pledge
Agreement on any capital stock of such Subsidiary (it being understood that, in
the case of any release of the Guarantee or capital stock of a Restricted
Subsidiary that is to be designated as an Unrestricted Subsidiary, the
Administrative Agent may condition the effectiveness of such release upon the
delivery to the respective trustees under the Senior Subordinated Notes
Indentures and New Senior Subordinated Notes Indentures (or agreement relating
to any Refunding Indebtedness) of the documents required pursuant thereto to
effect the release of such Restricted Subsidiary from its Guarantee thereunder).
SECTION 10.13. SUCCESSOR FACILITY. This Agreement is intended
to be a successor to the Existing Credit Agreement and to replace and refinance
the OCI Credit Agreement and to constitute (i) the "Senior Credit Facility"
under and for all purposes of each of the Senior Subordinated Notes Indentures
and (ii) the "New Credit Facility" under and for all purposes of the OCI
Indenture.
SECTION 10.14. EXISTING CREDIT AGREEMENT. Anything in this
Agreement to the contrary notwithstanding, the provisions of Article VII shall
not be construed to prohibit any action that may not, under Section 7.08 of the
Existing Credit Agreement, be prohibited without the consent of the "Required
Lenders" thereunder, it being understood that nothing in this Section 10.14
shall be deemed to affect the requirement set forth in Section 5.03(v) that, as
a condition to the initial extension of credit hereunder, no Default have
occurred and be continuing.
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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.
LAMAR MEDIA CORP. (formally known
as Lamar Advertising Company)
By: /s/ Keith Istre
------------------------------------------
Title: Chief Financial Officer
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<PAGE> 102
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SUBSIDIARY GUARANTORS
INTERSTATE LOGOS, INC.
THE LAMAR CORPORATION
LAMAR ADVERTISING OF MOBILE, INC.
LAMAR ADVERTISING OF COLORADO
SPRINGS, INC.
LAMAR ADVERTISING OF SOUTH
MISSISSIPPI, INC.
LAMAR ADVERTISING OF JACKSON, INC.
LAMAR TEXAS GENERAL PARTNER, INC.
LAMAR ADVERTISING OF SOUTH
GEORGIA, INC.
TLC PROPERTIES, INC.
TLC PROPERTIES II, INC.
LAMAR PENSACOLA TRANSIT, INC.
LAMAR ADVERTISING OF
YOUNGSTOWN, INC.
NEBRASKA LOGOS, INC.
OKLAHOMA LOGO SIGNS, INC.
MISSOURI LOGOS, INC.
OHIO LOGOS, INC.
UTAH LOGOS, INC.
TEXAS LOGOS, INC.
MISSISSIPPI LOGOS, INC.
GEORGIA LOGOS, INC.
SOUTH CAROLINA LOGOS, INC.
VIRGINIA LOGOS, INC.
MINNESOTA LOGOS, INC.
MICHIGAN LOGOS, INC.
NEW JERSEY LOGOS, INC.
FLORIDA LOGOS, INC.
KENTUCKY LOGOS, INC.
NEVADA LOGOS, INC.
TENNESSEE LOGOS, INC.
KANSAS LOGOS, INC.
COLORADO LOGOS, INC.
NEW MEXICO LOGOS, INC.
LAMAR ADVERTISING OF HUNTINGTON-
BRIDGEPORT, INC.
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<PAGE> 103
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LAMAR ADVERTISING OF PENN, INC.
LAMAR ADVERTISING OF
MISSOURI, INC.
LAMAR ADVERTISING OF
MICHIGAN, INC.
LAMAR ELECTRICAL, INC.
LAMAR ADVERTISING OF
SOUTH DAKOTA, INC.
LAMAR ADVERTISING OF
WEST VIRGINIA, INC.
LAMAR ADVERTISING OF
ASHLAND, INC.
AMERICAN SIGNS, INC.
LAMAR OCI NORTH CORPORATION
LAMAR OCI SOUTH CORPORATION
LAMAR ADVERTISING OF
GREENVILLE, INC.
LAMAR ROBINSON, INC.
LAMAR ADVERTISING OF
KENTUCKY, INC.
LAMAR ADVERTISING OF ROLAND, INC.
LAMAR ADVERTISING OF JOPLIN, INC.
By: /s/ Keith Istre
------------------------------------
Title: Chief Financial Officer
Credit Agreement
<PAGE> 104
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LAMAR TEXAS LIMITED PARTNERSHIP
By Lamar Texas General Partner, Inc.
its general partner
By: /s/ Keith Istre
------------------------------------
Title: Chief Financial Officer
LAMAR TENNESSEE, L.L.C.
By The Lamar Corporation, its manager
By: /s/ Keith Istre
------------------------------------
Title: Chief Financial Officer
LAMAR AIR, L.L.C.
By The Lamar Corporation, its manager
By: /s/ Keith Istre
------------------------------------
Title: Chief Financial Officer
TLC PROPERTIES, L.L.C.
By TLC Properties, Inc., its manager
By: /s/ Keith Istre
------------------------------------
Title: Chief Financial Officer
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<PAGE> 105
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LENDERS
THE CHASE MANHATTAN BANK,
as Lender and Administrative Agent
By /s/ Marian N. Schulman
-------------------------------------
Name: Marian N. Schulman
Title: Vice President
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<PAGE> 106
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FIRST UNION NATIONAL BANK,
as Lender and Co-Documentation Agent
By /s/ Jeff Graci
-----------------------------------
Name: Jeff Graci
Title: Vice President
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<PAGE> 107
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FLEET NATIONAL BANK, as
Lender and Co-Documentation Agent
By /s/ Tanya M. Crossley
----------------------------------
Name: Tanya M. Crossley
Title: Vice President
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<PAGE> 108
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THE FIRST NATIONAL BANK OF CHICAGO,
as Lender and Co-Documentation Agent
By /s/ Lynne M. Sanders
-----------------------------------
Name: Lynne M. Sanders
Title: Assistant Vice President
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<PAGE> 109
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ABN AMRO BANK N.V.
By /s/ Ann Schwalbenberg
-----------------------------------------
Name: Ann Schwalbenberg
Title: Vice President
By /s/ Thomas Rogers
-----------------------------------------
Name: Thomas Rogers
Title: Vice President
Credit Agreement
<PAGE> 110
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BANK OF MONTREAL,
CHICAGO BRANCH
By /s/ Ola Anderssen
------------------------------------
Name: Ola Anderssen
Title: Director
Credit Agreement
<PAGE> 111
- 106 -
BANKERS TRUST COMPANY
By /s/ Gregory Shefrin
---------------------------------------
Name: Gregory Shefrin
Title: Principal
Credit Agreement
<PAGE> 112
- 107 -
COMPAGNIE FINANCIERE DE
CIC ET DE L'UNION EUROPEENE
By /s/ Marcus Edward
----------------------------------
Name: Marcus Edward
Title: Vice President
By /s/ Sean Mounier
----------------------------------
Name: Sean Mounier
Title: First Vice President
Credit Agreement
<PAGE> 113
- 108 -
CREDIT LYONNAIS,
NEW YORK BRANCH
By /s/ Pascal Poupelle
------------------------------------
Name: Pascal Poupelle
Title: Executive Vice President
Credit Agreement
<PAGE> 114
- 109 -
MITSUBISHI TRUST & BANKING
CORPORATION
By /s/ Masayuki Mitsuhashi
-------------------------------------
Name: Masayuki Mitsuhashi
Title: Deputy General Manager
Credit Agreement
<PAGE> 115
- 110 -
SUNTRUST BANK, CENTRAL
FLORIDA N.A.
By /s/ W. David Wisdom
------------------------------------
Name: W. David Wisdom
Title: Vice President
Credit Agreement
<PAGE> 116
- 111 -
UNION BANK OF CALIFORNIA, N.A.
By /s/ Stender E. Sweeney
------------------------------------
Name: Stender E. Sweeney
Title: Assistant Vice President
Credit Agreement
<PAGE> 117
- 112 -
THE BANK OF NEW YORK
By /s/ Cynthia L. Rogers
----------------------------------
Name: Cynthia L. Rogers
Title: Vice President
Credit Agreement
<PAGE> 118
- 113 -
THE BANK OF NOVA SCOTIA
By /s/ Paul A. Weissenberger
----------------------------------
Name: P.A. Weissenberger
Title: Authorized Signatory
Credit Agreement
<PAGE> 119
- 114 -
DRESDNER BANK AG, NEW YORK
AND GRAND CAYMAN BRANCHES
By /s/ William E. Lambert
---------------------------------------
Name: William E. Lambert
Title: Vice President
By /s/ Brian E. Haughney
---------------------------------------
Name: Brian E. Haughney
Title: Assistant Vice President
Credit Agreement
<PAGE> 120
- 115 -
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By /s/ Stephen W. Hipp
---------------------------------------
Name: Stephen W. Hipp
Title: Senior Associate
By /s/ John G. Taylor
---------------------------------------
Name: John G. Taylor
Title: Vice President
Credit Agreement
<PAGE> 121
- 116 -
KEY CORPORATE CAPITAL INC.
By /s/ Jason R. Weaver
--------------------------------------
Name: Jason R. Weaver
Title: Vice President
Credit Agreement
<PAGE> 122
- 117 -
BANK OF AMERICA, N.A.
By /s/ Todd Shipley
--------------------------------------
Name: Todd Shipley
Title: Senior Vice President
Credit Agreement
<PAGE> 123
- 118 -
BANQUE NATIONALE DE PARIS,
NEW YORK BRANCH
By /s/ Serge Desrayaud
--------------------------------------
Name: Serge Desrayaud
Title: Vice President
By /s/ Gregg W. Bonardi
--------------------------------------
Name: Gregg W. Bonardi
Title: Vice President
Credit Agreement
<PAGE> 124
- 119 -
CIBC INC.
By /s/ Colleen Risorto
----------------------------------------
Name: Colleen Risorto
Title: Executive Director
CIBC World Markets Corp. As Agent
Credit Agreement
<PAGE> 125
- 120 -
THE FUJI BANK, LIMITED
By /s/ Teiji Teramoto
----------------------------------------
Name: Teiji Teramoto
Title: Vice President & Manager
Credit Agreement
<PAGE> 126
- 121 -
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By /s/ Mike Oakes
-----------------------------------------------
Name: Mike Oakes
Title: Senior Vice President, Houston Office
Credit Agreement
<PAGE> 127
- 122 -
MELLON BANK, N.A.
By /s/ Alexander M. Gordon
------------------------------------
Name: Alexander M. Gordon
Title: Lending Officer
Credit Agreement
<PAGE> 128
- 123 -
MERCANTILE BANK NATIONAL
ASSOCIATION
By /s/ Teresa A. Lekich
-----------------------------------
Name: Teresa A. Lekich
Title: Vice President
Credit Agreement
<PAGE> 129
- 124 -
PNC BANK, NATIONAL ASSOCIATION
By /s/ John T. Wilden
------------------------------------
Name: John T. Wilden
Title: Vice President
Credit Agreement
<PAGE> 130
- 125 -
US BANK NATIONAL ASSOCIATION
By /s/ Tom G. Gunder
------------------------------------
Name: Tom G. Gunder
Title: Vice President
Credit Agreement
<PAGE> 131
- 126 -
BAYERISCHE HYPO-UND
VEREINSBANK AG, NEW YORK BRANCH
By /s/ Sylvia K. Cheng
--------------------------------------
Name: Sylvia K. Cheng
Title: Director
By /s/ Carlo Lamberti
--------------------------------------
Name: Carlo Lamberti
Title: Associate Director
Credit Agreement
<PAGE> 132
- 127 -
NATIONAL CITY BANK
By /s/ Wilmer J. Jacobs
-----------------------------------------
Name: Wilmer J. Jacobs
Title: Officer
Credit Agreement
<PAGE> 133
- 128 -
ALLFIRST BANK
By /s/ Christopher L. Smith
------------------------------------
Name: Christopher L. Smith
Title: Vice President
Credit Agreement
<PAGE> 134
- 129 -
BANK OF HAWAII
By /s/ James C. Polk
------------------------------------
Name: James C. Polk
Title: Vice President
Credit Agreement
<PAGE> 135
- 130 -
THE DAI-ICHI KANGYO BANK LTD.
By /s/ Kazuki Shimizu
-------------------------------------
Name: Kazuki Shimizu
Title: Vice President
Credit Agreement
<PAGE> 136
- 131 -
ERSTE BANK DER OESTERREICHISCHEN
SPARKASSEN
By /s/ John S. Runnion
-----------------------------------
Name: John S. Runnion
Title: First Vice President
By /s/ Rima Terradista
-----------------------------------
Name: Rima Terradista
Title: Vice President
Credit Agreement
<PAGE> 137
- 132 -
MICHIGAN NATIONAL BANK
By /s/ Jeffrey W. Billig
--------------------------------------
Name: Jeffrey W. Billig
Title: Relationship Manager
Credit Agreement
<PAGE> 138
- 133 -
STATE STREET BANK AND TRUST
COMPANY
By /s/ Diane I. Rooney
------------------------------------
Name: Diane I. Rooney
Title: Vice President
Credit Agreement
<PAGE> 139
- 134 -
FIRSTRUST BANK
By /s/ Kent D. Nelson
------------------------------------
Name: Kent D. Nelson
Title: Vice President
Credit Agreement
<PAGE> 140
- 135 -
WEBSTER BANK
By /s/ Barbara E. Hillmeyer
-----------------------------------
Name: Barbara E. Hillmeyer
Title: Vice President
Credit Agreement
<PAGE> 141
- 136 -
FRANKLIN FLOATING RATE TRUST
By /s/ Chauncey Lufkin
-----------------------------------
Name: Chauncey Lufkin
Title: Vice President
Credit Agreement
<PAGE> 142
- 137 -
ARCHIMEDES FUNDING, L.L.C.
By: ING Capital Advisors LLC
as Collateral Manager
By /s/ Michael D. Hatley
----------------------------------
Name: Michael D. Hatley
Title: Managing Director
Credit Agreement
<PAGE> 143
- 138 -
BALANCED HIGH-YIELD FUND II LTD.
By: BHF (USA) Capital Corporation
as Attorney-in Fact
By /s/ Steven Alexander
--------------------------------------
Name: Steven Alexander
Title: Associate
By /s/ Nancy Ho
--------------------------------------
Name: Nancy Ho
Title: Associate
Credit Agreement
<PAGE> 144
- 139 -
GENERAL ELECTRIC CAPITAL
CORPORATION
By /s/ W. Jerome McDermott
-------------------------------------
Name: W. Jerome McDermott
Title: Duly Authorized Signatory
Credit Agreement
<PAGE> 145
- 140 -
KZH-SOLEIL-2 LLC
By /s/ Peter Chin
--------------------------------------------
Name: Peter Chin
Title: Authorized Agent
Credit Agreement
<PAGE> 146
- 141 -
METROPOLITAN LIFE INSURANCE COMPANY
By /s/ James R. Dingler
---------------------------------------
Name: James R. Dingler
Title: Director
Credit Agreement
<PAGE> 147
- 142 -
PPM AMERICA, INC., as Attorney-in-Fact,
on behalf on Jackson National Life Insurance
Company
By /s/ John Walding
----------------------------------------
Name: John Walding
Title: Managing Director
Credit Agreement
<PAGE> 148
- 143 -
SRF TRADING, INC.
By /s/ Kelly C. Walker
------------------------------------
Name: Kelly C. Walker
Title: Vice President
Credit Agreement
<PAGE> 149
- 144 -
TORONTO DOMINION (TEXAS), INC.
By /s/ Jorge A. Garcia
------------------------------------
Name: Jorge A. Garcia
Title: Vice President
Credit Agreement
<PAGE> 150
- 145 -
KZH WATERSIDE LLC
By /s/ Peter Chin
------------------------------------
Name: Peter Chin
Title: Authorized Agent
Credit Agreement
<PAGE> 151
- 146 -
PARIBAS CAPITAL FUNDING LLC
By /s/ M.S. Alexander
-----------------------------------
Name: M.S. Alexander
Title: Director
Credit Agreement
<PAGE> 152
- 147 -
TYLER TRADING, INC.
By /s/ David W. Nabors
------------------------------------
Name: David W. Nabors
Title: Vice President
Credit Agreement
<PAGE> 153
- 148 -
KZH CRESCENT-2 LLC
By /s/ Peter Chin
------------------------------------
Name: Peter Chin
Title: Authorized Agent
Credit Agreement
<PAGE> 154
- 149 -
KEMPER FLOATING RATE FUND
By /s/ Mark E. Wittnebel
-----------------------------------
Name: Mark E. Wittnebel
Title: S.V.P.
Credit Agreement
<PAGE> 155
- 150 -
PINEHURST TRADING, INC.
By /s/ Kelly C. Walker
------------------------------------
Name: Kelly C. Walker
Title: Vice President
Credit Agreement
<PAGE> 156
- 151 -
SEQUILS I, LTD.
By: TCW Advisors, Inc.
as its Collateral Manager
By /s/ Mark L. Gold
------------------------------------
Name: Mark L. Gold
Title: Managing Director
By /s/ Jonathan Berg
------------------------------------
Name: Jonathan Berg
Title: Assistant Vice President
Credit Agreement
<PAGE> 157
- 152 -
KZH CRESCENT LLC
By /s/ Peter Chin
------------------------------------
Name: Peter Chin
Title: Authorized Agent
Credit Agreement
<PAGE> 158
- 153 -
KZH CYPRESS TREE-1 LLC
By /s/ Peter Chin
--------------------------------
Name: Peter Chin
Title: Authorized Agent
Credit Agreement
<PAGE> 159
- 154 -
CYPRESSTREE INVESTMENT FUND LLC
By: CypressTree Investment Management Company,
Inc. its Managing Member
By /s/ Philip C. Robbins
------------------------------------------
Name: Philip C. Robbins
itle: Principal
Credit Agreement
<PAGE> 160
- 155 -
CYPRESSTREE INVESTMENT MANAGEMENT COMPANY, INC.
As: Attorney-in-Fact and on behalf of First
Allmerica Financial Life Insurance Company
as Portfolio Manager
By /s/ Philip C. Robbins
-------------------------------------------
Name: Philip C. Robbins
Title: Principal
Credit Agreement
<PAGE> 161
- 156 -
NORTH AMERICAN SENIOR FLOATING RATE
FUND
By: CypressTree Investment Management
Company, Inc.
as Portfolio Manager
By /s/ Philip C. Robbins
------------------------------------
Name: Philip C. Robbins
Title: Principal
Credit Agreement
<PAGE> 162
- 157 -
CYPRESSTREE SENIOR FLOATING RATE FUND
By: CypressTree Investment Management
Company, Inc.
as Portfolio Manager
By /s/ Philip C. Robbins
-----------------------------------------
Name: Philip C. Robbins
Title: Principal
Credit Agreement
<PAGE> 163
Schedule 2.01
<TABLE>
<CAPTION>
REVOLVING TRANCHE A TRANCHE B
CREDIT TERM LOAN TERM LOAN
NAME OF INSTITUTION COMMITMENTS COMMITMENTS COMMITMENTS TOTAL
- --------------------------------------------- ----------------- ----------------- ------------------ ------------------
<S> <C> <C> <C> <C>
The Chase Manhattan Bank $ 18,484,375 $ 23,765,625 $ 101,750,000 $ 144,000,000
First Union National Bank 17,500,000 22,500,000 2,000,000 42,000,000
Fleet National Bank 17,500,000 22,500,000 2,000,000 42,000,000
First National Bank of Chicago 17,500,000 22,500,000 -- 40,000,000
ABN Amro Bank N.V. 10,937,500 14,062,500 2,000,000 27,000,000
Bank of Montreal, Chicago Branch 10,937,500 14,062,500 2,000,000 27,000,000
Bankers Trust Company 10,937,500 14,062,500 2,000,000 27,000,000
Compagnie Financiere de CIC et de 10,937,500 14,062,500 2,000,000 27,000,000
L'Union Europeene
Credit Lyonnais New York Branch 10,937,500 14,062,500 2,000,000 27,000,000
Mitsubishi Trust & Banking Corporation 10,937,500 14,062,500 2,000,000 27,000,000
SunTrust Bank, Central Florida N.A. 10,937,500 14,062,500 2,000,000 27,000,000
Union Bank of California, N.A. 10,937,500 14,062,500 2,000,000 27,000,000
The Bank of New York 10,937,500 14,062,500 -- 25,000,000
The Bank of Nova Scotia 10,937,500 14,062,500 -- 25,000,000
Dresdner Bank AG, New York and 10,937,500 14,062,500 -- 25,000,000
Grand Cayman Branches
Bank Austria Creditanstalt 8,859,375 11,390,625 2,000,000 22,250,000
Corporate Finance, Inc.
Key Corporate Capital Inc. 8,859,375 11,390,625 1,000,000 21,250,000
Bank of America, N.A. 8,859,375 11,390,625 -- 20,250,000
Banque Nationale de Paris, 8,859,375 11,390,625 -- 20,250,000
New York Branch
CIBC Inc. 8,859,375 11,390,625 -- 20,250,000
The Fuji Bank, Limited 8,859,375 11,390,625 -- 20,250,000
The Industrial Bank of Japan, Limited, 8,859,375 11,390,625 -- 20,250,000
New York Branch
Mellon Bank, N.A. 8,859,375 11,390,625 -- 20,250,000
Mercantile Bank National Association 8,859,375 11,390,625 -- 20,250,000
PNC Bank, National Association 8,859,375 11,390,625 -- 20,250,000
US Bank National Association 8,859,375 11,390,625 -- 20,250,000
Bayerische Hypo-und Vereinsbank AG 6,562,500 8,437,500 1,000,000 16,000,000
New York Branch
National City Bank 6,562,500 8,437,500 1,000,000 16,000,000
Allfirst Bank 6,562,500 8,437,500 -- 15,000,000
Bank of Hawaii 6,562,500 8,437,500 -- 15,000,000
The Dai-Ichi Kangyo Bank Ltd. 6,562,500 8,437,500 -- 15,000,000
Erste Bank der Oesterreichischen 6,562,500 8,437,500 -- 15,000,000
Sparkassen
Michigan National Bank 6,562,500 8,437,500 -- 15,000,000
State Street Bank and Trust Company 6,562,500 8,437,500 -- 15,000,000
Firstrust Bank 4,375,000 5,625,000 -- 10,000,000
Webster Bank 4,375,000 5,625,000 -- 10,000,000
</TABLE>
Schedule 2.01 to Credit Agreement
<PAGE> 164
-2-
<TABLE>
<S> <C> <C> <C> <C>
Franklin Floating Rate Trust -- -- 6,000,000 6,000,000
Archimedes Funding, L.L.C. -- -- 5,000,000 5,000,000
Balanced High-Yield Fund II Ltd. -- -- 5,000,000 5,000,000
General Electric Capital Corporation -- -- 5,000,000 5,000,000
KZH - Soleil-2 LLC -- -- 5,000,000 5,000,000
Metropolitan Life Insurance Company -- -- 5,000,000 5,000,000
PPM America, Inc. -- -- 5,000,000 5,000,000
SRF Trading, Inc. -- -- 5,000,000 5,000,000
Toronto Dominion (Texas), Inc. -- -- 5,000,000 5,000,000
KZH Waterside LLC -- -- 4,000,000 4,000,000
Paribas Capital Funding LLC -- -- 4,000,000 4,000,000
Tyler Trading, Inc. -- -- 4,000,000 4,000,000
KZH Crescent-2 LLC -- -- 2,500,000 2,500,000
Kemper Floating Rate Fund -- -- 2,000,000 2,000,000
Pinehurst Trading, Inc. -- -- 2,000,000 2,000,000
Sequils I, Ltd. -- -- 2,000,000 2,000,000
KZH Crescent LLC -- -- 1,500,000 1,500,000
KZH Cypress Tree-1 LLC -- -- 1,500,000 1,500,000
Cypresstree Investment Fund LLC -- -- 1,000,000 1,000,000
Cypresstree Investment Management -- -- 1,000,000 1,000,000
Company, Inc.
North American Senior Floating Rate -- -- 1,000,000 1,000,000
Fund
Cypresstree Senior Floating Rate Fund -- -- 750,000 750,000
------------ ------------ ------------ --------------
TOTAL FUND COMMITMENTS $350,000,000 $450,000,000 $200,000,000 $1,000,000,000
</TABLE>
Schedule 2.01 to Credit Agreement
<PAGE> 165
Schedule 4.06
Disclosed Matters
Section 4.06(a). None.
Section 4.06(b). None.
Schedule 4.06 to Credit Agreement
<PAGE> 166
Schedule 4.11
Supplemental Disclosure
1. The Justice Department of the United States will require the divestiture of
some of the assets of Chancellor incident to the closing of the Chancellor
Acquisition. Negotiations are currently underway with representatives of the
Justice Department to determine the specific areas of overlap of Chancellor
assets with assets of Borrower and its Restricted Subsidiaries. It is unknown at
this time the extent and value of the assets that might be subject to
divestiture. The possible purchasers are also unknown.
2. Holdings is contemplating the issuance of the Senior Notes pursuant to the
Holdings Indenture. The net proceeds of that offering are to be invested in
Borrower and used by Borrower to prepay amounts due under the Amended and
Restated Credit agreement between Borrower and The Chase Manhattan Bank, as
Administrative Agent, dated July 16, 1998.
Schedule 4.11 to Credit Agreement
<PAGE> 167
Schedule 4.13
Material Agreements and Liens
Material Agreements
<TABLE>
<CAPTION>
PRINCIPAL
BALANCES
DESCRIPTION COLLATERAL 4/30/99
----------- ---------- -----------
<S> <C> <C>
8% SERIES A UNSECURED SUBORDINATED DISCOUNT DEBENTURES DUE NONE $ 1,273,134
2001
8% UNSECURED SUBORDINATED NOTES DUE 2006 NONE 14,666,665
11% SENIOR SECURED NOTES DUE MAY 15, 2003 PURSUANT TO NONE 1,172,000
INDENTURE DATED AS OF MAY 15, 1993
STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE NONE 255,000,000
DATED AS OF SEPTEMBER 25, 1997
9.625% SENIOR SUBORDINATED NOTES DUE 2006
STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE NONE 198,816,060
DATED AS OF SEPTEMBER 25, 1997
8.625% SENIOR SUBORDINATED NOTES DUE 2007 (NET OF
UNAMORTIZED DISCOUNT)
FIRST UNION NATIONAL BANK, AS TRUSTEE, DATED AUGUST 15, NONE 103,949,000
1997,
9 1/4% SENIOR SUBORDINATED NOTES DUE 2007
THE CHASE MANHATTAN BANK AS ADMINISTRATIVE AGENT, CREDIT EQUITY INTERESTS OF
AGREEMENT DATED JULY 16, 1998 CERTAIN RESTRICTED
COMMITMENT SUBSIDIARIES
TERM FACILITY UTILIZATION 400,000,000
REVOLVER UTILIZATION 150,000,000
INCREMENTAL FACILITY UTILIZATION 20,000,000
100,000,000
</TABLE>
Schedule 4.13 to Credit Agreement
<PAGE> 168
- 2 -
AMENDED AND RESTATED
STOCK PURCHASE AGREEMENT
BY AND BETWEEN LAMAR MEDIA
CORP. (FORMERLY LAMAR
ADVERTISING COMPANY) AND
CHANCELLOR MEDIA OF LOS ANGELES
AND CHANCELLOR MEZZANINE
HOLDINGS CORPORATION, DATED AS
OF JUNE 12, 1999
AMENDED AND RESTATED VOTING
AGREEMENT BY AND BETWEEN LAMAR
MEDIA CORPORATION (FORMERLY
LAMAR ADVERTISING COMPANY),
CHANCELLOR MEDIA CORPORATION OF
LOS ANGELES, CHANCELLOR
MEZZANINE HOLDINGS CORPORATION,
AND REILLY FAMILY LIMITED
PARTNERSHIP, DATED AS OF JUNE 12,
1999
LIMITED WAIVER AND CONSENT BY
AND BETWEEN LAMAR ADVERTISING
COMPANY, LAMAR NEW HOLDING CO.,
CHANCELLOR MEZZANINE HOLDINGS
CORPORATION AND CHANCELLOR
MEDIA CORPORATION OF LOS
ANGELES, DATED AS OF JULY 19, 1999
Liens
See Schedule 7.02.
Schedule 4.13 to Credit Agreement
<PAGE> 169
Schedule 4.14
Subsidiaries of Lamar Media Corp. ("LMC")
1. Interstate Logos, Inc. ("ILI")
(i) Delaware
(ii) LMC and TLC
(iii) 66 2/3% common stock (LMC)
33 1/3% common stock (TLC)
(iv) Restricted Subsidiary
2. The Lamar Corporation ("TLC")
(i) Louisiana
(ii) LMC
(iii) 100% common stock
(iv) Restricted Subsidiary
3. Lamar Advertising of Mobile, Inc.
(i) Alabama
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
4. Lamar Advertising of Colorado Springs, Inc.
(i) Colorado
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
5. Lamar Advertising of South Mississippi, Inc.
(i) Mississippi
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
Schedule 4.14 to Credit Agreement
<PAGE> 170
- 2 -
6. Lamar Advertising of Jackson, Inc.
(i) Mississippi
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
7. Lamar Texas General Partner, Inc. ("TXGP")
(i) Louisiana
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
8. Lamar Advertising of South Georgia, Inc.
(i) Georgia
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
9. TLC Properties, Inc.
(i) Louisiana
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
10. TLC Properties II, Inc.
(i) Texas
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
11. Lamar Pensacola Transit, Inc.
(i) Florida
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
Schedule 4.14 to Credit Agreement
<PAGE> 171
- 3 -
12. Lamar Advertising of Youngstown, Inc.
(i) Delaware
(ii) TLC
(iii) 100% common
(iv) Restricted Subsidiary
13. Nebraska Logos, Inc.
(i) Nebraska
(ii) ILI
(iii) 100% common stock
(iv) Restricted Subsidiary
14. Oklahoma Logo Signs, Inc.
(i) Oklahoma
(ii) ILI
(iii) 100% common stock
(iv) Restricted Subsidiary
15. Missouri Logos, Inc. ("MLI")
(i) Missouri
(ii) ILI
(iii) 100% common stock
(iv) Restricted Subsidiary
16. Ohio Logos, Inc.
(i) Ohio
(ii) ILI
(iii) 100% common stock
(iv) Restricted Subsidiary
17. Utah Logos, Inc.
(i) Utah
(ii) ILI
(iii) 100% common stock
(iv) Restricted Subsidiary
Schedule 4.14 to Credit Agreement
<PAGE> 172
- 4 -
18. Texas Logos, Inc.
(i) Texas
(ii) ILI
(iii) 100% common stock
(iv) Restricted Subsidiary
19. Mississippi Logos, Inc.
(i) Mississippi
(ii) ILI
(iii) 100% common stock
(iv) Restricted Subsidiary
20. Georgia Logos, Inc.
(i) Georgia
(ii) ILI
(iii) 100% common stock
(iv) Restricted Subsidiary
21. South Carolina Logos, Inc.
(i) South Carolina
(ii) ILI
(iii) 100% common stock
(iv) Restricted Subsidiary
22. Virginia Logos, Inc.
(i) Virginia
(ii) ILI
(iii) 100% common stock
(iv) Restricted Subsidiary
23. Minnesota Logos, Inc. ("MNLI")
(i) Minnesota
(ii) ILI
(iii) 100% common stock
(iv) Restricted Subsidiary
Schedule 4.14 to Credit Agreement
<PAGE> 173
- 5 -
24. Michigan Logos, Inc.
(i) Michigan
(ii) ILI
(iii) 100% common stock
(iv) Restricted Subsidiary
25. New Jersey Logos, Inc.
(i) New Jersey
(ii) ILI
(iii) 100% common stock
(iv) Restricted Subsidiary
26. Florida Logos, Inc.
(i) Florida
(ii) ILI
(iii) 100% common stock
(iv) Restricted Subsidiary
27. Kentucky Logos, Inc.
(i) Kentucky
(ii) ILI
(iii) 100% common stock
(iv) Restricted Subsidiary
28. Nevada Logos, Inc.
(i) Nevada
(ii) ILI
(iii) 100% common stock
(iv) Restricted Subsidiary
29. Tennessee Logos, Inc.
(i) Tennessee
(ii) ILI
(iii) 100% common stock
(iv) Restricted Subsidiary
Schedule 4.14 to Credit Agreement
<PAGE> 174
- 6 -
30. Kansas Logos, Inc.
(i) Kansas
(ii) ILI
(iii) 100% common stock
(iv) Restricted Subsidiary
31. Colorado Logos, Inc.
(i) Colorado
(ii) ILI
(iii) 100% common stock
(iv) Restricted Subsidiary
32. Lamar Advertising of Huntington-Bridgeport, Inc.
(i) West Virginia
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
33. Lamar Advertising of Penn, Inc.
(i) Delaware
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
34. Lamar Advertising of Missouri, Inc.
(i) Missouri
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
35. Lamar Advertising of Michigan, Inc.
(i) Michigan
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
Schedule 4.14 to Credit Agreement
<PAGE> 175
- 7 -
36. Lamar Electrical, Inc.
(i) Louisiana
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
37. Lamar Advertising of South Dakota, Inc.
(i) South Dakota
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
38. Lamar Advertising of West Virginia, Inc.
(i) West Virginia
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
39. Lamar Advertising of Ashland, Inc.
(i) Kentucky
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
40. American Signs, Inc.
(i) Washington
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
41. Lamar OCI North Corporation
(i) Delaware
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
Schedule 4.14 to Credit Agreement
<PAGE> 176
- 8 -
42. Lamar OCI South Corporation
(i) Mississippi
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
43. Lamar Advertising of Greenville, Inc.
(i) Mississippi
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
44. Lamar Robinson, Inc.
(i) Missouri
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
45. Lamar Advertising of Kentucky, Inc.
(i) Kentucky
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
46. Lamar Advertising of Roland, Inc.
(i) Tennessee
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
47. Missouri Logos, a Partnership
(i) Missouri
(ii) MLI and Missouri Logo Sign Company
(iii) 66 2/3% of the general partnership interest (MLI)
33 1/3% of general partnership interest (Missouri Logo Sign
Company)
(iv) Restricted Subsidiary
Schedule 4.14 to Credit Agreement
<PAGE> 177
- 9 -
48. Lamar Texas Limited Partnership
(i) Louisiana
(ii) TLC and TXGP
(iii) 99% of the partnership interest and Limited Partner (TLC)
1% of the partnership interest and General Partner (TXGP)
(iv) Restricted Subsidiary
49. Lamar Tennessee, L.L.C.
(i) Tennessee
(ii) TLC
(iii) 100% of the equity interest (TLC)
(iv) Restricted Subsidiary
50. Lamar Air, L.L.C.
(i) Louisiana
(ii) TLC and ILI
(iii) 90% of the equity interest (TLC)
10% of the equity interest (ILI)
(iv) Restricted Subsidiary
51. TLC Properties, L.L.C.
(i) Louisiana
(ii) TLC Properties, Inc.
(iii) 100% membership interest
(iv) Restricted Subsidiary
52. Canadian TODS Limited
(i) Nova Scotia, Canada
(ii) ILI
(iii) 100% Common Stock
(iv) Restricted Subsidiary
53. New Mexico Logos, Inc.
(i) New Mexico
(ii) ILI
(iii) 100% common stock
(iv) Restricted Subsidiary
Schedule 4.14 to Credit Agreement
<PAGE> 178
- 10 -
54. Lamar Advertising of Joplin, Inc.
(i) Missouri
(ii) TLC
(iii) 100% common stock
(iv) Restricted Subsidiary
INACTIVE SUBSIDIARIES
1. Lamar PCS, Inc.
(i) Delaware
(ii) The Lamar Corporation
(iii) 100% common stock
(iv) Inactive Subsidiary
2. Lamar Advertising of California, Inc.
(i) Delaware
(ii) LMC
(iii) 100% common stock
(iv) Inactive Subsidiary
SUBSIDIARIES TO BE ACQUIRED IN THE CHANCELLOR ACQUISITION
1. Chancellor Media Outdoor Corporation
(i) Delaware
(ii) Chancellor Media Corporation of Los Angeles (Seller)
(iii) 100% common stock
(iv) Anticipated Restricted Subsidiary
2. Chancellor Media Nevada Sign Corporation
(i) Delaware
(ii) Chancellor Media Outdoor Corporation
(iii) 100% common stock
(iv) Anticipated Restricted Subsidiary
Schedule 4.14 to Credit Agreement
<PAGE> 179
- 11 -
3. Chancellor Media MW Sign Corporation
(i) Delaware
(ii) Chancellor Media Outdoor Corporation
(iii) 100% common stock
(iv) Anticipated Restricted Subsidiary
4. Chancellor Media Martin Corporation
(i) Delaware
(ii) Chancellor Media Outdoor Corporation
(iii) 100% common stock
(iv) Anticipated Restricted Subsidiary
5. Western Poster Services, Inc.
(i) Texas
(ii) Chancellor Media Outdoor Corporation
William Pierce
Rachel Kitchens
(iii) 73.4% of the common stock (Chancellor Media Outdoor
Corporation)
23.3% of the common stock (William Pierce)
3.3% of the common stock (Rachel Kitchens)
(iv) Anticipated Restricted Subsidiary
6. Revolution Outdoor Advertising, Inc.
(i) Florida
(ii) Chancellor Media Outdoor Corporation
(iii) 100% common stock
(iv) Anticipated Restricted Subsidiary
7. Chancellor Media Whiteco Outdoor Corporation
(i) Delaware
(ii) Chancellor Mezzanine Holdings Corporation
(iii) 100% common stock
(iv) Anticipated Restricted Subsidiary
8. Triumph Outdoor Holdings, L.L.C.
(i) Delaware
(ii) Chancellor Media Outdoor Corporation
(iii) 100% of the equity interest
(iv) Anticipated Restricted Subsidiary
Schedule 4.14 to Credit Agreement
<PAGE> 180
- 12 -
9. Martin Media, L.P.
(i) California
(ii) Chancellor Media Nevada Sign Corporation
Chancellor Media Outdoor Corporation
Chancellor Media MW Sign Corporation
Chancellor Media MW Sign Corporation
(iii) 17.07% of the limited partnership interest (Chancellor Media
Nevada Sign Corporation
81.36% of the limited partnership interest (Chancellor Media
Outdoor Corporation
0.55% of general partnership interest (Chancellor Media MW
Sign Corporation)
1.02% of the limited partnership interest (Chancellor Media MW
Sign Corporation)
100% common stock
(iv) Anticipated Restricted Subsidiary
10. Dowling Company Incorporated
(i) Virginia
(ii) Martin Media, L.P.
(iii) 100% common stock
(iv) Anticipated Restricted Subsidiary
11. Lindsay Outdoor, Inc.
(i) California
(ii) Chancellor Media Martin Corporation
(iii) 100% common stock
(iv) Anticipated Restricted Subsidiary
12. Scenic Outdoor Marketing & Consulting, Inc.
(i) California
(ii) Chancellor Media Martin Corporation
(iii) 100% common stock
(iv) Anticipated Restricted Subsidiary
13. Hardin Development Corp.
(i) Florida
(ii) Revolution Outdoor Advertising, Inc.
(iii) 100% common stock
(iv) Anticipated Restricted Subsidiary
Schedule 4.14 to Credit Agreement
<PAGE> 181
- 13 -
14. Parsons Development Company
(i) Florida
(ii) Revolution Outdoor Advertising, Inc.
(iii) 100% common stock
(iv) Anticipated Restricted Subsidiary
15. Outdoor Promotions West, L.L.C.
(i) Delaware
(ii) Triumph Outdoor Holdings, L.L.C.
(iii) 100% common of the equity interest
(iv) Anticipated Restricted Subsidiary
16. Transit America Las Vegas, L.L.C.
(i) Delaware
(ii) Triumph Outdoor Holdings, L.L.C.
(iii) 100% of the equity interest
(iv) Anticipated Restricted Subsidiary
17. Triumph Outdoor Louisiana, LLC
(i) Delaware
(ii) Triumph Outdoor Holdings, L.L.C.
(iii) 100% of the equity interest
(iv) Anticipated Restricted Subsidiary
18. Triumph Outdoor Rhode Island, LLC
(i) Delaware
(ii) Triumph Outdoor Holdings, L.L.C.
(iii) 100% of the equity interest
(iv) Anticipated Restricted Subsidiary
Schedule 4.14 to Credit Agreement
<PAGE> 182
Schedule 7.01
Existing Indebtedness
<TABLE>
<CAPTION>
PRINCIPAL
DESCRIPTION BALANCES
----------- 4/30/99
(By Maker and Holder) --------
<S> <C>
LAMAR ADVERTISING OF MOBILE, INC
Small Business Administration $ 14,574
Small Business Administration
Waller Acquisition 155,089
E. B. Chester non-compete 351,822
First Community Bank
Outdoor East Acquisition 5,740
THE LAMAR CORPORATION
Roy Loup 15,864
Woodlawn Land Company, Inc. 220,663
Southeastern Displays, Inc. 6,977
Allen Robichaux 219,858
T & L Management Outdoor Advertising, Inc. 230,201
Vann Outdoor Advertising 75,275
Danny and Ann Schnitzer 50,000
Imperial Outdoor Advertising 1,980,958
LAMAR TEXAS LIMITED PARTNERSHIP
Small Business Administration 38,902
Small Business Administration 192,959
TLC PROPERTIES, INC
Nick Stamitoles 24,881
Nick Stamitoles 25,678
Peach Tree Realty 64,424
</TABLE>
Schedule 7.01 to Credit Agreement
<PAGE> 183
- 2 -
<TABLE>
<CAPTION>
PRINCIPAL
DESCRIPTION BALANCES
----------- 4/30/99
(By Maker and Holder) --------
<S> <C>
LAMAR ADVERTISING OF JACKSON, INC
Small Business Administration 22,430
LAMAR TENNESSEE LIMITED PARTNERSHIP II
Witt Outdoor, Inc. 100,000
Dominion Signs, Incorporated 140,030
INTERSTATE LOGOS, INC
Travelsigns Non-Competition Agreement 168,750
LAMAR ADVERTISING OF MISSOURI, INC
David Odegard 300,000
LAMAR MEDIA CORP
Jim Gilbeau 26,197
Cynthia L. Hill 84,000
Ronald W. Hill 126,000
First Interstate Bank
Northwest Acquisition 172,716
Walz Marketing, Inc. 537,522
Scott Butterfield - Northwest Acquisition 100,000
Willard T. Shelton 300,000
Brentwood Development 766,375
Esplanade, L.L.C 75,257
Travelers Property Casualty Insurance Company 251,963
8% Series A Unsecured 1,273,134
Subordinated Discount
Debentures Due 2001
</TABLE>
Schedule 7.01 to Credit Agreement
<PAGE> 184
- 3 -
<TABLE>
<CAPTION>
PRINCIPAL
DESCRIPTION BALANCES
----------- 4/30/99
(By Maker and Holder) --------
<S> <C>
8% Unsecured Subordinated Notes 14,666,665
Due 2006
11% Senior Secured Notes Due May 1,172,000
15, 2003 Pursuant to Indenture
Dated As of May 15, 1993
State Street Bank and Trust 255,000,000
Company, As Trustee
Dated As Of September 25, 1997
9.625% Senior Subordinated Notes
Due 2006
State Street Bank and Trust 198,816,060
Company, As Trustee
Dated As Of September 25, 1997
8.625% Senior Subordinated Notes
Due 2007 (Net Of Unamortized Discount)
First Union National Bank, As 103,949,000
Trustee, Dated August 15, 1997
9 1/4% Senior Subordinated Notes
Due 2007
The Chase Manhattan Bank As
Administrative Agent, Credit Agreement
Dated July 16, 1998
Commitment $400,000,000
Term Facility Utilization 150,000,000
Revolver Utilization 20,000,000
Incremental Facility Utilization 100,000,000
</TABLE>
Schedule 7.01 to Credit Agreement
<PAGE> 185
- 4 -
<TABLE>
<CAPTION>
PRINCIPAL
DESCRIPTION BALANCES
----------- 4/30/99
(By Maker and Holder) --------
<S> <C>
LAMAR ADVERTISING OF PENN, INC
D. C. Nokes, Jr 1,600,000
LAMAR ADVERTISING OF WEST VIRGINIA, INC
Tom Susman 76,000
Carol Susman 4.000
</TABLE>
Schedule 7.01 to Credit Agreement
<PAGE> 186
Schedule 7.03(a)(iii)
Existing Guarantees
<TABLE>
<CAPTION>
ITEM DESCRIPTION
---- -----------
<S> <C>
Leases and Advertising Contracts Site and Operating Leases and
Advertising Sales Contracts
executed by the Company and its
Subsidiaries in the ordinary course
of its operations of former
Subsidiaries and former Affiliates.
</TABLE>
Schedule 7.03 to Credit Agreement
<PAGE> 187
Schedule 7.07
Certain Existing Affiliate Transactions
Sign Acquisition Corporation acquired all of the issued and outstanding
stock of Interstate Highway Sign Corp., which company makes aluminum sign faces
purchased by Subsidiaries of Interstate Logos, Inc., a Subsidiary of Borrower.
Seventy-six and 8/10ths (76.8%) percent of the stock of Sign Acquisition
Corporation is held by Kevin P. Reilly, Jr. as voting trustee. Kevin P. Reilly,
Jr. is the general partner of the Reilly Family Limited Partnership, which
partnership owns voting control of Holdings. Holdings owns all of the issued and
outstanding stock of Borrower.
Schedule 7.08 to Credit Agreement
<PAGE> 188
Schedule 7.08
Existing Restrictions
1. Restrictions contained in the Missouri Logos, a General Partnership,
Partnership Agreement.
2. Restrictions contained in Small Business Administration Loan Documents.
Schedule 7.08 to Credit Agreement
<PAGE> 1
EXHIBIT 10.2
STOCKHOLDERS AGREEMENT
BY AND AMONG
LAMAR ADVERTISING COMPANY
AND
SIGNATORIES LISTED HEREIN
-----------------------------------
Dated as of September 15, 1999
-----------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
Article 1 DEFINITIONS.......................................................................1
Section 1.1 Definitions..................................................................1
Section 1.2 Rules of Construction........................................................4
Article 2 MANAGEMENT OF THE COMPANY AND CERTAIN ACTIVITIES..................................4
Section 2.1 Board of Directors...........................................................4
2.1.1 Board Representation.........................................................4
2.1.2 Vacancies....................................................................4
2.1.3 Committee Representation.....................................................5
2.1.4 Costs and Expenses...........................................................5
2.1.5 Other Activities of the Holders; Fiduciary Duties............................5
Article 3 CHANCELLOR LOCK-UP................................................................5
Section 3.1 Lock-Up Agreement............................................................5
Article 4 CERTAIN LIMITATIONS...............................................................6
Section 4.1 Transactions with Affiliates.................................................6
Section 4.2 Other Significant Transactions...............................................6
Article 5 LEGENDS...........................................................................7
Section 5.1 Restrictive Legends..........................................................7
5.1.1 Securities Act Legend........................................................7
5.1.2 Other Legends................................................................7
Section 5.2 Termination of Certain Restrictions..........................................7
Article 6 TERMINATION.......................................................................8
Section 6.1 Termination..................................................................8
Article 7 MISCELLANEOUS.....................................................................8
Section 7.1 Financial Statements.........................................................8
Section 7.2 Notices......................................................................9
Section 7.3 Voting of Holders............................................................9
Section 7.4 Governing Law...............................................................10
Section 7.5 Successors and Assigns......................................................10
Section 7.6 Duplicate Originals.........................................................10
</TABLE>
i
<PAGE> 3
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Section 7.7 Severability.......................................10
Section 7.8 No Waivers; Amendments.............................10
Section 7.9 Entire Agreement...................................10
</TABLE>
ii
<PAGE> 4
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (this "Stockholders Agreement") dated as of
September 15, 1999, is entered into by and among Lamar Advertising Company, a
Delaware corporation (including its successors, the "Company"), and the
securityholders of the Company listed on the signature pages hereof, or who may
execute counterpart signature pages hereto following the date hereof.
In consideration of the premises, mutual covenants and agreements
hereinafter contained and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 DEFINITIONS.
"AFFILIATE" means, with respect to any Person, any Person
who, directly or indirectly, controls, is controlled by or is under
common control with that Person. For purposes of this definition,
"control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by
contract or otherwise.
"BENEFICIALLY OWN" OR "BENEFICIAL OWNERSHIP" means
beneficial ownership determined in accordance with Rule 13d-3
promulgated under the Exchange Act.
"CHANCELLOR LA" means Chancellor Media Corporation of Los
Angeles, a Delaware corporation.
"CHANCELLOR DESIGNEE" shall have the meaning provided in
Section 2.1.1(a) hereof.
"CHANCELLOR HOLDERS" means, collectively, Chancellor LA,
Chancellor Mezzanine and any Affiliates of Chancellor LA or
Chancellor Mezzanine who then are parties to this Stockholders
Agreement and who own any Common Stock or Common Stock Equivalents
or any interest therein.
"CHANCELLOR MEZZANINE" means Chancellor Mezzanine Holdings
Corporation, a Delaware corporation.
"CHANGE OF CONTROL" means the occurrence of one or more of
the following events: (i) a majority of the Board of Directors of
the Company shall consist of Persons who are not Continuing
Directors, or (ii) the failure by Reilly and the Chancellor Holders
collectively to Beneficially Own securities
<PAGE> 5
having more than 50% of the ordinary voting power for the election
of directors of the Company.
"CLASS A COMMON STOCK" means shares of the Class A Common
Stock, par value $.001 per share, of the Company, and any capital
stock into which such Class A Common Stock hereafter may be
changed.
"CLASS B COMMON STOCK" means shares of the Class B Common
Stock, par value $.001 per share, of the Company, and any capital
stock, other than Class A Common Stock, into which such Class B
Common Stock hereafter may be changed.
"COMMON STOCK" means, collectively, the Class A Common
Stock and the Class B Common Stock.
"COMMON STOCK EQUIVALENTS" means, without duplication with
any other Common Stock or Common Stock Equivalents, any security of
the Company which is convertible into, exercisable for or
exchangeable for, directly or indirectly, Common Stock of the
Company, whether at the time of issuance or upon the passage of
time or the occurrence of some future event.
"COMPANY" shall have the meaning provided in the
introductory paragraph hereof.
"CONTINUING DIRECTOR " means, as of the date of
determination, any Person who (i) is a Chancellor Designee, (ii)
was a member of the Board of Directors of the Company as of the
date hereof, (iii) was nominated for election or elected to the
Board of Directors of the Company with the affirmative vote of a
majority of the Continuing Directors who were members of the Board
of Directors of the Company at the time of such nomination or
election or (iv) is a representative of Reilly or an Affiliate of
Reilly.
"EBITDA" shall have the meaning provided in Section 7.1
hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated by the SEC
thereunder.
"FULLY-DILUTED COMMON STOCK" means, at any time, the then
outstanding Common Stock of the Company plus (without duplication)
all shares of Common Stock issuable, whether at such time or upon
the passage of time or the occurrence of future events, upon the
conversion or exchange of all then outstanding Common Stock
Equivalents.
"GAAP" means generally accepted accounting principles.
"GROUP" means a group of related persons for purposes of
Section 13(d) of the Exchange Act.
2
<PAGE> 6
"HOLDER" means (i) any Person (other than the Company)
listed on the signature pages hereof as of the date of this
Stockholders Agreement and (ii) any direct or indirect transferee
of any such Person who elects to become a party to this
Stockholders Agreement by executing and delivering a counterpart
signature page hereto.
"MAJORITY CHANCELLOR HOLDERS" means Chancellor Holders
owning Common Stock and/or Common Stock Equivalents representing a
majority of the Fully-Diluted Common Stock then owned by all
Chancellor Holders.
"PERSON" or "PERSON" means any individual, corporation,
partnership, limited liability company, joint venture, association,
joint-stock company, trust, unincorporated organization or
government or other agency or political subdivision thereof.
"PURCHASE AGREEMENT" means the Second Amended and Restated
Stock Purchase Agreement, date as of August 11, 1999, by and among
the Company, Lamar Media Corp., a Delaware corporation and
wholly-owned subsidiary of the Company (formerly known as Lamar
Advertising Company), Chancellor Mezzanine and Chancellor LA.
"REILLY" means, collectively, the Reilly Family Limited
Partnership, a Louisiana limited partnership ("RFLP"), and any
Affiliates of RFLP (other than the Company and any of its
Subsidiaries) who then are parties to this Stockholders Agreement
and who own any Common Stock or Common Stock Equivalents or any
interest therein.
"SEC" means the U. S. Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as
amended, and the rules and regulations promulgated by the SEC
thereunder.
"STOCKHOLDERS AGREEMENT" means this Stockholders Agreement,
as such from time to time may be amended.
"SUBSIDIARY" of any Person means (i) a corporation a
majority of whose outstanding shares of capital stock or other
equity interests with voting power, under ordinary circumstances,
to elect directors, is at the time, directly or indirectly, owned
by such Person, by one or more subsidiaries of such Person or by
such Person and one or more subsidiaries of such Person, and (ii)
any other Person (other than a corporation) in which such Person, a
subsidiary of such Person or such Person and one or more
subsidiaries of such Person, directly or indirectly, at the date of
determination thereof, has (x) at least a majority ownership
interest or (y) the power to elect or direct the election of the
directors or other governing body of such Person.
3
<PAGE> 7
SECTION 1.2 RULES OF CONSTRUCTION. Unless the context otherwise
requires
(1) a term has the meaning assigned to it;
(2) "or" is not exclusive;
(3) words in the singular include the plural, and words
in the plural include the singular;
(4) provisions apply to successive events and
transactions; and
(5) "herein," "hereof" and other words of similar import
refer to this Stockholders Agreement as a whole and not to any
particular Article, Section or other subdivision.
ARTICLE 2
MANAGEMENT OF THE COMPANY AND CERTAIN ACTIVITIES
SECTION 2.1 BOARD OF DIRECTORS.
2.1.1 Board Representation.
(a) From and following the date hereof, the Board of Directors
of the Company shall consist of ten (10) individuals. The Majority Chancellor
Holders will be entitled to designate two (2) directors (each a "Chancellor
Designee"). The existence of the right, pursuant to this Section 2.1.1(a), on
the part of the Majority Chancellor Holders to designate certain directors will
in no way limit or impair the right of the Majority Chancellor Holders to vote
their shares of capital stock of the Company as they see fit with respect to the
election of persons to fill seats on the Board of Directors other than the seats
filled as a result of the designation rights under this Section 2.1.1(a).
(b) The Company, from time to time at each appropriate time,
will cause each of the persons theretofore serving as Chancellor Designees (or
other persons designated by the Majority Chancellor Holders as new Chancellor
Designees in replacement of such persons) to be nominated and recommended by the
Board of Directors of the Company for reelection to the Board of Directors of
the Company by the stockholders of the Company upon any expiration of their
respective terms of office.
2.1.2 Vacancies. If, prior to his election to the Board of
Directors of the Company pursuant to Section 2.1.1 hereof, any Chancellor
Designee shall be unable or unwilling to serve as a director of the Company,
then the Majority Chancellor Holders shall be entitled to designate a
replacement Chancellor Designee. If, following an election to the Board of
Directors of the Company pursuant to Section 2.1.1 hereof, any Chancellor
Designee shall resign or be removed or be unable to serve for any reason prior
to the expiration of his term as a director of the Company, then the Majority
Chancellor Holders shall, within thirty (30) days of such event, notify the
Board of Directors of the Company in writing of a replacement Chancellor
Designee, and the Board of Directors
4
<PAGE> 8
shall appoint such replacement Chancellor Designee to fill the unexpired term of
the director who such new Chancellor Designee is replacing. If the Majority
Chancellor Holders request that any Chancellor Designee be removed as a director
(with or without cause) by written notice thereof to the Company, then each of
the Holders shall vote all of its or his capital stock in favor of such removal
upon such request.
2.1.3 Committee Representation. So long as the Chancellor
Holders are entitled to designate any director under Section 2.1.1, at least one
(1) of the Chancellor Designees shall be permitted to serve on each committee of
the Board of Directors of the Company (provided that, if such committee has
eligibility requirements that are imposed by a Person other than the Company,
such as independence requirements for the independent committee of the Board of
Directors of the Company, such designee meets those requirements).
Notwithstanding the foregoing, the Executive Committee of the Board of Directors
of the Company shall not be required to have a Chancellor Designee serving on
such committee so long as (i) the actions of such committee are restricted to
the day to day management of the Company in the ordinary course of business and
(ii) each of such actions of such committee is not material to the Company and
its Subsidiaries, taken as a whole.
2.1.4 Costs and Expenses. The Company will pay all reasonable
out-of-pocket expenses incurred by the Chancellor Designees in connection with
the participation by directors in meetings of the Board of Directors (and
committees thereof) of the Company.
2.1.5 Other Activities of the Holders; Fiduciary Duties. It is
understood and accepted that the Holders and their Affiliates have interests in
other business ventures which may be in conflict with the activities of the
Company and its Subsidiaries and that, subject to applicable law, nothing in
this Stockholders Agreement shall limit the current or future business
activities of the Holders whether or not such activities are competitive with
those of the Company and its Subsidiaries. Nothing in this Stockholders
Agreement, express or implied, shall relieve any officer or director of the
Company or any of its Subsidiaries, or any Holder, of any fiduciary or other
duties or obligations they may have to the Company's stockholders.
ARTICLE 3
CHANCELLOR LOCK-UP
SECTION 3.1 LOCK-UP AGREEMENT. Each of Chancellor LA and Chancellor
Mezzanine agrees that, until that date that is twelve (12) months following the
date hereof, such entity will not sell or otherwise transfer any of the shares
of Common Stock acquired pursuant to the Purchase Agreement, or any interest
therein; provided, however, that this Section 3.1 shall not prohibit the
transfer of any such shares (or any interest therein) (i) to any Affiliate of
Chancellor LA or Chancellor Mezzanine in compliance with the other provisions of
this Stockholders Agreement, (ii) in a transaction approved by the Board of
Directors of the Company or (iii) pursuant to a bona fide pledge of such
5
<PAGE> 9
shares to a lender or in connection with a foreclosure (or similar proceeding or
remedy) effected with respect to any such pledge.
ARTICLE 4
CERTAIN LIMITATIONS
SECTION 4.1 TRANSACTIONS WITH AFFILIATES. The Company will not, nor
will it permit any of its Subsidiaries to, directly or indirectly, enter into or
engage in any transaction with or for the benefit of any of its Affiliates
(other than transactions between the Company and a wholly owned Subsidiary of
the Company or among wholly owned Subsidiaries of the Company), except for any
such transaction which (i) has been approved in advance in writing by the
Majority Chancellor Holders or (ii) is on terms no less favorable than those
that might reasonably have been obtained in a comparable transaction on an
arm's-length basis from a person that is not an Affiliate. With respect to the
requirement set forth in clause (ii) of the immediately preceding sentence, for
a transaction or series of related transactions involving a value of $1,000,000
or more, such determination will be made in good faith by a majority of the
members of the Board of Directors of the Company and a majority of the
disinterested members of the Board of Directors of the Company, and for a
transaction or series of transactions involving a value of $5,000,000 or more,
the Board of Directors of the Company must receive an opinion from a nationally
recognized investment banking firm that such transaction is (or that such series
of transactions are) fair, from a financial point of view, to the Company or
such Subsidiary, as applicable. Notwithstanding the foregoing, the restrictions
set forth in this Section 4.1 shall not apply to reasonable and customary
directors' fees, reasonable and customary directors' or officers'
indemnification arrangements, or reasonable and customary compensatory
arrangements with officers of the Company.
SECTION 4.2 OTHER SIGNIFICANT TRANSACTIONS. Subject to the provisions
set forth in this Section 4.2, without the prior written approval of the
Majority Chancellor Holders, neither the Company nor any of the Holders will
take any action which would result in (and the Company will not permit any of
its Subsidiaries to take any action which would result in) (i) a Change of
Control or (ii) the acquisition or disposition by the Company and/or any of its
Subsidiaries, in a single transaction or a series of related transactions, of
assets (which shall include, without limitation, capital stock or other equity
interests in any Person) with an aggregate fair market value of $500,000,000 or
more. Notwithstanding the foregoing, the restrictions set forth in this Section
4.2 shall not apply to (a) any transaction pursuant to which all Persons who
owned Common Stock immediately prior to such transaction cease to own any equity
interest in the Company or, if applicable, in the entity that is the successor
to the Company as a result of such transaction, (b) any merger in which all
Persons who owned Common Stock immediately prior to such merger are permitted to
exercise statutory appraisal rights, or (c) any sale of substantially all of the
assets of the Company to a Person that is not an Affiliate of the Company if the
net proceeds of such sale are promptly distributed to the holders of Common
Stock.
6
<PAGE> 10
ARTICLE 5
LEGENDS
SECTION 5.1 RESTRICTIVE LEGENDS.
5.1.1 Securities Act Legend. Except as otherwise provided in
Section 5.2 hereof, each certificate evidencing shares of Common Stock issued on
or after the date hereof to a Holder or to a subsequent transferee of such
Holder, shall be stamped or otherwise imprinted with a legend in substantially
the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR PURSUANT TO THE SECURITIES OR
"BLUE SKY" LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED, EXCEPT PURSUANT TO (i)
A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE
UNDER SUCH ACT, (ii) RULE 144 UNDER SUCH ACT, OR (iii) ANY OTHER EXEMPTION FROM
REGISTRATION UNDER SUCH ACT.
5.1.2 Other Legends. Each certificate evidencing shares of
Common Stock or Common Stock Equivalents, where applicable, issued on or after
the date hereof to a Holder or a subsequent transferee of such Holder shall be
stamped or otherwise imprinted with a legend in substantially the following
form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER, VOTING AND OTHER TERMS AND CONDITIONS SET FORTH IN THE
STOCKHOLDERS AGREEMENT DATED AS OF SEPTEMBER 15, 1999, A COPY OF WHICH MAY BE
OBTAINED FROM THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.
SECTION 5.2 TERMINATION OF CERTAIN RESTRICTIONS. Notwithstanding the
foregoing provisions of this Article 5, the legend requirements of Section 5.1.1
shall terminate as to any Common Stock (i) when and so long as such Common Stock
shall have been effectively registered under the Securities Act and disposed of
pursuant thereto or (ii) when the Company shall have received an opinion of
counsel reasonably satisfactory to it that such Common Stock may be transferred
without registration thereof under the Securities Act and that such legend may
be removed. Whenever the restrictions imposed by Section 5.1.1 shall terminate
as to any Common Stock, the Holder thereof shall be entitled to receive from the
Company, at the Company's expense, a new certificate evidencing such shares of
Common Stock not bearing the restrictive legend set forth in Section 5.1.1.
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<PAGE> 11
ARTICLE 6
TERMINATION
SECTION 6.1 TERMINATION. The provisions of this Stockholders Agreement
shall terminate on the earlier of (i) the date that is ten (10) years following
the date of this Stockholders Agreement and (ii) such date that the Chancellor
Holders collectively no longer Beneficially Own at least ten percent (10%) of
the Fully-Diluted Common Stock. Notwithstanding the foregoing, Section 7.1
hereof shall remain in full force and effect for so long as (and only for so
long as) the information to be provided to Chancellor LA or Chancellor Mezzanine
under such Section 7.1 is necessary for such entity in connection with the
preparation of its financial statements.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1 FINANCIAL STATEMENTS. The Company shall deliver to
Chancellor LA and Chancellor Mezzanine the following, together with management's
discussion and analysis of financial condition and results of operations for the
relevant fiscal periods, in writing:
(a) as soon as available and in any event within 80 days after
the end of each fiscal year of the Company, (i) an audited consolidated balance
sheet or equivalent statement of financial position of the Company and its
Subsidiaries and the related consolidated statements of income, cash flows, and
changes in stockholders' equity for such fiscal year, setting forth in each case
in comparative form the figures for the previous fiscal year, and (ii) a
statement of earnings before interest, taxes, depreciation and amortization as
per the consolidated financial statements of the Company and its Subsidiaries
prepared in accordance with GAAP ("EBITDA") for such fiscal year, all presented
in accordance with GAAP and reported on as to fairness of presentation,
accounting principles and consistency, and otherwise by independent public
accountants; and
(b) as soon as available and in any event within 35 days after
the end of each calendar quarter of each fiscal year of the Company, (i) an
unaudited consolidated balance sheet or equivalent statement of financial
position of the Company and its Subsidiaries as of the end of each such calendar
quarter, as applicable, and the related consolidated statements of income and
cash flows for the portion of the Company's fiscal year ended at the end of each
such calendar quarter setting forth in comparative form in the case of such
statements of income and cash flows the figures for the corresponding calendar
quarter of the previous fiscal year, and (ii) a statement of EBITDA for such
calendar quarter, all presented in accordance with GAAP and certified as to
fairness of presentation, accounting principles and consistency by an officer of
the Company.
8
<PAGE> 12
SECTION 7.2 NOTICES. Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given if made
by hand delivery, by telex, by telecopier, by registered or certified mail,
postage prepaid, return receipt requested, or by overnight courier, addressed as
follows (or at such other address as may be substituted by notice given as
herein provided):
If to the Company:
Lamar Advertising Company
5551 Corporate Boulevard
Baton Rouge, Louisiana 70808
Attention: Keith Istre
Fax: (225) 923-0658
With copies to:
Jones, Walker, Waechter, Poitevent,
Carrere & Denegre, L.L.P.
5th Floor
Four United Plaza
8555 United Plaza Boulevard
Baton Rouge, Louisiana 70809
Attention: Brad J. Axelrod
Fax: (225) 231-3336
If to any Holder, at its address listed on the signature pages hereof.
Any notice or communication hereunder shall be deemed to have been
given or made as of the date so delivered if personally delivered; when answered
back, if telexed; when receipt is acknowledged, if telecopied; five (5) calendar
days after mailing if sent by registered or certified mail (except that a notice
of change of address shall not be deemed to have been given until actually
received by the addressee); and one (1) business day after delivery to a
reputable overnight courier service guaranteeing next business day delivery.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
SECTION 7.3 VOTING OF HOLDERS. Each Holder shall vote his or its shares
of Voting Stock at any regular or special meeting of stockholders of the Company
or in any written consent executed in lieu of such a meeting of stockholders and
shall take all other lawful actions (including using its, his or her
commercially reasonable efforts to cause the Board of Directors of the Company
to take all such actions) necessary to give effect to the agreements contained
in this Stockholders Agreement (including but not limited to the election of the
Chancellor Designees) and to ensure that the certificate of incorporation and
bylaws of the Company as in effect at any time hereafter do not
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<PAGE> 13
conflict in any respect with the provisions of this Stockholders Agreement. In
order to effectuate the provisions of this Stockholders Agreement, each Holder
hereby agrees that when any action or vote is required to be taken by such
Holder pursuant to this Stockholders Agreement, such Holder shall use his
commercially reasonable efforts to call, or cause the appropriate officers and
directors of the Company to call, a special or annual meeting of stockholders of
the Company, as the case may be, or execute or cause to be executed a consent in
writing in lieu of any such meetings pursuant to the General Corporation Law of
the State of Delaware, as amended from time to time, or any successor statutes.
SECTION 7.4 GOVERNING LAW. THIS STOCKHOLDERS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. SECTION 7.5 SUCCESSORS AND
ASSIGNS. This Stockholders Agreement shall be binding upon the Company, each
Holder, and their respective successors and permitted assigns.
SECTION 7.5 SUCCESSORS AND ASSIGNS. This Stockholders Agreement shall
be binding upon the Company, each Holder, and their respective successors and
permitted assigns.
SECTION 7.6 DUPLICATE ORIGINALS. All parties may sign any number of
copies of this Stockholders Agreement. Each signed copy shall be an original,
but all of them together shall represent the same agreement.
SECTION 7.7 SEVERABILITY. In case any provision in this Stockholders
Agreement shall be held invalid, illegal or unenforceable in any respect for any
reason, the validity, legality and enforceability of any such provision in every
other respect and the remaining provisions shall not in any way be affected or
impaired thereby
SECTION 7.8 NO WAIVERS; AMENDMENTS.
7.8.1 No failure or delay on the part of the Company or any
Holder in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to the
Company or any Holder at law or in equity or otherwise.
7.8.2 Any provision of this Stockholders Agreement may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by the Company, the Holders holding at least a majority of the
Fully-Diluted Common Stock held by all Holders and by the Majority Chancellor
Holders.
SECTION 7.9 ENTIRE AGREEMENT. This Stockholders Agreement contains the
entire agreement among the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings with respect to such subject
matter.
[SIGNATURE PAGES FOLLOW]
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<PAGE> 14
LAMAR ADVERTISING COMPANY
By: /s/ Keith Istre
------------------------------
Name: Keith Istre
Title: Chief Financial Officer
<PAGE> 15
HOLDERS:
CHANCELLOR MEDIA CORPORATION OF
LOS ANGELES
By: /s/ W. Schuyler Hansen
----------------------------------------
Name: W. Schuyler Hansen
Title: Sr. Vice President and Chief
Accounting Officer
Address:
1845 Woodall Rogers Freeway
Suite 1300
Dallas, Texas 75201
Attention: General Counsel
Fax: (512) 340-7890
With copies to:
Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201-6950
Attention: Michael A. Saslaw
Fax: (214) 746-7777
and
Latham & Watkins
1001 Pennsylvania Avenue, N.W.
Suite 1300
Washington, D.C. 20004-2502
Attention: Eric L. Bernthal
Fax: (202) 637-2201
<PAGE> 16
CHANCELLOR MEZZANINE HOLDINGS
CORPORATION
By: /s/ W. Schuyler Hansen
---------------------------------------
Name: W. Schuyler Hansen
Title: Sr. Vice President and Chief
Accounting Officer
Address:
1845 Woodall Rogers Freeway
Suite 1300
Dallas, Texas 75201
Attention: General Counsel
Fax: (512) 340-7890
With copies to:
Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201-6950
Attention: Michael A. Saslaw
Fax: (214) 746-7777
and
Latham & Watkins
1001 Pennsylvania Avenue, N.W.
Suite 1300
Washington, D.C. 20004-2502
Attention: Eric L. Bernthal
Fax: (202) 637-2201
<PAGE> 17
REILLY FAMILY LIMITED PARTNERSHIP
By: /s/ Kevin P. Reilly, Jr.
----------------------------------------
Name Kevin P. Reilly, Jr.
Title: General Partner
Address:
c/o Lamar Advertising Company
5551 Corporate Boulevard
Baton Rouge, Louisiana 70808
Attention: Kevin P. Reilly, Jr.
Fax: (225) 923-0658
<PAGE> 1
EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT dated as of September 15, 1999
(this "Agreement"), among Lamar Advertising Company, a Delaware corporation
(the "Issuer"), Chancellor Media Corporation of Los Angeles, a Delaware
Corporation ("Chancellor LA"), and Chancellor Mezzanine Holdings Corporation, a
Delaware corporation ("Chancellor Mezzanine").
WHEREAS, this Agreement is being entered into in connection with the
closing of the transactions contemplated by the Purchase Agreement referred to
below.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, representations, warranties, covenants and agreements contained
herein, the parties hereto, intending to be legally bound hereby, agree as
follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions. The following terms, as used herein, shall
have the following respective meanings:
"Commission" means the Securities and Exchange Commission or any
successor governmental body or agency.
"Common Stock" means the Class A Common Stock, par value $0.001 per
share, of the Issuer and any capital stock into which such Common Stock
thereafter may be changed.
"Demand Registration" has the meaning ascribed thereto in Section
2.2(a).
"Demand Request" has the meaning ascribed thereto in Section 2.2(a).
"Disadvantageous Condition" has the meaning ascribed thereto in
Section 2.4.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Excluded Registration" means a registration under the Securities Act
of (i) securities pursuant to one or more Demand Registrations pursuant to
Section 2.2 hereof, (ii) securities registered on Form S-8 under the Securities
Act or any similar successor form and (iii) securities registered to effect the
acquisition of or combination with another business entity.
"Holder" means (i) Chancellor LA, (ii) Chancellor Mezzanine and (iii)
any direct or indirect transferee of Chancellor LA or Chancellor Mezzanine who
shall agree to be bound by the terms of this Agreement.
"Person" or "person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or government or other agency or political
subdivision thereof.
<PAGE> 2
"Piggyback Registration" has the meaning ascribed thereto in Section
2.3(a).
"Purchase Agreement" means the Second Amended and Restated Stock
Purchase Agreement dated as of August 11, 1999, among the Issuer, Lamar Media
Corp., a Delaware corporation and wholly-owned subsidiary of the Issuer
(formerly known as Lamar Advertising Company), Chancellor LA and Chancellor
Mezzanine.
"Registrable Securities" means, at any time, any shares of Common
Stock owned by the Holders, whether owned on the date hereof or acquired
hereafter; provided, however, that Registrable Securities shall not include any
shares of Common Stock (i) the sale of which has been registered pursuant to
the Securities Act and which shares have been sold pursuant to such
registration or (ii) which have been sold pursuant to Rule 144 of the
Commission under the Securities Act.
"Registration Expenses" means any and all expenses incident to
performance of or compliance with any registration of securities pursuant to
Article 2, including, without limitation, (i) all registration and filing fees,
(ii) all fees and expenses associated with filings required to be made with the
NASD (including, if applicable, the fees and expenses of any "qualified
independent underwriter" as such term is defined in Rule 2720(b)(15) of the
NASD Conduct Rules, and of its counsel), as may be required by the rules and
regulations of the NASD, (iii) fees and expenses of compliance with securities
or "blue sky" laws (including reasonable fees and disbursements of counsel in
connection with "blue sky" qualifications of the Registrable Shares), (iv)
rating agency fees, (v) printing expenses (including expenses of printing
certificates for the Registrable Shares in a form eligible for deposit with The
Depository Trust Company and of printing prospectuses if the printing of
prospectuses is requested by a holder of Registrable Shares), (vi) messenger
and delivery expenses, (vii) the Issuer's internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), (viii) the fees and expenses incurred in
connection with any listing of the Registrable Shares, (ix) fees and expenses
of counsel for the Issuer and its independent certified public accountants
(including the expenses of any special audit or "cold comfort" letters required
by or incident to such performance), (x) Securities Act liability insurance (if
the Issuer elects to obtain such insurance), (xi) the fees and expenses of any
special experts retained by the Issuer in connection with such registration,
(xii) the fees and expenses of other persons retained by the Issuer and (xiii)
reasonable fees and expenses of one firm of counsel for the Selling Holders
(which shall be selected by the Holders of a majority of the Registrable
Securities being included in any particular registration statement).
"Required Shelf Registration" has the meaning ascribed thereto in
Section 2.1.
"Rule 144" means Rule 144 (or any successor rule to similar effect)
promulgated under the Securities Act.
"Rule 145" means Rule 145 (or any successor rule to similar effect)
promulgated under the Securities Act.
"Rule 415 Offering" means an offering on a delayed or continuous basis
pursuant to Rule 415 (or any successor rule to similar effect) promulgated
under the Securities Act.
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<PAGE> 3
"Securities Act" means the Securities Act of 1933, as amended.
"Seller Affiliates" has the meaning ascribed thereto in Section 2.8.
"Selling Holder" means any Holder who sells Registrable Securities
pursuant to a public offering registered hereunder.
"Shelf Registration" means the registration under the Securities Act
of a Rule 415 Offering.
"Shelf Registration Statement" means a registration statement intended
to effect a Shelf Registration.
"Shelf Termination Date" has the meaning ascribed thereto in Section
2.1(c).
SECTION 1.2 Internal References. Unless the context indicates
otherwise, references to Articles, Sections and paragraphs shall refer to the
corresponding articles, sections and paragraphs in this Agreement, and
references to the parties shall mean the parties to this Agreement.
ARTICLE 2
REGISTRATION RIGHTS
SECTION 2.1 Shelf Registration. At any time after the date that is ten
months from the date hereof, if requested by a Holder or Holders holding a
majority in interest of the Registrable Securities, as soon as practicable (but
in any event not more than 15 days) after such request, the Issuer shall
prepare and file with the Commission a Shelf Registration Statement on an
appropriate form that shall include all Registrable Securities, and which shall
not include any other securities (the "Required Shelf Registration"). The
Issuer shall use its reasonable best efforts to cause such Shelf Registration
Statement to be declared effective as soon as practicable after such request;
provided, however, that the Issuer shall have no obligation to cause such Shelf
Registration Statement to be declared effective on a date that is prior to the
first anniversary of this Agreement. Notwithstanding anything else contained in
this Agreement, the Issuer shall only be obligated to keep such Shelf
Registration Statement effective until the earliest of:
(a) (i) 12 months after the date such Shelf Registration
Statement has been declared effective, provided that such 12-month period shall
be extended by (1) the length of any period during which the Issuer delays in
maintaining the Shelf Registration Statement current pursuant to Section 2.4,
(2) the length of any period (in which such Shelf Registration Statement is
required to be effective hereunder) during which such Shelf Registration
Statement is not maintained effective, and (3) such number of days that equals
the number of days elapsing from (x) the date the written notice contemplated
by Section 2.6(e) below is given by the Issuer to (y) the date on which the
Issuer delivers to the Holders of Registrable Securities the supplement or
amendment contemplated by Section 2.6(e) below;
(b) such time as all Registrable Securities have been sold or
disposed of thereunder or sold, transferred or otherwise disposed of to a
Person that is not a Holder; and
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<PAGE> 4
(c) such time as all securities owned by the Holders have
ceased to be Registrable Securities (the earliest of (a), (b) and (c) being the
"Shelf Termination Date").
The Required Shelf Registration shall not be counted as a Demand Registration
for purposes of Section 2.2 of this Agreement.
SECTION 2.2 Demand Registration.
(a) At any time after the date that is ten months from the date
hereof, upon written notice to the Issuer from a Holder or Holders holding a
majority in interest of the Registrable Securities (a "Demand Request")
requesting that the Issuer effect the registration under the Securities Act of
any or all of the Registrable Securities held by such requesting Holders, which
notice shall specify the intended method or methods of disposition of such
Registrable Securities, the Issuer shall prepare as soon as practicable and,
within 15 days after such request, file with the Commission a registration
statement with respect to such Registrable Securities and thereafter use its
reasonable best efforts to cause such registration statement to be declared
effective under the Securities Act for purposes of dispositions in accordance
with the intended method or methods of disposition stated in such request
within 30 days after the filing of such registration statement; provided,
however, that the Issuer shall have no obligation to (i) cause such
registration statement filed pursuant to this Section 2.2 to be declared
effective on a date that is prior to the first anniversary of this Agreement or
(ii) cause such registration statement filed pursuant to this Section 2.2 to be
declared effective during any period during which a Shelf Registration
Statement filed pursuant to Section 2.1 remains effective. Notwithstanding any
other provision of this Agreement to the contrary:
(i) the Holders may collectively exercise their Demand
Request rights for registration of their Registrable Securities under
this Section 2.2(a) on not more than three occasions (any such
registration being referred to herein as a "Demand Registration");
(ii) the method of disposition requested by Holders in
connection with any Demand Registration may not, without the Issuer's
written consent, be a Rule 415 Offering;
(iii) the Issuer shall not be required to effect a Demand
Registration hereunder if all securities owned by the Holders have
ceased to be Registrable Securities; and
(iv) the Issuer shall not be required to effect more than
one Demand Registration during any 12 month period.
(b) Notwithstanding any other provision of this Agreement to
the contrary, a Demand Registration requested by Holders pursuant to this
Section 2.2 shall not be deemed to have been effected, and, therefore, not
requested and the rights of each Holder shall be deemed not to have been
exercised for purposes of paragraph (a) above, (i) if such Demand Registration
has not become effective under the Securities Act or (ii) if such Demand
Registration, after it became effective under the Securities Act, was not
maintained effective under the Securities Act (including, without limitation,
if it was interfered with by any stop order, injunctions or other
4
<PAGE> 5
order or requirement the Commission or other governmental agency or court) for
at least 30 days (or such shorter period ending when all the Registrable
Securities covered thereby have been disposed of pursuant thereto) and, as a
result thereof, the Registrable Securities requested to be registered cannot be
distributed in accordance with the plan of distribution set forth in the
related registration statement. The Holders shall be deemed not to have
exercised a Demand Request under Section 2.2 if the Demand Registration related
to such Demand Request is delayed or not effected in the circumstances set
forth in this clause (b).
(c) The Issuer shall have the right to cause the registration
of additional shares of Common Stock for sale for the account of the Issuer,
but not for the account of any other Person, in the registration of Registrable
Securities requested by the Holders pursuant to Section 2.2(a) above, provided,
that if such Holders are advised by the lead or managing underwriter referred
to in Section 2.2(e) that, in such underwriter's good faith view, all or a part
of such Registrable Securities and additional shares of Common Stock cannot be
sold or the inclusion of such Registrable Securities and additional shares of
Common Stock in such registration would be likely to have a material adverse
effect on the price, timing or distribution of the offering and sale of the
Registrable Securities and additional equity securities then contemplated, then
the number of securities that can, in the good faith view of such underwriter,
be sold in such offering without so materially adversely affecting such
offering shall be allocated first, pro rata among the requesting Holders on the
basis of the relative number requested to be included therein by each such
Holder and then second, to the Issuer. The Holders of the Registrable
Securities to be offered pursuant to paragraph (a) above may require that any
such additional equity securities be included by the Issuer in the offering
proposed by such Holders on the same conditions as the Registrable Securities
that are included therein. If, in the case of any registration pursuant to a
Demand Request, the Holders making such Demand Request are advised by the lead
or managing underwriter referred to in Section 2.2(e) that, in such
underwriter's good faith view, all or a part of such Registrable Securities
cannot be sold or the inclusion of such Registrable Securities in such
registration would be likely to have a material adverse effect on the price,
timing or distribution of the offering and sale of the Registrable Securities
then contemplated, then such Holders will have the right, within 15 days
following such advice from such underwriter, to elect to terminate such Demand
Request, in which case the Holders shall be deemed not to have exercised a
Demand Request pursuant to Section 2.2 hereof.
(d) Within 10 days after delivery of a Demand Request by a
Holder, the Issuer shall provide a written notice to each Holder, advising such
Holder of its right to include any or all of the Registrable Securities held by
such Holder for sale pursuant to the Demand Registration and advising such
Holder of procedures to enable such Holder to elect to so include Registrable
Securities for sale in the Demand Registration as each such Holder may request.
Any Holder may, within 20 days of delivery to such Holder of a notice pursuant
to this Section 2.2(d), elect to so include such portion of its Registrable
Securities in the Demand Registration by written notice to such effect to the
Issuer specifying the number of Registrable Securities desired to be so
included by such Holder.
(e) In the event that any public offering pursuant to either
Section 2.1 or 2.2 of this Agreement shall involve, in whole or in part, an
underwritten offering, the Holders of a majority of the Registrable Securities
being included in such underwritten offering shall have the right to designate
an underwriter or underwriters as the lead or managing underwriters of such
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<PAGE> 6
underwritten offering; provided, that such selection shall be subject to the
consent of the Issuer, which consent shall not be unreasonably withheld or
delayed.
SECTION 2.3 Piggyback Registrations.
(a) Each time the Issuer proposes to register any of its equity
securities (other than pursuant to an Excluded Registration) under the
Securities Act for sale to the public (whether for the account of the Issuer or
the account of any securityholder of the Issuer ) and the form of registration
statement to be used permits the registration of Registrable Securities, the
Issuer shall give prompt written notice to each Holder (which notice shall be
given not less than thirty (30) days prior to the effective date of the
Issuer's registration statement), which notice shall offer each such Holder the
opportunity to include any or all of its Registrable Securities in such
registration statement (a "Piggyback Registration"), subject to the limitations
contained in Section 2.3(b) below. Each Holder who desires to have its
Registrable Securities included in such registration statement shall so advise
the Issuer in writing (stating the number of Registrable Securities desired to
be registered) within 20 days after the date of such notice from the Issuer.
Any Holder shall have the right to withdraw such Holder's request for inclusion
of such Holder's Registrable Securities in any registration statement pursuant
to this Section 2.3 by giving written notice to the Issuer of such withdrawal.
Subject to Section 2.3(b) below, the Issuer shall include in such registration
statement all such Registrable Securities so requested to be included therein;
provided, however, that the Issuer may at any time withdraw or cease proceeding
with any such registration if it shall at the same time withdraw or cease
proceeding with the registration of all other equity securities originally
proposed to be registered.
(b) If the managing underwriter of an offering involving a
request for Piggyback Registration advises the Issuer in writing (with a copy
to the Holders requesting inclusion of their Registrable Securities) that, in
such underwriter's good faith view, the inclusion of any Registrable Securities
pursuant to Section 2.3(a) above would be likely to have a material adverse
effect on the price, timing or distribution of such offering, then (i) the
number of such Holder's or Holders' Registrable Securities to be included in
the registration statement for such offering may, subject to the provisions of
the immediately following sentence, be reduced to an amount which, in the
judgment of the managing underwriter, would no longer be likely to have a
material adverse effect on the price, timing or distribution of such offering
or (ii) if no such reduction would, in the judgment of the managing
underwriter, eliminate such likelihood of a material adverse effect on the
price, timing or distribution of such offering, then the Issuer may, subject to
the provisions of the immediately following sentence, exclude all such
Registrable Securities from such registration statement. Any reduction in the
number of Registrable Securities to be included in the registration statement
for such offering pursuant to the immediately preceding sentence shall be
effected by the inclusion in such registration statement of (A) first, (p) if
such registration was initiated by the Issuer for the sale of securities for
its own account, any and all securities for sale by the Issuer or (q) if such
registration was initiated by any other Person pursuant to the exercise of
demand registration rights, any and all securities for sale by such Person
pursuant to such exercise of demand registration rights, (B) second, any
Registrable Shares requested to be included in such registration, pro rata
based on the ratio which such Holder's requested Registrable Securities bears
to the total number of Registrable Securities requested to be included in such
registration statement by all Holders who have requested that their Registrable
Securities be included in such registration statement, and (C) third, pro rata
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<PAGE> 7
among any other securities requested to be included in such registration by
other Persons pursuant to the exercise of contractual registration rights
granted by the Issuer. If as a result of the provisions of this Section 2.3(b)
any Holder shall not be entitled to include all Registrable Securities in a
registration that such Holder has requested to be so included, such Holder may
withdraw such Holder's request to include any Registrable Securities in such
registration statement. No Holder may participate in any registration statement
hereunder unless such Holder (x) agrees to sell such Holder's Registrable
Securities on the basis provided in any underwriting arrangements approved by
the Issuer relating to such registration statement and (y) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements, and other documents reasonably required under the terms of such
underwriting arrangements; provided, however, that no such Holder shall be
required to make any representations or warranties in connection with any such
registration other than representations and warranties as to (1) such Holder's
ownership of its Registrable Securities to be transferred free and clear of all
liens, claims, and encumbrances, (2) such Holder's power and authority to
effect such transfer, and (3) such matters pertaining to compliance with
securities laws as may be reasonably requested; provided further, however, that
the obligation of such Holder to indemnify pursuant to any such underwriting
arrangements shall be several, not joint and several, among such Holders
selling Registrable Securities, and the liability of each such Holder will be
in proportion thereto, and provided further that such liability will be limited
to the net amount received by such Holder from the sale of its Registrable
Securities pursuant to such registration statement.
SECTION 2.4 Certain Delay Rights. Notwithstanding any other provision
of this Agreement to the contrary, if at any time while the Required Shelf
Registration is effective the Issuer provides written notice to each Holder
that in the good faith and reasonable judgment of the Board of Directors of the
Issuer it would be materially disadvantageous to the Issuer (because the sale
of Registrable Securities covered by such registration statement or the
disclosure of information therein or in any related prospectus or prospectus
supplement would materially interfere with any acquisition, financing or other
material event or transaction in connection with which a registration of
securities under the Securities Act for the account of the Issuer is then
intended or the public disclosure of which at the time would be materially
prejudicial to the Issuer (a "Disadvantageous Condition")) for sales of
Registrable Securities thereunder to then be permitted, and setting forth the
general reasons for such judgment, the Issuer may refrain from maintaining
current the prospectus contained in the Shelf Registration Statement until such
Disadvantageous Condition no longer exists (notice of which the Issuer shall
promptly deliver in writing to each Holder). Furthermore, notwithstanding
anything else contained in this Agreement, with respect to any registration
statement filed, or to be filed, pursuant to Section 2.2 of this Agreement, if
the Issuer provides written notice to each Holder that in the good faith and
reasonable judgment of the Board of Directors of the Issuer it would be
materially disadvantageous to the Issuer (because of a Disadvantageous
Condition) for such a registration statement to be maintained effective, or to
be filed and become effective, and setting forth the general reasons for such
judgment, the Issuer shall be entitled to cause such registration statement to
be withdrawn or the effectiveness of such registration statement terminated,
or, in the event no registration statement has yet been filed, shall be
entitled not to file any such registration statement, until such
Disadvantageous Condition no longer exists (notice of which the Issuer shall
promptly deliver in writing to each Holder). With respect to each Holder, upon
the receipt by such Holder of any such notice of a Disadvantageous Condition
(i) in connection with the Required Shelf Registration, such Holder shall
forthwith discontinue use of the
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<PAGE> 8
prospectus and any prospectus supplement under such registration statement and
shall suspend sales of Registrable Securities until such Disadvantageous
Condition no longer exists and (ii) in connection with the Required Shelf
Registration or the Demand Registration, as applicable, if so directed by the
Issuer by notice as aforesaid, such Holder will deliver to the Issuer all
copies, other than permanent filed copies then in such Holder's possession, of
the prospectus and prospectus supplements then covering such Registrable
Securities at the time of receipt of such notice as aforesaid. Notwithstanding
anything else contained in this Agreement, (x) neither the filing nor the
effectiveness of any registration statement under Section 2.2 of this Agreement
may be delayed for more than a total of 60 days pursuant to this Section 2.4
and (y) the maintaining current of a prospectus (and the suspension of sales of
Registrable Securities) in connection with the Required Shelf Registration may
not be delayed under this Section 2.4 for more than a total of 60 days in any
six-month period. If, in the case of any registration pursuant to a Demand
Request, the Issuer provides notice to the applicable Holders of a
Disadvantageous Condition, then such Holders will have the right, within 15
days following such notice from the Issuer, to elect to terminate such Demand
Request, in which case the Holders shall be deemed not to have exercised a
Demand Request pursuant to Section 2.2 hereof.
SECTION 2.5 Expenses. Except as provided herein, the Issuer shall pay
all Registration Expenses with respect to each registration hereunder, whether
or not any registration statement becomes effective. Notwithstanding the
foregoing, (i) each Holder and the Issuer shall be responsible for its own
internal administrative and similar costs, which shall not constitute
Registration Expenses, (ii) each Holder shall be responsible for the legal fees
and expenses of its own counsel (except as provided in the definition of
Registration Expenses) and (iii) each Holder shall be responsible for all
underwriting discounts and commissions, selling or placement agent or broker
fees and commissions, and transfer taxes, if any, in connection with the sale
of securities by such Holder.
SECTION 2.6 Registration and Qualification. If and whenever the Issuer
is required to effect the registration of any Registrable Securities under the
Securities Act as provided in this Agreement, the Issuer shall as promptly as
practicable:
(a) prepare, file and cause to become effective a registration
statement under the Securities Act relating to the Registrable Securities to
bet offered in accordance with the intended method of disposition thereof;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective and to comply with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities (i) in the case of the
Required Shelf Registration, until the Shelf Termination Date, (ii) in the case
of a Demand Registration or Piggyback Registration, for a period of not less
than 180 days (or such shorter period as is necessary for underwriters in an
underwritten offering to sell unsold allotments), provided, that such 180-day
period shall be extended for such number of days that equals the number of days
elapsing from (x) the date the written notice contemplated by paragraph (e)
below is given by the Issuer to (y) the date on which the Issuer delivers to
the Holders of Registrable Securities the supplement or amendment contemplated
by paragraph (e) below;
8
<PAGE> 9
(c) furnish to the Holders of Registrable Securities and to any
underwriter of such Registrable Securities (i) such number of conformed copies
of such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), (ii) such number of copies of
the prospectus included in such registration statement (including each
preliminary prospectus), in conformity with the requirements of the Securities
Act, and (iii) such documents incorporated by reference in such registration
statement or prospectus, as the Holders of Registrable Securities or such
underwriter may reasonably request in order to facilitate the disposition of
the Registrable Shares owned by such Holder or the sale of such securities by
such underwriter (it being understood that, subject to Section 2.4 of this
Agreement and the requirements of the Securities Act and applicable state
securities laws, the Issuer consents to the use of the prospectus and any
amendment or supplement thereto by each Holder of Registrable Securities and
any underwriter of such Registrable Securities in connection with the offering
and sale of the Registrable Shares covered by the registration statement of
which such prospectus, amendment or supplement is a part);
(d) in the case of any underwritten offering, furnish to each
Selling Holder and any underwriter of Registrable Securities an opinion of
counsel for the Issuer and a "cold comfort" letter signed by the independent
public accountants who have audited the financial statements of the Issuer
included in the applicable registration statement, in each such case covering
substantially such matters with respect to such registration statement (and the
prospectus included therein) and the related offering as are customarily
covered in opinions of issuer's counsel with respect thereto and in
accountants' letters delivered to underwriters in underwritten public offerings
of securities and such other matters as any such Selling Holder or underwriter
may reasonably request;
(e) promptly notify each Selling Holder and each underwriter of
Registrable Securities in writing (i) at any time when a prospectus relating to
a registration pursuant to this Agreement is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and (ii)
of any request by the Commission or any other regulatory body having
jurisdiction for any additional information or amendment or supplement to any
registration statement or other document relating to such offering, and in
either such case, at the request of any Selling Holder or underwriter, promptly
prepare and furnish to each Selling Holder and underwriter a reasonable number
of copies of a supplement to or an amendment of such prospectus as may be
necessary so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading;
(f) cause all such Registrable Securities covered by such
registration to be listed on each securities exchange and included for
quotation on each automated interdealer quotation system on which the Common
Stock is then listed or included for quotation;
(g) provide a CUSIP number for the Registrable Shares included
in any registration statement not later than the effective date of such
registration statement;
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<PAGE> 10
(h) cooperate with each Selling Holder and each underwriter
participating in the disposition of Registrable Securities and their respective
counsel in connection with any filings required to be made with the NASD;
(i) during the period when a prospectus is required to be
delivered under the Securities Act, promptly file all documents required to be
filed with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act;
(j) prepare and file with the Commission promptly any
amendments or supplements to such registration statement or prospectus which,
in the opinion of counsel for the Issuer or the managing underwriter, are
required in connection with the distribution of the Registrable Securities;
(k) advise each Selling Holder, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by the
Commission suspending the effectiveness of any registration statement or the
initiation or threatening of any proceeding for such purpose and promptly use
its commercially reasonable efforts to prevent the issuance of any stop order
or to obtain its withdrawal at the earliest possible moment if such stop order
should be issued;
(l) use reasonable efforts to assist the Holders in the
marketing of Common Stock in connection with underwritten offerings hereunder
(including using reasonable efforts to have officers of the Issuer attend "road
shows" and analyst or investor presentations scheduled in connection with such
registration); and
(m) furnish for delivery in connection with the closing of any
offering of Registrable Securities pursuant to a registration effected pursuant
to this Agreement unlegended certificates representing ownership of the
Registrable Securities being sold in such denominations as shall be requested
by the Selling Holders or the underwriters.
SECTION 2.7 Underwriting; Due Diligence.
(a) If requested by the underwriters for any underwritten
offering of Registrable Securities pursuant to a registration requested under
this Article 2, the Issuer shall enter into an underwriting agreement with such
underwriters for such offering, which agreement will contain such
representations and warranties by the Issuer and such other terms and
provisions as are customarily contained in underwriting agreements with respect
to secondary distributions.
(b) In connection with the preparation and filing of each
registration statement registering Registrable Securities under the Securities
Act pursuant to this Article 2, the Issuer shall give the Holders of such
Registrable Securities and the underwriters, if any, and their respective
counsel and accountants, such reasonable and customary access to its books,
records and properties and such opportunities to discuss the business and
affairs of the Issuer with its officers and the independent public accounts who
have certified the financial statements of the Issuer as shall be necessary, in
the opinion of such Holders and such underwriters or their respective counsel,
to conduct a reasonable investigation within the meaning of the Securities Act;
provided that (i) each Holder and the underwriters and their respective counsel
and accountants shall have entered into a confidentiality agreement reasonably
acceptable to the
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<PAGE> 11
Issuer and (ii) the Holders of such Registrable Securities and the underwriters
and their respective counsel and accountants shall use their reasonable best
efforts to minimize the disruption to the Issuer's business and coordinate any
such investigation of the books, records and properties of the Issuer and any
such discussions with the Issuer's officers and accountants so that all such
investigations occur at the same time and all such discussions occur at the
same time.
SECTION 2.8 Indemnification.
(a) The Issuer agrees to indemnify and reimburse, to the
fullest extent permitted by law, each Selling Holder, and each of its
employees, advisors, agents, representatives, partners, officers, and directors
and each Person who controls such seller of Registrable Securities (within the
meaning of the Securities Act or the Exchange Act) and any agent or investment
advisor thereof (collectively, the "Seller Affiliates") against any and all
losses, claims, damages, liabilities, and expenses, joint or several
(including, without limitation, reasonable attorneys' fees and disbursements
except as limited by Section 2.8(c) below) based upon, arising out of, related
to or resulting from any untrue or alleged untrue statement of a material fact
contained in any registration statement, prospectus, or preliminary prospectus
or any amendment thereof or supplement thereto, or any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as the same are made in
reliance upon and in strict conformity with information furnished in writing to
the Issuer by such Selling Holder or any Seller Affiliate for use therein or
arise from such Selling Holder's or any Seller Affiliate's failure to deliver a
copy of the registration statement or prospectus or any amendments or
supplements thereto after the Issuer has furnished such Selling Holder or
Seller Affiliate with a sufficient number of copies of the same. The
reimbursements required by this Section 2.8(a) will be made by periodic
payments during the course of the investigation or defense, as and when bills
are received or expenses incurred.
(b) In connection with any registration statement in which a
Selling Holder is participating, each such Selling Holder will furnish to the
Issuer in writing such information and affidavits as the Issuer reasonably
requests for use in connection with any such registration statement or
prospectus and, to the fullest extent permitted by law, each such Selling
Holder will indemnify the Issuer and its directors and officers and each Person
who controls the Issuer (within the meaning of the Securities Act or the
Exchange Act) against any and all losses, claims, damages, liabilities, and
expenses (including, without limitation, reasonable attorneys' fees and
disbursements except as limited by Section 2.8(c) below) resulting from: (i)
any untrue statement or alleged untrue statement of a material fact contained
in the registration statement, prospectus, or any preliminary prospectus or any
amendment thereof or supplement thereto, or any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission is
contained in any information or affidavit so furnished in writing by such
Selling Holder or any of its Seller Affiliates specifically for inclusion in
the registration statement; or (ii) such Selling Holder's or any Seller
Affiliate's failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto after the Issuer has
furnished such Selling Holder or Seller Affiliate with a sufficient number of
copies of the same; provided, that the obligation to indemnify will be
11
<PAGE> 12
several, not joint and several, among such Selling Holders, and the liability
of each such Selling Holder will be in proportion to, and provided further that
such liability will be limited to, the net amount received by such Selling
Holder from the sale of Registrable Securities pursuant to such registration
statement; provided, however, that such Selling Holder shall not be liable in
any such case to the extent that, prior to the filing of any such registration
statement or prospectus or amendment thereof or supplement thereto, such
Selling Holder has furnished in writing to the Issuer information expressly for
use in such registration statement or prospectus or any amendment thereof or
supplement thereto which corrected or made not misleading information
previously furnished to the Issuer.
(c) Any Person entitled to indemnification hereunder will give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give such notice
shall not limit the rights of such Person except to the extent such failure
prejudiced the indemnifying party) and permit such indemnifying party to assume
the defense of such claim; provided, however, that any Person entitled to
indemnification hereunder shall have the right to employ separate counsel and
to participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such Person unless (i) the indemnifying
party has agreed to pay such fees or expenses, (ii) the indemnifying party
shall have failed to assume the defense of such claim or (iii) in the
reasonable opinion of counsel to such indemnified party, a conflict of interest
between such indemnified and indemnifying parties may exist with respect to
such claim. If such defense is not assumed by the indemnifying party as
permitted hereunder, the indemnifying party will not be subject to any
liability for any settlement made by the indemnified party without its consent
(but such consent will not be unreasonably withheld or delayed). If such
defense is assumed by the indemnifying party pursuant to the provisions hereof,
such indemnifying party shall not settle or otherwise compromise the applicable
claim unless (A) such settlement or compromise contains a full and
unconditional release of the indemnified party or (B) the indemnified party
otherwise consents in writing. An indemnifying party who is not entitled to, or
elects not to, assume the defense of a claim will not be obligated to pay the
fees and expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable
judgment of any indemnified party, a conflict of interest may exist between
such indemnified party and any other of such indemnified parties with respect
to such claim, in which event the indemnifying party shall be obligated to pay
the reasonable fees and disbursements of such additional counsel or counsels.
(d) Each party hereto agrees that, if for any reason the
indemnification provisions contemplated by Section 2.8(a) or Section 2.8(b) are
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, claims, damages, liabilities, or expenses (or actions in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such
losses, claims, liabilities, or expenses (or actions in respect thereof) in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified party in connection with the actions
which resulted in the losses, claims, damages, liabilities or expenses as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by such indemnifying party or indemnified party, and
the parties'
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<PAGE> 13
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The parties hereto agree that it would not
be just and equitable if contribution pursuant to this Section 2.8(d) were
determined by pro rata allocation (even if the Holders or any underwriters or
all of them were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in this Section 2.8(d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities, or
expenses (or actions in respect thereof) referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such
indemnified party in connection with investigating or, except as provided in
Section 2.8(c) above, defending any such action or claim. Notwithstanding the
provisions of this Section 2.8(d), no Holder shall be required to contribute an
amount greater than the dollar amount by which the net proceeds received by
such Holder with respect to the sale of any Registrable Securities exceeds the
amount of damages which such Holder has otherwise been required to pay by
reason of such statement or omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. The Holders' obligations in this Section 2.8(d)
to contribute shall be several in proportion to the amount of Registrable
Securities registered by them and not joint.
If indemnification is available under this Section 2.8, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in Section 2.8(a) and Section 2.8(b) without regard to the relative
fault of said indemnifying party or indemnified party or any other equitable
consideration provided for in this Section 2.8(d) subject, in the case of the
Holders, to the limited dollar amounts set forth in Section 2.8(b).
The indemnification and contribution provided for under this Agreement
shall be in addition to any liability which any party may otherwise have to any
other party and shall remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or any officer,
director, or controlling Person of such indemnified party and will survive the
transfer of the Common Stock and the termination of this Agreement.
SECTION 2.9 Issuer's Existing Shelf Registration. The Issuer shall use
its reasonable best efforts to cause the Issuer's Shelf Registration Statement
which was filed by the Issuer prior to the date hereof (the "Existing Shelf
Registration Statement") to be amended to contain a provision for the inclusion
in such Shelf Registration Statement of shares for sale for the account of
stockholders of the Issuer. In the event that the Issuer, after the expiration
of the twelve month period immediately following the date hereof, proposes to
effect any offering under the Existing Shelf Registration Statement (other than
to effect the acquisition of or combination with another business entity), it
shall permit each Holder to include its Registrable Securities on substantially
the same terms and subject to substantially the same conditions and limitations
(including, but not limited to, indemnification provisions) as would be the
case in connection with a registration that is the subject of Section 2.3
hereof. The Issuer will promptly file any prospectus supplements as are
necessary to reflect the inclusion in any such registration of any Registrable
Securities included in such registration by any Holder pursuant to this Section
2.9.
13
<PAGE> 14
ARTICLE 3
MISCELLANEOUS
SECTION 3.1 Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof.
SECTION 3.2 Successors and Assigns. Whether or not an express
assignment has been made pursuant to the provisions of this Agreement,
provisions of this Agreement that are for the Holders' benefit as the holders
of any Common Stock are, except as otherwise expressly provided herein, also
for the benefit of, and enforceable by, all subsequent holders of such Common
Stock, except as otherwise expressly provided herein. This Agreement shall be
binding upon the Issuer, each Holder, and, except as otherwise expressly
provided herein, their respective heirs, devisees, successors and assigns.
SECTION 3.3 Duplicate Originals. All parties may sign any number of
copies of this Agreement. Each signed copy shall be an original, but all of
them together shall represent the same agreement.
SECTION 3.4 Amendments, Waivers, Etc. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified or terminated,
except upon the execution and delivery of a written agreement executed by the
Issuer and Holders representing a majority of the Registrable Securities then
held by all Holders.
SECTION 3.5 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if given) by hand delivery or telecopy, or by
any courier service, such as Federal Express, providing proof of delivery. All
communications hereunder shall be delivered to the respective parties at the
address or telecopy number set forth on the signature pages hereto (unless such
contact information in the case of the Holders is updated by written notice
from the affected Holder to the Issuer).
SECTION 3.6 Severability. Whenever possible, each provision or portion
of any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision or portion of
any provision of this Agreement is held to be invalid, illegal or unenforceable
in any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
SECTION 3.7 No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a
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<PAGE> 15
waiver by such party of its right to exercise any such or other right, power or
remedy or to demand such compliance.
SECTION 3.8 No Third Party Beneficiaries. Except as expressly provided
in Section 2.8; this Agreement is not intended to be for the benefit of, and
shall not be enforceable by, any Person who or which is not a party hereto;
provided, that, this Agreement is also intended to be for the benefit of and is
enforceable by each Holder.
SECTION 3.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD
TO PRINCIPLES OF CONFLICT OF LAWS.
SECTION 3.10 Descriptive Headings. The descriptive headings used
herein are inserted for convenience of reference only and are not intended to
be part of or to affect the meaning or interpretation of this Agreement.
SECTION 3.11 Counterparts. This Agreement may be executed in
counterpart, each of which shall be deemed to be an original, but all of which,
taken together, shall constitute one and the same Agreement.
[THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 16
IN WITNESS WHEREOF, the Issuer and the Holders have caused this
Agreement to be duly executed as of the day and year first above written.
LAMAR ADVERTISING COMPANY
By: /s/ Keith Istre
-----------------------------------
Name: Keith Istre
Title: Chief Financial Officer
Address:
Lamar Advertising Company
5551 Corporate Boulevard
Baton Rouge, Louisiana 70808
Attention: Keith Istre
Fax: (225) 923-0658
<PAGE> 17
HOLDERS:
CHANCELLOR MEDIA CORPORATION OF
LOS ANGELES
By: /s/ W. Schuyler Hansen
------------------------------------
Name: W. Schuyler Hansen
Title: Sr. Vice President and Chief Accounting
Officer
Address:
1845 Woodall Rodgers Freeway
Suite 1300
Dallas, Texas 75201
Attention: General Counsel
Fax: (512) 340-7890
CHANCELLOR MEZZANINE HOLDINGS
CORPORATION
By: /s/ W. Schuyler Hansen
------------------------------------
Name: W. Schuyler Hansen
Title: Sr. Vice President and Chief Accounting
Officer
Address:
1845 Woodall Rodgers Freeway
Suite 1300
Dallas, Texas 75201
Attention: General Counsel
Fax: (512) 340-7890
<PAGE> 1
Exhibit 10.4
ASSUMPTION AGREEMENT
This Assumption Agreement dated as of July 20, 1999 is by and among
Lamar Advertising Company, a Delaware corporation ("LAC"), Lamar Media Corp., a
Delaware corporation ("LMC"), and the direct and indirect subsidiaries of such
corporations (collectively and together with all such subsidiaries as may be
formed hereafter, the "Subsidiaries") whose signature lines appear at the end
of this Agreement.
Introduction
LAC has been formed to own 100% of the outstanding equity of LMC,
which was formerly known as "Lamar Advertising Company". To facilitate the
accounting for certain overhead expenses, the parties hereto wish LAC to
assume, and be exclusively liable for, all "Assumed Obligations" as hereinafter
defined.
1. Assumption of Assumed Obligations. Effective as of the date hereof,
LAC hereby assumes the obligations to pay (i) all directors' fees and fees,
costs and expenses in respect of all professional and related services which
may be rendered to LMC and the Subsidiaries from time to time, including,
without limitation, the fees and expenses of accountants, lawyers, investment
bankers and other consultants retained in connection with matters affecting LMC
and the Subsidiaries collectively, (ii) all premiums, fees and expenses in
connection with all insurance policies and employee benefit programs (including
workmen's compensation) maintained on behalf of LMC and any Subsidiary, (iii)
all fees, costs and expenses incurred in connection with acquisitions and
financings, including, without limitation, banking and underwriting fees
(including underwriters discounts) and (iv) all fees, costs and expenses in
connection with the purchase by LAC and its Subsidiaries of data communications
services (all such obligations being hereinafter referred to collectively as
"Assumed Obligations"). Assumed Obligations shall include not only obligations
presently due and payable but all such obligations described in the preceding
sentence which may become due and payable at any time in the future.
2. Release of LMC and Subsidiaries. Effective as of the date hereof,
simultaneously with the assumption by LAC of obligations pursuant to Paragraph
1 hereof, (i) LMC and the Subsidiaries are hereby released from all obligations
with respect to the Assumed Obligations and (ii) the parties agree to cause all
trade creditors owed Assumed Obligations to invoice LAC exclusively for trade
payables with respect thereto, with the understanding that LAC will be the
exclusive obligor thereunder.
3. Accounting. Effective as of the date hereof, the parties hereto
shall institute accounting controls and procedures necessary to account for the
assumption and release provided for in this Agreement.
<PAGE> 2
4. Miscellaneous. This Agreement shall remain in full force and effect
until terminated by all of the parties hereto. The parties hereto agree to take
such further measures as any party shall deem appropriate to effectuate the
provisions of this Agreement. This Agreement shall be governed by the laws of
the State of Delaware.
LAMAR ADVERTISING COMPANY
/s/ Kevin P. Reilly, Jr.
------------------------------------------
By: Kevin P. Reilly Jr.
Title: President and Chief Executive Officer
LAMAR MEDIA CORP.
/s/ Kevin P. Reilly, Jr.
------------------------------------------
By: Kevin P. Reilly Jr.
Title: President and Chief Executive Officer
THE SUBSIDIARIES
INTERSTATE LOGOS, INC.
/s/ Kevin P. Reilly, Jr.
-----------------------------------------------
By: Kevin P. Reilly Jr.
Title: Vice President
THE LAMAR CORPORATION
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
LAMAR ADVERTISING OF MOBILE, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
LAMAR ADVERTISING OF COLORADO
SPRINGS, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
2
<PAGE> 3
LAMAR ADVERTISING OF SOUTH
MISSISSIPPI, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
LAMAR ADVERTISING OF JACKSON, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
LAMAR TEXAS GENERAL PARTNER, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
LAMAR ADVERTISING OF SOUTH
GEORGIA, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
TLC PROPERTIES, INC.
/s/ Kevin P. Reilly
----------------------------------------------
By: Kevin P. Reilly
Title:
TLC PROPERTIES II, INC.
/s/ Kevin P. Reilly
----------------------------------------------
By: Kevin P. Reilly
Title:
3
<PAGE> 4
LAMAR PENSACOLA TRANSIT, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
LAMAR ADVERTISING OF
YOUNGSTOWN, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
NEBRASKA LOGOS, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: Vice President
OKLAHOMA LOGO SIGNS, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: Vice President
MISSOURI LOGOS, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: Vice President
OHIO LOGOS, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: Vice President
4
<PAGE> 5
UTAH LOGOS, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: Vice President
TEXAS LOGOS, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: Vice President
MISSISSIPPI LOGOS, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: Vice President
GEORGIA LOGOS, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: Vice President
SOUTH CAROLINA LOGOS, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: Vice President
VIRGINIA LOGOS, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: Vice President
5
<PAGE> 6
MINNESOTA LOGOS, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: Vice President
MICHIGAN LOGOS, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: Vice President
NEW JERSEY LOGOS, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: Vice President
FLORIDA LOGOS, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: Vice President
KENTUCKY LOGOS, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: Vice President
NEVADA LOGOS, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: Vice President
6
<PAGE> 7
TENNESSEE LOGOS, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: Vice President
KANSAS LOGOS, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: Vice President
COLORADO LOGOS, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: Vice President
NEW MEXICO LOGOS, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: Vice President
LAMAR ADVERTISING OF
HUNTINGTON-BRIDGEPORT, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
LAMAR ADVERTISING OF PENN, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
7
<PAGE> 8
LAMAR ADVERTISING OF MISSOURI, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
LAMAR ADVERTISING OF MICHIGAN, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
LAMAR ELECTRICAL, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
LAMAR ADVERTISING OF SOUTH
DAKOTA, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
LAMAR ADVERTISING OF WEST
VIRGINIA, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
8
<PAGE> 9
LAMAR ADVERTISING OF ASHLAND, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
AMERICAN SIGNS, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
LAMAR OCI NORTH CORPORATION
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
LAMAR OCI SOUTH CORPORATION
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
LAMAR ADVERTISING OF
GREENVILLE, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
LAMAR ROBINSON, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
9
<PAGE> 10
LAMAR ADVERTISING OF KENTUCKY, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
LAMAR ADVERTISING OF ROLAND, INC.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
LAMAR TEXAS LIMITED PARTNERSHIP
BY: Lamar Texas General Partner, Inc.
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
LAMAR TENNESSEE, L.L.C.
BY: The Lamar Corporation, its Manager
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
AIR, L.L.C.
BY: The Lamar Corporation, its Manager
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
10
<PAGE> 11
TLC PROPERTIES, L.L.C.
BY: TLC Properties, Inc., its Manager
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title:
CANADIAN TODS, LIMITED
/s/ Kevin P. Reilly, Jr.
----------------------------------------------
By: Kevin P. Reilly, Jr.
Title: President and Chief Executive Officer
11
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<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 10,778
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<RECEIVABLES> 92,904
<ALLOWANCES> 8,610
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<CURRENT-ASSETS> 135,738
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<BONDS> 1,593,690
0
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<COMMON> 88
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<TOTAL-LIABILITY-AND-EQUITY> 3,230,543
<SALES> 294,102
<TOTAL-REVENUES> 294,614
<CGS> 0
<TOTAL-COSTS> 93,481
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<LOSS-PROVISION> 2,114
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<INCOME-CONTINUING> (18,219)
<DISCONTINUED> 0
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<PAGE> 1
EXHIBIT 99.1
FACTORS AFFECTING FUTURE OPERATING RESULTS
OUR DEBT AGREEMENTS AND THOSE OF LAMAR MEDIA
CONTAIN COVENANTS AND RESTRICTIONS THAT CREATE THE
POTENTIAL FOR DEFAULTS
The terms of the indenture relating to Lamar Advertising's outstanding
notes, Lamar Media's bank credit facility and the indentures relating to Lamar
Media's outstanding notes restrict, among other things, the ability of Lamar
Advertising and Lamar Media to:
o dispose of assets;
o incur or repay debt;
o create liens; and
o make investments.
Lamar Media's ability to make distributions to Lamar Advertising is
also restricted under the terms of these agreements.
Under Lamar Media's bank credit facility we must maintain specified
financial ratios and levels including:
o interest coverage;
o fixed charges ratio;
o senior debt ratios; and
o total debt ratios.
If we fail to comply with these tests, the lenders have the right to cause
all amounts outstanding under the bank credit facility to become immediately
due. If this were to occur and the lenders decide to exercise their right to
accelerate the indebtedness, it would create serious financial problems for us.
Our ability to comply with these restrictions, and any similar restrictions in
future agreements, depends on our operating performance. Because our performance
is subject to prevailing economic, financial and business conditions and other
factors that are beyond our control, we may be unable to comply with these
restrictions in the future.
BECAUSE WE HAVE SIGNIFICANT FIXED PAYMENTS ON OUR
DEBT, WE MAY LACK SUFFICIENT CASH FLOW TO OPERATE
OUR BUSINESS AS WE HAVE IN THE PAST AND MAY NEED
TO BORROW MONEY IN THE FUTURE TO MAKE THESE
PAYMENTS AND OPERATE OUR BUSINESS
We have borrowed substantial amounts of money in the past and may borrow
more money in the future. At September 30, 1999, Lamar Advertising Company had
approximately $288 million of convertible notes outstanding. At September 30,
1999, Lamar Media had approximately $1,310 million of debt outstanding to third
parties consisting of approximately $757 million in bank debt, $529 million in
various series of senior subordinated notes of Lamar Media and $24 million in
various other short-term and long-term debt of Lamar Media. The debt of Lamar
Advertising and Lamar Media totaling $1,598 million represents approximately 53%
of the Company's total capitalization. In addition, Lamar Media had $287.5
million in long-term notes payable to Lamar Advertising Company at September 30,
1999.
A large part of our cash flow from operations must be used to make
principal and interest payments on our debt. If our operations make less money
in the future, we may need to borrow to make these payments. In addition, we
finance most of our acquisitions through borrowings under Lamar Media's bank
credit facility which presently has a total committed amount of $1 billion in
term and revolving credit loans. At September 30, 1999, we had approximately
$243 million available to borrow under this bank credit facility. Since our
borrowing capacity under Lamar Media's bank credit facility is limited, we may
not be able to continue to finance future acquisitions at our historical rate
with borrowings under this bank credit facility. We may need to borrow
additional amounts or seek other sources of financing to fund future
acquisitions. We cannot guarantee that such additional financing will be
available or available on favorable terms. We also may need the consent of the
banks under Lamar Media's bank credit facility, or the holders of other
indebtedness, to borrow additional money.
OUR BUSINESS COULD BE HURT BY CHANGES
IN ECONOMIC AND ADVERTISING TRENDS
We sell advertising space to generate revenues. A decrease in demand for
advertising space could
<PAGE> 2
adversely affect our business. General economic conditions and trends in the
advertising industry affect the amount of advertising space purchased. A
reduction in money spent on our displays could result from:
o a general decline in economic conditions;
o a decline in economic conditions in particular markets where we conduct
business;
o a reallocation of advertising expenditures to other available media by
significant users of our displays; or
o a decline in the amount spent on advertising in general.
OUR OPERATIONS ARE IMPACTED BY THE
REGULATION OF OUTDOOR ADVERTISING
Our operations are significantly impacted by federal, state and local
government regulation of the outdoor advertising business.
The federal government conditions federal highway assistance on states
imposing location restrictions on the placement of billboards on primary and
interstate highways. Federal laws also impose size, spacing and other
limitations on billboards. Some states have adopted standards more restrictive
than the federal requirements. Local governments generally control billboards as
part of their zoning regulations. Some local governments have enacted ordinances
which require removal of billboards by a future date. Others prohibit the
construction of new billboards and the reconstruction of significantly damaged
billboards, or allow new construction only to replace existing structures.
Local laws which mandate removal of billboards at a future date often do
not provide for payment to the owner for the loss of structures that are
required to be removed. Certain federal and state laws require payment of
compensation in such circumstances. Local laws that require the removal of a
billboard without compensation have been challenged in state and federal courts
with conflicting results. Accordingly, we may not be successful in negotiating
acceptable arrangements when our displays have been subject to removal under
these types of local laws.
Additional regulations may be imposed on outdoor advertising in the future.
Legislation regulating the content of billboard advertisements has been
introduced in Congress from time to time in the past. Additional regulations or
changes in the current laws regulating and affecting outdoor advertising at the
federal, state or local level may have a material adverse effect on our results
of operations.
OUR CONTINUED GROWTH THROUGH ACQUISITIONS
MAY BECOME MORE DIFFICULT AND INVOLVES
COSTS AND UNCERTAINTIES
We have substantially increased our inventory of advertising displays
through acquisitions. Our operating strategy involves making purchases in
markets where we currently compete as well as in new markets. However, the
following factors may affect our ability to continue to pursue this strategy
effectively.
o The outdoor advertising market has been consolidating, and this may
adversely affect our ability to find suitable candidates for purchase.
o We are also likely to face increased competition from other outdoor
advertising companies for the companies or assets we wish to purchase.
Increased competition may lead to higher prices for outdoor advertising
companies and assets and decrease those we are able to purchase.
o We do not know if we will have sufficient capital resources to make
purchases, obtain any required consents from our lenders, or find
acquisition opportunities with acceptable terms.
o From January 1, 1997 to September 30, 1999, we completed 142 transactions
involving the purchase of complementary outdoor advertising assets,
including the acquisition on September 15, 1999 of Chancellor Media Outdoor
Corporation for a purchase price consisting of $700 million in cash and a
fixed amount of 26,227,273 shares of our Class A common stock and the
acquisition on October 1, 1998 of Outdoor Communications, Inc. for $385
million. We must integrate these and other acquired assets and businesses
into our existing operations. This process of integration may result in
unforeseen difficulties and could require significant time and attention
from our management that would otherwise be directed at developing our
existing business. Further, we cannot be certain that the benefits and cost
savings that we anticipate from these purchases will develop.
<PAGE> 3
DUE TO THE CHANCELLOR OUTDOOR ACQUISITION, WE
HAVE SIGNIFICANTLY EXPANDED OUR OPERATIONS IN
MAJOR MARKETS WHERE WE CANNOT BE SURE OUR
BUSINESS STRATEGY WILL CONTINUE TO BE SUCCESSFUL
Our acquisition of Chancellor Outdoor has significantly expanded our
operations in major markets. Because we have historically focused on middle
markets and have not had substantial operations in major markets to date, we
cannot guarantee that we will be able to replicate the success that we have
achieved with our business strategy in middle markets. Achieving our goals in
major markets will depend to a great extent on our ability to attract and retain
national advertising customers. Our success to date has been built in large
measure on our ability to attract and retain local advertising customers.
Approximately 81% of our net advertising revenues for 1998 derived from local
advertising. We cannot be sure that the strategies that have worked well with
local advertising customers will work with national advertisers.
In addition, expanding our operations in major markets will put us in
increased competition with larger competitors with more diversified media
operations who may have a more established market presence and greater financial
resources then we do. We may also face more intense competition from other forms
of outdoor advertising and other media in major markets than we do in middle
markets.
THE BAN ON TOBACCO ADVERTISING HAS ELIMINATED A
TRADITIONALLY SIGNIFICANT SOURCE OF OUR REVENUES
AND WE MAY NOT BE ABLE TO CONTINUE TO REPLACE
THESE LOST REVENUES THROUGH OTHER SOURCES
We have removed all of our outdoor advertising of tobacco products in
connection with settlements the states reached with the U.S. tobacco companies.
Our tobacco revenues as a percentage of consolidated net revenues were 7% for
the twelve months ended December 31, 1998 and 3% for the nine months ended
September 30, 1999.
The ban on outdoor advertising of tobacco products in the settlement
increased our available inventory. To date, we have been successful in replacing
the tobacco advertising removed with substitute advertising at comparable rates.
We cannot be sure, however, that we will continue to be able to do so in the
future. If we are unable to continue to replace tobacco advertising, the
resulting increase in available inventory could cause us to reduce our rates or
limit our ability to raise rates. In addition, we cannot guarantee that
substitute advertisers will pay rates as favorable to us as those paid by
tobacco advertisers.
WE FACE COMPETITION FROM LARGER AND MORE
DIVERSIFIED OUTDOOR ADVERTISERS AND OTHER FORMS OF
ADVERTISING THAT COULD HURT OUR PERFORMANCE
We cannot be sure that in the future we will compete successfully against
the current and future sources of outdoor advertising competition and
competition from other media. The competitive pressure that we face could
adversely affect our profitability or financial performance. Even though, as a
result of the Chancellor Outdoor acquisition, we are the largest company
focusing exclusively on outdoor advertising, we face competition from larger
companies with more diversified operations which also include radio and other
broadcast media. We also face competition from other forms of media, including
television, radio, newspapers and direct mail advertising. We must also compete
with an increasing variety of other out-of-home advertising media that include
advertising displays in shopping centers, malls, airports, stadiums, movie
theaters and supermarkets, and on taxis, trains and buses.
In our logo sign business, we currently face competition for state-awarded
service contracts from two other logo sign providers as well as local companies.
Initially, we compete for state-awarded service contracts as they are
privatized. Because these contracts expire after a limited time, we must compete
to keep our existing contracts each time they are up for renewal.
IF OUR CONTINGENCY PLANS RELATING TO HURRICANES
FAIL, THE RESULTING LOSSES COULD HURT OUR BUSINESS
Although we have developed contingency plans designed to deal with the
threat posed to our advertising structures by hurricanes, we cannot guarantee
that these plans will work. If these plans fail, significant losses could
result.
A significant portion of our structures is located in the Mid-Atlantic and
Gulf Coast regions of the United States. These areas are highly susceptible to
hurricanes during the late summer and early fall. In the past, we have incurred
significant losses due to severe storms. These losses resulted from structural
damage, overtime compensation, loss of billboards that could not be replaced
under applicable laws and reduced occupancy because billboards were out of
service.
<PAGE> 4
We have determined that it is not economical to obtain insurance against
losses from hurricanes and other storms. Instead, we have developed contingency
plans to deal with the threat of hurricanes. For example, we attempt to remove
the advertising faces on billboards at the onset of a storm, when possible,
which permits the structures to better withstand high winds during a storm. We
then replace these advertising faces after the storm has passed. However, these
plans may not be effective in the future and, if they are not, significant
losses may result.
OUR LOGO SIGN CONTRACTS ARE SUBJECT TO
STATE AWARD AND RENEWAL
A growing portion of our revenues and operating income come from our
state-awarded service contracts for logo signs. We cannot predict what remaining
states, if any, will start logo sign programs or convert state-run logo sign
programs to privately operated programs. We compete with many other parties for
new state-awarded service contracts for logo signs. Even when we are awarded a
contract, the award may be challenged under state contract bidding requirements.
If an award is challenged, we may incur delays and litigation costs.
Generally, state-awarded logo sign contracts have a term, including renewal
options, of ten to twenty years. States may terminate a contract early, but in
most cases must pay compensation to the logo sign provider for early
termination. Typically, at the end of the term of the contract, ownership of the
structures is transferred to the state without compensation to the logo sign
provider. Of our current logo sign contracts, three are subject to renewal in
May, June and October 2000. We cannot guarantee that we will be able to obtain
new logo sign contracts or renew our existing contracts. In addition, after we
receive a new state-awarded logo contract, we generally incur significant
start-up costs. We cannot guarantee that we will continue to have access to the
capital necessary to finance those costs.
OUR OPERATIONS COULD BE AFFECTED
BY THE LOSS OF KEY EXECUTIVES
Our success depends to a significant extent upon the continued services of
our executive officers and other key management and sales personnel. Kevin P.
Reilly, Jr., our Chief Executive Officer, our regional managers and the manager
of our logo sign business, in particular, are essential to our continued
success. Although we have designed our incentive and compensation programs to
retain key employees, we have no employment contracts with any of our employees
and none of our executive officers have signed non-compete agreements. We do not
maintain key man insurance on our executives. If any of our executive officers
or other key management and sales personnel stopped working with us in the
future, it could have an adverse effect on our business.
WE COULD EXPERIENCE SYSTEM FAILURES AND
DISRUPTIONS OF OUR OPERATIONS AS A RESULT OF
THE YEAR 2000 DATE RECOGNITION PROBLEM
The year 2000 date recognition problem could cause our computer systems to
fail, resulting in miscalculations and incorrect data. Computer systems which
may be affected by this year 2000 problem include computer systems embedded in
production equipment; displays containing computer systems; business data
processing systems; production, management and planning systems; and personal
computers. The Company has conducted an assessment of its software and related
systems and believes they are year 2000 compliant. The Company's year 2000
effort also included communication with significant third party vendors and
customers to determine the extent to which the Company's systems are vulnerable
to those parties' failure to reach year 2000 compliance. The Company cannot
assure you that our customers, suppliers and other third parties that we deal
with are or will be year 2000 compliant in a timely manner or that the Company's
systems will be unaffected. Interruptions in the services provided to us or in
the purchases made by these third parties could also disrupt our operations.
Parties affected by a disruption in our operations and services could make
claims or bring lawsuits against us. Depending upon the extent and duration of
any disruptions caused by the year 2000 problem and the specific services
affected, these disruptions could have an adverse affect on our business.
