SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] Annual Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [Fee Required]
For the fiscal year ended December 31, 1993 or
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [No Fee Required]
For the transition period from to
Commission file number 1-8309.
PRICE COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
NEW YORK 13-2991700
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
45 Rockefeller Plaza, New York, New York l0020
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 757-5600
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, par value $.01 per share American Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None.
Indicate by check mark whether the registrant has filed
all documents and reports required to be filed by Sections 12, 13
or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under its Plan of Reorganization as
confirmed by the court.
Yes X No
Indicate by check mark whether the registrant (l) has
filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of l934 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 the filing
requirements for the past 90 days. YES X NO .
Page l of Pages
The Exhibit Index Appears on Page
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K ( 229.405 of this chapter)
is not contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K
or any amendment to the Form 10-K. [ ]
AGGREGATE MARKET VALUE OF THE VOTING STOCK
HELD BY NONAFFILIATES OF THE COMPANY
Aggregate market value of the Common Stock held by non-
affiliates of the Company, based on the last sale price on the
American Stock Exchange ("AMEX") on February 28, 1994 ($4.50 as
reported in the Wall Street Journal): approximately $43.5 million.
(For this purpose, all outstanding shares of Common Stock have been
considered held by non-affiliates, other than the shares
beneficially owned by directors, executive officers and principal
shareholders of the Company; certain of such persons disclaim that
they are affiliates of the Company.)
Indicate the number of shares outstanding of each of the
Company's classes of common stock as of the latest practicable
date:
9,892,290 shares of Common Stock, par value $.01 per share,
were outstanding as of February 28, 1994.
DOCUMENTS INCORPORATED BY REFERENCE: None.
<PAGE>
PART I
Item l. Business.
General
References to the "Company" or "Price" in this Report include
Price Communications Corporation and its subsidiaries, unless the
context otherwise indicates.
The Company is a nationwide diversified communications company
whose current primary businesses are owning and operating
television and radio stations through wholly-owned indirect
subsidiaries. The Company's television properties currently
consist of three NBC affiliated television stations, KSNF-TV,
serving Joplin, Missouri/Pittsburg, Kansas; KJAC-TV, serving
Beaumont/Port Arthur, Texas; and KFDX-TV, serving Wichita Falls,
Texas/Lawton, Oklahoma. The Company currently owns three AM and
three FM radio stations serving the Fort Wayne, Indiana; Buffalo,
New York; and West Palm Beach, Florida markets. See "Recent
Developments" regarding the Company's agreement to purchase WHTM-
TV, serving the Harrisburg-York-Lancaster-Lebanon, Pennsylvania
market, for approximately $41 million and its agreements to sell
the Buffalo and Fort Wayne radio stations.
The Company's business strategy is to acquire communications
properties at prices it considers attractive, finance such
properties on terms satisfactory to it, manage such properties in
accordance with its operating strategy and dispose of them if and
when the Company determines such disposition to be in its best
interest, although such acquisition and (except as disclosed
herein) divestiture activity ceased during the pendency of the
Company's reorganization and the negotiations preceding such
reorganization. See "Recent Developments" regarding sales and
acquisitions of properties since the Company's reorganization
became effective. For the foregoing reasons, the results of the
Company's historical operations are not comparable to or indicative
of results in the future. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
The Company was organized in New York in l979 and began active
operations in l98l. Its principal executive offices are located at
45 Rockefeller Plaza, New York, New York l0020, and its telephone
number is (2l2) 757-5600.
Recent Developments
On December 30, 1992, the Company's consensual Plan of
Reorganization (the "Plan"), which had been approved by the United
States Bankruptcy Court for the Southern District of New York in
July of that year became effective. Under the Plan, the following
occurred:
(a) Holders of approximately $31 million principal amount of
the Company's 10% Convertible Senior Subordinated
Debentures (the "10% Debentures") received new $31
million face amount of seven year 5% Senior Secured Notes
(the "Secured Notes"). This debt was retired during 1993
(see below).
(b) Apollo Investment Fund, L.P. and James Finkelstein
purchased 75% of the common stock of Alexandra Publishing
Corporation which owns the stock of The New York Law
Publishing Company in exchange for the cancellation of
approximately $19 million of principal amount of 10%
Debentures, the payment to the Company of approximately
$7.5 million in cash, and, in addition, the assumption or
repayment of certain liabilities of the Company totalling
approximately $45 million.
(c) The holders of the subordinated debt received 94.5% of
the common stock of Price.
(d) Shareholders received shares which constituted 3.5% of
the common stock of the restructured corporation, and
Robert Price, President of the Company, received 2%. In
addition, Robert Price entered into a three-year
employment contract.
The Company's goal for the period immediately following its
emergence from bankruptcy was to dispose of assets that did not
produce cash flow for the Company (such as investments in Northstar
Television Group, Inc. ("NTG"), Fairmont Communications Corporation
("Fairmont"),its cellular interests and the Company's remaining 25
percent interest in The New York Law Publishing Company) and to use
the proceeds from such sales to retire its remaining debt.
Pursuant to that goal, on October 1, 1993, the Company sold its 74
percent interest in PriCellular Corporation for $11 million. All
of the proceeds from that transaction, combined with approximately
$10 million of the Company's existing liquid assets, were used to
retire $23.2 million face amount of the Company's Secured Notes
during October of 1993. The Company recognized gains of
approximately $1.5 million on the retirement of this debt.
On November 24, 1993, the Company purchased from investment
advisory clients of W.R. Huff Asset Management Co., L.P. ("Huff")
a block of 2,249,086 shares of its Common Stock for a price of
$3.75 per share in cash, plus the stock of its indirect wholly-
owned subsidiary Price Publishing Corporation ("PPC"). The stock
had a book value of approximately $3.8 million. PPC owns 100
percent of the common stock of Alexandra Publishing Corporation
which in turn owns 25 percent of the common stock of The New York
Law Publishing Company. Concurrent with the purchase of the stock,
several nominees of Huff resigned from the Company's Board of
Directors. See Note 13 of Notes to Consolidated Financial
Statements for accounting treatment of this transaction.
In December 1993, the Company sold its common and preferred
stock positions in NTG for approximately $2.4 million in cash.
This investment had no book value and a gain of $2.4 million was
recognized on the sale. The proceeds of the sale were used to
retire a portion of the amount borrowed under the Line of Credit
described below, leaving a remaining balance of $3.2 million as of
December 31, 1993.
On December 21, 1993, certain subsidiaries of the Company
entered into a Line of Credit Agreement (the "Line of Credit") with
the Bank of Montreal. The Line of Credit is for $10 million,
reduced periodically beginning quarterly on March 31, 1994, bears
interest at a rate equal to the Bank of Montreal base rate, as
defined (or other rates at the borrowers' option) and is secured by
the assets of the subsidiaries. There is also a fee of 1/2 percent
per annum on the unused portion of the Line of Credit. On December
24, 1993, the Company borrowed $5.6 million pursuant to this
agreement and the proceeds were used to retire the remaining $7.6
million face amount of Secured Notes. The Company recognized an
additional gain of approximately $500,000 on this early
extinguishment of debt.
On December 27, 1993, the Company announced that it entered
into an agreement to sell substantially all the assets of its radio
stations, WWKB-AM and WKSE-FM in Buffalo, New York, for $5 million
in cash. This transaction has been approved by the Federal
Communications Commission ("FCC") and management expects it to
close during the first half of 1994. The Company expects to
realize a gain on this transaction.
On February 16, 1994, the Company entered into an agreement to
purchase WHTM-TV, Channel 27, serving the Harrisburg-York-
Lancaster-Lebanon, Pennsylvania market for approximately $41
million. The transaction is subject to FCC approval. The Company
expects to close on this purchase during the second half of 1994.
During February of 1994, the Company sold its outdoor
advertising business for a total of $875,000, including $200,000
cash and a note from the buyer for $675,000. A pre-tax loss of
approximately $340,000 will be recognized on the sale in 1994.
In March, 1994, the Company entered into an agreement to sell
radio stations WOWO-AM and WOWO-FM in Fort Wayne, Indiana, for $2.3
million in cash. The transaction is subject to FCC approval and
management estimates it will close during the second half of 1994.
The Company expects to realize a gain on this transaction.
Due to the developments described above, the Company's
historical results of operations should not be regarded as
indicative of its future results.
Segment Data
See Note 12 of Notes to Consolidated Financial Statements for
segment data concerning the Company's television, radio and other
operations. The Company's television, radio and other segments
contributed 52 percent, 45 percent and 3 percent, respectively, of
the Company's net revenue for the year ended December 31, 1993. As
discussed above, the Company sold 75 percent of its interest in The
New York Law Publishing Company at the end of 1992, and during
1993, accounted for its remaining 25 percent as an investment under
the equity method of accounting. For the years ended December 31,
1992 and 1991, the Company's television, radio and publishing and
other segments contributed 21 and 21 percent, 17 and 17 percent and
62 and 62 percent, respectively.
Acquisitions and Divestitures
Historically, the Company actively acquired and divested
broadcasting and other properties, although such acquisition and
divestiture activity ceased during the pendency of the Company's
reorganization and the negotiations preceding it (with the
exception of the dispositions which occurred pursuant to the
Company's Plan). With the completion of the Company's
reorganization, the Board of Directors of the Company has
determined to investigate and pursue acquisition possibilities.
See "Recent Developments."
In pursuing its acquisition and divestiture strategy, the
Company has no fixed formula for determining the purchase price of
properties it seeks. With respect to media properties, to date,
the Company generally concentrates its acquisition activities on
properties that have a history of generating Media Cash Flow
(operating profits before deductions for interest, depreciation,
amortization and income taxes) or properties that have potential
for growth. In seeking acquisitions of media properties, the
Company generally gives greater weight to a property's Media Cash
Flow than to its net income, because such Media Cash Flow is a
standard widely used in the industry to evaluate media properties.
The Company's strategy is to seek properties that can be purchased
at attractive multiples of "trailing" Media Cash Flow, the Media
Cash Flow for the twelve months immediately prior to such
acquisition, either in anticipation that such Media Cash Flow will
continue at historical levels, or in anticipation that the Company
will be able to improve it. However, the Company may consider
acquiring properties without such cash flow if it believes them to
have sufficient potential for growth or to otherwise be consistent
with the Company's objectives.
Prices of media properties are affected by a number of factors
in addition to a property's Media Cash Flow, including the
characteristics and anticipated growth of the market area, the
terms of purchase, programming, the competitive situation within
the market area, the possibility of improving Media Cash Flow, the
dial position and signal strength (in the case of radio stations),
operating history, network affiliation and assigned signal
frequency (in the case of television stations), and the value of
the fixed assets acquired in connection with the purchase.
To finance its acquisitions and to provide funds for other
purposes, the Company may consider using a variety of sources,
including the proceeds of debt sold to the public, borrowings from
banks and other institutional lenders, seller financing,
convertible preferred stock and common stock issued by the Company
or its subsidiaries, and cash on hand. Historically, the Company
often acquired properties through newly organized subsidiaries,
based on the credit of the properties being acquired or by
borrowing or issuing securities at the parent company level.
From time to time brokers and potential buyers approach the
Company with respect to the potential sale of certain of its media
properties. The Company has generally not listed its properties
with brokers, but management follows the practice of permitting
potential responsible buyers to visit its media properties and of
presenting bona fide offers from financially responsible parties to
the Company's Board of Directors for consideration. Proceeds of
asset sales will be used to retire outstanding debt, to repurchase
equity, to finance the Company's investments in new properties or
for other corporate purposes as determined by the Board of
Directors.
Broadcasting Properties
The Company's broadcasting properties include three NBC
affiliated television stations: KSNF-TV, serving Joplin,
Missouri/Pittsburg, Kansas; KJAC-TV, serving Beaumont/Port Arthur,
Texas; and KFDX-TV, serving Wichita Falls, Texas/Lawton, Oklahoma;
three AM and three FM radio stations, WOWO-AM and WOWO-FM serving
Fort Wayne, Indiana; WWKB-AM and WKSE-FM, serving Buffalo, New
York; and WBZT-AM and WIRK-FM, serving West Palm Beach, Florida,
and debt and equity interests in Fairmont, which interests
currently have no book value. For a description of the Company's
interests in Fairmont see "Interests in Fairmont" below. For a
discussion of the pending acquisition of WHTM-TV, serving
Harrisburg-York-Lancaster-Lebanon, Pennsylvania and dispositions of
the Buffalo and Fort Wayne radio stations see "Recent
Developments."
Interests in Fairmont
In connection with the sale in l987 of seven radio stations to
Fairmont for an aggregate sale price of $120 million, the Company
loaned $50 million to Fairmont (the "Fairmont Notes") and acquired
a 27% equity interest in Fairmont. The Fairmont Notes were issued
in three series of 12 1/2% increasing rate subordinated notes due
in 1992, extendible at Fairmont's option to 1994. Interest on the
notes was payable quarterly in cash or additional notes at
Fairmont's election.
On August 28, 1992, Fairmont filed for voluntary relief under
Chapter 11 of the U.S. Bankruptcy Code. At that date, the Company
ceased to record additional notes related to interest paid in kind
since it is not entitled to interest after that date under the
Bankruptcy Code.
The $94.8 million principal amount of Fairmont Notes owned by
the Company as of December 31, 1993 (which includes accrued
interest paid in additional Fairmont Notes) and the Company's
equity investment in Fairmont had no book value as of December 3l,
l993.
By order dated September 10, 1993, the United States
Bankruptcy Court for the Southern District of New York confirmed
the chapter 11 plan of reorganization (the "Fairmont Plan") for
Fairmont and the Fairmont Subsidiaries. Essentially, the Fairmont
Plan provides for the orderly liquidation of the assets of Fairmont
and the Fairmont Subsidiaries, and the distribution of the proceeds
derived therefrom according to the relative priorities of the
parties asserting interests therein. The Company believes that the
level of asset sales may be sufficiently high to provide for some
recovery upon the Fairmont Notes, although the exact amount of any
such recovery is unclear at this time.
Operating Strategy
At the outset, the Company develops specific plans for each
property acquired in an effort to improve its efficiency. The
Company attempts to increase the Media Cash Flow of its
broadcasting properties and to make each property a significant one
relative to its competitors. The Company's goal is to realize
annual increases in the net revenue of its properties that exceed
increases in operating expenses.
The Company has sought both to elevate its television and
radio stations' positions in their markets and to increase
advertising rates, although the position of stations in their
markets tends to fluctuate. Station revenue growth benefits from
the advertising revenue growth of the markets themselves, which the
Company believes can generally be measured by the growth in retail
sales in the areas involved.
Local demographic considerations and promotion play less of a
role in television station programming than in the case of radio
stations, because a significant portion of station programming is
provided by the television networks to the Company's network
affiliated television stations. The Company strives to improve or
maintain the ratings of its television stations by fine tuning non-
network programming and news coverage, improving promotional
activities and upgrading physical and technical facilities where
necessary.
Within each radio market, the Company targets key demographic
groups (determined by age and/or sex), based on advertiser demand
and the nature of competition in the market. Research is
periodically conducted by outside consultants to help refine and
improve the programming of each station, and the Company attempts
to direct its sales efforts, both local and national, to obtain the
largest possible share of advertising budgets. Although broadcast
ratings normally reflect all teenage and adult listeners in a
market and the Company's stations may perform well in the overall
ratings, the Company's emphasis is on superior performance in the
targeted demographic group, which it believes can result in
substantial improvement in Media Cash Flow by attracting
advertisers interested in reaching the target groups. The Company
also seeks to generate revenues through promotional events and
print-media tie-ins, techniques that may be particularly important
as a station grows more successful and its ability to increase the
number of commercials sold becomes more limited.
The Television Broadcasting Industry
Television station revenues are primarily derived from local,
regional and national advertising and from fees paid by television
networks for the local broadcast of network programming, with a
small percentage of revenue sometimes obtained from studio rental
and programming-related activities. The primary costs involved in
owning and operating television stations are salaries, programming,
promotion, depreciation and amortization, and selling expenses.
The majority of national and local advertising contracts are
short-term, generally running for only a few weeks, while
advertising contracts sold by networks are typically for longer
periods. National spot and local advertising revenues are more
susceptible to fluctuations in the economy than network
compensation. Advertising rates charged by a television station
vary, depending upon the population and number of television sets
in the area served by the station, a program's popularity among the
viewers an advertiser wishes to attract, the number of advertisers
vying for available time, the prices being charged by competitors
and the availability of alternative media in the market area. The
number of television sets in an area and a program's popularity are
reflected in surveys made by a rating service of the number of sets
tuned to the station at various times. Advertising rates are
highest during the most desirable viewing hours. Local and most
regional sales of advertising time are made by a station's sales
staff. National sales are made by a national "rep firm",
specializing in television advertising sales on the national level,
which is compensated on a commission-only basis.
For most network programming that is broadcast by a network
affiliate, the network pays the affiliate a fee, which varies in
amount depending upon the time of day during which the program is
broadcast. "Prime-time" programming (7 to 11 P.M. E.S.T. Sundays
and 8 to 11 P.M. E.S.T. other days) generally earns the highest
fees. Recent trends indicate a general reduction in network
compensation levels. It is widely expected that this reduction
will continue in the foreseeable future. However, a network often
allocates portions of advertising time during network broadcasts
for direct sale by the local station to advertisers and these time
slots have generally been increasing.
While revenues are spread over the calendar year, the first
quarter generally reflects the lowest and the fourth quarter the
highest revenue for the year. The increase in retail advertising
each fall in preparation for the holiday season, combined with
political advertising in election years and new fall television
programming, tend to increase fourth quarter revenues.
A significant portion of the programs broadcast by the
Company's network affiliated television stations is provided by
their networks. Programming costs are generally lower for network
affiliates than for independent television stations, and network
programs generally achieve higher ratings than non-network
programs. The Company's television stations also acquire programs
from non-network sources. Programs obtained from non-network
sources usually consist of syndicated television shows, some of
which have been shown previously on a network, and feature films.
The competitive position of a network affiliated television
station is significantly affected by viewer acceptance of the
network's programs. Network affiliation agreements are generally
for a term of one or two years, and are generally renewed
automatically. A network affiliate may reject particular network
programs, which might then be offered to other stations in the
area. The FCC has eliminated the two-year limitation on the terms
of network affiliation agreements, although the major television
networks have not yet modified their standard practices. The
Company does not believe that the FCC's action will have a material
effect on its business.
Competitive factors, in addition to management experience,
include a station's authorized transmitter power and antenna
location, assigned frequency, network affiliation, carriage of the
station's signal on local cable television systems, viewer
acceptance of network and local programming and the strength of
local competition. Generally, a television broadcasting station in
one market does not compete with stations in another market.
Competition for advertising and viewers may also come from
low-power television stations, multichannel multipoint distribution
service ("MMDS" or "wireless cable") systems or, increasingly in
recent years, cable television systems importing out-of-market
television broadcast stations and cable programming networks.
Newspapers also compete strongly with television stations for local
advertisers' budgets, as do radio and outdoor advertising.
During the past several years, there has been a steady growth
of cable communications systems and a significant liberalization of
FCC rules which allow cable systems, satellite master antenna
systems, and MMDS services located in areas served by the stations
to provide additional program choices. To date, the existence of
additional program services has not had a demonstrably adverse
effect upon the Company's television stations. The FCC has adopted
"must carry" and "retransmission consent" rules at the direction of
Congress pursuant to the 1992 Cable Television Consumer Protection
and Competition Act. Under this new regulatory regime, virtually
all cable systems that carried the Company's television stations
have continued to do so. Some systems have agreed to provide
compensation to the Company's television stations in return for
carriage on the cable system under the new regulations, although
such compensation is not substantial. A number of cable television
entities have appealed the must carry and retransmission consent
rules. A three-judge panel of the U.S. District Court for the
District of Columbia upheld the rules, but the U.S. Supreme Court
decided to review the ruling and heard oral argument in January
1994. A decision by the Court is expected in the next few months.
Television broadcasters generally have been supportive of cable
regulation. In any event, the Company believes that cable
subscriber demand for programming carried by the Company's
television stations makes it unlikely that the stations will cease
to be carried by cable systems served by those stations, even in
the absence of must carry rules.
The Company's television broadcast properties also may
experience competition from other forms of home entertainment such
as video cassette recorders and laser disk players, CD-ROM
multimedia and other computer programs, and, in varying degrees
from other sources of entertainment in the area, including motion
picture theaters, live theater and sporting events.
Several other new technologies are in their developmental
stages, such as high definition television capable of transmitting
television pictures with higher resolution, truer color and wider
aspect ratios. The FCC has recently determined that local
television stations such as the Company's will be entitled to
frequencies necessary to broadcast high definition television so
long as those frequencies are used within a specified time period.
These developing technologies have had no immediate impact on the
television broadcast industry, and their potential impact on the
Company's business cannot be predicted.
The Radio Broadcasting Industry
Virtually all of the revenue of a radio station is derived
from local and national advertising, and to a minor extent from
network compensation. Local sales are made by a station's sales
staff. National sales are made by a national "rep firm",
specializing in radio advertising sales on the national level,
which is compensated on a commission-only basis. The majority of
national and local advertising contracts are short-term, generally
running for only a few weeks. Advertising rates charged by a radio
station are based primarily on the station's ability to attract
audiences in the market area. A station's listenership is
reflected in rating service surveys of the number of radios tuned
to the station at various times. Rates are generally highest
during morning and evening drive-time hours. The primary costs
incurred in owning and operating radio stations are salaries,
programming, depreciation and amortization, promotion and
advertising, rental of premises for studios and transmitting
equipment, music license royalty fees and selling expenses.
Radio broadcasting revenues are spread over the calendar year,
with the first quarter generally reflecting the lowest and the
fourth quarter the highest revenues for the year, due in part to
increases in retail advertising in the fall in preparation for the
holiday season, and, in election years, to political advertising.
The radio industry, like the television industry, is
continually faced with technological changes and inventions.
Currently, the FCC is considering the authorization of Digital
Audio Broadcasting ("DAB") which would permit the transmission of
radio signals in a digital mode, in contrast to the current analog
transmission used in AM and FM radio broadcast service. Cable
television systems have the capability of delivering digital audio
services and some digital music services are currently in
operation. The radio industry is also continually faced with the
possible rise in popularity of competing entertainment and
communications media, changes in labor conditions, governmental
restrictions and actions of Congress and Federal regulatory bodies,
including the FCC, any of which could have a material effect on the
Company's business. However, in general, radio stations have
enjoyed growth in listeners and value within the past several
decades. Increased population and greater availability of radios,
particularly car and portable radios, have contributed to this
growth.
The Company's radio broadcasting stations compete with the
other broadcasting stations in their respective market areas, as
well as with other advertising media such as newspapers, broadcast
and cable television, magazines, outdoor advertising, transit
advertising and direct mail marketing. Competition within the
radio broadcasting industry occurs primarily in individual market
areas, so that a station in one market does not generally compete
with stations in other market areas. In addition to management
experience, factors that are material to competitive position
include the station's rank in its market, authorized power,
assigned frequency, audience characteristics, local program
acceptance and the number and characteristics of other stations in
the market area. The Company attempts to improve its competitive
position with promotional campaigns aimed at the demographic groups
targeted by its stations, and by sales efforts designed to attract
advertisers that have done little or no radio advertising; these
latter efforts emphasize the effectiveness of radio advertising in
increasing the advertisers' revenues, rather than the station's
ratings in its market.
Federal Regulation of Broadcasting
Radio and television broadcasting (as well as some other
potential communications investments of the Company) are subject to
the jurisdiction of the FCC under the Communications Act of l934,
as amended ("Communications Act"). The Communications Act, among
other things, prohibits the assignment of a broadcast license or
the transfer of control of a corporation holding a license without
the prior approval of the FCC. Legislation has been introduced
from time to time which would amend the Communications Act in
various respects and the FCC from time to time considers new
regulations or amendments to its existing regulations. The Company
cannot predict the effect of any such new legislation or amendments
on the Company.
Radio station licenses are issued and renewable for terms of
seven years. Television licenses are issued and renewable for
terms of five years. The Company's licenses have the following
expiration dates, until renewed:
KSNF-TV..................February l, l998
KJAC-TV..................*
KFDX-TV..................August l, l998
WBZT-AM..................February l, l996
WIRK-FM..................February l, l996
WOWO-AM..................August l, l996
WOWO-FM..................August l, l996
WWKB-AM..................June 1, 1998
WKSE-FM..................June l, l998
* The license term for KJAC-TV was to have expired on
August 1, 1993. KJAC-TV filed a timely application for
renewal, thereby extending the license term until action
is taken on the renewal application. That application
remains pending due to a viewer complaint about the Phil
Donahue program. The Company expects the station's
license to be renewed during 1994 for a term ending
August 1, 1998.
In the vast majority of cases, radio and television licenses
are renewed by the FCC. Current FCC regulations permit cognizable
ownership by one entity of up to 18 FM radio stations, 18 AM radio
stations and 12 television stations. With respect to television
stations, however, there is an additional ownership limit based on
audience reach. Under the audience reach limitation, an entity may
acquire cognizable ownership interests in up to 12 television
stations only if the aggregate number of television households
reached by the television stations does not exceed 25% of the
national television household audience as determined by the
Arbitron ADI market rankings. The percentage of the national
television household audience reached by the Company's television
stations is significantly under these limitations.
The FCC's rules generally prohibit the common ownership of a
television station and an AM radio station, an FM radio station or
general circulation daily newspaper in the same market, although an
AM-FM station combination by itself is permitted. Ownership of a
CATV system and television station in the same market is also
prohibited. These rules apply to entities such as the Company,
that seek new authorizations or approval of a transfer of an
existing combination. The FCC has recently relaxed its ownership
restrictions such that common ownership of television and radio
stations may be permissible in the 25 largest markets and in most
radio markets, common ownership of three or four radio stations may
now be permissible. No more than two of the stations in a given
market may be AM stations and no more than two may be FM stations.
The FCC has also initiated a rule making proceeding in which it is
considering relaxation of both its national and local television
ownership restrictions. In July 1992, the FCC relaxed its ban on
ownership of cable television systems by local telephone companies,
permitting telephone companies to offer video dialtone service.
The Company is unable to predict at this time the impact of these
initiatives on its television broadcast operations.
The FCC requires the attribution to a broadcast company not
only of licenses held by the company, but also of licenses
attributable to its officers and directors and certain of its
stockholders and their affiliates, such that there would be a
violation of FCC regulations where such an officer, director,
stockholder or stockholder's affiliate together held attributable
interests in more than the permitted number of stations on a
nationwide or local market basis. In general, under FCC rules
attribution of broadcast licenses would occur where any officer,
director, or five percent or greater stockholder of a broadcasting
company directly, indirectly or through affiliates owns, operates,
controls or has a five percent or greater voting interest in or is
an officer or director of any other broadcasting company. The
Company's By-Laws state that the Board of Directors shall prohibit
any voting or transfer of its capital stock, including its Common
Stock, which would cause the Company to violate the Communications
Act or FCC regulations.
The foregoing is only a brief summary of certain provisions of
the Communications Act and the regulations of the FCC. Reference
is made to the Communications Act, FCC regulations and the public
notices promulgated by the FCC for further information. The
Company is unable to predict what impact, if any, changes in these
laws would have on its operations.
Employees
As of December 3l, l993, the Company employed approximately
236 full time persons at its radio and television stations. The
stations have not experienced any significant labor problems under
the Company's ownership and the Company considers its labor
relations on the whole to be good.
The Company relies on experienced managers for its
broadcasting operations, who are given considerable authority at
the local level. Where appropriate, the Company has also hired new
management in an effort to improve the operations of a particular
property.
Item 2. Properties.
The Company and its subsidiaries own or lease space for
offices, studio and production facilities, antenna sites and
certain equipment for each of its stations. The Company believes
that its other facilities are suitable and adequate for carrying on
its broadcasting and other operations and that no major capital
improvements will be necessary over the next year. Renewal options
are available for the majority of the leases. (See Note 15 of the
Notes to Consolidated Financial Statements for information on
minimum lease payments of the Company and its subsidiaries for the
next five years.) Certain subsidiaries of the Company own the land
which is used for transmitter sites and studio facilities.
Item 3. Legal Proceedings.
On November 29, 1993, Apollo Investment Fund, L.P. ("Apollo"),
commenced an action by way of temporary restraining order and order
to show cause in the Supreme Court of the State of New York, County
of New York, entitled Apollo Investment Fund, L.P. v. Price
Communications Corporation, Price Publishing Corporation, W.R. Huff
Asset Management Co., L.P., and William R. Huff, Index No.
130011/93, seeking to enjoin the Company and PPC from selling their
interest in Alexandra Publishing Corporation ("Alexandra"), to the
Huff defendants, or in the alternative, if the sale had already
been completed, rescission of the transaction. Apollo based its
claim on an Amended and Restated Shareholders Agreement, dated as
of May 8, 1992, (the "Shareholders Agreement"), among Apollo, the
Company, PPC, Alexandra, and The New York Law Publishing Company,
which purports to restrict the sale of shares of Alexandra held by
the Company or PPC.
On December 20, 1993, the Company answered the complaint
asserting that the challenged transaction involved only the sale of
shares of PPC, Alexandra's parent, which was not restricted by the
Shareholders Agreement. The Company also asserted a counterclaim
against Apollo pursuant to paragraph 11 of the Shareholders
Agreement, for the legal fees and expenses incurred in connection
with the defense of the litigation.
On December 23, 1993, the defendants filed a joint opposition
to plaintiff's motion for a preliminary injunction, and also filed
a joint cross-motion for summary judgment dismissing the complaint.
Shortly thereafter, settlement discussions began and are
continuing. The hearing on the motion and cross-motion were
adjourned pending the outcome of the settlement discussions.
The Company believes that this suit may have errors and has
not been brought on sound legal advice of Plaintiffs' Counsel and
that it is without merit and the Company intends to vigorously
defend this action if it is not settled.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
Executive Officers of the Registrant
The following table sets forth the executive officers of the
Company, their respective ages, the year in which each was first
elected an executive officer and the office of the Company held by
each. Each executive officer will hold office until removed or
until their respective successors have been duly elected and
qualified.
Executive
Officer's Name Age Position Officer Since
Robert Price 61 President, 1979
Chief Executive
Officer and Treasurer
Bill Bengtson 62 Senior Vice 1989
President/
Television
Kim I. Pressman 37 Senior Vice 1984
President
Lee K. Strasser 37 Vice President/Radio 1992
Alisa R. Diamond-Lichaw 31 Vice President- l990
Corporate Affairs and
Secretary
Robert Price (Director, President, Chief Executive
Officer and Treasurer of the Company), an attorney, is a former
General Partner of Lazard Freres & Co. He has served as an
Assistant United States Attorney, practiced law in New York and
served as Deputy Mayor of New York City. In the early sixties, Mr.
Price served as President and Director of Atlantic States
Industries, a corporation owning weekly newspapers and four radio
stations. After leaving public office, Mr. Price became Executive
Vice President of The Dreyfus Corporation and an Investment Officer
of The Dreyfus Fund. In 1972 he joined Lazard Freres & Co. Mr.
Price has served as a Director of Holly Sugar Corporation, Atlantic
States Industries, The Dreyfus Corporation, Graphic Scanning Corp.
and Lane Bryant, Inc., and is currently a member of The Council on
Foreign Relations. Mr. Price is also a Director and Chairman of
TLM Corporation, and a Director and President of Atlas Cellular
Corporation.
Bill Bengtson has held a variety of positions in the
broadcasting industry for 34 years and assumed his current position
in July 1989. Mr. Bengtson is also Vice President and General
Manager of KSNF-TV, the Company's NBC affiliate in Joplin,
Missouri/Pittsburg, Kansas, a position he has held since April
1987. From January 1985 to March 1987, he was Vice President and
General Manager of KRCG-TV, a CBS affiliate in Jefferson
City/Columbia, Missouri formerly owned by the Company. Prior to
joining the Company in 1985, Mr. Bengtson was Vice President and
General Manager of KOAM-TV in Pittsburg, Kansas for 12 years. Mr.
Bengtson has served on the National Association of Broadcasters'
Television Board of Directors, and as President of the Pittsburg,
Kansas Chamber of Commerce, President of the Pittsburg, Kansas
Industrial Development Corporation and Mayor of Pittsburg, Kansas.
Kim I. Pressman, a certified public accountant, is a
graduate of Indiana University and holds an M.B.A. from New York
University. Before assuming her present office as Senior Vice
President in January 1990, Ms. Pressman was Vice President and
Treasurer of the Company from November 1987 to December 1989. She
was also Secretary of the Company from July 1989 to February 1990.
She was Vice President-Broadcasting and Vice President, Controller,
and Assistant Treasurer of the Company from 1984 to October 1987.
Prior to joining the Company in 1984, Ms. Pressman was employed for
three years by Peat, Marwick, Mitchell & Co., a national certified
public accounting firm, and for more than three years thereafter
was Supervisor, Accounting Policies for International Paper Company
and then Manager, Accounting Operations for Corinthian Broadcasting
Division of Dun & Bradstreet Company, a large group owner of
broadcasting stations. Ms. Pressman is a Director, Vice President,
Treasurer and Secretary of TLM Corporation, and a Director, Vice
President and Treasurer of Atlas Cellular Corporation.
Lee K. Strasser is a cum laude graduate of the University
of Miami's School of Communications. Mr. Strasser is also Vice
President and General Manager of WIRK-FM/WBZT-AM, the Company's
Country FM and news/talk AM radio stations in West Palm Beach,
Florida, a position he has held since December 1991. Previously,
he served as General Sales Manager of the stations from 1987 to
December 1991. Prior to joining the Company in 1987, Mr. Strasser
had been an account executive in the Palm Beach County marketplace
since 1985. He began his career in the Miami radio market in 1981
at WNWS radio.
Alisa R. Diamond-Lichaw attended Washington University in
St. Louis and is a graduate of New York University. Ms. Diamond-
Lichaw has been Vice President - Corporate Affairs since January
1990 and became Secretary in December 1991. Previously, Ms.
Diamond-Lichaw had been Assistant Vice President of the Company
since June 1989. She was also an Assistant Secretary of the
Company from September 1987 to January 1990. She served as
Administrator-Corporate Services of the Company from November 1986
to June 1989 and prior to that was employed in a variety of
positions at the Company since joining it in October 1984. Before
joining the Company Ms. Diamond-Lichaw was employed at MTV in
promotion and marketing, worked in marketing sales services at NBC
and was an Account Executive at Izod Lacoste. Ms. Diamond-Lichaw
is also an Assistant Secretary of TLM Corporation.
<PAGE>
PART II
Item 5. Market for Company's Common Stock and
Related Stockholder Matters
a) Market for Common Stock
The Company's Common Stock is listed for trading on the
American Stock Exchange ("AMEX") under the ticker symbol "PR". The
range of high and low last sale prices for the Company's Common
Stock on the AMEX for each of the four quarters of l993 and l992,
as reported by the AMEX (adjusted for stock dividends and stock
splits, including the 1 for 20 reverse stock split which occurred
on December 30, 1992, and rounded to the nearest eighth) was:
l993 l992
Quarter High Low High Low
First 2 7/8 2 7 1/2 1 7/8
Second 2 15/16 2 6 1/4 1 7/8
Third 3 3/16 2 3/8 3 3/4 1 1/4
Fourth 4 3/8 2 3/4 2 1/2* 1 1/4*
[*through 12/24/92]
The high and low last sale prices for the Company's Common
Stock on the AMEX for January l994, as reported by the AMEX were 4
3/8 and 3 1/2, respectively. The Common Stock of the Company, as
reorganized pursuant to the Plan of Reorganization, began trading
on a when issued basis on the AMEX on December 28, 1992. The high
and low last sale prices of the Reorganized Company's Common Stock
for the remainder of the Fourth Quarter of 1992 were 2 3/4 and 1
7/8, respectively. The Company's Common Stock has been afforded
unlisted trading privileges on the Pacific Stock Exchange under the
ticker symbol "PR.P", on the Chicago Stock Exchange under the
ticker symbol "PR.M" and on the Boston Stock Exchange under the
ticker symbol "PR.B".
b) Holders
On January 31, l994, there were 749 holders of record of the
Company's Common Stock. The Company estimates that brokerage firms
hold Common Stock in street name for approximately 5,000 persons.
c) Dividends
The Company, to date, has paid no cash dividends on its Common
Stock. The Board of Directors will determine future dividend
policy based on the Company's earnings, financial condition,
capital requirements and other circumstances. In addition, it is
the present policy of the Board of Directors to retain cash and any
earnings of the Company for the operation of the Company, and
therefore it is not anticipated that dividends will be paid on its
Common Stock in the foreseeable future.
Item 6. Selected Financial Data.
The following table sets forth certain selected consolidated
financial data with respect to the Company for each of the five
years in the period ended December 3l, l993, derived from audited
consolidated financial statements of the Company and Notes thereto.
A vertical black line has been placed to separate pre-
reorganization consolidated operating statement and balance sheet
items from the post-reorganization consolidated operating statement
and balance sheet items since they are not prepared on a comparable
basis (See Note 1 of Notes to Consolidated Financial Statements).
<TABLE>
Consolidated Operating Statement Items
(in thousands, except for per share amounts)
<CAPTION>
Year Ended December 31
Reorganized
Company Predecessor Company
1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Net Revenue $22,790 $53,957 $48,452 $48,150 $67,335
Operating Expenses 16,335 39,567 37,182 37,146 50,722
Corporate Expenses 3,649 4,973 6,123 5,189 2,810
Other Expense (Income) - Net 539 (35) 12,925 19,535 (14,389)
Interest Expense 1,485 17,768 41,473 40,184 43,808
Amortization of Debt Discount and
Deferred Debt Expense 766 1,004 2,039 2,534 4,974
Depreciation and Amortization 2,343 4,873 5,132 4,957 16,076
Unrealized Noncash (Recovery)
Loss on Marketable Securities (1)<F1> 146 (146) (8,476) 890 7,107
Share of Loss of Partially
Owned Companies 1,118 2,934 9,005 9,546 3,221
Loss from Continuing Operations
Before Reorganization Items,
Income Taxes, and Extraordinary Items (3,591) (16,981) (56,951) (71,831) (46,994)
Reorganization Items - (5,983) - - -
Loss from Continuing Operations Before
Income Taxes and Extraordinary Items (3,591) (22,964) (56,951) (71,831) (46,994)
Income Tax (Expense) Benefits (124) (499) 327 (591) (1,619)
Loss from Continuing Operations Before
Extraordinary Items (3,715) (23,463) (56,624) (72,422) (48,613)
Loss from Discontinued Operations - - - - (1,491)
Extraordinary Items (Net of Income Taxes):
Gain on Early Extinguishments of Debt 2,010 - - 5,287 9,919
Gain on Forgiveness of Debt and Partial
Sale of Subsidiary - 312,678 - - -
Net (Loss) Income $(1,705) $289,215 ($56,624) ($67,135) ($40,185)
Per Share Amounts (2)<F2>:
Loss from Continuing Operations
Before Extraordinary Items $(0.31)
Extraordinary Items $ 0.17
Net Loss $(0.14)
<FN>
<F1>(1) See Note 1 of Notes to Consolidated Financial Statements
<F2>(2) Per share amounts for the Predecessor Company are neither comparable
nor meaningful due to the forgiveness of debt,
partial sale of subsidiary, issuance of new common stock and
adoption of Fresh Start Reporting.
</TABLE>
<TABLE> Consolidated Balance Sheet Items
(in thousands, including notes)
<CAPTION>
As of December 31
Reorganized Company Predecessor Company
1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Total Current Assets $8,925 $28,494 $18,464 $23,895 $87,196
Total Assets 37,272 74,327 92,347 114,887 198,810
Total Current Liabilities (1)<F1> 3,292 11,373 338,274 297,605 32,920
Long-Term Debt (2)<F2> 3,200 22,100 41,198 45,310 327,152
Shareholders' Equity (Deficit) 30,705 40,646 (287,823) (231,199) (163,210)
<FN>
<F1>(1) Net of unamortized original issue discount of $5,124, $6,203 and
$589 as of December 31, 1991, 1990 and 1989, respectively.
<F2>(2) Net of unamortized original issue discount of $8,705 and $7,615 as
of December 31, 1992 and 1989, respectively.
/TABLE
<PAGE>
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations.
The Company reorganized and emerged from bankruptcy
proceedings on December 30, 1992 and adopted Fresh Start Reporting
in accordance with the guidelines established by the American
Institute of Certified Public Accountants in Statement of Position
90-7 "Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code". Under Fresh Start Reporting, assets and
liabilities were recorded at their estimated fair market value and
the historical deficit was eliminated. Accordingly, the Company's
financial statements have been prepared as if it is a new reporting
entity and a vertical black line has been placed to separate the
pre-reorganization consolidated statements of operations and cash
flows from the post-reorganization consolidated statements of
operations and cash flows since they are not prepared on a
comparable basis.
Due to pending and subsequent acquisitions and dispositions
discussed under Business - Recent Developments, the retirement of
the Company's Secured Notes, the consummation of the Plan of
Reorganization and the adoption of Fresh Start Reporting, the
Company's historical results of operations should not be regarded
as indicative of its future results. The following discussion
should be read in conjunction with the Consolidated Financial
Statements and the Notes thereto.
Results of Operations - General
Results for future periods will be affected by the nature and
timing of future acquisitions or dispositions. Future acquisitions
could substantially increase the Company's operating expenses,
depreciation and amortization charges and, if additional financing
is required, interest expense, as well as increasing revenues. For
these reasons, the results of the Company's historical operations
may not be comparable from period to period or indicative of
results in the future.
1993 Compared to 1992
The Company's net revenue, operating expenses and depreciation
and amortization for the year ended December 31, 1993 are not
comparable to the year ended December 31, 1992 due to the sale of
75 percent of its stock of The New York Law Publishing Company as
part of the Plan. The Company's net revenue decreased by
approximately $31.2 million and operating expenses by $23.2 million
as the result of that sale. However, net revenue from the
broadcasting segment increased by $1.5 million or 7.1 percent, due
to an overall improvement in the market for broadcast advertising,
the impact of political revenues and an improvement in market
shares at certain of the Company's properties. Operating expenses
for the broadcasting segment increased 4% primarily as the result
of programming additions at the Company's radio properties.
The Company's corporate expenses decreased from 1992 primarily
because professional fees and administrative expenses incurred
during the Company's reorganization negotiations, excluding those
that are classified as reorganization items decreased during 1993.
Interest expense and the amortization of debt discount during 1993
decreased from 1992 primarily because the Company's long-term debt
was substantially reduced as a result of its Plan of
Reorganization. Additionally, approximately $23.2 million face
amount of the new Secured Notes were retired in October 1993,
further reducing those expenses.
The Company's share of loss of partially owned companies
decreased in 1993 primarily because the Company ceased to record
losses on its share of PriCellular Corporation, once that
investment was reduced to its realizable value of $11 million, the
amount that the Company sold it for in October of 1993. The
decrease was offset, in part, by losses related to The New York Law
Publishing Company which was accounted for under the equity method
in 1993. The Company's "other (income) expense, net," decreased to
an expense of $539,000 in 1993, as a result of the purchase of the
2,249,086 shares of the Company's common stock from Huff (see
Business-Recent Developments and Note 13 of Notes to Consolidated
Financial Statements) on which a loss of approximately $4.0 million
was recognized. This loss was offset in part by the sale of the
Company's preferred and common stock in NTG for $2.4 million, which
resulted in a gain of the same amount since the stock was carried
at a book value of zero. Additionally, the Company had a recovery
of approximately $300,000 on the repayment of the note from LL
Broadcasting which had been recorded at $2.9 million under Fresh
Start Reporting. As a result of the foregoing, the Company
recognized a loss before extraordinary item of approximately $3.7
million as compared to a loss of $23.5 million in 1992. The 1992
loss also includes net reorganization expense items totalling
approximately $6 million relating to the Company's period under
Chapter 11.
Extraordinary income for 1992 was approximately $313 million
due to the forgiveness of debt and the partial sale of The New York
Law Publishing Company as part of the Company's Plan of
Reorganization. Extraordinary income for 1993 was approximately $2
million due to the early extinguishment of the Company's Secured
Notes.
The Company had net loss per share before extraordinary item
of $.31 and net loss per share of $.14 for 1993. Per share amounts
for prior periods are not comparable or meaningful due to the
forgiveness of debt, partial sale of subsidiary, issuance of new
common stock and adoption of Fresh Start Reporting.
1992 Compared to 1991
The Company's net revenue for 1992 increased by approximately
$5.5 million or 11.4% compared to 1991. Net revenue from the
broadcasting segment increased by $2.1 million or 11.3%, due to an
overall improvement in the market for broadcast advertising and the
impact of political and Olympic revenues. Net revenue from the
publishing and other segment increased by $3.4 million or 11.4%
primarily because of increases in display and legal advertising and
subscription revenues which resulted primarily from increases in
subscription prices. Operating expenses increased by 6.4% during
1992 primarily as a result of the increase in revenues. The
Company's corporate expenses decreased from 1991 primarily because
professional fees and administrative expenses incurred during the
Chapter 11 proceedings are classified as Chapter 11 reorganization
items rather than corporate expenses. In addition, the overall
reorganization expenses declined from approximately $3.9 million in
1991 to $2.8 million in 1992. Interest expense and the
amortization of debt discount during 1992 decreased from 1991
primarily because the Company discontinued, effective May 8, 1992,
the accrual of interest expense and amortization of debt discount
on prepetition debt. The Company's share of loss of partially
owned companies decreased in 1992 primarily because the Company
ceased to record its share of Fairmont's losses once the book value
of its equity interest in Fairmont declined to zero during the
fourth quarter of 1991. Also, during the third quarter of 1992,
the Company ceased to record its share of PriCellular's losses as
the book value of that investment declined to zero (as a result of
Fresh Start Reporting, this investment was recorded at $11.5
million on the Company's balance sheet as of December 31, 1992).
The Company's "other (income) expense, net," was net income for
1992 versus a net expense for 1991 because of a significant
decrease in loss on sale of securities, the existence of recoveries
on notes receivable during 1992, and the absence of an accrual of
a bonus during 1992 due to the expiration of a long-term employment
agreement, partially offset by an increased loss on disposition of
equipment during 1992.
The improvements to net income during 1992 were partially
offset by the valuation adjustment under Fresh Start Reporting. In
addition, during 1991 there was an unrealized noncash recovery on
marketable securities which was de minimis during 1992. As a
result of the foregoing, the Company's net loss before
extraordinary item decreased by approximately $33.2 million from
1991 to approximately $23.5 million in 1992.
Liquidity and Capital Resources
The Company had approximately $1.4 million in cash and cash
equivalents and net working capital of approximately $6.0 million
at December 31, 1993. Long-term debt of $3.2 million was owed by
the Company as of December 31, 1993.
The Company will require substantial funds to complete the
approximately $41 million acquisition of WHTM-TV (See "Business-
Recent Developments") and funds available under the Line of Credit
Agreement combined with the Company's existing liquid assets and
proceeds from the sales of properties may not be sufficient. In
that case, the Company will consider expanding its credit lines or
selling additional assets to raise the capital required for the
purchase. Additionally, if the Company's acquisition strategy (see
"Business-Acquisitions and Divestitures") continues to be
successful the Company may require substantial capital to finance
them. The Company may use a variety of sources including the
proceeds of debt sold to the public, additional borrowings from
banks and other institutional lenders, seller financing,
convertible preferred stock and common stock issued at the parent
company or subsidiary level. There can be no assurance that the
Company will be successful in obtaining funds from those sources.
Although the Company has incurred substantial depreciation and
amortization expense as a result of the purchase of its properties,
it does not anticipate the need to make major capital expenditures
in respect of its existing media properties (see "Properties")
during 1994 and it does not believe that such lack of major capital
expenditures will affect its competitive position. Capital
expenditures for 1993 were approximately $650,000.
The Company's sources of funds historically have been its
liquid assets, cash flow from its operating and investment
activities, proceeds from the sale of properties and proceeds from
loans and financings. The Company intends to seek to improve cash
flow from operations by continuing to impose stringent budget
procedures on its media properties and by continuing to seek to
increase revenues at its properties in excess of increases in
operating expenses.
Certain of the Company's subsidiaries currently have in place
a Line of Credit with the Bank of Montreal for up to $10 million on
which $3.2 million is currently outstanding. The Line of Credit is
reduced periodically, beginning quarterly on March 31, 1994, bears
interest at a rate equal to the Bank of Montreal base rate, as
defined (or other rates at the borrowers' option) and is secured by
the assets of the Company's subsidiaries who are the borrowers on
the Line of Credit. See Note 9 of Notes to Consolidated Financial
Statements.
Item 8. Financial Statements and Supplementary Data.
Price Communications Corporation and Subsidiaries Consolidated
Financial Statements are set forth on the following pages of this
Part II.
INDEX TO FINANCIAL STATEMENTS
__________
PRICE COMMUNICATIONS CORPORATION and SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
Reports of Independent Auditors II-10-1
Consolidated Balance Sheets at December 31,
1993 and 1992 II-10-3
Consolidated Statements of Operations for
Years ended December 31, 1993,
1992 and 1991 II-10-5
Consolidated Statements of Shareholders' Equity
(Deficit) for Years ended December 31,
1993, 1992 and 1991 II-10-6
Consolidated Statements of Cash Flows
for Years ended December 31, 1993,
1992 and 1991 II-10-7
Notes to Consolidated Financial Statements II-10-9
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
None.
<AUDIT-REPORT>
Audited Consolidated Financial Statements
and Schedules
Price Communications Corporation
and Subsidiaries
December 31, 1993 and 1992 and for each of
the three years in the period ended
December 31, 1993
with Reports of Independent Auditors
<PAGE>
Report of Independent Auditors
The Board of Directors and Shareholders
Price Communications Corporation
We have audited the accompanying consolidated balance sheet
of Price Communications Corporation and Subsidiaries as of
December 31, 1993 (the "Company") and the related
consolidated statements of operations, shareholders' equity,
and cash flows for the year then ended. Our audit also included the
financial statement schedules listed in the Index at Item 14(a).
These consolidated financial statements and financial statement schedules
are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements and financial statement schedules based on our
audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
<PAGE>
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of Price Communications Corporation and
Subsidiaries at December 31, 1993, and the results of their
operations and their cash flows for the year then ended in
conformity with generally accepted accounting principles.
Also in our opinion, the related financial statement
schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, present
fairly, in all material respects, the information set forth
therein.
March 8, 1994
Ernst & Young
<PAGE>
Independent Auditors' Report
The Board of Directors and Shareholders
Price Communications Corporation:
We have audited the accompanying consolidated balance sheet of
Price Communications Corporation and subsidiaries as of December
31, 1992 (Reorganized Company) and the related consolidated
statements of operations, shareholders' equity (deficit), and cash
flows for each of the years in the two-year period ended December
31, 1992 (Predecessor Company). In connection with our audits of
the consolidated financial statements, we have also audited the
related financial statement schedules as listed in Part IV, Item
14(a). These consolidated financial statements and financial
statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
consolidated financial statements and financial statement schedules
based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Price Communications Corporation and subsidiaries as of
December 31, 1992, and the results of their operations and their
cash flows for each of the years in the two-year period ended
December 31, 1992 in conformity with generally accepted accounting
principles. Also in our opinion, the related financial statement
schedules, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly, in all
material respects, the information set forth therein.
As discussed in note 1 to the consolidated financial statements,
effective December 30, 1992, Price Communications Corporation was
reorganized under a plan confirmed by the Federal Bankruptcy Court
and adopted a new basis of accounting whereby all remaining assets
and liabilities were revalued at their estimated fair values. As
discussed in notes 1 and 10, Price Communications Corporation and
subsidiaries (Reorganized Company) have changed their method of
accounting for income taxes in 1992 to adopt the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes."
KPMG Peat Marwick
New York, New York
February 18, 1993
<PAGE>
Price Communications Corporation
and Subsidiaries
Consolidated Balance Sheets
December 31
1993 1992
- -----------------------------
Assets
Current assets:
Cash and cash equivalents $1,395,102 $9,119,527
Marketable securities (Note 1) - 9,778,100
- -----------------------------
1,395,102 18,897,627
Accounts receivable, net of
allowance for doubtful accounts
of $487,576 in 1993 and $565,351 4,006,801 3,652,743
in 1992
Film broadcast rights 565,929 611,289
Notes receivable (Note 3) - 2,900,000
Prepaid expenses and other 2,957,235 2,432,763
current assets
- -----------------------------
Total current assets 8,925,067 28,494,422
- -----------------------------
Investment in partially owned - 4,000,000
company (Note 4)
Property and equipment, at cost,
less accumulated depreciation 13,728,171 14,949,417
(Note 6)
Broadcast licenses, less
accumulated amortization of 12,797,559 13,204,000
$406,441 in 1993 (Note 1)
Film broadcast rights 138,383 302,971
Investment in cellular
communication properties - 11,500,000
(Note 5)
Other assets 470,031 600,000
Reorganization value in excess of
amounts allocable to identifiable
assets, less accumulated 1,212,289 1,276,094
amortization of $63,805 in 1993
(Note 1)
- -----------------------------
Total assets $37,271,500 $74,326,904
=============================
(Continued)
<PAGE>
Price Communications Corporation
and Subsidiaries
Consolidated Balance Sheets, Continued
December 31
1993 1992
- -----------------------------
Liabilities and shareholders' equity
Current liabilities:
Accounts payable and accrued
expenses $2,249,404 $4,108,417
(Note 7)
Repurchase agreement - 4,930,083
Accrued interest (Note 9) 7,233 350,835
Other current liabilities (Note 8) 1,035,585 1,984,069
- -----------------------------
Total current liabilities 3,292,222 11,373,404
- -----------------------------
Long-term debt, net of
unamortized discount of 3,200,000 22,100,000
$8,705,000 in 1992 (Note 9)
Other liabilities (Note 8) 74,747 207,089
Commitments and contingencies
(Note 15)
Shareholders' equity (Notes 13
and 14):
Common stock, par value $.01 per
share; authorized 40,000,000
shares; outstanding 9,883,717
shares in 1993 and 12,109,583 98,837 121,096
shares in 1992
Additional paid-in capital 32,310,285 40,525,315
Accumulated deficit (1,704,591) -
- -----------------------------
Total shareholders' equity 30,704,531 40,646,411
- -----------------------------
Total liabilities and $37,271,500 $74,326,904
shareholders' equity
=============================
See accompanying notes to consolidated financial statements.
<PAGE>
Price Communications Corporation
and Subsidiaries
Consolidated Statements of Operations
Year ended December 31
- --------------------------------------------
Reorganized |
Company | Predecessor Company
- --------------------------------------------
1993 | 1992 1991
- --------------------------------------------
Revenue $26,010,294 | $57,178,019
$51,156,970
Agency and 3,220,102 | 3,221,385 2,704,832
representatives' |
commissions |
- --------------------------------------------
Net revenue 22,790,192 | 53,956,634
48,452,138
- --------------------------------------------
Operating expenses 16,334,761 | 39,567,392
37,181,862
Corporate expenses 3,648,524 | 4,973,287 6,123,146
Other expense (income), 539,289 | (35,492)
12,925,224
net (Note 11) |
Interest expense |
(contractual interest 1,485,389 | 17,768,032
41,473,136
was $43,105,988 in |
1992) |
Amortization of debt |
discount and deferred 766,075 | 1,003,578 2,038,509
debt expense |
Depreciation and 2,343,015 | 4,873,136 5,132,446
amortization |
Unrealized noncash |
(recovery) loss on 145,884 | (145,884)
(8,475,606)
marketable securities |
Share of loss of |
partially owned 1,118,293 | 2,933,763 9,004,587
companies |
(Notes 4 and 5) |
- --------------------------------------------
26,381,230 | 70,937,812
105,403,304
- --------------------------------------------
Loss before |
reorganization items, (3,591,038) | (16,981,178)
(56,951,166)
income taxes and |
extraordinary item |
<PAGE>
|
Reorganization items: |
Interest income - | 357,000 -
Professional fees and - | (1,312,579) -
other |
Valuation adjustment - | (5,026,967) -
(Note 1 and 17) |
- --------------------------------------------
Loss before |
income taxes and (3,591,038) | (22,963,724)
(56,951,166)
extraordinary item |
Income tax (expense) (123,885) | (499,326) 326,782
benefit (Note 10) |
Loss before (3,714,923) | (23,463,050)
(56,624,384)
extraordinary item |
Extraordinary item, net |
of income taxes of $0 |
in 1993 and $900,000 in 2,010,332 | 312,678,036 -
1992 (Notes 2, 9, 10
and 17) |
- --------------------------------------------
Net (loss) income $(1,704,591) | $289,214,986
$(56,624,384)
============================================
(Loss) income per share |
(Note 1): |
Loss before |
extraordinary item $(.31) *
*
Extraordinary item $.17 | * *
Net loss $(.14) | * *
============================================
* Per share amounts for the Predecessor Company are neither
comparable nor meaningful due to forgiveness of debt,
partial sale of subsidiary, issuance of new common stock and
adoption of Fresh Start Reporting.
See accompanying notes to consolidated financial statements.
<PAGE>
Price Communications Corporation
and Subsidiaries
<TABLE>
Consolidated Statements of Shareholders' Equity (Deficit)
Years ended December 31, 1993, 1992 and 1991
<CAPTION>
Predecessor Company
Junior
Common Stock Common Stock Treasury Stock
No. of Par Value No. of Par Value No. of Par Value
Shares Shares Shares
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1990 9,028,890 $90,289 500,000 $5,000 608,800 $(489,298)
Net Loss - - - - - -
Balance, December 31, 1991 9,028,890 90,289 500,000 5,000 608,800 (489,298)
Net income - - - - - -
Treasury stock (552,182) (5,522) - - (608,800) 489,298
Reorganized Company
common stock issued
on conversion of
Predecessor Company
common stock and
junior common stock (8,476,708) (84,767) (500,000) (5,000) - -
Reorganized Company
common stock issued on
conversion of
debentures - - - - - -
Elimination of deficit
under Fresh
Start Reporting - - - - - -
Reorganized Company:
Balance, December 31, 1992 - - - - - -
Net loss - - - - - -
Fractional shares
issued on
conversion of
Predecessor Company
common stock - - - - - -
Purchase of common stock - - - - - -
Stock options exercised - - - - - -
Balance, December 31, 1993 - $ - - $ - - $ -
</TABLE>
<TABLE>
<CAPTION>
Reorganized Company Additional
Common Stock Paid-in Accumulated
No. of Par Value Capital Deficit Total
Shares
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1990 - $ - $28,393,444 $(259,198,681) $(231,199,246)
Net Loss - - - (56,624,384) (56,624,384)
Balance, December 31, 1991 - - 28,393,444 (315,823,065) (287,823,630)
Net income - - - 289,214,986 289,214,986
Treasury stock - - (438,272) - 45,504
Reorganized Company
common stock issued
on conversion of
Predecessor Company
common stock and
junior common stock 666,027 6,660 883,107 - 800,000
Reorganized Company
common stock issued
on conversion of
debentures 11,443,556 114,436 38,295,115 - 38,409,551
Elimination of
deficit under Fresh
Start Reporting - - (26,608,079) 26,608,079 -
Reorganized Company:
Balance, December 31, 1992 12,109,583 121,096 40,525,315 - 40,646,411
Net loss - - - (1,704,591) (1,704,591)
Fractional shares
issued on
conversion of
Predecessor Company
common stock 2,168 22 (22) - -
Purchase of common stock (2,249,089) (22,491) (8,271,014) - (8,293,505)
Stock options exercised 21,055 210 56,006 - 56,216
Balance, December 31, 1993 9,883,717 $ 98,837 $32,310,285 $(1,704,591) $30,704,531
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
Price Communications Corporation
and Subsidiaries
Consolidated Statements of Cash Flows
Year ended December 31
- --------------------------------------------
Reorganized |
Company | Predecessor Company
- --------------------------------------------
1993 | 1992 1991
- --------------------------------------------
Cash flows (used in) |
provided by operating |
activities |
Net (loss) income $(1,704,591) | $289,214,986
$(56,624,384)
- --------------------------------------------
Adjustments to |
reconcile net (loss) |
income to net cash |
(used in) provided by |
operating activities: |
Items not affecting |
cash: |
Amortization of debt |
discount and deferred 766,075 | 1,003,578
2,038,509
debt expense |
Depreciation and 2,343,015 | 4,873,136
5,132,446
amortization |
Share of loss of |
partially owned 1,118,293 | 2,933,763
9,004,587
companies |
Loss on disposition 425 | 364,024 54,333
of equipment |
Reserves for losses on - | -
2,915,712
notes receivable |
Deficiency of film |
broadcast rights - | (103,320)
(339,475)
amortization over |
payments |
(continued)
<PAGE>
Price Communications Corporation
and Subsidiaries
Consolidated Statements of Cash Flows
Year ended December 31
- --------------------------------------------
Reorganized |
Company | Predecessor Company
- --------------------------------------------
1993 | 1992 1991
- --------------------------------------------
Unrealized noncash |
loss (recovery) on 145,884 | (145,884)
(8,475,606)
marketable securities |
Valuation |
adjustment, net of - | 6,732,774 -
working capital |
valuation |
Change in assets and |
liabilities, net of |
effects of |
reorganization: |
(Increase) decrease in |
net accounts receivable (354,058) | (959,580) 214,844
(Increase) |
decrease in prepaid (297,915) | 395,910
(930,882)
expenses and other |
assets |
Decrease in film 209,948 | 129,953 42,659
broadcast rights |
Decrease in due from - | 1,410,960 605,857
broker/dealer |
(Decrease) increase in |
accounts payable and (1,859,013) | 1,028,242 425,740
accrued expenses |
(Decrease) |
increase in accrued (343,602) | 15,243,681
35,673,639
interest payable, net |
of forgiveness |
(continued)<PAGE>
Price Communications Corporation
and Subsidiaries
Consolidated Statements of Cash Flows
Year ended December 31
- --------------------------------------------
Reorganized |
Company | Predecessor Company
- --------------------------------------------
1993 | 1992 1991
- --------------------------------------------
(Decrease) |
increase in other (1,080,826) | (514,252)
2,032,559
liabilities |
Reclassification of |
transactions to |
investing and financing |
activities: |
Loss on purchase of
Common Stock 3,976,597
Gain on early |
extinguishments of debt (2,010,332) | - -
Gain on |
forgiveness of debt and - | (312,678,036) -
partial sale of |
subsidiary |
(Gain) loss on sale of (6,609) | (6,940)
7,996,741
securities |
Recovery on notes (2,730,432) | (387,588) -
receivable |
- --------------------------------------------
Total adjustments (122,550) | (280,679,579)
56,391,663
- --------------------------------------------
Net cash (used in) |
provided by operating (1,827,141) | 8,535,407
(232,721)
activities |
- --------------------------------------------
(continued)
<PAGE>
Price Communications Corporation
and Subsidiaries
Consolidated Statements of Cash Flows
Year ended December 31
- --------------------------------------------
Reorganized |
Company | Predecessor Company
- --------------------------------------------
1993 | 1992 1991
- --------------------------------------------
Cash flows provided by |
(used in) investing |
activities |
Sale of businesses and $11,000,214 | $4,738,627 $-
equipment |
Investment in (454,337) | - -
businesses |
Purchases of securities |
under agreements to (8,050,811) | - -
resell |
Capital expenditures (577,918) | (704,681)
(514,467)
Purchases of marketable |
securities and mutual (36,704,873) | (10,476,315)
(9,551,596)
funds |
Proceeds from sale of |
marketable securities 54,394,512 | 1,034,640
13,932,705
and mutual funds |
Proceeds from notes 5,630,432 | 654,707 32,851
receivable |
- --------------------------------------------
Net cash provided by |
(used in) investing 25,237,219 | (4,753,022)
3,899,493
activities |
Cash flows used in |
financing activities |
Repurchases and (20,846,643) | (5,300,960)
(5,126,035)
payments of long-term |
debt |
Net borrowings under |
(repayment of) (4,930,083) | 4,930,083 -
repurchase agreements |
Net borrowings under 3,020,065 | - -
line of credit |
agreement |
(continued)<PAGE>
Price Communications Corporation
and Subsidiaries
Consolidated Statements of Cash Flows
Year ended December 31
- --------------------------------------------
Reorganized |
Company | Predecessor Company
- --------------------------------------------
1993 | 1992 1991
- --------------------------------------------
Purchase of common (8,434,058) | - -
stock |
Proceeds from stock 56,216 | - -
options exercised |
- --------------------------------------------
Net cash used in (31,134,503) | (370,877)
(5,126,035)
financing activities |
- --------------------------------------------
Net (decrease) |
increase in cash and (7,724,425) | 3,411,508
(1,459,263)
cash equivalents |
Cash and cash |
equivalents at 9,119,527 | 5,708,019
7,167,282
beginning of year |
- --------------------------------------------
Cash and cash $1,395,102 | $9,119,527
$5,708,019
equivalents at end |
of year |
============================================
Supplemental |
disclosures of cash |
flow information |
Income taxes paid, net $158,878 | $ 255,225 $55,046
of refunds |
============================================
Interest paid $1,828,991 | $3,170,272
$5,799,497
============================================
Chapter 11 items: |
Interest received $- | $357,000 $-
============================================
Professional and |
administrative expenses $26,085 | $505,144 $-
paid |
============================================
See accompanying notes to consolidated financial statements.
<PAGE>
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies
a. Basis of Presentation-The consolidated financial
statements include the accounts of Price Communications
Corporation (the "Company" or "Price") and its subsidiaries.
All significant intercompany items and transactions have
been eliminated.
b. Fresh Start Reporting-The Company reorganized and
emerged from Chapter 11 bankruptcy proceedings on December
30, 1992 (the "Effective Date"-see Note 2), and adopted
Fresh Start Reporting in accordance with the guidelines
established by the American Institute of Certified Public
Accountants in Statement of Position 90-7, "Financial
Reporting by Entities in Reorganization Under the Bankruptcy
Code." Under Fresh Start Reporting, assets and liabilities
are recorded at their estimated fair market value and the
historical deficit is eliminated. Accordingly, the Company's
financial statements have been prepared as if it is a new
reporting entity (referred to as the "Reorganized Company")
as of the Effective Date. A vertical black line has been
placed to separate the consolidated statements of operations
and cash flows of the Company prior to the reorganization
(referred to as the "Predecessor Company") from those of the
Reorganized Company, since they are not prepared on a
comparable basis.
The Company's operations for the two-day period of
December 30 and December 31, 1992 were insignificant.
Accordingly, December 31, 1992 was used as the cut-off date
for financial reporting purposes in lieu of the Effective
Date.
The revaluation of the Company's assets and liabilities as
of December 31, 1992 was based on an independent appraisal,
modified as appropriate, and resulted in a reduction in net
carrying values of assets and liabilities of approximately
$5,027,000. The components of this adjustment are shown in the
"Fresh Start Reporting" column of Note 17.<PAGE>
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
c. Depreciation and Amortization-Depreciation is computed
on the straight-line method on the basis of estimated useful
lives, as follows:
Buildings-15 to 25 years
Broadcasting equipment-10 to 12 years
Leasehold improvements-the life of the underlying lease
Furniture and fixtures-3 to 10 years
Transportation equipment-3 years
d. Intangible Assets:
i. Excess of purchase price over the fair value of net
assets acquired prior to December 31, 1992 includes FCC
licenses, station call letters, and goodwill. As a result of
the implementation of Fresh Start Reporting, unamortized
goodwill has been eliminated and FCC licenses have been
restated at their approximate fair value as of December 31,
1992. These assets are integral determinants of a communica
tions property's economic value, and have long and
productive lives. The Predecessor Company amortized such
intangible assets over a 40-year period, the maximum life
allowable under Accounting Principles Board Opinion No. 17.
The Reorganized Company continues to amortize the assets
over a 40-year life commencing from the original date of
acquisition.
ii. Deferred expenses associated with debt instruments were
amortized under the straight-line method over their
respective lives. Debt discounts are amortized under the
effective interest method. As of December 31, 1992, the
unamortized carrying value of deferred debt expense and
unamortized debt discount associated with debt forgiven or
exchanged under the Company's Plan of Reorganization (the
"Plan"-see Note 2) was eliminated.
e. Reorganization Value in Excess of Amounts Allocable to
Identifiable Assets-The reorganization value in excess of
amounts allocable to identifiable assets, which results from
the implementation of Fresh Start Reporting is amortized
using the straight-line method over 20 years.
<PAGE>
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
f. Per Share Data-Primary income per common share is based
on income for the period divided by the weighted average
number of shares of common stock and common stock
equivalents outstanding, which was approximately 11.9
million shares for 1993. Per share amounts for the
Predecessor Company are not presented because they are
neither comparable nor meaningful due to forgiveness of
debt, partial sale of subsidiary, issuance of new common
stock and adoption of Fresh Start Reporting.
g. Allowance for Doubtful Accounts-The Company provides an
allowance for doubtful accounts based on reviews of its
customers' accounts. Included in operating expense is bad
debt expense of approximately $264,000, $514,000, and
$780,000 for the years ended December 31, 1993, 1992 and
1991, respectively.
h. Barter Transactions-Revenue from barter transactions
(advertising provided in exchange for goods and services) is
recognized as income when advertisements are broadcast, and
merchandise or services received are charged to expense when
received or used.
i. Advertising Revenues-Sales of advertisements are
recognized as income when advertisements are broadcasted or
printed.
j. Film Broadcast Rights-The capitalized cost of film
broadcast rights is amortized on the basis of the estimated
number of showings or, if unlimited showing are permitted,
over the term of the broadcast license agreements.
Unamortized film broadcast rights are classified as current
or noncurrent on the basis of their estimated future usage.
Amortization of film broadcast rights is included in
operating expenses and amounted to approximately $800,000,
$940,000, and $1,036,000 for the years ended December 31,
1993, 1992, and 1991, respectively.
<PAGE>
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
k. Cash and Cash Equivalents-For purposes of the
consolidated statements of cash flows, the Company considers
all highly liquid debt instruments, including Treasury
bills, purchased with maturities of three months or less at
the time of purchase to be cash equivalents.
l. Marketable Securities-Investment in marketable
securities was stated at the lower of aggregate cost or
market. Dividend and interest income were accrued as earned.
As of December 31, 1992, the carrying value of marketable
securities, which consisted of 6.375% U.S. Treasury Notes
due August 15, 2002, was increased by approximately
$146,000, to reflect the increase in market value over cost,
in accordance with Fresh Start Reporting.
Net realized gains (losses) on sales of investment in
mutual funds and marketable securities are based upon
weighted average cost (see Note 11).
m. Income Taxes-Effective December 31, 1992, the Company
adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes," ("Statement 109") issued by
the Financial Accounting Standards Board (see Note 10). The
cumulative effect of this change had no significant impact
on the Company's consolidated financial statements,
including income tax expense. Under the asset and liability
method of Statement 109, deferred tax assets and liabilities
are recognized for the future tax consequences attributable
to differences between the financial statement carrying
amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under
Statement 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income
in the period that includes the enactment date.
<PAGE>
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
1. Summary of Significant Accounting Policies (continued)
m. (continued)
Prior to December 31, 1992, the Company accounted for
income taxes pursuant to the deferred method under APB
Opinion 11. Under the deferred method, deferred income taxes
were recognized for income and expense items that were
reported in different years for financial reporting purposes
and income tax purposes using the tax rate applicable for
the year of calculation.
2. Reorganization
On December 30, 1992, the Plan, which had been approved by
the United States Bankruptcy Court for the Southern District
of New York in July of that year, became effective. Under
the Plan, the following occurred:
a. Holders of approximately $31 million principal amount
of the Company's 10% Convertible Senior Subordinated
Debentures (the "10% Debentures") received new $31 million
face amount seven-year 5% Senior Secured Notes (the "Secured
Notes"-see Note 9).
b. Apollo Investment Fund, L.P. and James Finkelstein
purchased 75% of Alexandra Publishing Corporation, which
owns The New York Law Publishing Company, in exchange for
the cancellation of approximately $19 million of principal
amount of 10% Debentures, and the payment to the Company of
approximately $7.5 million in cash and the assumption or
repayment of certain liabilities of the Company totaling
approximately $45 million. See note 13 for subsequent
disposal of the remaining 25% interest in the publishing
subsidiaries.
c. The holders of the existing subordinated debt received
94.5% of the common stock of Price.
<PAGE>
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
2. Reorganization (continued)
d. Shareholders received shares which constitute 3.5% of
the common stock of the Reorganized Company, and Robert
Price, President of the Company, received 2% of such common
stock in exchange for the junior common stock, all of which
was held by Mr. Price. In addition, Mr. Price entered into a
three-year employment contract.
The gain on the partial sale of publishing companies and the
gain from cancellation of indebtedness resulted in
extraordinary income of approximately $312.7 million which
is net of a tax provision of $900,000 relating to the sale
of the publishing companies. The gain resulting from the
forgiveness of debt is not taxable for Federal income tax
purposes.
In a related transaction, on August 5, 1992, the Company
exchanged its interest in TLM Corporation (until then a 90.7%
owned subsidiary) for 90.7% of the assets of TLM Corporation.
These assets consisted of cash and common stock and certain
public debt securities of the Company. The Company's loss
from the transaction was de minimis.
3. Notes Receivable
Investments in notes made through private placements include
the following:
a. The note receivable at December 31, 1992 represented a
14-1/2% $3.2 million subordinated note due in 1993 from the
buyers of WIBA-AM/FM stated at its approximate fair value
based on the independent appraisal (see Note 1) completed in
connection with Fresh Start Reporting. In 1993, this note
was paid in full, resulting in a recovery of approximately
$300,000.
<PAGE>
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
3. Notes Receivable (continued)
b. In connection with the sale in 1987 of seven radio
stations to Fairmont Communications Corporation ("Fairmont")
for an aggregate sale price of $120 million, the Company
loaned $50 million to Fairmont (the "Fairmont Notes") and
acquired a 27% equity interest in Fairmont. The Fairmont
Notes were issued in three series of 12 1/2% increasing rate
subordinated notes due in 1992, extendible at Fairmont's
option to 1994. Interest on the notes was payable quarterly
in cash or additional notes at Fairmont's election.
On August 28, 1992, Fairmont filed for voluntary relief
under Chapter 11 of the U.S. Bankruptcy Code. At that date
the Company ceased to record additional notes related to
interest paid in kind since it is not entitled to interest
after that date under the Bankruptcy Code.
The $94.8 million principal amount of Fairmont Notes owned
by the Company (which includes accrued interest paid in
additional Fairmont Notes) and the Company's equity investment
in Fairmont had no book value as of December 31, 1993 and 1992.
By order dated September 10, 1993, the United States
Bankruptcy Court for the Southern District of New York
confirmed the Chapter 11 Plan of Reorganization (the
"Fairmont Plan") for Fairmont and the Fairmont subsidiaries.
Essentially, the Fairmont Plan provides for the orderly
liquidation of the assets of Fairmont and the Fairmont
subsidiaries, and the distribution of the proceeds derived
therefrom according to the relative priorities of the
parties asserting interests therein. The Company believes
that the level of asset sales may be sufficiently high to
provide for some recovery upon the Fairmont Notes, although
the exact amount of any such recovery is unclear at this
time.
<PAGE>
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
4. Investment in Partially Owned Company
On December 30, 1992, the Company, in connection with its
Plan of Reorganization, sold 75% of its publishing
subsidiaries (see Note 2). The Company retained a 25%
interest in Alexandra Publishing Corporation which owns 100%
of The New York Law Publishing Company. This investment was
recorded at its approximate fair value of $4 million as of
December 31, 1992 as a result of Fresh Start Reporting (see
Note 1).
In November 1993, in connection with the repurchase of
common stock (see Note 13), the Company transferred its
remaining 25% interest in Alexandra Publishing, which had a
carrying value of approximately $3.8 million.
For the years ended December 31, 1992 and 1991, these
subsidiaries were consolidated in the statement of
operations and cash flows of the Predecessor Company. Based upon
audited financial information, Alexandra Publishing Corporation and
subsidiary had net revenue and income of approximately $32.6
million and $2.9 million (including intercompany expenses of $1.3
million), respectively, for the year ended December 31, 1992. For
the year ended December 31, 1993, the 25% interest in such
subsidiaries was accounted for by the equity method of
accounting and the Reorganized Company recognized a charge
to operations of approximately $230,000 for its period of
ownership.
5. Investment in Cellular Communication Properties
The Company accounted for its investment in PriCellular
Corporation ("PriCellular") under the equity method of
accounting as it believed its control in PriCellular to be
temporary. The Company recognized 75% of PriCellular's
losses as a charge to operations to the extent of its
investment in PriCellular representing $2.9 million and $4.3
million for the years ended December 31, 1992 and 1991,
respectively. Prior to Fresh Start Reporting, the
Predecessor Company's investment in PriCellular had been
<PAGE>
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
5. Investment in Cellular Communication Properties (continued)
reduced to zero book value. In accordance with the court approved
Plan, the Company transferred 1% of PriCellular's common
stock to Robert Price, reducing the Company's interest to
74%. The consolidated financial statements of the
Reorganized Company as of December 31, 1992 reflect an
approximate fair value of the investment of $11.5 million,
in connection with Fresh Start Reporting (see Note 1).
On October 1, 1993, the Company sold its remaining 74%
interest in PriCellular to a subsidiary of PriCellular for
$11 million in cash. Under the agreement of sale,
PriCellular and such subsidiary indemnified the Company
against all liabilities and claims relating to PriCellular
and its business. The proceeds from the sale have been used
to repurchase a portion of the Secured Notes, in accordance
with the terms of the indenture of such notes (see Note 9).
During 1993, the Company recognized a charge of
approximately $890,000 related to its share of PriCellular's
losses through October 1, 1993, and realized no gain or loss
from the sale of its interest in PriCellular.
<PAGE>
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
6. Property and Equipment
Property and equipment consist of the following:
December 31
1993 1992
---------------------------
Land $2,328,000 $2,328,000
Buildings 3,468,209 3,439,000
Broadcasting equipment 7,720,940 7,315,000
Outdoor fixtures 801,320 756,417
Leasehold improvements 229,783 229,000
Furniture and fixtures 619,870 541,000
Transportation equipment 432,814 341,000
---------------------------
15,600,936 14,949,417
Less, accumulated 1,872,765 -
depreciation
---------------------------
Net property and equipment $13,728,171 $14,949,417
===========================
As discussed in Note 1, in conjunction with the consummation
of the Plan, the Company implemented Fresh Start Reporting.
Accordingly, as of December 31, 1992, all property and
equipment were restated to reflect approximate fair value
and accumulated depreciation was eliminated.
7. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consist of the
following:
December 31
1993 1992
---------------------------
Accounts payable-suppliers $906,770 $1,186,035
Accrued professional fees 299,113 979,214
Accrued Chapter 11 expenses 47,664 807,435
Other 995,857 1,135,733
---------------------------
$2,249,404 $4,108,417
===========================
<PAGE>
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
8. Other Liabilities
Other liabilities consist of:
December 31
1993 1992
---------------------------
Liability for film $507,603 $724,199
broadcast rights
Income and franchise taxes 522,512 1,250,000
payable
Other 80,217 216,959
---------------------------
1,110,332 2,191,158
Less, amounts due currently (1,035,585) (1,984,069)
---------------------------
$74,747 $207,089
===========================
<PAGE>
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
9. Long-Term Debt
Long-term debt consists of the following notes payable by
the Company and its wholly-owned subsidiaries at December
31, 1993 and 1992 as follows:
December 31
1993 1992
---------------------------
Subsidiaries:
Atlantic Broadcasting
Corporation, Southeast Texas
Broadcasting Corporation,
Texoma Broadcasting
Corporation and Tri-State
Broadcasting Corporation: $3,200,000
Note payable to Bank of -
Montreal under term loan
agreement (A)
Parent Company:
5% Senior Secured Notes, due
October 9, 1999; interest
payable semiannually; net
of unamortized discount - $22,100,000
of $8,705,000 (effective
interest rate of 11.04%) (B)
---------------------------
Total debt $3,200,000 $22,100,000
===========================
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
9. Long-Term Debt (continued)
(A) On December 21, 1993, certain subsidiaries of the
Company entered into a Line of Credit Agreement (the "Line
of Credit") with the Bank of Montreal ("BOM"). The Line of
Credit is for $10 million, reduced by $2 million, $2.5
million, $2.5 million and $3 million in 1994, 1995, 1996 and
1997, respectively. Borrowings under the Line of Credit
bear interest at the BOM Base Rate, as defined (or at other
rates at the borrowers' option), and are secured by the
assets of the subsidiaries which have book value of
approximately $26 million. There is also a fee of 1/2 of
1% on the unused portion of the Line of Credit. On December
24, 1993, the Company borrowed $5.6 million pursuant to this
agreement and the proceeds were used to retire the remaining
$7.6 million face amount of Secured Notes. On December 31,
1993, the proceeds from the sale of the Company's position
in Northstar Television Group ("NTG" - see Note 11) were
used to repay $2.4 million of borrowings under the Line of
Credit.
(B) In connection with the Plan, the Company issued
$30,805,000 face amount of the Senior Notes. The Company
recorded these notes net of a discount of $8,705,000 under
Fresh Start Reporting (see Note 1). Accrued interest related
to these notes was approximately $351,000 at December 31,
1992. During October and December 1993, the Company
repurchased all of the Secured Notes for approximately $20.8
million, plus accrued interest, and realized a gain of
approximately $2.0 million, net of taxes of zero.
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
10. Income Taxes
As discussed in Note 1, the Company adopted Statement 109 as
of December 31, 1992. The cumulative effect of this change
had no significant impact on the Company's consolidated
financial statements, including tax expense, for the year
then ended.
The Company had, as of December 31, 1993 and 1992, deferred
tax assets, which were subject to a valuation allowance of
approximately $46,031,000 and $44,604,000, respectively, and
deferred tax liabilities of approximately $3,943,000 and
$4,169,000, respectively. These deferred tax assets and
liabilities consist of the following:
December 31,
1993 1992
Deferred tax assets
Accounts receivable, principally due to
allowance for doubtful accounts $166,000 $ 192,000
Notes from and investment in partially owned 15,251,000 31,785,000
companies
Minimum tax credit carryforward 642,000 -
Capital loss carryforwards 19,905,000 -
Net operating loss carryforwards 13,910,000 13,931,000
Investment tax credit carryforwards 100,000 100,000
Notes Receivable, principally due to reserves - 787,000
Investment in cellular communications
properties, principally due to Fresh
Start Reporting - 1,978,000
$49,974,000 $48,773,000
December 31,
1993 1992
Deferred tax liabilities
Property and equipment, principally due to
differences in depreciation and the effects
of Fresh Start Reporting $3,662,000 $3,393,000
Deferred compensation 281,000 -
Unamortized debt discount - 727,000
Unrealized gain on marketable securities - 49,000
$3,943,000 $4,169,000
<PAGE>
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
10. Income Taxes (continued)
Income tax expense in 1993 and 1992 consist of approximately
$124,000 and $499,000, respectively, primarily for state and
local income taxes. In addition, a provision of $900,000,
primarily for Federal alternative minimum tax, has been
included in extraordinary items for the year ended December
31, 1992 (see Note 2).
Income tax benefit in 1991 consists of refunds for Federal
alternative minimum tax of $505,104 related to the carryback
of capital losses incurred in 1991 and 1990 and state and
local taxes of $178,322.
Net operating loss carryforwards aggregating approximately
$41.0 million are available for federal income tax
purposes at December 31, 1993. These carryforwards expire
in the years 2002 through 2006. The Company also has
available investment tax credit carryforwards of
approximately $100,000 expiring in the year 2000. All of
these carryforwards arose prior to the reorganization
and are subject to the limitations of Internal Revenue
Code Sections 382 and 383.
11. Other Expense (Income)-Net
Other expense (income)-net consist of:
1993 1992 1991
-------------------------------------
(Gains) loss on sales $(6,609) $(6,940) $7,996,741
of securities
Interest income (715,918) (543,252) (1,092,880)
Loss on disposition of 425 364,024 54,333
equipment
Compensation-bonus
under employment - - 2,512,200
contract
(Recovery) reserves
for losses on notes (2,730,432) (387,588) 2,915,712
receivable
Loss on purchase of
Common Stock (Note 13) 3,976,597 - -
Other-net 15,226 538,264 539,118
-------------------------------------
$539,289 $(35,492) $12,925,224
=====================================
<PAGE>
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
11. Other Expense (Income)-Net (continued)
As of December 31, 1992, in conjunction with the adoption of
Fresh Start Reporting, the investment in common and
preferred stock of NTG was removed from the Company's
consolidated balance sheet since its estimated realizable
value was zero (see Note 1). In December 1993, the Company
sold its investment in NTG for approximately $2.4 million in
cash and recognized a gain of approximately $2.4 million on the
sale.
12. Segment Data
The Reorganized Company's business operations are classified
into two segments: Television and Radio Broadcasting and
Other. The Predecessor Company's business operations
included Publishing with Other. The Company's Publishing
operations were transferred to third parties in 1992 (see
Note 2) and therefore, are no longer consolidated in the
Reorganized Company's operations. There are no transfers
between segments of the Company. The segment data follows:
Year ended December 31, 1993
---------------------------------------------------
Broadcasting
Television Radio Other Consolidated
---------------------------------------------------
Net revenue $11,744,547 $10,271,892 $773,753 $22,790,192
Operating 7,484,486 8,226,346 623,929 16,334,761
expenses
Depreciation
and 1,153,860 834,346 354,809 2,343,015
amortization
---------------------------------------------------
Operating $3,106,201 $1,211,200 $(204,985) $4,112,416
income (loss)*
===================================================
<PAGE>
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
12. Segment Data (continued)
Year ended December 31, 1992
---------------------------------------------------
Broadcasting Publishing
Television Radio and Other Consolidated
---------------------------------------------------
Net revenue $11,239,395 $9,309,229 $33,408,010 $53,956,634
Operating 7,570,105 7,544,032 24,453,255 39,567,392
expenses
Depreciation
and 1,683,309 1,074,407 2,115,420 4,873,136
amortization
---------------------------------------------------
Operating $1,985,981 $690,790 $6,839,335 $9,516,106
income*
===================================================
Year ended December 31, 1991
---------------------------------------------------
Broadcasting Publishing
Television Radio and Other Consolidated
---------------------------------------------------
Net revenue $10,359,913 $8,095,942 $29,996,283 $48,452,138
Operating 7,472,675 7,334,037 22,375,150 37,181,862
expenses
Depreciation
and 1,778,524 1,045,864 2,308,058 5,132,446
amortization
---------------------------------------------------
Operating $1,108,714 $(283,959) $5,313,075 $6,137,830
income (loss)*
===================================================
* Operating income (loss) is before corporate expenses,
other expense (income)-net, interest expense, amortization
of debt discount and deferred debt expense, unrealized non-
cash loss (recovery) on marketable securities, share of loss
of partially owned companies, reorganization items, income
taxes and extraordinary items.
<PAGE>
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
12. Segment Data (continued)
Identifiable Capital
Assets Expenditures
------------------------------
1993:
Television broadcasting $16,208,021 $397,604
Radio broadcasting 13,988,511 200,600
Other 3,673,912 50,069
Corporate 3,401,056 3,885
------------------------------
Consolidated $37,271,500 $652,158
==============================
1992:
Television broadcasting $17,067,971 $354,779
Radio broadcasting 17,584,247 253,442
Publishing and other 19,322,971 273,955
Corporate 20,351,715 19,959
------------------------------
Consolidated $74,326,904 $902,135
==============================
1991:
Television broadcasting $38,099,678 $448,543
Radio broadcasting 15,692,764 33,400
Publishing and other 21,714,768 173,486
Corporate 16,839,618 9,933
Consolidated $92,346,828 $665,362
<PAGE>
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
13. Shareholders' Equity (Deficit)
A. Refer to notes 1 and 2 for a description of changes to
shareholders' equity (deficit) pursuant to the Plan of
Reorganization.
B. On November 24, 1993, the Company purchased from
investment advisory clients of W. R. Huff Asset Management
Co., L.P. ("Huff") a block of 2,249,086 shares of its common
stock. The purchase price consisted of $3.75 per share in
cash, plus the stock of its indirect wholly-owned
subsidiary, Price Publishing Corporation, which held the
remaining 25% interest in the New York Law Publishing
Company (see Note 2). The stock of Price Publishing Corporation had
a book value of approximately $3,836,000 at such date which in the
opinion of management approximated its fair value (see Note 4). In
connection with this transaction, the Company recorded a loss of
approximately $3,977,000 reflecting the difference between the value
of the cash and stock of Price Publishing Corporation transferred to
Huff and the then current trading market price of the common stock.
The loss has been included in other expense (income) in the
accompanying statement of operations (see Note 11) and the common
stock purchased from Huff has been treated as constructively retired
in the accompanying balance sheet at December 31, 1993. The purchase
agreement includes a provision for certain additional payments to
Huff (or rescission of the agreement if such payments are not made)
if, among other things, litigation, as defined, is pending at the end
of one year from the purchase date. Also, additional payments to
Huff may be required if there has been a change in control of or
other specified transaction involving the Company at such purchase
anniversary date.
<PAGE>
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
13. Shareholders' Equity (Deficit) (continued)
In connection with the Company's purchase of common stock
from Huff, the Company has deposited $1,500,000 with a
collateral agent to secure certain obligations under the
purchase agreement.
C. In connection with the Plan, warrants on the Company's
common stock, originally issued on April 12, 1990, were
amended. The warrants will be exercisable for approximately
124,000 shares of the Reorganized Company's common stock at
an exercise price of $4.23 per share during the five-year
period commencing October 1, 1993.
D. The Company has an employment agreement with Robert
Price, covering base salary and incentive compensation based
on Company performance. The agreement provides for bonuses
payable in common stock to Mr. Price during specified
periods after December 30, 1992 commencing on specified
events and/or performance achievements by the Company and
its subsidiaries. The number of shares awarded under such
agreement will be based upon a predetermined percentage of
the then outstanding shares of Price's common stock.
14. Stock Option Plan
A long-term incentive plan, (the "1992 Long Term Incentive
Plan") was established under the Plan, which provides for
granting incentive stock options, as defined under current
tax law, and other stock-based incentives to key employees
and officers. The maximum number of shares of the Company
that are subject to awards granted under the 1992 Long Term
Incentive Plan is 1,000,000. The exercise of such options,
other than those granted on December 10, 1992, will be exer
cisable at a price not less than the fair market value on
the date of the grant, for a period up to ten years.
<PAGE>
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
14. Stock Option Plan (continued)
New incentive stock options were granted on December 10,
1992 under the 1992 Long Term Incentive Plan to key
employees and officers. The number of options issued
represents essentially a 1 for 2 reverse split for all
previously awarded stock options granted, which were
canceled pursuant to the Plan, except for options previously
awarded to Robert Price which were surrendered by Mr. Price.
Options granted on December 10, 1992 represent 170,911
shares and the exercise price was set at $2.67 per share.
During 1993, options for 21,055 shares were exercised and as
of December 31, 1993, options for 140,630 shares remained
outstanding. Also, at December 31, 1993, common stock of
838,315 shares remain reserved for the issuance of stock
options.
15. Commitments and Contingencies
The Company is involved in various claims and litigation
arising in the ordinary course of business. In the opinion
of legal counsel and management, the ultimate disposition of
these matters will not have a material adverse effect on the
Company's financial condition.
<PAGE>
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements (continued)
15. Commitments and Contingencies (continued)
The Company and its subsidiaries lease a variety of assets
used in their operations, including office space and antenna
sites. Renewal options are available in the majority of
leases. The following is a schedule of the Company's minimum
rental commitment for operating leases of real and personal
property for each of the five years subsequent to 1993 and
in the aggregate:
Operating
Leases
----------
Year:
1994 $261,000
1995 257,000
1996 269,000
1997 268,000
1998 263,000
Thereafter 210,000
----------
Total minimum lease payments $1,528,000
==========
Rental expense for operating leases was approximately
$312,000, $1,468,000, and $1,384,000 for the years ended
December 31, 1993, 1992 and 1991, respectively.
At December 31, 1993, the Company is committed to the
purchase of film broadcast rights of various syndicated
programming aggregating approximately $135,000,
$235,000, $21,000 and $11,000 for the years 1994, 1995, 1996
and 1997, respectively.
<PAGE>
Price Communications Corporation
and Subsidiaries
Notes to Consolidated Financial Statements
16. Subsequent Events
On December 27, 1993, the Company announced that it entered
into an agreement to sell substantially all the assets of
its radio stations, WWKB-AM and WKSE-FM in Buffalo, New
York, for $5 million in cash. This transaction has been
approved by the Federal Communications Commission ("FCC")
and management expects it to close during the first half of
1994. The Company expects to realize a gain on the
transaction.
On February 16, 1994, the Company entered into an agreement
to buy WHTM-TV, Channel 27, serving the Harrisburg-York-Lancaster-
Lebanon, Pennsylvania market for approximately $41 million.
This transaction is subject to FCC approval. The Company
expects to close on this purchase during the second half of
1994.
On February 16, 1994, the Company sold its outdoor
advertising business for a total of $875,000, including
$200,000 cash and a note from the buyer for $675,000. A pre-
tax loss of approximately $340,000 will be recognized in
1994 on the sale.
In March 1994, the Company entered into an agreement to
sell radio stations WOWO-AM and WOWO-FM in Fort Wayne,
Indiana, for $2.3 million in cash. The transaction is
subject to FCC approval. The Company expects to realize a
gain on the transaction.
<PAGE>
PRICE COMMUNICATIONS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(17)Plan of Reorganization
<TABLE>
The following illustrates the effects of the consummation of the Plan, as described in note 2.
<CAPTION>
Exchange of Old
Pre-Effective Subord. Debt and Exchange of
Date Balance Apollo Old Stock for Senior Debt for Fresh Start Reorganized
Sheet Transaction Common Stock Secured Notes Reporting Balance Sheet
<S> <C> <C> <C> <C> <C> <C>
Assets
Current assets:
Cash, cash items and marketable
securities:
Cash and cash equivalents $ 9,463,053 (343,526) - - - 9,119,527
Marketable securities 9,778,100 - - - - 9,778,100
19,241,153 (343,526) - - - 18,897,627
Accounts receivable, net 7,699,152 (4,046,409) - - - 3,652,743
Film broadcast rights 611,289 - - - - 611,289
Note receivable 1,500,000 - - - 1,400,000 2,900,000
Prepaid expenses and other
current assets 3,269,155 (1,136,392) 300,000 - - 2,432,763
Total current assets 32,320,749 (5,526,327) 300,000 - 1,400,000 28,494,422
Notes receivable, net of reserves
Notes from and investment in
partially owned companies 174,800,315 1,818,538 - - (172,618,853) 4,000,000
Less, deferred income (169,907,697) - - - 169,907,697 -
Notes and equity in partially
owned companies 4,892,618 1,818,538 - - (2,711,156) 4,000,000
Property and equipment, at cost,
less accumulated depreciation 12,460,099 (694,981) - - 3,184,299 14,949,417
Broadcast licenses and other
intangible assets, less
accumulated amortization 46,398,883 (7,213,009) (3,296,385) (1,303,593) (21,381,896) 13,204,000
Investment in cellular
communication properties - - - - 11,500,000 11,500,000
Film broadcast rights 302,971 - - - - 302,971
Other assets 260,422 (260,422) 600,000 - - 600,000
Reorganization value in excess of
amounts allocable to
identifiable assets - - - - 1,276,094 1,276,094
Total assets $ 96,635,742 (11,876,201) (2,396,385) (1,303,593) (6,732,659) 74,326,904
</TABLE>
(Continued)
PRICE COMMUNICATIONS CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(17), Continued
<TABLE>
<CAPTION>
Exchange of Old
Pre-Effective Subord. Debt and Exchange of
Date Balance Apollo Old Stock for Senior Debt for Fresh Start Reorganized
Sheet Transaction Common Stock Secured Notes Reporting Balance Sheet
<S> <C> <C> <C> <C> <C> <C>
Liabilities and Shareholders
Equity (Deficit)
Current liabilities:
Accounts payable and
accrued expenses $ 7,719,304 (2,398,728) - - (1,212,159) 4,108,417
Accrued interest 852,042 (852,042) - 350,835 - 350,835
Other current liabilities 7,558,602 (5,081,000) - - (493,533) 1,984,069
Repurchase agreement 4,930,083 - - - - 4,930,083
Long-term debt - current portion
net of unamortized discount 4,000,000 (4,000,000) - - - -
Total current liabilities 25,060,031 (12,331,770) - 350,835 (1,705,692) 11,373,404
Liabilities subject to compromise
under Chapter 11 proceedings 336,046,477 (27,068,331) (272,815,643) (36,162,503) - -
Long-term debt, net of
unamortized discount 41,000,000 (41,000,000) - 22,100,000 - 22,100,000
Other liabilities 310,295 (103,206) - - - 207,089
Shareholders equity (deficit):
Old Common Stock, par value $.01
per share; authorized 40,000,000
shares; outstanding:
9,028,890 shares 84,767 - (84,767) - - -
New Common Stock, par value $.01
per share; authorized 40,000,000
shares; outstanding:
12,109,583 - - 121,096 - - 121,096
Junior Common Stock, par value
$.01 per share; authorized,
issued and outsanding:
500,000 shares 5,000 - (5,000) - - -
Additional paid-in capital 27,955,172 - 39,178,222 - (26,608,079) 40,525,315
Accumulated deficit (333,826,000) 68,627,106 231,209,707 12,408,075 21,581,112 -
(305,781,061) 68,627,106 270,419,258 12,408,075 (5,026,967) 40,646,411
Total liabilities and shareholders
equity (deficit) $ 96,635,742 (11,876,201) (2,396,385) (1,303,593) (6,732,659) 74,326,904
</TABLE>
The Apollo Transaction includes the sale of 75% of the Company's
interest in Alexandra Publishing Corporation, which owns The New
York Law Publishing Company. As a result of this transaction, the
Company will no longer consolidate its interest in these companies.
During 1992, The New York Law Publishing Company contributed
approximately $32.6 million to the Company's net revenue, $23.9
million to operating expenses and $1.6 million to depreciation and
amortization. The gain on the partial sale of publishing companies
and the gain from cancellation of indebtedness resulted in
extraordinary income of approximately $312.7 million which is net
of a tax provision of $900,000 relating to the sale of the
publishing companies. The gain resulting from the forgiveness of
debt is not taxable for Federal income tax purposes.<PAGE>
(18)Supplemental Cash
Flow Information
The following is a supplemental schedule of noncash investing
activities for
the years ended December 31, 1993, 1992 and 1991:
1993 1992 1991
Fairmont (Note 3):
Notes received - 8,983,281 11,064,240
Deferred income - (8,983,281) (11,064,240)
NTG (Note 11):
Dividends accumulated - 11,030,660 9,420,794
Deferred income - (11,030,660) (9,420,794)
/AUDIT-REPORT
<PAGE>
PART III
The information called for by Items 10, 11, 12 and 13 is
incorporated herein by reference from the following portions of the
definitive proxy statement to be filed by the Company in connection
with its 1994 Meeting of Shareholders.
Item Incorporated from
Item 10. Directors and Executive Directors and Executive
Officers of the Company Officers
Item 11. Executive Compensation "Executive Compensation" and
"Certain Transactions"
Item 12. Security Ownership of "Principal Shareholders" and
Certain Beneficial "Securities Ownership of
Owners and Management Management"
Item 13. Certain Relationships "Executive Compensation" and
and Related Transactions "Certain Transactions"
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K
(a) (1) and (2) List of financial statements and financial
statement schedules:
Independent Auditors' Reports
Consolidated Balance Sheets at December 31, 1993 and 1992
Consolidated Statements of Operations for Years ended
December 31, 1993, 1992 and 1991
Consolidated Statements of Shareholders' Equity (Deficit) for
Years ended December 31, 1993, 1992 and 1991
Consolidated Statements of Cash Flows for the Years ended
December 31, 1993, 1992 and 1991
Notes to Consolidated Financial Statements
III. Condensed Financial Information of Registrant
V. Property, Plant and Equipment
VI. Accumulated Depreciation and Amortization
of Property, Plant and Equipment
VIII. Valuation and Qualifying Accounts
X. Supplementary Income Statement Information
(Schedules other than those listed are omitted for
the reason that they are not required or are not
applicable or the required information is shown in
the financial statements or notes thereto.)
(3) Exhibits
See Exhibit Index at page E-l, which is incorporated
herein by reference.
(b) Reports on Form 8-K.
During the quarter ended December 31, 1993, Registrant
filed the following Current Reports on Form 8-K:
On October 14, 1993, Registrant filed a report on
Form 8-K wherein a disposition of assets occurring
on October 1, 1993 was reported at Item 2. No
financial statements were included in or as
exhibits to this Current Report.
On December 2, 1993, Registrant filed Amendment No.
1 to its Current Report on Form 8-K filed on
October 14, 1993. The Amendment No. 1 reported
certain recent developments and included certain
pro forma financial statements as Exhibit 99(ii).
Also on December 2, 1993, Registrant filed a report
on Form 8-K wherein a repurchase of Registrant's
common stock occurring on November 24, 1993, and
the institution of litigation against Registrant on
November 29, 1993, were reported at Item 5.
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
<TABLE>
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Balance Sheets
December 31, 1993 and 1992
<CAPTION>
ASSETS: 1993 1992
<S> <C> <C>
Cash and cash equivalents $912,044 $8,471,613
Marketable securities - 9,778,100
Prepaid expenses and other current assets 2,023,123 1,264,003
Total current assets 2,935,167 19,513,716
Investments in and receivables from subsidiaries*<F1> 28,709,979 51,457,384
Property and equipment, net 166,693 238,000
Other 299,196 600,000
$32,111,035 $71,809,100
LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts payable and accrued expenses $885,599 $2,531,771
Accrued interest - 350,835
Other current liabilities 520,905 1,250,000
Repurchase agreement - 4,930,083
Total current liabilities 1,406,504 9,062,689
Long-term debt, net - 22,100,000
Shareholders' equity 30,704,531 40,646,411
$32,111,035 $71,809,100
<FN>
<F1>* Eliminated in consolidation
</TABLE>
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
<TABLE>
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Statements of Operations
<CAPTION>
Year Ended December 31,
Reoganized
Company Predecessor Company
1993 1992 1991
<S> <C> <C> <C>
Corporate expenses $3,648,524 $4,973,287 $6,123,146
Other expense - net 3,473,391 173,898 10,685,920
Interest expense 1,465,315 14,531,762 37,025,495
Amortization of debt discount and deferred debt expense 756,975 877,139 1,987,793
Depreciation and amortization 75,192 47,480 30,642
Unrealized noncash loss (recovery) on marketable securities 145,884 (145,884) (8,481,206)
Share of loss of partially owned company - - 4,734,087
(Earnings) loss of unconsolidated subsidiaries (5,850,243) (3,273,853) 4,973,060
Loss before reorganization items, income taxes
and extraordinary item (3,715,038) (17,183,829) (57,078,937)
Reorganization items - (5,802,959) -
Loss before income taxes
and extraordinary item (3,715,038) (22,986,788) (57,078,937)
Income tax benefit (expense) 115 (122,887) 454,553
Loss before extraordinary item (3,714,923) (23,109,675) (56,624,384)
Extraordinary item, net of income tax expense of 2,010,332 312,324,661 -
$900,000 in 1992
Net income (loss) $(1,704,591) $289,214,986 ($56,624,384)
</TABLE>
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
<TABLE>
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
Statements of Cash Flows
<CAPTION>
Year Ended December 31,
Reoganized
Company Predecessor Company
1993 1992 1991
<S> <C> <C> <C>
Cash flows used in operating activities:
Net income (loss) $(1,704,591) $289,214,986 ($56,624,384)
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
Items not affecting cash:
Amortization of debt discount and deferred debt expense 756,975 877,139 1,987,793
Depreciation and amortization 75,192 47,480 30,642
Unrealized noncash loss (recovery) on marketable securities 145,884 (145,884) (8,481,206)
Share of loss of partially owned company - - 4,734,087
Reserve for loss on note receivable - - 1,000,000
(Earnings) loss of unconsolidated subsidiaries (5,850,243) (3,273,853) 4,973,060
Valuation adjustment, net of working capital valuation - 5,515,443 -
Change in assets and liabilities net of effects of reorganization:
Increase in prepaid expenses and other assets (458,316) (100,557) (534,926)
Decrease in due from broker/dealer - 237,498 1,499,371
(Decrease) increase in accounts payable and accrued expenses (1,646,172) 1,774,500 (200,083)
(Decrease) increase in other liabilities, net of forgiveness (729,095) (347,038) 1,968,059
(Decrease) increase in accrued interest, net of forgiveness (350,835) 14,477,864 37,015,303
Reclassification of transactions to investing and financing
activities:
Loss on purchase of common stock 3,976,597 - -
Gain on early extinguishments of debt (2,010,332) - -
Gain on forgiveness of debt and partial sale of subsidiary - (312,324,661) -
(Gain) loss on sale of securities, net (6,609) - 7,877,666
Recovery on note receivable - (50,000) -
Total adjustments (6,096,954) (293,312,069) 51,869,766
Net cash used in operating activities (7,801,545) (4,097,083) (4,754,618)
Cash flows provided by investing activities:
Cash received from (paid to) subsidiaries*<F1> 24,828,406 12,671,261 (216,177)
Purchases of marketable securities and mutual funds (36,704,873) (9,632,215) (1,696,818)
Purchases of securities under agreements to resell (8,050,811) - -
Proceeds from sales of marketable securities and mutual funds 54,394,512 - 6,388,825
Capital expenditures (3,885) (19,959) -
Investment in partially owned company (66,805) - -
Proceeds from note receivable - 50,000 -
Net cash provided by investing activities 34,396,544 3,069,087 4,475,830
Cash flows (used in) provided by financing activities:
Repurchases of long-term debt (20,846,643) - -
Purchases of common stock (8,434,058) - -
Proceeds from stock options exercised 56,216 - -
Net (repayments of) borrowings under repurchase agreements (4,930,083) 4,930,083 -
Net cash (used in) provided by financing activities (34,154,568) 4,930,083 -
Net (decrease) increase in cash and cash equivalents (7,559,569) 3,902,087 (278,788)
Cash and cash equivalents at beginning of year 8,471,613 4,569,526 4,848,314
Cash and cash equivalents at end of year $912,044 $8,471,613 $4,569,526
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Income taxes, net of refunds $158,251 $53,898 $72,906
Interest $1,816,150 $16,054 $10,193
Chapter 11 items:
Interest received - $357,000 -
Professional and administrative expenses paid 26,085 $505,144 -
<FN>
<F1>* Eliminated in consolidation
/TABLE
<PAGE>
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
<TABLE>
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
1993, 1992 and 1991
<CAPTION>
Balance at
Beginning Additions Sale of Balance at
Classification of Period at Cost Retirements Business Fresh Start End of Period
<S> <C> <C> <C> <C> <C> <C>
For the year ended
December 31, 1993:
Land $2,328,000 $0 $0 $0 $0 $2,328,000
Buildings $3,439,000 $29,209 $0 $0 $0 $3,468,209
Broadcasting equipment 7,315,000 405,940 0 0 0 7,720,940
Outdoor fixtures 756,417 44,903 0 0 0 801,320
Leasehold improvements 229,000 783 0 0 0 229,783
Furniture and fixtures 541,000 79,509 (639) 0 0 619,870
Transportation equipment 341,000 91,814 0 0 0 432,814
Total 1993 $14,949,417 $652,158 ($639) $0 $0 $15,600,936
For the year ended
December 31, 1992:
Land $3,937,711 $0 $0 $0 ($1,609,711) $2,328,000
Buildings $3,509,639 $69,115 $0 $0 ($139,754) $3,439,000
Broadcasting equipment 14,872,325 231,232 (619,029) 0 (7,169,528) 7,315,000
Publishing equipment 1,912,419 225,121 (1,426,011) (711,529) 0 0
Outdoor fixtures 1,828,466 19,233 (13,154) 0 (1,078,128) 756,417
Leasehold improvements 1,102,557 5,184 (26,605) (760,800) (91,336) 229,000
Furniture and fixtures 2,852,239 177,840 (771,906) (659,002) (1,058,171) 541,000
Transportation equipment 790,103 174,410 (183,874) 0 (439,639) 341,000
Total 1992 $30,805,459 $902,135 ($3,040,579) ($2,131,331) ($11,586,267) $14,949,417
For the year ended
December 31, 1991:
Land $3,937,711 $0 $0 $0 $0 $3,937,711
Buildings $3,501,458 $8,181 $0 $0 $0 $3,509,639
Broadcasting equipment 14,709,001 246,240 (82,916) 0 0 14,872,325
Publishing equipment 1,889,641 22,778 0 0 0 1,912,419
Outdoor fixtures 1,810,928 21,924 (4,386) 0 0 1,828,466
Leasehold improvements 1,117,069 0 (14,512) 0 0 1,102,557
Furniture and fixtures 2,607,913 250,826 (6,500) 0 0 2,852,239
Transportation equipment 741,297 115,413 (66,607) 0 0 790,103
Total 1991 $30,315,018 $665,362 ($174,921) $0 $0 $30,805,459
</TABLE>
<PAGE>
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
<TABLE>
SCHEDULE VI - ACCUMULATED DEPRECIATION of PROPERTY, PLANT AND EQUIPMENT
<CAPTION>
1993, 1992 and 1991
Balance at
Beginning Depreciation Sale of Balance at
Classification of Period Expense Retirements Business Fresh Start End of Period
<S> <C> <C> <C> <C> <C> <C>
For the year ended
December 31, 1993:
Buildings $0 $327,451 $0 $0 $0 $327,451
Broadcasting equipment 0 1,036,932 0 0 0 1,036,932
Outdoor fixtures 0 126,070 0 0 0 126,070
Leasehold improvements 0 69,529 0 0 0 69,529
Furniture and fixtures 0 142,676 0 0 0 142,676
Transportation equipment 0 170,107 0 0 0 170,107
Total 1993 $0 $1,872,765 $0 $0 $0 $1,872,765
For the year ended
December 31, 1992:
Buildings $2,468,980 $403,740 $0 $0 ($2,872,720) $0
Broadcasting equipment 8,051,152 1,319,268 (284,477) 0 (9,085,943) 0
Publishing equipment 1,487,764 155,323 (1,425,242) (324,003) 106,158 0
Outdoor fixtures 950,211 217,217 (9,647) 0 (1,157,781) 0
Leasehold improvements 797,102 109,880 (26,605) (638,336) (242,041) 0
Furniture and fixtures 1,863,753 362,328 (770,430) (474,011) (981,640) 0
Transportation equipment 619,187 79,567 (162,154) 0 (536,600) 0
Total 1992 $16,238,149 $2,647,323 ($2,678,555) ($1,436,350) ($14,770,567) $0
For the year ended
December 31, 1991:
Buildings $2,070,719 $398,261 $0 $0 $0 $2,468,980
Broadcasting equipment 6,812,240 1,265,060 (26,148) 0 0 8,051,152
Publishing equipment 1,170,938 316,826 0 0 0 1,487,764
Outdoor fixtures 796,101 154,271 (161) 0 0 950,211
Leasehold improvements 680,580 116,522 0 0 0 797,102
Furniture and fixtures 1,495,297 368,456 0 0 0 1,863,753
Transportation equipment 626,909 58,886 (66,608) 0 0 619,187
Total 1991 $13,652,784 $2,678,282 ($92,917) $0 $0 $16,238,149
</TABLE> PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
<TABLE>
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
DECEMBER 1993, 1992 AND 1991
<CAPTION>
Balance at Additions Balance at
Beginning Charged to End of
Description<F1> of Period Expenses Deductions (a) Period
<S> <C> <C> <C> <C>
For the year ended
December 31, 1993:
Allowance for
doubtful accounts $565,351 $263,909 ($341,684) $487,576
For the year ended
December 31, 1992:
Allowance for<F2>
doubtful accounts $612,438 $513,908 ($560,995)(b) $565,351
For the year ended
December 31, 1991:
Allowance for
doubtful accounts $418,283 $780,039 ($585,884) $612,438
<FN>
<F1>(a) Amounts written off as uncollectible and payments.
<F2>(b) $85,000 relates to the partial sale of companies in 1992.
/TABLE
<PAGE>
PRICE COMMUNICATIONS CORPORATION AND SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
Year Ended December 31
Reorganized
Company Predecessor Company
Classification 1993 1992 1991
Maintenance and repairs $331,325 $569,556 $556,317
Royalties $404,205 $324,763 $374,936
Advertising $656,275 $3,379,941 $2,768,538
<PAGE>
Securities and Exchange Commission
Washington, D.C. 20549
Price Communications Corporation
Commission File No. 1-8309
Annual Report on Form 10-K
for the year ended December 31, 1993
Exhibits
Item 14(a)(3).
EXHIBIT INDEX
Item 14(a)(3)
Price Communications Corporation
Annual Report on Form 10-K for the year ended
December 31, 1993
Page
(3)(a)<PAGE>
Restated Certificate of Incorporation of the
Registrant as filed with the Secretary of
State of the State of New York on
December 29, 1992, incorporated by reference
to Exhibit 3(a) to Registrant's Form 10-K
for the year ended December 31, 1992.<PAGE>
(b)<PAGE>
Restated Bylaws of the Registrant.<PAGE>
(4)(a)<PAGE>
Indenture dated as of December 30, 1992
between the Registrant and IBJ Schroder Bank
& Trust Company, as trustee, relating to the
Company's 5% Senior Secured Notes due 1999
(the "Indenture"), incorporated by reference
to Exhibit 4(a) to Registrant's Form 10-K
for the year ended December 31, 1992.<PAGE>
(b)<PAGE>
Pledge, Intercreditor and Collateral Agency
Agreement dated as of December 30, 1992,
among the Registrant, IBJ Schroder Bank &
Trust Company, as Trustee under the
Indenture, and IBJ Schroder Bank & Trust
Company, as Collateral Agent, incorporated
by reference to Exhibit 4(b) to Registrant's
Form 10-K for the year ended December 31,
1992.<PAGE>
(10)(a)<PAGE>
The Registrant's 1992 Long Term Incentive
Plan, incorporated by reference to Exhibit
10(a) to Registrant's Form 10-K for the year
ended December 31, 1992.<PAGE>
(b)<PAGE>
Amended and Restated Employment Agreement
dated as of May 8, 1992 between The New York
Law Publishing Company and Robert Price,
incorporated by reference to Exhibit 10(b)
to Registrant's Form 10-K for the year ended
December 31, 1992.<PAGE>
(c) Employment Agreement with Robert Price,
dated May 8, 1992, incorporated by reference
to Exhibit 10(c) to Registrant's Form 10-K
for the year ended December 31, 1992.<PAGE>
(d)<PAGE>
Agreement dated May 8, 1992 between the
Registrant and Robert Price with respect to
PriCellular Corporation, incorporated by
reference to Exhibit 10(d) to Registrant's
Form 10-K for the year ended December 31,
1992.<PAGE>
(e)<PAGE>
Amended and Restated Stock Purchase
Agreement dated as of May 8, 1992 among the
Registrant, Price Publishing Corporation,
Alexandra Publishing Corporation, The New
York Law Publishing Company and Apollo
Investment Fund, L.P., incorporated by
reference to Exhibit 10(e) to Registrant's
Form 10-K for the year ended December 31,
1992.<PAGE>
(f)<PAGE>
Amended and Restated Shareholders Agreement
dated as of May 8, 1992 among the
Registrant, Apollo Investment Fund, L.P.,
Price Publishing Corporation, Alexandra
Publishing Corporation, and The New York Law
Publishing Company, incorporated by
reference to Exhibit 10(f) to Registrant's
Form 10-K for the year ended December 31,
1992.<PAGE>
(g)<PAGE>
Registration Rights Undertaking,
incorporated by reference to Exhibit 10(g)
to Registrant's Form 10-K for the year ended
December 31, 1992.<PAGE>
(h)<PAGE>
Warrant Agreement dated April 12, 1990
between Price Communications Corporation and
Warner Communications Investors, Inc.,
incorporated by reference to Exhibit (4) to
Registrant's Form 8-K filed to report an
event of April 12, 1990.<PAGE>
(i)<PAGE>
Form of Amendment to Time Warner Warrant,
incorporated by reference to Exhibit 10(i)
to Registrant's Form 10-K for the year ended
December 31, 1992.<PAGE>
(j)<PAGE>
Stock Purchase Agreement, dated as of
April 27, 1987, among Registrant, Republic
Broadcasting Corporation and Fairfield
Broadcasting, Inc., as amended July 16,
1987, incorporated by reference to Annex I
to Registrant's Definitive Proxy Statement
dated July 27, 1987.<PAGE>
(k)<PAGE>
Notes and Stock Purchase Agreement between
and among Fairfield Broadcasting, Inc.,
Price Communications Corporation and
Republic Broadcasting Corporation dated as
of September 30, 1987, as amended,
incorporated by reference to Exhibit 10(a)
to Registration Statement on Form S-1 (File
No. 33-30318).<PAGE>
(l)<PAGE>
Stockholders' Agreement among Fairfield
Broadcasting, Inc., Price Communications
Corporation, Citicorp Venture Capital Ltd.,
Osborn Communications Corporation and
Prudential-Bache Interfunding Inc., dated as
of September 30, 1987, incorporated by
reference to Exhibit 10(b) to Registration
Statement on Form S-1 (File No. 33-30318).<PAGE>
(m)<PAGE>
Asset Purchase Agreement by and among NTG,
Inc., Price Communications Corporation and
Western Michigan Broadcasting Corporation,
Rhode Island Broadcasting Corporation,
Magnolia Broadcasting Corporation and
Keystone Broadcasting Corporation, dated as
of June 28, 1989, incorporated by reference
to Exhibit 10(c) to Registration Statement
on Form S-1 (File No. 33-30318).<PAGE>
(n)<PAGE>
Stock Purchase Agreement between NTG
Holdings, Inc. and Price Communications
Corporation, dated as of June 28, 1989,
incorporated by reference to Exhibit 10(d)
to Registration Statement on Form S-1 (File
No. 33-30318).<PAGE>
(o)<PAGE>
Network Affiliation Agreement, dated
September 10, 1982, between National
Broadcasting Company, Inc. and Tri-State
Broadcasting Corporation, as amended
(KSNF-TV), incorporated by reference to
Exhibit 10(v) to Registration Statement on
Form S-1 (File No. 33-30318).<PAGE>
(p)<PAGE>
Network Affiliation Agreement, dated
April 22, 1989, between National
Broadcasting Company, Inc. and Continental
Broadcasting Corporation (KJAC-TV),
incorporated by reference to Exhibit 10(w)
to Registration Statement on Form S-1 (File
No. 33-30318).<PAGE>
(q)<PAGE>
Network Affiliation Agreement, dated
January 1, 1981, between National
Broadcasting Company, Inc. and Clay
Broadcasting Corporation of Texas, as
amended (KFDX-TV), incorporated by reference
to Exhibit 10(x) to Registration Statement
on Form S-1 (File No. 33-30318).<PAGE>
(r)<PAGE>
Stock Purchase Agreement dated March 1, 1990
among Time Warner Inc., Warner
Communications Investors, Inc., Price
Communications Corporation, and PriCellular
Corporation, incorporated by reference to
Exhibit (1) to Registrant's Form 8-K filed
to report events of April 12, 1990.<PAGE>
(s)<PAGE>
Amendment No. 1 to Stock Purchase Agreement
dated April 6, 1990, among Time Warner Inc.,
Warner Communications Investors, Inc., Price
Communications Corporation, and PriCellular
Corporation, incorporated by reference to
Exhibit (2) to Registrant's Form 8-K filed
to report an event of April 12, 1990.<PAGE>
(t)<PAGE>
Stock Option Agreement, dated April 12, 1990
between PriCellular Corporation and Warner
Communications Investors, Inc., incorporated
by reference to Exhibit (3) to Registrant's
Form 8-K filed to report an event of
April 12, 1990.<PAGE>
(u)<PAGE>
Line of Credit Agreement, dated as of
December 21, 1993, among Atlantic
Broadcasting Corporation, Southeast Texas
Broadcasting Corporation, Texoma
Broadcasting Corporation, Tri-State
Broadcasting Corporation, the Lenders
Parties Thereto and the Bank of Montreal.<PAGE>
(v)<PAGE>
Securities Purchase Agreement, dated
December 30, 1993, among Apple Publishing
Corporation, Price Communications
Corporation, Equity-Linked Investors, L.P.
and Equity-Linked Investors-II.<PAGE>
(w)<PAGE>
Agreement dated November 19, 1993, between
Price Communications Corporation, Apple
Publishing Corporation, the Sellers listed
on Exhibit A thereto and W.R. Huff Asset
Management Co., L.P.<PAGE>
(x)<PAGE>
Stock Purchase Agreement, dated as of
October 1, 1993, by and between Price
Communications Cellular, Inc., Price
Communications Corporation and Atlas
Cellular Corporation, incorporated by
reference to Exhibit 10 to Registrant's
Form 8-K filed to report an event of October
1, 1993.<PAGE>
(y)<PAGE>
Form of Indemnification Agreement between
Registrant and its officers and directors. <PAGE>
(11)<PAGE>
Statement regarding computation of per share
earnings (omitted; computation can be
clearly determined from material contained
in the Report).<PAGE>
(22)<PAGE>
Subsidiaries of Registrant<PAGE>
(24.2) Consent of Ernst & Young
Consent of KPMG Peat Marwick
(25)<PAGE>
The powers of attorney to sign amendments to
this Report appear on the signature page.<PAGE>
EXHIBIT 22
Subsidiaries of Price Communications Corporation as of December 31,
1993.
Name of Subsidiary State of Incorporation
Atlantic Broadcasting Corporation Delaware
Republic Broadcasting Corporation New York
Wayne Broadcasting Corporation Indiana
Huntington Broadcasting Corporation Delaware
Federal Broadcasting Corporation New York
Atlas Broadcasting Corporation New York
Eagle Broadcasting Corporation Delaware
Price Outdoor Media Corporation of America Delaware
Price Outdoor Media of Missouri Inc. Delaware
Apple Publishing Corporation Delaware
The Red Bank Register New Jersey
Empire State Broadcasting Corporation Delaware
Eimar Realty Corporation Delaware
Continental Broadcasting Corporation Delaware
Texoma Broadcasting Corporation Texas
Tri-State Broadcasting Corporation Delaware
Southeast Texas Broadcasting Corporation Texas
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 and 15(d) of the
Securities and Exchange Act of 1934, the Company has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
PRICE COMMUNICATIONS CORPORATION
By/s/ Robert Price
Robert Price, President
Dated: March 31, 1994
Pursuant to the requirements of the Securities and Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the Company and in the capacities and on the dates indicated. Each person
whose signature appears below hereby authorizes and appoints Robert Price as
his attorney-in-fact to sign and file in his behalf individually and in each
capacity stated below any and all amendments to this Annual Report.
Dated: March 31, l994 By/s/ Robert Price
Robert Price, Director
and President
(Principal Executive Officer,
Financial Officer and
Accounting Officer)
Dated: March 31, l994 By/s/ George H. Cadgene
George H. Cadgene,
Director
Dated: March 31, 1994 By/s/ Harold A. Christiansen
Harold A. Christiansen,
Director
Dated: March 31, 1994 By/s/ James H. Duncan., Jr.
James H. Duncan Jr.,
Director
Dated: March 31, l994 By/s/ Robert F. Ellsworth
Robert F. Ellsworth,
Director
Dated: March 31, 1994 By/s/ Kim I. Pressman
Kim I. Pressman
Director
[Lord Day Letterhead]
December 30, 1993
Price Communications Corporation
Apple Publishing Corporation
45 Rockefeller Plaza
New York, New York 10020
Ladies & Gentlemen:
We have acted as counsel to Equity-Linked
Investors, L.P., a New York limited partnership ("ELI-I"), and
Equity-Linked Investors-II, a New York limited partnership ("ELI-
II"; and together with ELI-I, the "Buyers"), in connection with
the Securities Purchase Agreement, dated December 30, 1993 (the
"Purchase Agreement") among the Buyers, Apple Publishing
Corporation, a Delaware corporation ("Apple"), and Price
Communications Corporation, a New York corporation ("Price"),
regarding the sale by Price and Apple to the Buyers of certain
securities of and other interests in Northstar Television Group,
Inc. (the "Company"). Unless otherwise defined herein,
capitalized terms used herein have the meanings provided in the
Purchase Agreement.
In such capacity, we have examined, among other
things, (i) executed copies of the Purchase Agreement, (ii) a
copy of the Amended and Restated Limited Partnership Agreement of
ELI-I dated as of October 2, 1984, as amended, and (iii) a copy
of the Limited Partnership Agreement of ELI-II dated as of
October 1, 1987, as amended.
In connection with the foregoing, we have
examined originals or copies satisfactory to us of all such
records, agreements, certificates, governmental orders, permits,
authorizations and other documents as we have deemed relevant and
necessary as a basis for the opinions hereinafter expressed. In
such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as
originals and the conformity with the original documents of all
documents submitted to us as copies. As to any facts material to
our opinions set forth below, we have, to the extent that such
facts were not independently established by us, relied upon
certificates of general partners or other representatives of the
Buyers.
In giving the opinions expressed below, we have
also assumed: (i) the due existence of each of Price and Apple;
(ii) the legal right, power and authority of each of Price and
Apple under all applicable laws and regulations to execute,
deliver and perform its respective obligations under the Purchase
Agreement; (iii) the due authorization, execution and delivery by
each of Price and Apple of the Purchase Agreement; and (iv) the
validity, binding effect and enforceability of the Purchase
Agreement in accordance with its terms against each of Price and
Apple.
The opinions expressed below are subject to the
qualification that enforcement of the Purchase Agreement may be
limited by any applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally from time to time in effect and may
be subject to the application of equitable principles and the
availability of equitable remedies.
In giving the opinions expressed below, we do
not purport to be experts in, and are not opining on, the laws of
any jurisdiction other than the laws of the State of New York.
Based upon and subject to the foregoing, we are
of the opinion that:
1. Each of the Buyers has the partnership power
and authority to enter into the Purchase Agreement.
2. The execution, delivery and performance by
each of the Buyers of the Purchase Agreement has been duly
authorized by each of the Buyers, respectively.
3. Each of the Buyers has duly executed and
delivered the Purchase Agreement.
4. The Purchase Agreement constitutes the
legal, valid and binding obligation of each of the Buyers,
enforceable against each of the Buyers in accordance with its
terms.
This opinion is furnished to you by us as
counsel for the Buyers in connection with the above-referenced
transaction and is intended solely for your benefit. This
opinion may not be relied upon by any other person or for any
other purpose without our prior written consent.
Sincerely,
<PAGE>
RELEASE
RELEASE dated as of December 30, 1993 by and
among each of the following parties (but only to the extent such
party has executed and delivered a counterpart hereof)
EQUITY-LINKED INVESTORS, L.P., a New York limited partnership
("ELI-I"), EQUITY-LINKED INVESTORS-II, a New York limited
partnership ("ELI-II"; ELI-I and ELI-II being sometimes herein
referred to individually as a "Buyer" and collectively as the
"Buyers"), BANKERS TRUST COMPANY, a New York corporation,
individually as a Lender and as a Stockholder of the Company and
as an Agent (the "Bank"), NORTHSTAR TELEVISION GROUP, INC., a
Delaware corporation (the "Company"), NTG, INC., a Delaware
corporation ("NTG"), NORTHSTAR TELEVISION OF JACKSON, INC., a
Delaware corporation ("Jackson"), NORTHSTAR TELEVISION OF ERIE,
INC., a Delaware corporation ("Erie"), NORTHSTAR TELEVISION OF
GRAND RAPIDS, INC., a Delaware corporation ("Grand Rapids"),
NORTHSTAR TELEVISION OF PROVIDENCE, INC., a Delaware corporation
("Providence"), TELEVISION LEASING CORP., a Delaware corporation
("TLC"; the Company, NTG, Jackson, Erie, Grand Rapids, Providence
and TLC being sometimes herein referred to individually as a
"Northstar Company" and collectively as the "Northstar
Companies"), OSBORN COMMUNICATIONS CORPORATION, a Delaware
corporation ("Osborn"), RICHARD APPLETON ("Appleton"), APPLE
PUBLISHING CORPORATION, a Delaware corporation ("Apple"), and
PRICE COMMUNICATIONS CORPORATION, a New York corporation
("Price"; Apple and Price being sometimes herein referred to
individually as a "Price Company" and collectively as the "Price
Companies").
W I T N E S S E T H:
WHEREAS, the Price Companies and the Buyers
executed and delivered the Securities Purchase Agreement dated
December 30, 1993 (the "Purchase Agreement"), providing for the
sale to the Buyers by the Price Companies of all interests in the
capital stock of the Company held by either of the Price
Companies or any of their Affiliates; and
WHEREAS, Apple is the holder of 100,000 shares
of Class A Common Stock, par value $.01 per share, of the
Company, 10,000 shares of Class A Preferred Stock, par value $.01
per share, of the Company, 15,000 shares of Class B Preferred
Stock, par value $.01 per share, of the Company, and 25,000
shares of Class C Preferred Stock, par value $.01 per share, of
the Company; and
WHEREAS, under Section 7.1(j) and Section 7.2(g)
of the Purchase Agreement, the execution and delivery of this
Release is a condition to the obligations of the Buyers to close
under the Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual
agreements and conditions hereinafter set forth and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties who have executed and
delivered a counterpart hereof hereby agree as follows:
Section 5. Definitions.
(i) Capitalized terms not otherwise defined
herein are used as defined in the Purchase Agreement.
(ii) As used in this Agreement, the following
terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the
terms defined):
"Affiliate", when used with respect to any
person, means (i) if such person is a corporation, any officer or
director thereof and any person which is, directly or indirectly,
the beneficial owner (by itself or as part of any group) of more
than five percent (5%) of any class of any equity security
(within the meaning of the Securities Exchange Act of 1934, as
amended) thereof, and, if such beneficial owner is a partnership,
any partner thereof, or if such beneficial owner is a
corporation, any person controlling, controlled by or under
common control with such beneficial owner, or any officer or
director of such beneficial owner or of any corporation occupying
any such control relationship, (ii) if such person is a
partnership, any partner thereof, and (iii) any other person
which, directly or indirectly, controls or is controlled by or is
under common control with such person. For purposes of this
definition, "control" (including the correlative terms
"controlling", "controlled by" and "under common control with"),
with respect to any person, shall mean possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of such person, whether through the
ownership of voting securities or by contract or otherwise;
provided that (A) neither Price nor Apple nor any officer or
director of any Northstar Company nominated by Price or Apple
under the terms of the Stockholders Agreement shall be deemed an
"Affiliate" of any Northstar Company under any of the foregoing
clauses and (B) neither ELI-I nor ELI-II shall be deemed an
"Affiliate" of Price under any of the foregoing clauses.
"Claims" has the meaning provided in Section 4
hereof.
"Credit Agreement" means the Credit Agreement,
dated as of September 29, 1989, among NTG, the Company and the
Bank (as a Lender and as an Agent), as amended and as it may be
amended or as in effect from time to time hereafter.
"Lien" has the meaning provided in the Purchase
Agreement.
"Other Interests" has the meaning provided in
the Purchase Agreement.
"Non-Price Parties" means ELI-I, ELI-II and (to
the extent that the following have executed and delivered a
counterpart of this Release) the Northstar Companies, the Bank,
Osborn and Appleton.
"Person" or "person" means an individual,
corporation, partnership, firm, association, joint venture,
trust, unincorporated organization, government, governmental
body, agency, political subdivision or other entity.
"Purchase Agreement" has the meaning provided in
the recitals hereto.
"Purchase Agreement Documents" means the
Purchase Agreement and any document, certificate, agreement or
instrument executed and delivered in connection therewith
(including without limitation this Release).
"Released Parties" has the meaning provided in
Section 4 hereof.
"Releasing Parties" has the meaning provided in
Section 5 hereof.
"Released Price Persons" has the meaning
provided in Section 5 hereof.
"Releasing Price Persons" has the meaning
provided in Section 4 hereof.
"Securities" has the meaning provided in the
Purchase Agreement.
"Stockholders Agreement" means the Stockholders'
Agreement dated as of September 29, 1989 by and among ELI-I, ELI-
II, the Bank, the Company, NTG, Apple, Osborn and Appleton, as
amended and as may be amended or as in effect from time to time
hereafter.
Section 6. Representations and Warranties of
the Price Companies.
Each of the Price Companies hereby represents
and warrants jointly and severally to each of ELI-I, ELI-II and
the other Non-Price Parties, as follows:
(i) Price is a corporation duly organized,
validly existing and in good standing under the laws of the State
of New York. Apple is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware.
(ii) Price and Apple each have all requisite
power, authority and legal right (i) to execute, deliver and
perform this Release and (ii) to consummate the transactions
herein contemplated. This Release has been duly authorized,
executed and delivered by Price and Apple and constitutes the
legal, valid and binding obligation of Price and Apple,
enforceable against each of Price and Apple in accordance with
its terms.
(iii) The execution, delivery and
performance by Price and Apple of this Release:
I. do not and will not violate any
provisions of Price's or Apple's
Certificate of Incorporation or By-laws;
II. do not and will not require either Price
Company to obtain any consent, waiver,
approval, license, order, designation or
authorization of, or to give any notice
to, or to make any registration, filing,
qualification or declaration with, any
Person (including without limitation any
shareholder or any court or other
governmental authority);
III. do not and will not with or without the
giving of notice or the passage of time
or both, violate or conflict with, or
result in a breach or termination of any
provisions of, or constitute a default
under, or accelerate or permit the
acceleration of the performance required
by the terms of, or result in the
creation of any Lien upon any of the
assets of any Price Company pursuant to,
or otherwise give rise to any liability
or obligation under, any contract,
license, permit, agreement or instrument
of any kind to which either Price Company
or any of its Affiliates is a party or by
which either Price Company or any of its
respective assets or properties may be
bound (including without limitation any
mortgage, loan agreement, note or lease)
or any applicable order, judgment, writ,
injunction, decree, statute, law, rule,
regulation or ruling of any court,
administrative agency or other
governmental authority or any other
restriction of any kind to which either
Price Company or any of its Affiliates is
a party or by which either Price Company
or any of its respective assets or
properties may be bound.
(iv) Immediately prior to the Closing, Apple was
the record and beneficial owner of the Securities, free and
clear of any and all Liens (other than as provided by the
Stockholders Agreement). Neither Price nor Apple has
transferred, assigned or conveyed any of its interests,
benefits, rights or obligations under the Stockholders
Agreement to any Person (other than as may have been
transferred, assigned or conveyed to the Buyers in connection
with the Purchase Agreement).
Section 7. Representations and Warranties of the
Northstar Companies, ELI-I, ELI-II, the Bank, Osborn and
Appleton.
Each of ELI-I, ELI-II and each other Non-Price
Party, in each case as to itself only, hereby represents and
warrants to Price and Apple as follows:
(i) Each Northstar Company and Osborn (to the
extent it is a Non-Price Party) is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Delaware. Each of ELI-I and ELI-II is a
limited partnership duly organized and in good standing under
the laws of New York. The Bank (to the extent it is a
Non-Price Party) is a corporation duly organized, validly
existing and in good standing under the laws of the State of
New York.
(ii) Each Northstar Company, ELI-I, ELI-II, the
Bank, Osborn and Appleton (to the extent it is a Non-Price
Party) has all requisite power, authority and legal right
(i) to execute, deliver and perform this Release and (ii) to
consummate the transactions herein contemplated. This
Release has been duly authorized, executed and delivered by
each of the Northstar Companies, ELI-I, ELI-II, the Bank,
Osborn and Appleton (to the extent it is a Non-Price Party)
and constitutes the legal, valid and binding obligation of
each Northstar Company, ELI-I, ELI-II, the Bank, Osborn and
Appleton (to the extent it is a Non-Price Party) enforceable
against the Northstar Companies, ELI-I, ELI-II, the Bank,
Osborn and Appleton (to the extent it is a Non-Price Party),
respectively, in accordance with its terms.
(iii) The execution, delivery and performance
by each Northstar Company, ELI-I, ELI-II, the Bank, Osborn
and Appleton (to the extent it is a Non-Price Party) of this
Release:
I. do not and will not violate any provision
of each Northstar Company's or the Bank's
or Osborn's respective Certificate of
Incorporation or By-laws or ELI-I's or ELI-
II's respective limited partnership
agreement;
II. do not and will not require such Non-Price
Party to obtain any consent, waiver,
approval, license, order, designation or
authorization of, or to give any notice to,
or to make any registration, filing,
qualification or declaration with, any
Person (including without limitation any
shareholder or any court or other
governmental authority);
III. do not and will not with or without the
giving of notice or the passage of time or
both, violate or conflict with, or result
in a breach or termination of any
provisions of, or constitute a default
under, or accelerate or permit the
acceleration of the performance required by
the terms of, or result in the creation of
any Lien upon any of the assets of the
Northstar Companies, ELI-I, ELI-II, the
Bank, Osborn or Appleton, as the case may
be, pursuant to, or otherwise give rise to
any liability or obligation under, any
contract, license, permit, agreement or
instrument of any kind to which the
Northstar Companies, ELI-I, ELI-II, the
Bank, Osborn or Appleton, as the case may
be, are a party or by which any of such
parties or any of their assets or
properties may be bound (including without
limitation any mortgage, loan agreement,
note or lease) or any applicable order,
judgment, writ, injunction, decree,
statute, law, rule, regulation or ruling of
any court, administrative agency or other
governmental authority or any other
restriction of any kind to which any
Northstar Company, ELI-I, ELI-II, the Bank,
Osborn or Appleton, as the case may be, is
a party or by which any of them or any of
their respective assets or properties may
be bound.
(iv) Neither any Northstar Company, ELI-I, ELI-II,
the Bank, Osborn nor Appleton (to the extent it is a
Non-Price Party) has transferred, assigned or conveyed any of
its interests, benefits, rights or obligations under the
Stockholders Agreement to any Person.
Section 8. Release by Price and Apple.
(i) Each of Price and Apple does hereby for
itself, its predecessors, successors and assigns and its
Affiliates and their predecessors, successors and assigns
(together, the "Releasing Price Persons") release and forever
discharge each of the Northstar Companies (whether or not a
Non-Price Party), ELI-I, ELI-II and each other Non-Price
Party and each of their respective predecessors and
successors and assigns, and each of their respective
Affiliates, and the present and former officers, directors,
employees, partners, stockholders, accountants, attorneys,
agents and representatives of any of such released entities,
and their respective heirs, executors, administrators,
successors and assigns (together, the "Released Parties")
from any and all claims, debts, demands, allegations,
actions, causes of action, suits, duties, dues, sums of
money, bills, accounts, reckonings, bonds, specialties,
indemnities, exonerations, covenants, contracts,
controversies, agreements, promises, omissions, trespasses,
variances, damages, judgments, extents, costs, expenses,
losses, exposures, executions, obligations and liabilities
whatsoever, whether in law, equity, admiralty or otherwise
and whether or not presently known (including without
limitation any unknown or unsuspected claims) (the foregoing
collectively, "Claims") that any Releasing Price Person ever
had (from the beginning of the world to the date of this
Release), may have, or hereafter can, shall or may have
against any Released Party of any kind whatsoever based upon,
arising out of, related to or in connection with (I) any
Northstar Company or (II) any Releasing Price Person's (or
any Released Party's) ownership of or investment or other
interest in any Northstar Company, or (III) any Releasing
Price Person's (or any Released Party's) transactions or
agreements with or relating to any Northstar Company,
including without limitation and among other things the
following:
I. Claims based upon, arising out of, related
to or in connection with the Stockholders Agreement or
any Releasing Price Person's status as a stockholder of
any Northstar Company;
II. Claims based upon, arising out of, related
to or in connection with the business, assets,
liabilities, affairs, operations, actions, condition
(financial or otherwise) or prospects of any Northstar
Company whether under the Certificates of Incorporation
or By-laws of any Northstar Company or applicable laws
or otherwise (including without limitation any claim
which a Releasing Price Person may assert or pursue
through a stockholder derivative action or any action
against any lender, investor, stockholder, director or
officer of any Northstar Company for actions taken (or
failed to be taken)); and
III. Claims based upon, arising out of, related
to or in connection with the liquidation of any
Northstar Company or any failure by any Northstar
Company to make a distribution and/or pay dividends to
its stockholders;
except that this Release does not release (x) any Claims
under the terms of the Purchase Agreement Documents or
(y) any Claims of contribution brought by a Releasing Price
Person against any Released Party in the event that such
Releasing Price Person is subject to a Claim by a Person
unaffiliated with such Releasing Price Person and
unaffiliated with any Non-Price Party (and which Claim has
not been brought or asserted in order for a Releasing Price
Person to take advantage of the exception provided by this
clause (y)), provided such Claim of contribution and such
third party Claim involve the same subject matter.
(ii) The Release provided under this Section 4 is
unconditional and shall not be affected by the breach of any
representation, warranty or other provision hereof or
contained in any Purchase Agreement Document or otherwise and
shall not be affected by whether any persons other than ELI-I
and ELI-II are Non-Price Parties.
Section 9. Release by the Non-Price Parties.
Each of the Non-Price Parties does hereby for
itself, its predecessors, successors and assigns and its
affiliates and their predecessors, successors and assigns,
and its heirs, executors and administrators (together, the
"Releasing Parties"), release and forever discharge each of
Price and Apple, each of their predecessors and successors
and assigns, and each of their respective Affiliates, and the
present and former officers, directors, employees, partners,
stockholders, accountants, attorneys, agents and
representatives of any such released entities, and their
respective heirs, executors, administrators, successors and
assigns (together, the "Released Price Persons") from any and
all Claims that any Releasing Party ever had (from the
beginning of the world to the date of this Release), may
have, or hereafter can, shall or may have against any
Released Price Person of any kind whatsoever, based upon,
arising out of, related to or in connection with (I) any
Northstar Company or (II) any Releasing Party's (or any
Released Price Person's) ownership of or investment or other
interest in any Northstar Company, or (III) any Releasing
Party's (or any Released Price Person's) transactions or
agreements with or relating to any Northstar Company,
including without limitation, Claims based upon, arising out
of, related to or in connection with the Stockholders
Agreement; except that this Release does not release
(w) any Claims for indemnification provided by or
arising from breach of a covenant, representation or warranty
set forth in the Amended and Restated Asset Purchase
Agreement dated as of June 28, 1989 by and among NTG, Price,
Western Michigan Broadcasting Corporation, Rhode Island
Broadcasting Corporation, Magnolia Broadcasting Corporation
and Keystone Broadcasting Corporation,
(x) any Claims arising from actions taken by any
Released Price Person creating or giving rise to a
commitment, obligation, liability or contract of any
Northstar Company,
(y) any Claims under the terms of the Purchase
Agreement Documents or any rights in favor of ELI-I or ELI-II
(or their successors or assigns) relating to the Securities
and/or the Other Interests transferred to ELI-I and ELI-II
pursuant to the Purchase Agreement, or
(z) any Claims of contribution brought by a
Releasing Party against any Released Price Person in the
event that such Releasing Party is subject to a claim by a
Person unaffiliated with such Releasing Party (and which
Claim has not been brought or asserted in order for a
Releasing Party to take advantage of the exception provided
by this clause (z)), provided such Claim of contribution and
such third party Claim involve the same subject matter.
Section 10. Derivative Actions.
Each of the Price Companies and the Non-Price
Parties agrees that it shall not bring, vote for or otherwise
support or participate as a stockholder of any Northstar
Company in any stockholder derivative action against any
person with respect to any Claim which such party has
released such person from under this Release.
Section 11. No Admission.
This Release and compliance with this Release shall
not be construed as an admission by any party hereto of any
liability whatsoever, or as an admission by any party hereto
of any violation of the rights of any person, or any
violation of any order, law, statute, duty, or contract
whatsoever or as an admission of any other fact or matter.
Section 12. Miscellaneous.
Section (a). Amendments & Waivers.
(i) This Release may be amended, modified or
supplemented in each case only by a written instrument
executed by the party against whom the enforcement of the
provisions of such amendment, modification or supplement is
sought. The terms hereof may be waived by a party only by a
written instrument executed by such party.
(ii) The waiver by any party hereto of a breach of
any provision of this Release shall not operate or be
construed as a waiver of any subsequent or other breach,
whether or not similar.
Section (b). Enforceability.
Each party agrees that neither it nor any of its
successors (nor any of its or its successor's affiliates)
will initiate, prosecute or defend any action, proceeding or
suit (or otherwise assert any claim) in whole or in part on
the grounds that any or all of the terms or provisions of
this Release are illegal, invalid, not binding, unenforceable
or against public policy.
Section (c) Third Party Beneficiaries.
There are no third party beneficiaries to this
Release other than the Released Parties and Released Price
Persons.
Section (d). Headings.
The headings in this Release are for convenience of
reference only, are not a part hereof and shall not affect
the interpretation or construction hereof.
Section (e). Governing Law.
This Release shall be governed by and construed and
enforced in accordance with the laws of the State of New York
without regard to any choice-of-law rules thereof which might
apply the laws of any other jurisdiction.
Section (f). Counterparts.
This Release may be executed in two or more
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument and all signatures need not appear on any one
counterpart.
Section (g). Validity.
This Release shall be valid, binding and
enforceable against Price and Apple on the one hand and ELI-I
and ELI-II (and any other Non-Price Parties) on the other
hand so long as this Release has been executed and delivered
by Price, Apple, ELI-I and ELI-II (and any such other Non-
Price Parties), notwithstanding that one or more of Osborn,
Appleton, the Bank and/or the Northstar Companies has not
executed and delivered this Release.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties have duly executed
this Agreement on the date first above written.
EQUITY-LINKED INVESTORS, L.P.
By Rohit M. Desai Associates
General Partner
By_____________________________
Name:
Title:
EQUITY-LINKED INVESTORS-II
By Rohit M. Desai Associates-II
General Partner
By_____________________________
Name:
Title:
BANKERS TRUST COMPANY, individually and as Agent
By_____________________________
Name:
Title:
NORTHSTAR TELEVISION GROUP, INC.
By_____________________________
Name:
Title:
<PAGE>
NTG, INC.
By_____________________________
Name:
Title:
NORTHSTAR TELEVISION OF JACKSON,
INC.
By_____________________________
Name:
Title:
NORTHSTAR TELEVISION OF ERIE,
INC.
By_____________________________
Name:
Title:
NORTHSTAR TELEVISION OF GRAND
RAPIDS, INC.
By_____________________________
Name:
Title:
NORTHSTAR TELEVISION OF
PROVIDENCE, INC.
By_____________________________
Name:
Title:
TELEVISION LEASING CORP.
By______________________________
Name:
Title:
OSBORN COMMUNICATIONS CORPORATION
By______________________________
Name:
Title:
________________________________
Richard Appleton
PRICE COMMUNICATIONS CORPORATION
By______________________________
Robert Price
President
APPLE PUBLISHING CORPORATION
By______________________________
Robert Price
President<PAGE>
[Proskauer Rose Goetz & Mendelsohn Letterhead]
December 30, 1993
Equity-Linked Investors, L.P.
Equity-Linked Investors-II
c/o Desai Capital Management Incorporated
540 Madison Avenue
New York, NY 10022
Ladies & Gentlemen:
We have acted as special counsel to Apple Publishing
Corporation, a Delaware corporation ("Apple") and Price
Communications Corporation, a New York corporation ("Price"), in
connection with the Securities Purchase Agreement, dated
December 30, 1993 (the "Purchase Agreement") among Equity-Linked
Investors, L.P., a New York limited partnership ("ELI-I"), and
Equity-Linked Investors-II, a New York limited partnership ("ELI-
II"; and together with ELI-I, the "Buyers"), regarding the sale
by Price and Apple to the Buyers of certain securities of and
other interests in Northstar Television Group, Inc. (the
"Company"). Unless otherwise defined herein, capitalized terms
used herein have the meanings provided in the Purchase Agreement.
In such capacity, we have examined, among other things,
executed copies of the Purchase Agreement.
In connection with the foregoing, we have examined
originals or copies satisfactory to us of all such records,
agreements, certificates, governmental orders, permits,
authorizations and other documents as we have deemed relevant and
necessary as a basis for the opinions hereinafter expressed. In
such examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as
originals and the conformity with the original documents of all
documents submitted to us as copies. As to any facts material to
our opinions set forth below, we have, to the extent that such
facts were not independently established by us, relied upon
certificates of officers or other representatives of Price or
Apple.
In giving the opinions expressed below, we have also
assumed: (i) the due existence of each of the Buyers; (ii) the
legal right, power and authority of each of the Buyers under all
applicable laws and regulations to execute, deliver and perform
its respective obligations under the Purchase Agreement; (iii)
the due authorization, execution and delivery by each of the
Buyers of the Purchase Agreement; and (iv) the validity, binding
effect and enforceability of the Purchase Agreement in accordance
with its terms against each of the Buyers.
The opinions expressed below are subject to the
qualification that enforcement of the Purchase Agreement may be
limited by any applicable bankruptcy, reorganization, insolvency,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally from time to time in effect and may
be subject to the application of equitable principles and the
availability of equitable remedies.
In giving the opinions expressed below, we do not purport
to be experts in, and are not opining on, the laws of any
jurisdiction other than the laws of the State of New York and the
corporate laws of the State of Delaware.
Based upon and subject to the foregoing, we are of the
opinion that:
1. Price is a corporation duly organized, validly
existing and in good standing under the laws of the State of New
York.
2. Apple is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware.
3. Each of Price and Apple has the corporate power and
authority to enter into the Purchase Agreement and Apple has the
corporate power and authority to sell, transfer and deliver the
Securities.
4. The execution, delivery and performance by each of
Price and Apple of the Purchase Agreement has been duly
authorized by each of Price and Apple, respectively.
5. Each of Price and Apple has duly executed and
delivered the Purchase Agreement.
6. The Purchase Agreement constitutes the legal, valid
and binding obligation of each of Price and Apple, enforceable
against each of Price and Apple in accordance with its terms.
This opinion is furnished to you by us as special counsel
for Price and Apple in connection with the above-referenced
transaction and is intended solely for your benefit. This
opinion may not be relied upon by any other person or for any
other purpose without our prior written consent.
Sincerely,
<PAGE>
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT, dated December 30, 1993,
among Apple Publishing Corporation, a Delaware corporation
("Apple"); Price Communications Corporation, a New York
corporation ("Price"; Apple and Price being sometimes herein
referred to individually as a "Price Company" and collectively as
the "Price Companies" or the "Sellers"); and Equity-Linked
Investors, L.P., a New York limited partnership ("ELI-I") and
Equity-Linked Investors-II, a New York limited partnership
("ELI-II"; ELI-I and ELI-II being sometimes herein referred to
individually as a "Buyer" and collectively as the "Buyers").
W I T N E S S E T H:
WHEREAS, Apple owns certain capital stock of Northstar
Television Group, Inc., a Delaware corporation (the "Company");
and
WHEREAS, as of the date hereof Apple is the beneficial
owner (and Price is the holder of record) of 100,000 shares of
Class A Common Stock, par value $.01 per share, of the Company
(the "Common Stock"), 10,000 shares of Class A Preferred Stock,
par value $.01 per share, of the Company, 15,000 shares of Class
B Preferred Stock, par value $.01 per share, of the Company, and
25,000 shares of Class C Preferred Stock, par value $.01 per
share, of the Company (collectively, the "Preferred Stock") (the
Common Stock and the Preferred Stock collectively, the
"Securities"); and
WHEREAS, the Buyers desire to purchase from the Sellers,
and the Sellers desire to sell and transfer to the Buyers, all of
the right, title and interest of any Price Company (or any of
their Affiliates) in or to any capital stock of the Company or of
any subsidiary of the Company, all as more fully described herein
and upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants
and conditions hereinafter set forth, the parties hereby agree as
follows:
SECTION 7. Sale of Securities.
Upon the terms and subject to the conditions set forth in
this Agreement, (i) Apple and Price agree to sell to the Buyers
at the Closing all right, title and interest in and to the
following Securities:
Shares of Shares of
Preferred Stock Common Stock
ELI-I 5,000 Class A 50,000 Class A
7,500 Class B
12,500 Class C
ELI-II 5,000 Class A 50,000 Class A
7,500 Class B
12,500 Class C
and (ii) Price agrees to sell to the Buyers at the Closing all
other right, title or interest (the "Other Interests"), if any,
which any of the Price Companies or any of their Affiliates may
have in or with respect to any capital stock of the Company or of
any direct or indirect subsidiary of the Company, including
without limitation any rights under the Share Purchase Agreement
dated as of September 29, 1989 by and between the Company and
Price and any rights under the Stockholders Agreement. Upon the
terms and subject to the conditions set forth in this Agreement,
the Buyers agree at the Closing to purchase and to accept
assignment, transfer and delivery from the Sellers of the
Securities and any Other Interests.
SECTION 8. The Closing.
1 Date and Place.
Subject to the terms and conditions set forth in
this Agreement, the closing for the transactions contemplated by
this Agreement (the "Closing") shall be held at the offices of
Lord Day & Lord, Barrett Smith, 1675 Broadway, New York, New
York. The time and date of the Closing (the "Closing Date")
shall be 12:00 noon, Eastern Standard Time, on December 30, 1993
or such other time and date as the parties hereto may agree in
writing.
2 Transfer and Purchase.
Subject to the terms and conditions hereof, on
the Closing Date:
(i) The Sellers shall pay (on or before the
Closing) all requisite stock transfer taxes, sales taxes,
conveyance taxes and provide all requisite stock transfer stamps
in connection with the sale of the Securities and any Other
Interests to the Buyers and the consummation of the transactions
contemplated herein.
(ii) Certificates representing the Securities
and any Other Interests shall be delivered to the Buyers together
with duly executed stock powers by Apple (and/or Price or any
Affiliate, as may be appropriate, with respect to the Securities
or Other Interests) endorsed in blank, free and clear of all
Liens, voting trusts, voting agreements, other agreements,
rights, options, warrants or other restrictions of any kind,
nature or description (including without limitation, the IBJ
Lien), other than the Stockholders Agreement.
(iii) The Buyers, as full and complete
consideration for the Securities and Other Interests, shall each
pay $1,207,360 (for an aggregate purchase price of $2,414,720) to
Apple, payable on the Closing Date by wire transfer of
immediately available funds pursuant to instructions to be
provided by Apple.
(iv) The Price Companies shall execute and
deliver to the Buyers a counterpart of the Release (as defined in
Section 7.1(j) hereof) and the Buyers shall execute and deliver a
counterpart of the Release to the Price Companies.
3 Further Assurances.
(i) Each of the Price Companies shall, on the
Closing Date and thereafter, execute and deliver from time to
time at the request of the Buyers all such further assignments,
endorsements, and other instruments and documents which either of
the Buyers may request, in form and substance reasonably
satisfactory to the Buyers and their counsel, in order to
effectuate the sale and transfer of all of the Securities and any
Other Interests, including all of the Price Companies' (or their
Affiliates') ownership interests in the Company, to the Buyers as
contemplated by this Agreement.
(ii) From and after the Closing Date, each of
the Price Companies shall deliver such further documents as
reasonably requested (and to the extent requested from time to
time) by the Buyers to terminate the rights of the Price
Companies under any shareholders agreement, proxy or other
agreement or instrument involving the Company or its subsidiaries
or relating to capital stock interests therein or to transfer any
such rights to the Buyers.
SECTION 9. Definition of Terms.
As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms
defined):
"Affiliate" means any direct or indirect
subsidiary of Price and any other person who, directly or
indirectly, controls, is controlled by or is under common control
with, Price; provided, that (i) the Company and its direct and
indirect subsidiaries shall not be deemed subsidiaries of, or
controlled by, any Price Company and (ii) no Price Company shall
be deemed a subsidiary of, or controlled by, the Buyers.
"Application" means the FCC Form 316 Application
filed on December 10, 1993, as may be supplemented or amended
hereafter, requesting consent to the consummation of the
transactions contemplated by this Agreement.
"FCC" means the Federal Communications
Commission or any successor agency thereto.
"IBJ Indenture" means, collectively, the
Indenture dated as of December 30, 1992 between Price and IBJ
Schroder Bank & Trust Company, a national banking association
("IBJ") and the Pledge, Intercreditor and Collateral Agency
Agreement, dated as of December 30, 1992 between IBJ and Price,
each as may have been, and as may hereafter be, amended,
supplemented or modified.
"IBJ Lien" means any Lien imposed by, created
under, or existing or arising pursuant to the IBJ Indenture.
"Lien" means any mortgage, pledge,
hypothecation, security interest, assignment, charge,
encumbrance, lien (statutory or other), deposit arrangement,
preference, right of first refusal, option, claim, priority or
other security arrangement or preferential arrangement of any
kind or nature whatsoever, and the filing of, or agreement to
give, any financing statement under the Uniform Commercial Code
or any similar statute of any jurisdiction.
"Person" or "person" means an individual,
corporation, partnership, firm, association, joint venture,
trust, unincorporated organization, government, governmental
body, agency, political subdivision or other entity.
"Stockholders Agreement" shall mean the
Stockholders' Agreement dated September 29, 1989 by and among the
Company, NTG, Inc., Richard Appleton and certain stockholders of
the Company, as amended from time to time.
SECTION 10. Representations and Warranties of the
Price Companies.
Price and Apple hereby jointly and severally
represent and warrant as follows as of the date hereof and as of
the Closing Date:
1 Stock Ownership. Apple is, and on the
Closing Date will be, the lawful and beneficial owner (and Price
is, and on the Closing Date will be, the registered owner) of the
Securities (all of which shares are duly authorized, validly
issued, fully paid and non-assessable). There are no Other
Interests (but if any exist they will be transferred to the
Buyers on the Closing Date without thereby imposing any
obligations or liabilities on the Buyers). All the Securities
are owned by Apple, and registered in the name of Price, free and
clear of any Liens, agreements or other arrangements or
restrictions of any kind (other than this Agreement and the
Stockholders Agreement and other than Liens, agreements or other
arrangements or restrictions created by the Buyers). The
delivery of the Securities by the Sellers to the Buyers will
convey to the Buyers lawful, valid, marketable and indefeasible
title thereto free and clear of any Liens, agreements or other
arrangements or restrictions of any kind.
2 Execution, Delivery and Performance.
(a) Price is a corporation, duly organized,
validly existing and in good standing under the laws of the state
of New York. Apple is a corporation, duly organized, validly
existing and in good standing under the laws of the State of
Delaware.
(b) Each of the Price Companies has all
requisite power, authority and legal right (i) to execute,
deliver and perform this Agreement and each of the other
agreements, instruments and documents required to be executed and
delivered by a Price Company hereunder and (ii) to consummate the
transactions herein and therein contemplated. This Agreement has
been duly authorized, executed and delivered by each of the Price
Companies and constitutes, and each of the other agreements,
instruments and documents required to be executed and delivered
by such Price Company hereunder, when so executed and delivered,
will constitute, the legal, valid and binding obligation of such
Price Company, enforceable against such Price Company in
accordance with its respective terms.
3 No Conflict.
The execution, delivery and performance by each
Price Company of this Agreement and each of the other agreements,
instruments and documents required to be executed and delivered
by each Price Company hereunder and the consummation by each
Price Company of all of the transactions contemplated hereby and
thereby:
A. do not and will not violate any
provision of such Price Company's Certificate of
Incorporation or By-laws or any stockholders
agreement relating to the Company (with the
possible exception of certain provisions of the
Stockholders Agreement);
B. except for the FCC approval
contemplated by this Agreement (which approval
shall be obtained on or prior to the Closing
Date), do not and will not require any Price
Company to obtain any consent, waiver, approval,
license, order, designation or authorization of,
or to give any notice to, or to make any
registration, filing, qualification or
declaration with, any Person (including without
limitation any stockholder or any court or other
governmental authority) (with the possible
exception of a consent under the terms of the
Stockholders Agreement); and
C. do not and will not with or without the
giving of notice or the passage of time or both,
violate or conflict with, or result in a breach
or termination of any provision of, or
constitute a default under, or accelerate or
permit the acceleration of the performance
required by the terms of, or result in the
creation of any Lien upon any of the Securities
or any Other Interests pursuant to, or otherwise
give rise to any liability or obligation under,
any contract, license, permit, agreement or
instrument of any kind to which either of the
Price Companies or any of its Affiliates is a
party or by which either of the Price Companies
or any of its assets or properties may be bound
(including without limitation any mortgage, loan
agreement, note or lease) or any applicable
order, judgment, writ, injunction, decree,
statute, law, rule, regulation or ruling of any
court, administrative agency or other
governmental authority or any other restriction
of any kind to which either of the Price
Companies or any of its Affiliates is a party or
by which either of the Price Companies or any of
its assets or properties may be bound.
This Section 4.3 does not address contracts and agreements to
which the Company and/or any of its subsidiaries is a party,
unless any Price Company or any Affiliate is a party thereto.
4 IBJ Lien.
Price has delivered true and complete copies of
the IBJ Indenture as in effect on the date hereof to the Buyers.
5 Litigation.
There are no civil, criminal, administrative,
arbitration or other actions, suits or proceedings or
investigations or claims pending against or involving any Price
Company or any Affiliate or, to the best of the knowledge of
either of the Price Companies, threatened (or pending but not
against or involving any Price Company or any Affiliate) in law,
equity or otherwise which:
A. questions the validity of this Agreement
or any other agreement, instrument or document required to be
executed and delivered by either of the Price Companies hereunder
or any action required to be taken pursuant hereto or thereto; or
B. might result in the creation of any Lien
upon any of the Securities (or any Other Interests); or
C. might declare this Agreement unlawful or
cause the rescission of any of the transactions or events
contemplated hereby or could require the Buyers to divest itself
of any or all of the Securities (or any Other Interests) or might
restrict any rights of the Buyers with respect to the Securities
(or any Other Interests).
6 Information Concerning Sale of the
Securities.
Each of the Price Companies acknowledges that it
has been given access to information concerning and has been
given the opportunity to ask questions and receive answers with
respect to the business, operations, assets, liabilities,
condition (financial or otherwise), affairs and prospects of the
Company and any other information as may be or may have been
necessary to verify the accuracy of any information that was
provided to it or to which it had access and has received (or has
had the opportunity to receive) any other information which it
may have deemed relevant or advisable in order for the Price
Companies to evaluate the merits and risks of a sale of its
investment in the Company. Notwithstanding the foregoing, each
of the Price Companies acknowledges that it has relied solely on
its own independent evaluation of the economic, credit and other
risks involved in the sale of its investment in the Company in
making its decision to sell the Securities, and that the Buyers
have not made and are not making directly or indirectly any
representations or warranties as to the Company or its business,
operations, assets, liabilities, condition (financial or
otherwise), affairs and prospects or otherwise in connection with
the transactions contemplated hereby.
SECTION 11. Representations and Warranties
of the Buyers.
Each Buyer hereby represents and warrants (as to
itself) to the Price Companies as follows as of the date hereof
and as of the Closing Date:
1 General Matters.
(i) Organization, Power and Authority. Each of
the Buyers is a limited partnership duly formed, validly existing
and in good standing under the laws of the State of New York.
(ii) Execution, Delivery and Performance. Each
of the Buyers has the full partnership power and authority to
execute, deliver and perform its obligations under this
Agreement. The execution, delivery and performance of this
Agreement by each Buyer has been duly authorized by each Buyer
and no further action on the part of each Buyer is necessary to
authorize such execution, delivery and performance. This
Agreement has been duly executed and delivered by each Buyer and
constitutes the legal, valid and binding obligation of each
Buyer, enforceable against each Buyer, respectively, in
accordance with its terms.
2 No Conflict.
The execution, delivery and performance by each
of the Buyers of this Agreement and each of the other agreements,
instruments and documents required to be executed and delivered
by each Buyer hereunder and the consummation by each Buyer of all
of the transactions contemplated hereby and thereby (except that
no representation or warranty is made with respect to the
transfer of any Other Interests to the Buyers):
A. do not and will not violate any
provision of such Buyer's limited partnership
agreement or any stockholders agreement relating
to the Company (with the possible exception of
certain provisions of the Stockholders
Agreement);
B. except for the FCC approval
contemplated by this Agreement (which approval
shall be obtained on or prior to the Closing
Date), do not and will not require either Buyer
to obtain any consent, waiver, approval,
license, order, designation or authorization of,
or to give any notice to, or to make any
registration, filing, qualification or
declaration with, any Person (including without
limitation any stockholder or any court or other
governmental authority) (with the possible
exception of a consent under the terms of the
Stockholders Agreement); and
C. do not and will not with or without the
giving of notice or the passage of time or both,
violate or conflict with, or result in a breach
or termination of any provision of, or
constitute a default under, or accelerate or
permit the acceleration of the performance
required by the terms of, or otherwise give rise
to any liability or obligation under, any
contract, license, permit, agreement or
instrument of any kind to which either of the
Buyers is a party or by which either of the
Buyers or any of its assets or properties may be
bound (including without limitation any
mortgage, loan agreement, note or lease) or any
applicable order, judgment, writ, injunction,
decree, statute, law, rule, regulation or ruling
of any court, administrative agency or other
governmental authority or any other restriction
of any kind to which either of the Buyers is a
party or by which either of the Buyers or any of
its assets or properties may be bound.
This Section 5.2 does not address contracts and agreements to
which the Company and/or any of its subsidiaries is a party,
unless either or both of the Buyers are also parties thereto.
3 Litigation.
There are no civil, criminal, administrative,
arbitration or other actions, suits or proceedings or
investigations or claims pending against or involving the Buyers
or, to the best of the knowledge of either of the Buyers,
threatened against the Buyers (or pending but not against or
involving the Buyers) in law, equity or otherwise which:
A. questions the validity of this Agreement
or any other agreement, instrument or document required to be
executed and delivered by either of the Buyers hereunder or any
action required to be taken pursuant hereto or thereto; or
B. might declare this Agreement unlawful or
cause the rescission of any of the transactions or events
contemplated hereby or could require the Price Companies to
disgorge any or all of the consideration received by the Price
Companies hereunder.
SECTION 12. Confidentiality; Solicitation.
(i) From and after the Closing, the Price
Companies and their Affiliates, employees and agents
(collectively, "Restricted Persons") will hold and keep
confidential (and will not disclose or use) any information
regarding the Company or its subsidiaries and their respective
businesses, operations, assets, liabilities, conditions
(financial or otherwise), affairs or prospects; provided, that
this Section 6.1 shall not apply to the following: (w)
information which is publicly available at the time of disclosure
(through no act of any Restricted Person), (x) information which
is disclosed to any Restricted Person by a third party (other
than the Company or any of its stockholders, officers, directors,
employees, agents, attorneys, accountants or affiliates) which
did not disclose it in violation of a duty of confidentiality,
(y) use of information to perform the Sellers' obligations
hereunder or (z) disclosures which are required to be made by a
Restricted Person under legal process by subpoena or other court
order or other applicable laws or regulations, or which are
requested by the Buyer or any of its affiliates.
(ii) During the two-year period commencing on
the Closing Date, no Price Company or any of its Affiliates shall
(i) solicit or encourage any senior officer of the Company or of
any direct or indirect subsidiary of the Company (except with
respect to senior officers appointed by Price and employed by a
Price Company on the date hereof) (A) to leave employment with
the Company or with such subsidiary or (B) to become an employee,
officer or director of, or consultant to, any Price Company or
any of its Affiliates or (ii) solicit or encourage any officer or
employee of the Company or of any direct or indirect subsidiary
of the Company (except with respect to senior officers appointed
by Price and employed by a Price Company on the date hereof) to
join any Price Company or any of its Affiliates in a capacity (as
employee, officer, director or consultant) which relates to a
broadcast market which is the same as, or which overlaps, a
broadcast market currently served (as of the Closing Date) by the
Company or any direct or indirect subsidiary of the Company.
SECTION 13. Closing Conditions.
1 Conditions for the Buyers.
The obligation of each of the Buyers to purchase
the Securities hereunder and to proceed with the Closing is
subject to the satisfaction, at or prior to the Closing Date, of
the following conditions (any of which may be waived in writing
by the Buyers):
(i) Performance of Obligations. The Price
Companies shall have performed and complied with all agreements,
covenants and conditions contained in this Agreement and any
other documents contemplated hereby which are required to be
performed or complied with by the Price Companies at or prior to
the Closing Date, and all instruments and documents required by
this Agreement to be executed by the Price Companies shall be
reasonably satisfactory in form and substance to the Buyers and
their counsel.
(ii) Representations and Warranties. The
representations and warranties of the Price Companies contained
in this Agreement or in any certificate or document delivered
pursuant hereto shall have been correct and complete when made
and, in addition, shall be correct and complete at and as of the
Closing Date, with the same force and effect as though such
representations and warranties had been made at and as of the
Closing Date.
(iii) Compliance Certificate. The Buyers shall
have received a certificate dated the Closing Date executed by
the President of each of the Price Companies to the effect that
the conditions of Section 7.1(a) and 7.1(b) hereof have been
satisfied.
(iv) Proceedings. All corporate and other
proceedings regarding the Price Companies in connection with the
transactions contemplated by this Agreement and any other
agreement, instrument or document required to be executed and
delivered by the Price Companies hereunder, and all documents
incident thereto, shall be in form and substance reasonably
satisfactory to the Buyers and their counsel, and the Buyers
shall have received all such originals or certified or other
copies of such documents as the Buyers or their counsel may
reasonably request.
(v) Opinion of Counsel. The Buyers shall have
received a favorable opinion of Proskauer Rose Goetz &
Mendelsohn, counsel for the Price Companies, dated as of the
Closing Date and substantially in the form attached hereto as
Exhibit A. In giving such opinion, such counsel shall be
entitled to rely in good faith upon certificates of the Sellers
with respect to factual matters.
(vi) FCC Approval. The FCC shall have granted
its approval of the Application and such approval shall not
include any conditions which are materially adverse to the Buyers
or the Company.
(vii) Satisfaction and Discharge of IBJ Lien.
The Buyers shall have received at the Closing documentation
evidencing the complete satisfaction and discharge of the IBJ
Lien (and any other Lien against or affecting the Securities or
any Other Interests) and the termination of all agreements,
instruments and Liens relating thereto.
(viii) Resignations and Surrenders. The Buyers
shall have received (i) resignations effective as of the Closing
Date of any director or officer of the Company appointed by Price
and/or Apple as requested by the Buyers, (ii) written surrender,
to the extent requested by the Buyers, by such directors or
officers (or their designees) holding powers of attorney from the
Company, of their authority and power to act under such powers of
attorney, and (iii) any and all proxies held by any Price Company
from any other stockholder of the Company (including without
limitation any held pursuant to Section 4(f) of the Stockholders
Agreement); provided, that the Buyers in their discretion may
make such requests with respect to clause (i), (ii) and/or (iii)
subsequent to the Closing at which time the Price Companies agree
that they will deliver such resignations or surrender such
proxies or powers of attorney.
(ix) Material Adverse Change. There shall not
have occurred after the date hereof a material adverse change in
the business, assets, liabilities, operations, condition
(financial or otherwise), affairs or prospects of the Company or
its subsidiaries.
(x) Release. Price and Apple shall have
executed and delivered to the Buyers a Release, which shall be
substantially in the form attached hereto as Exhibit B (the
"Release") and the Price Companies agree to deliver counterparts
of such Release, from time to time from and after the Closing
Date, to additional parties (if any) to the Release (such other
parties being referred to in the Release as other Non-Price
Parties) who execute and deliver counterparts of the Release.
2 Conditions for the Price Companies.
The obligation of the Price Companies to sell,
transfer and assign the Securities and any Other Interests
hereunder and to proceed with the Closing is subject to the
satisfaction, at or prior to the Closing Date, of the following
conditions (any of which may be waived in writing by the Price
Companies):
(i) Performance of Obligations. The Buyers
shall have performed and complied with all agreements, covenants
and conditions contained in this Agreement and any other
documents contemplated hereby which are required to be performed
or complied with by the Buyers at or prior to the Closing Date,
and all instruments and documents required by this Agreement to
be executed by the Buyers shall be reasonably satisfactory in
form and substance to the Price Companies and their counsel.
(ii) Representations and Warranties. The
representations and warranties of the Buyers contained in this
Agreement or in any certificate or document delivered pursuant
hereto shall have been correct and complete when made and, in
addition, shall be correct and complete at and as of the Closing
Date, with the same force and effect as though such
representations and warranties had been made at and as of the
Closing Date.
(iii) Compliance Certificate. The Price
Companies shall have received a certificate dated the Closing
Date executed by the General Partner of each of the Buyers to the
effect that the conditions of Section 7.2(a) and 7.2(b) hereof
have been satisfied.
(iv) Proceedings. All partnership proceedings
regarding the Buyers in connection with the transactions
contemplated by this Agreement and any other agreement,
instrument or document required to be executed and delivered by
the Buyers hereunder, and all documents incident thereto, shall
be in form and substance reasonably satisfactory to the Price
Companies and their counsel, and the Price Companies shall have
received all such originals or certified or other copies of such
documents as the Price Companies or their counsel may reasonably
request.
(v) Opinion of Counsel. The Price Companies
shall have received a favorable opinion of Lord Day & Lord,
Barrett Smith, counsel for the Buyers, dated as of the Closing
Date and substantially in the form attached hereto as Exhibit C.
In giving such opinion, such counsel shall be entitled to rely in
good faith upon certificates of the Buyers with respect to
factual matters.
(vi) FCC Approval. The FCC shall have granted
its approval of the Application and such approval shall not
include any conditions which are materially adverse to the Price
Companies.
(vii) Release. The Buyers shall have executed
and delivered to the Price Companies the Release.
SECTION 14. Indemnification.
(i) From and after the Closing Date, each of
the Price Companies hereby agrees to indemnify and hold the
Buyers and their respective affiliates and their respective
partners, officers, employees, agents and representatives and
their respective successors, assigns and legal representatives
(collectively, the "Indemnified Buyers") harmless from and
against any and all losses, claims, damages, costs, liabilities
or expenses (including without limitation reasonable attorneys'
fees and reasonable costs of investigation and defense) suffered
or incurred by any and/or all of the Indemnified Buyers or to
which any and/or all of the Indemnified Buyers may become subject
arising out of, resulting from or in connection with a breach of
any representation or warranty or covenant of Price and/or Apple
in this Agreement.
(ii) From and after the Closing Date, each of
the Buyers hereby agrees to indemnify and hold the Price
Companies and their respective affiliates and their respective
officers, employees, directors, stockholders, agents and
representatives and their respective successors, assigns and
legal representatives (collectively, the "Indemnified Parties")
harmless from and against any and all losses, claims, damages,
costs, liabilities or expenses (including without limitation
reasonable attorneys' fees and reasonable costs of investigation
and defense) suffered or incurred by any and/or all of the
Indemnified Parties or to which any and/or all of the Indemnified
Parties may become subject arising out of, resulting from or in
connection with a breach of any representation or warranty or
covenant of the Buyers in this Agreement.
SECTION 15. Termination.
Notwithstanding anything in this Agreement to
the contrary:
(i) Mutual Consent. This Agreement may be
terminated with the mutual consent of the parties hereto.
(ii) Outside Date. If for any reason the
Closing Date shall not have occurred on or before January 31,
1994, then, unless otherwise agreed to in writing between the
parties hereto, this Agreement shall terminate automatically at
the close of business on such date.
Any termination of this Agreement in accordance with this
Section 9 shall have the effect of causing this Agreement
thereupon to become void and of no further force or effect, and
thereupon no party hereto will have any rights, duties,
liabilities or obligations of any kind or nature against any
other party hereto based upon either this Agreement or the
transactions contemplated hereby, except that nothing in this
Section 9 shall relieve any party from liability for any breach
of the covenants to consummate the transactions contemplated by
this Agreement at the Closing provided that the conditions to any
such obligation have been fulfilled as provided herein.
SECTION 16. Miscellaneous.
1 Fees and Expenses.
All legal and other fees, costs and expenses
incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such
fees, costs or expenses.
2 Notices.
All notices and other communications given or
made pursuant hereto shall be in writing and shall be delivered
by messenger (against written receipt), overnight courier or
registered or certified mail (postage prepaid, return receipt
requested) to the parties at the following respective addresses:
(i) If to the Buyers:
c/o Desai Capital Management Incorporated
540 Madison Avenue
New York, N.Y. 10022
Attention: Mr. Rohit M. Desai
with a copy to:
Lord Day & Lord, Barrett Smith
1675 Broadway
New York, New York 10019
Attention: Christopher Hilbert, Esq.
(ii) If to Price and/or Apple, then to:
Price Communications Corporation
45 Rockefeller Plaza
New York, N.Y. 10020
Attention: Mr. Robert Price, President
with a copy to:
Proskauer Rose Goetz & Mendelsohn
1585 Broadway
New York, N.Y. 10036
Attention: Peter G. Samuels, Esq.
or to such other persons or at such other addresses as shall be
furnished by like notice to the other party, and such notice or
other communication shall be deemed to have been given or made as
of the date so delivered or received.
3 Successors and Assigns; No Third-Party
Beneficiaries.
(i) This Agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their respective
successors and assigns; provided, however, that no party shall
assign (by operation of law or otherwise) or delegate any of the
obligations, duties, benefits or rights under this Agreement
without the prior written consent of the Price Companies (in the
case of an assignment or delegation by a Buyer) or the Buyers (in
the case of an assignment or delegation by a Price Company).
(ii) Nothing in this Agreement shall confer
upon any person or entity other than a party to this Agreement or
a party's permitted successors and assigns, any rights or
remedies of any nature or kind whatsoever under or by reason of
this Agreement.
4 Entire Agreement.
This Agreement, together with the Release and
any further agreements entered into by the Buyers and the Price
Companies at the Closing, (a) contain the entire agreement and
understanding of the parties with respect to the subject matter
hereof and (b) supersede all prior negotiations, discussions,
correspondence, communications, understandings and agreements
among the parties relating to the subject matter hereof, all of
which are merged into this Agreement. No prior drafts of this
Agreement and no words or phrases from any such prior drafts
shall be admissible into evidence in any action or proceeding
involving this Agreement.
5 Amendment; Waiver; Consent.
(i) This Agreement may be amended, modified or
supplemented, and the terms hereof may be waived, in each case
only by a written instrument executed by the parties hereto.
(ii) The waiver by any party hereto of a breach
of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent or other breach, whether
or not similar.
6 Severability.
Any provision hereof which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction, in each case so long as the
essential nature of the transaction between the parties has been
maintained. To the extent permitted by applicable law, the
parties hereby waive any provision of law which may render any
provision hereof prohibited or unenforceable in any respect.
7 Specific Performance.
The parties agree that irreparable damage will
result in the event that this Agreement is not specifically
enforced, and the parties agree that any damages available at law
for a breach of this Agreement would not be an adequate remedy.
Therefore, the provisions hereof and the obligations of the
parties hereunder shall be enforceable in a court of equity, or
other tribunal with jurisdiction, by a decree of specific
performance, and appropriate injunctive relief may be applied for
and granted in connection therewith. Such remedies and all other
remedies provided for in this Agreement shall, however, be
cumulative and not exclusive and shall be in addition to any
other remedies which a party may have under this Agreement or
otherwise.
8 Counterparts.
This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts
shall together constitute one and the same agreement, and all
signatures need not appear on any one counterpart.
9 Headings.
The headings and captions in this Agreement and
the table of contents are for convenience of reference only and
shall not define, limit or otherwise affect any of the terms or
provisions hereof.
10 Governing Law.
This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State
of New York, without regard to any choice-of-law rules thereof
which might apply the laws of any other jurisdiction.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have
executed and delivered this Agreement as of the date first above
written.
APPLE PUBLISHING CORPORATION
By______________________________
Robert Price, President
PRICE COMMUNICATIONS CORPORATION
By______________________________
Robert Price, President
EQUITY-LINKED INVESTORS, L.P.
By Rohit M. Desai Associates
General Partner
By______________________________
Name:
Title:
EQUITY-LINKED INVESTORS-II
By Rohit M. Desai Associates-II
General Partner
By______________________________
Name:
Title:
Exhibit E(3)
[Letterhead of Goller & Associates]
December 21, 1993
Bank of Montreal, as Agent
430 Park Avenue
New York, New York 10022
Ladies and Gentlemen:
We have acted as special Missouri counsel to Tri-State
Broadcasting Corporation ("Tri-State"), a Delaware Corporation
registered to transact business in the State of Missouri; in
connection with (a) the Line of Credit Agreement, dated as of
December 21, 1993 (the "Credit Agreement"), among the Co-
Borrowers, the lenders parties thereto (the "Lenders") and Bank
of Montreal, as agent for the Lenders (in such capacity, the
"Agent") and (b) the Notes and the other Loan Documents referred
to in the Credit Agreement.
The opinions expressed below are furnished to you pursuant
to subsection 4.1(g) of the Credit Agreement. Unless otherwise
defined in the Credit Agreement and used herein shall have the
meanings given to them in the Credit Agreement.
In arriving at the opinions expressed below, we have
examined and relied on the originals, or copies certified or
otherwise identified to our satisfaction, of each of (1) the
Credit Agreement, (2) the Note dated the date hereof, (3) the
Security Agreement, (4) the Stock Pledge Agreement and (5) the
Intercompany Subordination Agreement (collectively, the
"Transaction Documents");
In rendering the opinions expressed below, we have assumed,
with your permission, without independent investigation or
inquiry, (a) the authenticity of all documents submitted to us as
originals, (b) the genuineness of all signatures on all documents
that we examined (other than those of the Loan Parties and
officers of the Loan Parties) and (c) the conformity to authentic
originals of documents submitted to us as certified, conformed or
photostatic copies.
When our opinions expressed below are stated "to the best of
our knowledge," we have made reasonable and diligent
investigation of the subject matters of such opinions and have no
reason to believe that there exist any facts or other information
that would render such opinions incomplete or incorrect.
Based upon and subject to the foregoing, we are of the
opinion that:
1. Tri-State Broadcasting Corporation is duly qualified as
a foreign corporation and is in good standing under the laws of
Missouri, pursuant to RSMo 351.572, to lawfully transact business
within the State of Missouri under the duly issued Certificate of
Authority. Tri-State Broadcasting Corporation's Certificate of
Corporate Good Standing for a Foreign Corporation is attached
hereto and incorporated herein by reference.
2. Except for the filings and recordings described on
Schedule 1, attached hereto, and the Certificate of Corporate
Good Standing for a Foreign Corporation, attached hereto, no
consent or authorization of, approval by, notice to, filing with
or other act by or in respect of, any Governmental Authority or
any other Person is required in connection with the borrowings
under the Credit Agreement or with the execution, delivery,
performance, validity or enforceability of the Credit Agreement
and the other Transaction Documents or the perfection of the
security interests created by the Security Documents.
3. The execution and delivery of the Transaction Documents
by Tri-State Broadcasting Corporation, the performance by Tri-
State of its obligations thereunder, the consummation of the
transactions contemplated thereby, the compliance by Tri-State
with any of the provisions thereof, the borrowing under the
Credit Agreement and the use of proceeds thereof, all as provided
therein will not violate, or constitute a default under, Missouri
Law.
4. (a) The provisions of the Security Agreement create in
favor of the Agent a legal, valid and enforceable security
interest in the Collateral (as defined in the Security
Agreement).
(b) Upon filing of the Financing Statements in the
Filing Offices, the Agent will have a perfected security interest
in the Filing Collateral.
(c) Set forth in Schedule 1, attached hereto, are the
proper filing offices for the perfection of the Agent's security
interest in the collateral of Tri-State which may be perfected
under the Missouri Uniform Commercial Code.
Our opinions set forth in this document are subject to the
effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealings.
We are members of the bar of the State of Missouri and we
express no opinion as to the laws of any other jurisdiction.
Very truly yours,
Goller and Associates, P.C.
By
David R. Goller
DRG:rs<PAGE>
SCHEDULE 1
1. The Personal Property Financing Statements shall be
filed in the Office of the Recorder of Deeds of Jasper
County, Missouri, and with the Secretary of State of
Missouri in Jefferson City, Missouri.<PAGE>
Exhibit E(2)
[Letterhead of Paul, Landy, Beiley & Harper, P.A.]
December 21, 1993
Bank of Montreal, as Agent
430 Park Avenue
New York, New York 10022
And each of the Lenders parties to the
Line of Credit Agreement referred
to below
Re: Atlantic Broadcasting Corporation,
a Delaware Corporation (the "Company")
Gentlemen:
We have acted as special Florida counsel for the Company in
connection with the loan and related security arrangements made
among the Company, Southeast Texas Broadcasting Corporation, a
Texas corporation ("Southeast"), Texoma Broadcasting Corporation,
a Texas corporation ("Texoma"), Tri-State Broadcasting
Corporation, a Delaware corporation ("Tri-State"; collectively
with the Company, Southeast and Texoma, the "Co-Borrowers") and
Bank of Montreal, as agent (in such capacity, the "Agent") for
certain lenders (the "Lenders") pursuant to the Line of Credit
Agreement dated as of December 21, 1993 (the "Credit Agreement")
among the Co-Borrowers, the Agent, and the Lenders. Unless
otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the
Credit Agreement.
We have examined and relied on originals or copies,
certified or otherwise identified to our satisfaction as being
true copies, of the following:
(a) the Credit Agreement;
(b) a Security Agreement executed by the Co-Borrowers in
favor of the Agent on December 21, 1993 (the "Security
Agreement"), granting the Agent a security interest in
the collateral described in paragraph 2 of the Security
Agreement ("Collateral"), including Collateral owned by
the Company or in which the Company has any interest
(the "Company Collateral");
(c) a financing statement on Form UCC-1 executed by the
Company and naming the Agent as secured party relating
to the personal property assets of the Company located
in Florida, which is to be filed in the Office of the
Secretary of State of Florida ("Florida Financing
Statement"); and
(d) a certificate executed by an officer of the Company on
December 21, 1993, to which certificate is attached,
inter alia, a copy of the charter documents of the
Company, by-laws of the Company and a certified copy of
the resolution of the board of directors of the Company
respecting this transaction.
The agreements and instruments referred to in subparagraphs (a)
through (d) above are herein collectively referred to as the
"Documents".
In our examination, we have assumed the genuineness of all
signatures, the legal capacity of all natural persons, the
authenticity of all documents submitted to us as originals and
the conformity to authentic original documents of all documents
submitted to us as certified or photostatic copies. As to facts
material to the opinions expressed in this letter, we have relied
on statements and certificates of officers of the Company and of
state authorities and on the representations, warranties and
statements contained in the Documents. We have assumed that the
Documents, together with the other contracts referred to in the
Documents, reflect the complete understanding and agreement of
the parties. We have also assumed that the personal property
described in any of the Documents is adequately and accurately
described and that, to the extent required by applicable law,
such Documents have been duly and properly filed and recorded in
the records of the appropriate governmental office with all
appropriate taxes and fees paid. We have further assumed that
the Documents are legal, valid and binding under the laws of the
State of New York, and that a court of competent jurisdiction
would construe and enforce the Documents in accordance with the
laws of the State of New York.
We have assumed: that each entity that is a party to the
Documents has been duly organized or formed and is validly
existing and in good standing as a corporate or similar
organization under the laws of its jurisdiction of organization,
and is qualified to do business and is in good standing as a
foreign corporation or other organization in each jurisdiction
where by law it is required to be so qualified; that the
Documents have been duly authorized, executed and delivered by
each party thereto and constitute such party's valid and binding
obligation, enforceable against such party in accordance with its
terms; that each party has the requisite corporate or other
organizational power and authority to perform such party's
obligations under the Documents; and that each party to the
Documents has performed and will perform such party's obligations
under the Documents.
We have investigated such questions of law for the purpose
of rendering the opinions in this letter as we have deemed
necessary. We express no opinion in this letter concerning any
law other than the law of the State of Florida.
On the basis of and in reliance on the foregoing, and
subject to the limitations, qualifications and exceptions set
forth below, we are of the opinion that:
1. No consent, approval or authorization of, or other
action by, any Florida governmental authority or Florida
regulatory body is required in connection with the execution,
delivery, validity of, or enforceability by or against the
Company of any of the Documents to which the Company is a party.
2. The execution and delivery of the Documents by the
Company, the performance by the Company of its obligations
thereunder, the consummation of the transactions contemplated
thereby, the compliance by the Company with any of the provisions
thereof, the borrowings under the Credit Agreement and the use of
the proceeds therefor, all as provided therein, will not violate,
or constitute a default under, any Requirement of Law (as defined
in the Credit Agreement).
3. When the Florida Financing Statement has been properly
filed in the Office of the Secretary of State of Florida, subject
to the qualifications and limitations set forth in this letter,
and assuming that the laws of the State of Florida apply to the
issue of perfecting a security interest in the Company
Collateral, the security interest in the Company Collateral
created by the Security Agreement will be valid and perfected
under the Uniform Commercial Code as enacted in the State of
Florida (the "UCC") to the extent that the Company Collateral
constitutes equipment or inventory (as such terms are defined in
the UCC) located in Florida and, if the Company has its Chief
Executive Office in Florida, to the extent that the Company
Collateral constitutes accounts, chattel paper or general
intangibles (as such terms are defined in the UCC), and no
further filing or recording of any document or instrument or
other action is or will be required under Florida law to perfect
or to maintain the perfection of such security interest under the
UCC, except that (a) perfection of the security interest in
proceeds will be limited to the extent provided in Section 9-306
of the UCC, (b) continuation statements need to be filed from
time to time, as discussed below, and (c) the security interest
of the Agent will cease to be perfected (i) four months after the
grantor of the security interest changes its name, identity or
corporate structure so as to make the financing statement then on
file seriously misleading, unless new appropriate financing
statements are filed before the expiration of such four-month
period in the appropriate jurisdiction, and (ii) if the
applicable Company Collateral is disposed of pursuant to
authorization of the Agent.
4. To the extent that the Company Collateral constitutes
fixtures which are deemed personal property under applicable
Florida law and are located in Florida ("Florida Personal
Property Fixtures") and the Co-Borrowers are not "transmitting
utilities" (as such term is defined in the UCC), subject to the
qualifications and limitations set forth in this letter, and
assuming that the laws of the State of Florida apply to the issue
of perfecting a security interest in the Florida Personal
Property Fixtures, a security interest in the Florida Personal
Property Fixtures may be perfected by recording a duly executed
financing statement on Form UCC-1, containing the legal
description and the name of the record owner of the real property
on which the Florida Personal Property Fixtures are located and
describing the Florida Personal Property Fixtures, with the Clerk
of the Circuit Court of each County in the State of Florida in
which such real property is located (collectively, the "Florida
Fixture Filings"). In the event that the Company is deemed to be
a transmitting utility, subject to the qualifications and
limitations set forth in this letter, and assuming that the laws
of the State of Florida apply to the issue of perfecting a
security interest in the Florida Personal Property Fixtures, a
security interest in the Florida Personal Property Fixtures may
be perfected by filing a duly executed financing statement on
Form UCC-1, in form similar to the Florida Financing Statement
(without the need to attach a legal description or name the
record owner of the real property on which the Florida Personal
Property Fixtures are located) and describing the Florida
Personal Property Fixtures, in the Office of the Secretary of
State of Florida.
With respect to the opinions expressed in paragraphs 3 and 4
above, we advise you that the Florida Financing Statement and the
Florida Fixture Filings are effective for a period of five years
from the date of filing or recording, as applicable. The
effectiveness of the Florida Financing Statement and the Florida
Fixture Filings lapses upon expiration of such five-year period
unless a continuation statement with respect thereto is filed or
recorded, as applicable, prior to the lapse. Such a continuation
statement may be filed or recorded, as applicable, by the secured
party within six months prior to the expiration of such five-year
period. Upon the timely filing or recording, as applicable, of
the continuation statement, the effectiveness of the original
statement is continued for five years after the last date to
which the filing or recording, as applicable, was effective,
whereupon it lapses in the same manner as provided above, unless
another continuation statement is filed or recorded, as
applicable, prior to such lapse. Succeeding continuation
statements may be filed or recorded, as applicable, in the same
manner to continue the effectiveness of the original Florida
Financing Statement and the Florida Fixture Filings.
We express no opinion as to the creation or perfection of a
security interest in any of the Company Collateral unless it is
the type of Company Collateral which is specifically referred to
and described in paragraphs 3 and 4 above. Without limiting the
foregoing, we express no opinion to the extent any of the Company
Collateral consists of (i) personal property or interest therein
of a type excluded from the coverage of the UCC by Section 9-104
thereof, (ii) money, instruments or documents (each as defined in
the UCC), (iii) property which is subject to any certificate of
title statute or any national or international system for the
registration of interest in property, including liens and
security interests, (iv) any accounts with respect to which the
United States of America or any agency thereof is the account
debtor, (v) equipment used in farming operations, farm products,
timber or minerals or the like, (including oil and gas), (vi)
goods which are mobile and which are of a type normally used in
more than one jurisdiction, (vii) patents, patent licenses,
trademarks, trademark licenses or other intellectual property;
and (viii) FCC licenses.
We express no opinion as to title or the condition of title
of any real or personal property or as to the priority of any
lien or security interest created by the Security Agreement.
This opinion is rendered solely as of the date hereof, and
we disclaim any responsibility to update it to reflect any
changes of fact or law occurring after the date hereof. This
opinion is rendered solely for your benefit and the benefit of
the Lenders, and only with respect to the transaction described
herein. It may not be relied upon or distributed to any other
party without our prior written consent. This opinion may not be
paraphrased, quoted or summarized, nor may it be duplicated or
reproduced in part.
Very truly yours,
PAUL, LANDY, BEILEY
& HARPER, P.A.<PAGE>
Exhibit E(4)
[Letterhead of Orgain, Bell & Tucker, L.L.P.]
December 23, 1993
Bank of Montreal, Agent
430 Park Avenue
New York, New York 10022
And each of the Lenders Parties to the
Line of Credit Agreement referred to below
This letter regards a transaction by and among Atlantic
Broadcasting Corporation, a Delaware corporation ("Atlantic"),
Southeast Texas Broadcasting Corporation, a Texas corporation
("Southeast"), Texoma Broadcasting Corporation, a Texas
corporation ("Texoma"), Tri-State Broadcasting Corporation, a
Delaware corporation ("Tri-State"; collectively with Atlantic,
Southeast and Texoma, the "Co-Borrowers"), Atlas Broadcasting
Corporation, a New York corporation ("Atlas"), Continental
Broadcasting Corporation, a Delaware corporation ("Continental";
together with Atlas, the "Pledgors"), and Price Communications
Corporation, a New York corporation ("PCC"; together with the Co-
Borrowers and the Pledgors, the "Loan Parties") in connection
with (a) the Line of Credit Agreement, dated as of December 21,
1993 (the "Credit Agreement" or "Line of Credit Agreement"),
among the Co-Borrowers, the lenders parties thereto (the
"Lenders") and Bank of Montreal, as agent for the Lenders (in
such capacity, the "Agent") and (b) the Notes and the other
Transaction Documents referred to in the Credit Agreement. We
have acted as special Texas counsel for Texoma and Southeast with
respect only to the Security Agreement and the opinions expressed
herein. This letter replaces and substitutes for our opinion
telecopied earlier this date.
The opinions expressed below are furnished to you
pursuant to subsection 4.1(g) of the Credit Agreement, but the
nature and scope of the opinions are limited to those stated in
this letter. Unless otherwise defined herein, terms defined in
the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement.
In arriving at the opinions expressed below regarding
the Security Agreement,
(a) We have examined and relied on the following
unsigned copies of each of (1) the Line of Credit Agreement
(12/20/93 5:18 pm), (2) Form of Demand Note Exhibit "A" (12/20/93
4:05 pm), (3) Security Agreement Exhibit "B" (no draft date/time,
being draft received by Federal Express on December 22, 1993),
(4) Stock Pledge Agreement Exhibit "C" (12/20/93 6:01 pm), (5)
the Intercompany Subordination Agreement Exhibit "F" (12/20/93
5:58 pm), and (6) "12/21/93 Changed Pages" (bearing telecopy
transmittal banner sent by "Proskauer", with date "12-22-93;
11:45 AM"), (collectively called the "Transaction Documents"),
(b) we have examined unfiled copies of the financing
statements attached as Schedule 1 (collectively, the "Financing
Statements") respectively naming either Texoma or Southeast as
Debtor and the Agent as Secured Party and describing certain
Collateral (as set forth in the attached Financing Statements) as
to which security interests may be perfected by filing under the
Uniform Commercial Code of the State of Texas (the "Texas Filing
Collateral"), which we understand will be filed in the filing
offices listed on Schedule 2 (the "Filing Offices"). The Texas
Filing Collateral is limited to Collateral which is governed by
the law of the State of Texas, as set forth in the Uniform
Commercial Code as in effect in the State of Texas (the "UCC"),
and which can be perfected by filing.
(c) we have examined a Certificate of Existence for
Texoma and Southeast dated December 17, 1993, as issued by the
Texas Secretary of State and a Certification of Account Status
for Texoma and Southeast dated December 17, 1993, as issued by
the Texas Comptroller of Public Accounts; and
(d) certain corporate documents of Texoma and
Southeast that were sent to us and are listed on Schedule 3 (the
"Corporate Documents").
In rendering the opinions expressed below, we have
assumed, with your permission, without independent investigation
or inquiry, (a) the authenticity of all documents submitted to us
as originals, (b) the genuineness of all signatures on all
documents that we examined, (c) the conformity to authentic
executed and delivered (and in the case of the Financing
Statements, filed) originals of the documents submitted to us as
draft copies, (d) that neither Texoma or Southeast nor their
respective property is owed or leased in whole or in part by or
from any agency or body of the federal, state, or local
government, (e) that neither Texoma or Southeast nor its property
are regulated by any agency of the State of Texas nor is subject
to any judicial or administrative order that affects its ability
to borrow or encumber its property; (f) that neither Texoma or
Southeast nor any of their affiliates is a debtor, debtor-in-
possession, or reorganized debtor in any pending bankruptcy
proceeding; (g) that all of the terms and provisions of the
Transaction Documents are enforceable in accordance with their
respective written terms against all the respective parties
thereto; and (h) the other matters stated herein to have been
assumed.
The Security Agreement with regard to which we opine
states that "This Agreement shall be governed by, and construed
in accordance with, the law of the State of New York." Further,
several defined terms used in the Security Agreement and terms,
provisions, rights, and remedies provided therein are stated with
direct reference to New York law. In the context of this opinion
this circumstance raises at least two issues: whether New York
law governs; and if so, to what extent. We are opining only as
to Texas law. Accordingly, to the extent that New York governs,
you should not rely on our opinion. There is recent Texas
legislation that affects these issues.
Effective September 1, 1993, Texas added Section 35.51
to its Business & Commerce Code, entitled "Rights of Parties To
Choose Law Applicable to Certain Transactions." We have provided
a copy to you. Based on our understanding of this transaction,
this transaction qualifies for coverage under Tex. Bus. & Com.
Code 35.51.
Tex. Bus. & Com. Code 35.51 contains two concepts that
are relevant to our opinion; to wit: [i] Tex. Bus. & Com. Code
35.51(b) provides (with two exceptions) that if an agreement
provides that the law of another state "governs an issue relating
to the transaction", then the law "of that jurisdiction governs
the issue"; and [ii] Tex. Bus. & Com. Code 35.51(c) provides
(with two exceptions) that if an agreement provides that the law
of another state "governs the interpretation or construction of
an agreement relating to the transaction", then the law "of that
jurisdiction governs the issue". The new statute is more complex
than the foregoing summary and I refer you to the statute for a
more complete understanding of its provisions.
Accordingly, other than issues within the exceptions
stated in Tex. Bus. & Com. Code 35.51, a court may hold that all
issues under the Security Agreement are governed by New York law.
Provided that, this conclusion is subject to the following three
points: we assume (but do not opine) that the Security Agreement
meets the statutory definition as a transaction which "bears a
reasonable relation" to New York as defined in Tex. Bus. & Com.
Code 35.51(d); this is a new statute and we have no guidance
from the courts; and the Security Agreement is not drafted in
terms that strictly fit Tex. Bus. & Com. Code 35.51 and certain
"issues" may be held not to be within the coverage of Tex. Bus. &
Com. Code 35.51, as a matter of the wording of the Security
Agreement.
On its face, Tex. Bus. & Com. Code 35.51 presents some
unresolved interpretation issues to which there is no ready
answer. For example, if New York law governs, must the financing
statements be filed with the New York filing office or the Texas
Secretary of State? In short, the situation of a Security
Agreement covering Texas collateral but stating that it is
governed by New York law raises inherent uncertainties,
compounded by the recent passage of Tex. Bus. & Com. Code 35.51.
Our opinion is subject to this general area of uncertainty.
Our opinion assumes that both Texas law and New York
law are both fully complied with regarding the creation,
attachment, and perfection of the security interests under the
Security Agreement, but our opinion addresses Texas compliance
only. We do not opine that New York law has been complied with.
Nor do we opine on any aspect of the affect of New York law on
our opinion. For example without limitation, we express no
opinion on whether a failure to perfect the Texas Collateral in
New York under New York law will render perfection in Texas
ineffective, by virtue of the choice of law provisions in the
Security Agreement.
Based upon and subject to the foregoing and the other
assumptions and limitations stated herein, we are of the opinion
that:
1. Based on the Certificate of Existence for Texoma and
Southeast dated December 17, 1993, as issued by the
Texas Secretary of State and Certification of Account
Status for Texoma and Southeast dated December 17,
1993, as issued by the Texas Comptroller of Public
Accounts, and the Corporate Documents, each of Texoma
and Southeast:
(a) is duly organized, validly existing and in
good standing under the laws of Texas; and
(b) unless and except as may be limited or
restricted by any resolutions, contracts, or other
corporate documents which we have not reviewed, Texoma
and Southeast each has the corporate power and
authority and the legal corporate right to own and
operate its property, to lease the property it operates
as lessee and to conduct the business in which it is
currently engaged, assuming but not opining that it is
currently conducting its business within the
limitations of their respective Articles of
Incorporation. Provided that, the foregoing is limited
to power and authority under the general corporate law
of the State of Texas and is not an express or implied
opinion regarding any limits or restrictions that may
apply under other laws, such as, but not limited to,
the Federal Communications Act and Regulations.
Further provided that the foregoing opinion is
restricted to the scope of the respective purposes
stated in the respective Articles of Incorporation of
Texoma and Southeast, which is limited as stated
therein; and
(c) unless and except as may be limited or
restricted by any resolutions, contracts, or other
corporate documents which we have not reviewed and
assuming (but not opining) that under and within the
meaning of Tex. Rev. Civ. Stat. Ann. art. 1302-
2.06(C)(3), each of the "Co-Borrowers" is an
"affiliated corporation" of each of Texoma and
Southeast and that Texoma and Southeast are each an
"affiliated corporation" with respect to each other,
Texoma and Southeast has the corporate power and
authority, and the legal right, and has taken all
necessary corporate action, to make, deliver and
perform its obligations under the Transaction Documents
to which it is a party and to borrow under the Credit
Agreement and to grant the security interests
contemplated by the Security Agreement. Provided that,
the foregoing is limited to power and authority under
the general corporate law of the State of Texas and is
not an express or implied opinion regarding any limits
or restrictions that may apply under other laws, such
as, but not limited to, the Federal Communications Act
and Regulations. Further provided that the foregoing
opinion is restricted to the scope of the respective
purposes stated in the respective Articles of
Incorporation of Texoma and Southeast, which is limited
as stated therein;
2. Except for the filings and recordings of the Financing
Statements described on Schedules 1 attached hereto in
the offices described in Schedule 2 attached hereto, no
consent or authorization of, approval by, notice to,
filing with or other act by or in respect of, any
governmental authority or any other person is required
under Texas law in connection with the borrowings under
the Credit Agreement or with the execution, delivery,
performance, validity or enforceability of the Credit
Agreement and the other Transaction Documents or the
perfection of the security interests in the Collateral
created by the Security Agreement. Provided that, no
opinion is rendered regarding the creation, attachment,
enforceability, perfection, or priority of the security
interest granted in Patents, Patent Licenses,
Trademarks, Trademark Licenses, licenses granted by the
FCC and proceeds and products thereof. Further
provided that no opinion is rendered regarding the
rights and remedies as among the Lenders or among the
Agent and Lenders.
3. (a) Under Texas laws, the Security Agreement
creates in favor of the Agent a legal, valid and
enforceable security interest in the part of the
Collateral (as defined in the Security Agreement) which
is Texas Filing Collateral. Provided that, no opinion
is rendered regarding the creation, attachment,
enforceability, perfection, or priority of the security
interest granted in Patents, Patent Licenses,
Trademarks, Trademark Licenses, licenses granted by the
FCC and proceeds and products thereof. Further
provided that no opinion is rendered regarding the
rights and remedies as among the Lenders or among the
Agent and Lenders.
(b) Upon timely filing of the Financing
Statements in the Filing Offices, the Agent will have a
perfected security interest in the Texas Filing
Collateral, consisting of Accounts, Inventory,
Equipment and General Intangibles, as defined under
Texas law. Provided that, no opinion is rendered
regarding the creation, attachment, enforceability,
perfection, or priority of the security interest
granted in Patents, Patent Licenses, Trademarks,
Trademark Licenses, licenses granted by the FCC and
proceeds and products thereof. Further provided that
no opinion is rendered regarding the rights and
remedies as among the Lenders or among the Agent and
Lenders.
Our opinions are limited to the specific categories of
Collateral described in the Security Agreement as limited above,
under Texas law, without regard to the scope or meaning of the
collateral description under the law of any other state. For
example, except for the advisory opinion expressed below, no
opinion has been requested or given regarding creation or
perfection of a security interest in any goods which may be
fixtures under Texas law. Further, the Collateral is defined
generically, such as "Equipment" and no opinion is given
regarding any particular item or sub-category of such collateral
as to which special rules may apply such as, but not limited to,
any goods which may be fixtures or any item of Collateral which
might be subject to the rules regarding multi-state transactions
under Tex. Bus. & Com. Code 9.103, accessions, Collateral that
is not located at the address of the respective debtors, and co-
mingled or processed goods.
As an advisory opinion only, any Equipment which is or
becomes a "fixture" and which is adequately described as such in
the Security Agreement (if any) may be perfected under Texas law
by filing as a fixture filing, by filing a Texas form UCC-1
which: describes the affected collateral as fixtures and goods
which are or are to become fixtures; recites that it is to be
filed for record in the real estate records; and contains a
description of the real estate sufficient if it were contained in
a mortgage of the real estate to give constructive notice of the
mortgage under the law of Texas. If the debtor does not have an
interest of record in the real estate, such financing statement
must show the name of the record owner. The foregoing is not an
opinion that the Security Agreement covers fixtures.
Our opinions set forth herein are subject to the
effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law), other public policies of the State of Texas, and an implied
covenant of good faith and fair dealing.
We have assumed that the following facts are true in
rendering this opinion:
(i) The Co-Borrowers (a) own the assets to be subject
to Lender's security interests free and clear of
any liens, encumbrances, or claims, (b) have good
and sufficient title to those assets, and (c) has
"rights in the collateral" as that term is used in
Section 9.203 of the Texas Uniform Commercial
Code.
(ii) The due authorization, execution, and delivery of,
and the validity and binding effect of, the
Transaction Documents on the parties other than
Texoma and Southeast and the due execution and
delivery of, and the validity and binding effect
of, the Transaction Documents on Texoma and
Southeast.
(iii) The proper and timely filing of the Financing
Statements with the Secretary of State of the
State of Texas, and in the Counties of Jefferson,
Orange, and Wichita (and that the only places in
Texas where Texoma and Southeast do business or in
which their respective property is located are
Beaumont, Texas, Port Arthur, Texas, Mauriceville,
Texas, and Wichita Falls, Texas).
(iv) The representations and warranties of the Loan
Parties in the Transaction Documents are true and
correct in all material respects.
(v) The Loan Parties have full power and authority to
enter into each of the Transaction Documents to
which either is a party.
(vi) There is no action, suit, proceeding or
investigation at law or in equity before or by any
court or governmental agency or body pending or
threatened, wherein an adverse decision, ruling or
finding (i) would result in any material adverse
change in the condition (financial or otherwise),
results of operation, business or prospects of the
Co-Borrowers, or which would materially and
adversely affect the properties of the Co-
Borrowers (ii) would materially and adversely
affect the transactions contemplated by the
Transaction Documents, or (iii) would adversely
affect the validity or enforceability of the
Transaction Documents.
(vii) The execution and delivery of the Transaction
Documents by the parties thereto and the
consummation of all of the transactions therein
contemplated.
(viii) The execution and delivery of the Transaction
Documents by the parties thereto and the
consummation of all of the transactions therein
contemplated and the fulfillment of, or compliance
with, the terms and provisions thereof, will not
contravene the articles of incorporation or by-
laws of the Loan Parties (other than Texoma or
Southeast) or conflict with or result in a breach
of any of the terms, conditions or provisions, or
constitute a default under, any partnership or
corporate restriction or bond, debenture, note,
mortgage, indenture, agreement or other instrument
to which the Co-Borrowers are a party or by which
any of them is or may be bound or to which any of
the property or assets of any of them is or may be
subject, or any law or any order, rule or
regulation applicable to any of them in any court,
federal or state regulatory body, administrative
agency or other governmental body having
jurisdiction over any of them or their respective
properties or operations.
Subject to the above and below matters, to the extent
that Texas law governs (and it may not, see above), we express
doubt as to the enforceability under Texas law of the following
provisions in the Security Agreement: 7.4, 7.5, and 12, to the
extent that they purport to grant the secured party all rights
and remedies of a secured party under the New York Code or other
remedies not allowed under Texas law or waive notices required by
Texas law; 3.2 to the extent that it makes the security
interests superior to the rights of all other creditors and
purchasers of and from the Co-Borrower, except purchasers of
Inventory in the ordinary course of business; 8.1 to the
extent that it appoints the Agent for the Lenders as the
"agent" of the Co-Borrowers; the exculpatory provisions of 9,
especially the last sentence of 9 and any provision which
purports to relieve Agent or Lenders of their duties and
obligations under the Tex. Bus. & Com. Code Article 9, or limit
the consequences for violation of such duties; 10, to the extent
that it authorizes the Agent to file financing statements without
the signature of the Co-Borrowers; 8.3 to the extent that
interest is charged on certain expenses without limiting such
charges to the maximum rate of interest under Texas law; and
oral agreements, if any, and oral amendments may, under some
circumstances, be enforceable despite a written agreement that
provides otherwise.
We further note that the secured "Obligations" are
defined only with reference to the opening clause of 1.1 of the
Security Agreement which does not expressly incorporate the
definition of "Obligations". Further the term "Obligations" is
used in another, more limited, context in 4.4 of the Security
Agreement. This may be subject to challenge or misinterpretation
by the courts or may open the door for oral testimony regarding
the meaning of "Obligations", especially regarding any issues of
"cross collateralization" which may develop.
Further, no opinion is expressed, as to creation,
attachment, perfection, priority, enforceability, or otherwise,
with regard to any item of Collateral that is leased or which is
the subject of a lien or claim of others, as described in 3.1 of
the Security Agreement.
Further, neither the Security Agreement nor Financing
Statements state that the Collateral is covered "wherever
located", which raises the risk that the security interest or its
priority may be successfully attacked in the event that it is, or
becomes, located at a place other than the address for the
respective debtors shown on the Security Agreement and Financing
Statements.
To the extent Texas law governs, we note the following
matters and problems with respect to the Financing Statements:
the signature for Texoma and Southeast are incomplete and
ambiguous because they do not conform to the corporate format
commonly used in Texas of "By: "X", its [office]"; the secured
party must sign all Financing Statements; the definition section
of the schedules to the Financing Statements incorporates New
York law for the definition of the Collateral that is covered and
we express no opinion as to whether same renders the description
inadequate under Texas law, if Texas law is held to govern; the
"number of additional sheets" blank must be completed; the
reference to "co-borrowers" in the schedules to the Financing
Statements is ambiguous and not adequate to perfect a security
interest in the Collateral of a "co-borrower" other than the
"Debtor" named and signing on the face of the respective
Financing Statements.
Our opinions are limited in all respects to the
substantive law of the State of Texas and we assume no
responsibility as to the applicability thereto, or the effect
thereon, of the laws of any other jurisdiction. Accordingly, we
express no opinion as to the laws of any other state or the
perfection and effect of perfection or non-perfection or priority
of a security interest in Collateral subject to the laws of
another state.
The opinions given above do not extend to matters
affecting the creation and perfection and priority of any
security interests, assignments, or liens, which depend on acts
or omissions beyond the face of the Transaction Documents, such
as other liens and security interests, recording, and other
matters of record. The opinion given above as to the perfection
of security interests does not apply to the Pledged Stock, motor
vehicles, mobile homes, other property subject to certificate of
title laws, instruments as defined in UCC Section 9.105(1)(i),
money, insurance payable by reason of loss or damages to the
Collateral to the extent payable to a person not a party to the
Documents, and other property subject to perfection procedures
other than the filing of a financing statement pursuant to UCC
Section 9.302.
We express no opinion as to the validity, priority or
perfection of security interests in any Collateral which is in
the form of a deposit account or any Collateral not meeting the
description requirements of Section 9.110 of the UCC.
We express no opinion as to the priority of such
security interest in any Collateral or portions thereof which are
or become subject to [a] liens for taxes, assessments, levies,
fees and other governmental and similar charges that may be
afforded priority over the security interest by federal law or
state law, or [b] rights of governmental or public authorities to
condemn, appropriate, use or control the use of any of the
Collateral, or [c] setoffs, counterclaims or defenses of tenants,
account debtors or obligors on any leases or chattel paper which
constitutes Collateral.
We express no opinion as to the perfection or priority
of the security interest in any Collateral to the extent the
Lender consented to any security interest in favor of any other
party or has authorized the disposition of any Collateral or
released or subordinated the Lender's security interest therein.
We have not made any title, lien, security interest,
encumbrances, or judgment searches. Accordingly, we express no
opinion relating to priority, the existence or absence of title,
liens, security interests, encumbrances, or judgments, nor the
absence thereof.
This opinion is limited to the matters stated herein
and no opinion is implied or may be inferred beyond the matters
expressly stated. This opinion is provided at your request and
is to be limited in its use to reliance by you in consummating
the transactions described herein and no other person or entity
may rely or claim reliance upon this opinion. This opinion is
rendered as of the date hereof, and we undertake no, and hereby
disclaim any, obligation to advise you of any changes in facts or
law or new developments which might affect any matters or
opinions set forth herein.
We are members of the bar of the State of Texas and we
express no opinion as to the laws of any other jurisdiction.
Sincerely,
ORGAIN, BELL & TUCKER, L.L.P.
Gary Neale Reger
GNR:jb<PAGE>
Exhibit E(1)
[Letterhead of Proskauer Rose Goetz & Mendelsohn]
December 21, 1993
Bank of Montreal, as Agent
430 Park Avenue
New York, New York 10022
And each of the Lenders parties
to the Line of Credit Agreement
referred to below
Ladies and Gentlemen:
We have acted as counsel for Atlantic Broadcasting
Corporation, a Delaware corporation ("Atlantic"), Southeast Texas
Broadcasting Corporation, a Texas corporation ("Southeast"),
Texoma Broadcasting Corporation, a Texas corporation ("Texoma"),
and Tri-State Broadcasting Corporation, a Delaware corporation
("Tri-State" and, with each of Atlantic, Southeast and Texoma,
individually, a "Co-Borrower" and, collectively, the "Co-
Borrowers"), Atlas Broadcasting Corporation, a New York
corporation ("Atlas") and Continental Broadcasting Corporation, a
Delaware corporation ("Continental" and, together with Atlas,
individually, a "Pledgor" and, collectively, the "Pledgors"),
(the Co-Borrowers and the Pledgors, individually, a "Loan Party"
and, collectively, the "Loan Parties"), in connection with (i)
the Line of Credit Agreement dated as of December 21, 1993 (the
"Credit Agreement"), by and among the Co-Borrowers, the several
lenders from time to time parties thereto (the "Lenders") and
Bank of Montreal, as agent (the "Agent"), (ii) the demand note
dated as of December 21, 1993 (the "Note"), from the Co-Borrowers
to each Lender, (iii) the Security Agreement, dated as of
December 21, 1993 (the "Security Agreement"), of the Co-Borrowers
in favor of the Agent, (iv) the Stock Pledge Agreement, dated as
of December 21, 1993 (the "Pledge Agreement"), of the Pledgors in
favor of the Agent, and (v) the Intercompany Subordination
Agreement among the Pledgors, the Co-Borrowers and the Agent,
dated December 21, 1993 (the "Subordination Agreement" and, with
the Credit Agreement, the Note, the Security Agreement and the
Pledge Agreement, each a "Loan Document" and collectively, the
"Loan Documents"). This opinion letter is being delivered to you
pursuant to Section 4.1(g) of the Credit Agreement. Unless
otherwise specified herein, all terms defined in the Loan
Documents and used herein shall have the same respective meanings
herein as therein.
We have made such examination of the certificates of
incorporation, by-laws and other similar corporate documents and
records of each of the Loan Parties and of such other agreements
and documents as we have deemed necessary for the purpose of
rendering the opinions hereinafter expressed. As to matters of
fact material to our opinion, we have relied upon and have
assumed the accuracy of the recitals and representations made by
various parties to the Loan Documents and upon an officer's
certificate of fact.
Based on and subject to the foregoing, it is our
opinion that:
1. Each of the Loan Parties that is a Delaware or New
York corporation is validly existing and in good standing under
the law of the jurisdiction of its incorporation, and the
respective Loan Parties are qualified to do business and in good
standing in the jurisdictions set forth beside their names on
Schedule 1.
2. Each of the Loan Parties that is a Delaware or New
York corporation has the corporate power and authority (a) to own
and operate its properties, to lease the properties it operates
as lessee and carry on its business as now being conducted, and
(b) to execute, deliver and perform its obligations under each of
the Loan Documents to which it is a party.
3. Each of the Loan Parties that is a Delaware or New
York corporation has been duly authorized by all necessary
corporate action to execute and deliver, and to perform its
obligations under, each of the Loan Documents to which it is a
party.
4. All authorizations, consents, approvals,
registrations, notices and filings with or from New York State,
Delaware and United States federal governmental authorities
necessary for the transactions contemplated by any of the Loan
Documents and for the taking by any of the Loan Parties of any
action to be taken by any such Loan Party under any Loan Document
and the performance by any of the Loan Parties of their
respective obligations under the Loan Documents have been
effected or obtained and are in full force and effect (except
that we express no opinion in this paragraph with regard to
filings, if any, that may be required under the Uniform
Commercial Code as in effect in any jurisdiction, and we express
no opinion in this paragraph with regard to matters involving
federal communications laws).
5. There is no charter or by-law provision of any
Loan Party that is a Delaware or New York corporation, or, to the
best of our knowledge (which shall mean, for all purposes of this
opinion, the actual present knowledge of attorneys at our firm
who have been involved in this transaction), (a) any provision of
any charter or by-law of any other Loan Party or any preference
stock, instrument, mortgage, indenture, contract or agreement
binding on any Loan Party, or affecting any of its properties, or
(b) any statute, regulation, rule, order or judgment under the
laws of the State of New York, the General Corporation Law of the
State of Delaware or the federal laws of the United States
(excluding federal communications laws, as to which we express no
opinion) that would prohibit, conflict with, result in a default
under or in any way prevent the execution, delivery or
performance by any such Loan Party of any of its material
obligations under any Loan Document to which it is a party. We
note that certain contracts, agreements and leases may require
consents of other parties in connection with such contracts,
agreements and leases being included in the Collateral.
6. Each of the Loan Documents has been duly executed
and delivered by each of the Loan Parties that is a Delaware or
New York corporation and that is a party thereto and each of the
Loan Documents constitutes the legal, valid and binding
obligation of each of the Loan Parties that is a party thereto,
enforceable against such party in accordance with its terms
(assuming, in the case of each Loan Party that is not a Delaware
or New York corporation, that that Loan Party (a) is validly
existing and in good standing in the jurisdiction of its
incorporation, and (b)
is duly authorized to execute and deliver, and has the corporate
power and authority to execute, deliver and perform its
obligations under, the respective Loan Documents).
7. The Security Agreement creates in favor of the
Agent, for the ratable benefit of the Lenders, a security
interest in the Collateral to which Article 9 of the New York
Uniform Commercial Code (the "NY UCC") is applicable (the "New
York Article 9 Collateral").
8. Upon the filing of financing statements in the
offices listed on Schedule 2, the Agent, for the ratable benefit
of the Lenders, will have a perfected security interest in that
part of the New York Article 9 Collateral (other than fixtures)
in which a security interest is perfected by filing a financing
statement under the NY UCC.
9. The Pledge Agreement, together with the delivery
of the certificates representing the shares of stock identified
on Schedule 1 to the Pledge Agreement (the "Pledged Stock") to
the Agent, for the ratable benefit of the Lenders, in the State
of New York, creates in favor of the Agent, for the ratable
benefit of the Lenders, a perfected security interest under the
NY UCC in the Pledged Stock. Assuming the Agent, for the ratable
benefit of the Lenders, acquires its interest in the Pledged
Stock in good faith and without notice of any adverse claim, the
Agent, for the ratable benefit of the Lenders, will acquire its
security interest in the Pledged Stock free of adverse claims.
10. None of the Loan Parties is an "investment
company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, or a
"holding company", as defined in, or otherwise subject to
regulation under, the Public Utility Holding Company Act of 1935.
11. The shares of the Pledged Stock (a) constitute, to
the best of our knowledge, all the issued and outstanding capital
stock of each Co-Borrower, (b) in the case of Pledged Stock
issued by a Delaware or New York corporation, have been duly and
validly issued and are fully paid, and (c) are owned of record
and, to the best of our knowledge, beneficially by one of the
Pledgors.
12. Except as set forth on Schedule 3.6 to the Credit
Agreement, to the best of our knowledge, there is no litigation,
proceeding or investigation before any arbitrator or before or by
any governmental authority, excepting the FCC, pending or
threatened by or against any Loan Party (a) that could reasonably
be expected to have a material adverse effect on the business,
properties or condition (financial or otherwise) of the Co-
Borrowers taken as a whole, or (b) with respect to the Loan
Documents.
The foregoing opinions are qualified to the extent that
the enforcement of each of the Loan Documents may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, receivership or other similar laws relating to or
affecting creditors' rights generally and by general principles
of equity (whether enforcement thereof is sought in a proceeding
at law or in equity).
Paragraphs 7, 8 and 9 do not address any law, other
than Article 9 or 8, as the case may be, of the NY UCC.
Furthermore, we express no opinion with respect to any New York
Article 9 Collateral of a type described in section 9-401(1)(a)
or (b) of the NY UCC or represented by a certificate of title.
Except as set forth in paragraph 1 above with respect
to the due qualification and good standing of the Loan Parties,
the foregoing opinions are specifically limited to the laws of
the state of New York, the Delaware General Corporation Law and
the federal laws of the United States (other than federal
communications laws, as to which we express no opinion). In that
connection, the Co-Borrowers have obtained and delivered to you
opinions of special local counsel as follows: Paul, Landy,
Beiley & Harper, P.A. (Special Florida Counsel to Atlantic);
Orgain, Bell & Tucker (Special Texas Counsel to Southeast and
Texoma); and Goller & Associates (Special Missouri Counsel to
Tri-State).
This opinion is rendered to you and is solely for your
benefit only in connection with the above transaction. This
opinion may not be relied upon by you for any other purpose or
furnished to, quoted or relied upon by any other
person, firm or corporation for any purpose without our prior
written consent.
Very truly yours,
PROSKAUER ROSE GOETZ & MENDELSOHN
By:______________________________
Peter G. Samuels
<PAGE>
SCHEDULE 1
Jurisdiction of Jurisdiction of Loan
Party Incorporation Qualification
Atlas Broadcasting New York
Corporation
Atlantic Broadcasting Delaware Florida
Corporation
Continental Delaware
Broadcasting Corporation
Southeast Texas Texas
Broadcasting Corporation
Texoma Broadcasting Texas
Corporation
Tri-State Broadcasting Delaware Missouri
Corporation
<PAGE>
SCHEDULE 2
Filing information for Co-Borrower Personal Property
Financing Statements.
New York Secretary of State.
City Reporter, New York County.<PAGE>
FORM OF DEMAND NOTE
$ New York, New York
December __, 1993
FOR VALUE RECEIVED, each of the undersigned, ATLANTIC
BROADCASTING CORPORATION, a Delaware corporation, SOUTHEAST TEXAS
BROADCASTING CORPORATION, a Texas corporation, TEXOMA
BROADCASTING CORPORATION, a Texas corporation, and TRI-STATE
BROADCASTING CORPORATION, a Delaware corporation, jointly and
severally (collectively, the "Co-Borrowers"), hereby
unconditionally promises to pay to the order of
(the "Lender") at the office of Bank of Montreal located at 430
Park Avenue, New York, New York 10022, in lawful money of the
United States of America and in immediately available funds, on
the Termination Date or at any time upon demand by the Lender the
principal amount of (a) DOLLARS ($ ),
or, if less, (b) the aggregate unpaid principal amount of all
Loans made by the Lender to the Co-Borrowers pursuant to
subsection 2.1 of the Credit Agreement, as hereinafter defined.
The Co-Borrowers further jointly and severally agree to pay
interest in like money at such office on the unpaid principal
amount hereof from time to time outstanding at the rates and on
the dates specified in subsection 2.9 of such Credit Agreement.
The holder of this Note is authorized to endorse on the
schedules annexed hereto and made a part hereof or on a
continuation thereof which shall be attached hereto and made a
part hereof the date, Type and amount of each Loan made pursuant
to the Credit Agreement and the date and amount of each payment
or prepayment of principal thereof, each continuation thereof,
each conversion of all or a portion thereof to another Type and,
in the case of Eurodollar Loans, the length of each Interest
Period with respect thereto. Each such endorsement shall
constitute prima facie evidence of the accuracy of the
information endorsed. The failure to make any such endorsement
shall not affect the obligations of the Co-Borrowers in respect
of such Loan.
This Note (a) is one of the Notes referred to in the Line of
Credit Agreement, dated as of December 21, 1993 (as amended,
supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Co-Borrowers, the Lender, the other banks
and financial institutions from time to time parties thereto and
Bank of Montreal, as agent, (b) is subject to the provisions of
the Credit Agreement and (c) is subject to optional and mandatory
prepayment in whole or in part as provided in the Credit
Agreement. This Note is secured and guaranteed as provided in
the Loan Documents. Reference is hereby made to the Loan
Documents for a description of the properties and assets in which
a security interest has been granted, the nature and extent of
the security and the guarantees, the terms and conditions upon
which the security interests and each guarantee were granted and
the rights of the holder of this Note in respect thereof.
AT THE ELECTION OF THE LENDER AT ANY TIME, ALL AMOUNTS THEN
REMAINING UNPAID ON THIS NOTE SHALL BECOME IMMEDIATELY DUE AND
PAYABLE.
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or
otherwise, hereby waive presentment, demand, protest and all
other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them
in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
ATLANTIC BROADCASTING CORPORATION
By:
Title:
SOUTHEAST TEXAS BROADCASTING
CORPORATION
By:
Title:
TEXOMA BROADCASTING CORPORATION
By:
Title:
TRI-STATE BROADCASTING CORPORATION
By:
Title: Schedule A to
LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
Date<PAGE>
Amount of
Base Rate
Loans<PAGE>
Amount
Converted to
Base Rate
Loans<PAGE>
Amount of
Principal of
Base Rate
Loans Repaid<PAGE>
Amount of
Base Rate
Loans
Converted to
Eurodollar
Loans<PAGE>
Unpaid
Principal
Balance of
Base Rate
Loans<PAGE>
Notation
Made By<PAGE>
Schedule B to Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
Date<PAGE>
Amount of
Eurodollar
Loans<PAGE>
Amount
Converted
to
Eurodollar
Loans<PAGE>
Interest
Period and
Eurodollar
Rate with
Respect
Thereto<PAGE>
Amount of
Principal
of
Eurodollar
Loans
Repaid<PAGE>
Amount of
Eurodollar
Loans
Converted
to Base
Rate Loans<PAGE>
Unpaid
Principal
Balance of
Eurodollar
Loans<PAGE>
Notation
Made By<PAGE>
<PAGE>
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of December 21, 1993, made by
ATLANTIC BROADCASTING CORPORATION, a Delaware corporation, SOUTHEAST
TEXAS BROADCASTING CORPORATION, a Texas corporation, TEXOMA
BROADCASTING CORPORATION, a Texas corporation, and TRI-STATE
BROADCASTING CORPORATION, a Delaware corporation (each a "Co-
Borrower"; collectively, the "Co-Borrowers"), in favor of Bank of
Montreal, as Agent (in such capacity, the "Agent") for the Lenders
parties to the Line of Credit Agreement, dated as of the date hereof
(as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Co-Borrowers, the Agent and such
Lenders.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make available a line of credit to the Co-
Borrowers upon the terms and subject to the conditions set forth
therein; and
WHEREAS, it is a condition precedent to the effectiveness of
the Credit Agreement that the Co-Borrowers shall have executed and
delivered this Security Agreement to the Agent for the ratable benefit
of the Lenders.
NOW, THEREFORE, in consideration of the premises and to induce
the Agent and the Lenders to enter into the Credit Agreement, the Co-
Borrowers hereby agree with the Agent, for the ratable benefit of the
Lenders, as follows:
4.. Defined Terms.
a. Definitions. i. Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the
meanings given to them in the Credit Agreement, and the following
terms which are defined in the Uniform Commercial Code in effect in
the State of New York on the date hereof are used herein as so
defined: Accounts, Chattel Paper, Documents, Equipment, Farm
Products, General Intangibles, Instruments, Inventory and Proceeds.
ii. The following terms shall have the following meanings:
"Agreement": this Security Agreement, as the same may be
amended, modified or otherwise supplemented from time to time.
"Code": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Collateral": as defined in Section 2 of this Agreement.
"Collateral Account": any collateral account established by
the Agent as provided in subsection 5.3 or subsection 7.2.
"Patents": (a) all letters patent of the United States or any
other country and all reissues and extensions thereof, including,
without limitation, any thereof referred to in Schedule 2 hereto,
and (b) all applications for letters patent of the United States or
any other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation, any
thereof referred to in Schedule 2 hereto.
"Patent License": all agreements, whether written or oral,
providing for the grant by or to the Co-Borrowers of any right to
manufacture, use or sell any invention covered by a Patent,
including, without limitation, any thereof referred to in Schedule
2 hereto.
"Trademarks": (a) all trademarks, trade names, corporate
names, company names, business names, fictitious business names,
trade styles, service marks, logos and other source or business
identifiers, and the goodwill associated therewith, now existing or
hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, whether in
the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any
other country or any political subdivision thereof, or otherwise,
including, without limitation, any thereof referred to in Schedule
3 hereto, and (b) all renewals thereof.
"Trademark License" means any agreement, written or oral,
providing for the grant by or to the Co-Borrowers of any right to
use any Trademark, including, without limitation, any thereof
referred to in Schedule 3 hereto.
b. Other Definitional Provisions. i. The words "hereof,"
"herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and section and paragraph
references are to this Agreement unless otherwise specified.
ii. The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such
terms.
5.. Grant of Security Interest. As collateral security for
the prompt and complete payment and performance when due (whether at
the stated maturity, by acceleration or otherwise) of the Obligations,
each of the Co-Borrowers hereby grants to the Agent for the ratable
benefit of the Lenders a security interest in all of the following
property now owned or at any time hereafter acquired by such Co-
Borrower or in which such Co-Borrower now has or at any time in the
future may acquire any right, title or interest (collectively, the
"Collateral"):
i. all Accounts;
ii. all Chattel Paper;
iii. all Documents;
iv. all Equipment;
v. all General Intangibles;
vi. all Instruments;
vii. all Inventory;
viii. all Patents;
ix. all Patent Licenses;
x. all Trademarks;
xi. all Trademark Licenses;
xii. to the extent permitted by law, all licenses granted by
the FCC;
xiii. all books and records pertaining to the Collateral; and
xiv. to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing.
6.. Representations and Warranties. Each Co-Borrower hereby
represents and warrants (such representations and warranties to
automatically be deemed to be restated on the date of each Loan as if
made on such date) that:
a. Title; No Other Liens. Except for the security interest
granted to the Agent for the ratable benefit of the Lenders pursuant
to this Agreement, such Co-Borrower owns or leases each item of the
Collateral free and clear of any and all material Liens or claims of
others. No security agreement, financing statement or other public
notice with respect to all or any part of the Collateral is on file or
of record in any public office, except such as have been filed in
favor of the Agent, for the ratable benefit of the Lenders, pursuant
to this Agreement.
b. Perfected First Priority Liens. The security interests
granted pursuant to this Agreement i. upon completion of the filings
specified in Schedule 4 hereto will constitute perfected security
interests in the Collateral in favor of the Agent, for the ratable
benefit of the Lenders, ii. are prior to all other Liens on the
Collateral in existence on the date hereof and iii. are enforceable as
such against (1) all creditors of and purchasers from such Co-Borrower
(except purchasers of Inventory in the ordinary course of business)
and (2) any Person having any interest in the real property where any
of the Equipment is located.
c. Inventory and Equipment. The Inventory and the Equipment
are kept at the locations listed on Schedule 1 hereto.
d. Chief Executive Office. The location of such Co-
Borrower's chief executive office and chief place of business are set
forth on Schedule 1 hereto.
e. Farm Products. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.
7.. Covenants. Each Co-Borrower covenants and agrees with
the Agent and the Lenders that:
a. Delivery of Instruments and Chattel Paper. If any amount
payable under or in connection with any of the Collateral shall be or
become evidenced by any Instrument or Chattel Paper, such Instrument
or Chattel Paper shall be immediately delivered to the Agent, duly
indorsed in a manner satisfactory to the Agent, to be held as
Collateral pursuant to this Agreement.
b. Marking of Records. Such Co-Borrower will mark its books
and records pertaining to the Collateral to evidence this Agreement
and the security interests created hereby.
c. Maintenance of Insurance. i. Such Co-Borrower will
maintain, with financially sound and reputable companies, insurance
policies (1) insuring the Inventory and Equipment against loss by
fire, explosion, theft and such other casualties as may be reasonably
satisfactory to the Agent and (2) insuring such Co-Borrower against
liability for personal injury and property damage relating to such
Inventory and Equipment, such policies to be in such form and amounts
and having such coverage as may be reasonably satisfactory to the
Agent and the Lenders.
ii. Such Co-Borrower shall deliver to the Agent and the
Lenders a report of a reputable insurance broker with respect to such
insurance during the month of January in each calendar year and such
supplemental reports with respect thereto as the Agent may from time
to time reasonably request.
d. Payment of Obligations. Such Co-Borrower will pay and
discharge or otherwise satisfy at or before maturity or before they
become delinquent, as the case may be, all taxes, assessments and
governmental charges or levies imposed upon the Collateral or in
respect of income or profits therefrom, as well as all claims of any
kind (including, without limitation, claims for labor, materials and
supplies) against or with respect to the Collateral, except that no
such charge need be paid if the amount or validity thereof is
currently being contested in good faith by appropriate proceedings,
reserves in conformity with GAAP with respect thereto have been
provided on the books of such Co-Borrower and such proceedings do not
involve any material danger of the sale, forfeiture or loss of any of
the Collateral or any interest therein.
e. Maintenance of Perfected Security Interest; Further
Documentation. i. Such Co-Borrower shall maintain the security
interest created by this Agreement as a first, perfected security
interest and shall defend such security interest against claims and
demands of all Persons whomsoever.
ii. At any time and from time to time, upon the written
request of the Agent, and at its sole expense, such Co-Borrower will
promptly and duly execute and deliver such further instruments and
documents and take such further action as the Agent may reasonably
request for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or
continuation statements under the Uniform Commercial Code in effect in
any jurisdiction with respect to the security interests created
hereby.
f. Changes in Locations, Name, etc. Such Co-Borrower will
not:
i. permit any of the Inventory or Equipment to be kept at a
location other than those listed on Schedule 1 hereto;
ii. change the location of its chief executive office and
chief place of business from that specified in subsection 3.4; or
iii. change its name, identity or corporate structure to such
an extent that any financing statement filed by the Agent in
connection with this Agreement would become seriously misleading,
unless, in the case of each of clauses (a), (b) and (c), it shall have
given the Agent and the Lenders at least 30 days' prior written notice
of any such change.
g. Further Identification of Collateral. Such Co-Borrower
will furnish to the Agent and the Lenders from time to time statements
and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Agent may
reasonably request, all in reasonable detail.
h. Notices. Such Co-Borrower will advise the Agent and the
Lenders promptly, in reasonable detail, at their respective addresses
set forth in the Credit Agreement of:
i. any Lien (other than security interests created hereby) on,
or claim asserted against, any of the Collateral; and
ii. of the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the
aggregate value of the Collateral or on the security interests created
hereby.
i. Indemnification. Such Co-Borrower agrees to pay, and to
save the Agent and the Lenders harmless from, any and all reasonable
liabilities, costs and expenses (including, without limitation, legal
fees and expenses) (1) with respect to, or resulting from any delay by
the Co-Borrowers in paying, any and all excise, sales or other taxes
which may be payable or determined to be payable with respect to any
of the Collateral, (2) with respect to, or resulting from, any delay
by the Co-Borrowers in complying with any Requirement of Law
applicable to any of the Collateral and (3) in connection with any of
the transactions contemplated by this Agreement; provided that no Co-
Borrower shall have any obligation under this subsection 4.9 with
respect to liabilities, costs or expenses arising solely from the
gross negligence or willful misconduct of the Agent or any Lender.
8.. Provisions Relating to Accounts.
a. Co-Borrowers Remain Liable under Accounts. Anything
herein to the contrary notwithstanding, the Co-Borrowers shall remain
liable under each of the Accounts to observe and perform all the
conditions and obligations to be observed and performed by them
thereunder, all in accordance with the terms of any agreement giving
rise to each such Account. Neither the Agent nor any Lender shall
have any obligation or liability under any Account (or any agreement
giving rise thereto) by reason of or arising out of this Agreement or
the receipt by the Agent or any Lender of any payment relating to such
Account pursuant hereto, nor shall the Agent or any Lender be
obligated in any manner to perform any of the obligations of any Co-
Borrower under or pursuant to any Account (or any agreement giving
rise thereto), to make any payment, to make any inquiry as to the
nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party under any Account (or any
agreement giving rise thereto), to present or file any claim, to take
any action to enforce any performance or to collect the payment of any
amounts which may have been assigned to it or to which it may be
entitled at any time or times.
b. Analysis of Accounts. The Agent shall have the right to
make test verifications of the Accounts in any manner and through any
medium that it reasonably considers advisable, and the Co-Borrowers
shall furnish all such assistance and information as the Agent may
require in connection with such test verifications. At any time and
from time to time, upon the Agent's request and at the expense of the
Co-Borrowers, the Co-Borrowers shall cause independent public
accountants or others satisfactory to the Agent to furnish to the
Agent reports showing reconciliations, aging and test verifications
of, and trial balances for, the Accounts. The Agent in its own name
or in the name of others may communicate with account debtors on the
Accounts to verify with them to the Agent's satisfaction the
existence, amount and terms of any Accounts.
c. Collections on Accounts. i. The Agent hereby authorizes
the Co-Borrowers to collect the Accounts, subject to the Agent's
direction and control, and the Agent may curtail or terminate said
authority at any time. If requested in writing by the Agent at any
time, any payments of Accounts, when collected by any Co-Borrower, (1)
shall be forthwith (and, in any event, within two Business Days)
deposited by such Co-Borrower in the exact form received, duly
indorsed by such Co-Borrower to the Agent if required, in a Collateral
Account maintained under the sole dominion and control of the Agent,
subject to withdrawal by the Agent for the account of the Lenders only
as provided in subsection 7.3, and (2) until so turned over, shall be
held by such Co-Borrower in trust for the Agent and the Lenders,
segregated from other funds of such Co-Borrower.
ii. Each such deposit of Proceeds of Accounts shall be
accompanied by a report identifying in reasonable detail the nature
and source of the payments included in the deposit.
iii. At the Agent's request, the Co-Borrowers shall deliver
to the Agent all original and other documents evidencing, and relating
to, the agreements and transactions which gave rise to the Accounts,
including, without limitation, all original orders, invoices and
shipping receipts.
d. Representations and Warranties. Each Co-Borrower hereby
represents and warrants (such representations and warranties to
automatically be deemed to be restated on the date of each Loan as if
made on such date) that:
i. No amount payable to any Co-Borrower under or in
connection with any Account is evidenced by any Instrument or Chattel
Paper which has not been delivered to the Agent.
ii. The place where each Co-Borrower keeps its records
concerning the Accounts is set forth on Schedule 1.
iii. None of the obligors on any Accounts is a Governmental
Authority.
e. Covenants. i. The amount represented by the Co-Borrowers
to the Lenders from time to time as owing by each account debtor or by
all account debtors in respect of the Accounts will at such time be
the correct amount actually owing by such account debtor or debtors
thereunder.
ii. No Co-Borrower will amend, modify, terminate or waive any
agreement giving rise to an Account in any manner which could
reasonably be expected to materially adversely affect the value of
such Account as Collateral.
iii. No Co-Borrower will fail to exercise promptly and
diligently each and every material right which it may have under each
agreement giving rise to an Account (other than any right of
termination).
iv. No Co-Borrower will fail to deliver to the Agent a copy
of each material demand, notice or document received by it relating in
any way to any agreement giving rise to an Account.
v. Other than in the ordinary course of business as generally
conducted by each Co-Borrower over a period of time, such Co-Borrower
will not grant any extension of the time of payment of any of the
Accounts, compromise, compound or settle the same for less than the
full amount thereof, release, wholly or partially, any Person liable
for the payment thereof, or allow any credit or discount whatsoever
thereon.
vi. Each Co-Borrower will not remove its books and records
from the location specified in subsection 5.4(b).
vii. In any suit, proceeding or action brought by the Agent
or any Lender under any Account for any sum owing thereunder, each Co-
Borrower will save, indemnify and keep the Agent and such Lender
harmless from and against all expense, loss or damage suffered by
reason of any defense, setoff, counterclaim, recoupment or reduction
or liability whatsoever of the account debtor thereunder, arising out
of a breach by any Co-Borrower of any obligation thereunder or arising
out of any other agreement, indebtedness or liability at any time
owing to or in favor of such account debtor or its successors from any
Co-Borrower.
9.. Provisions Relating to Patents and Trademarks.
a. Representations and Warranties. Each Co-Borrower hereby
represents and warrants (such representations and warranties to
automatically be deemed to be restated on the date of each Loan as if
made on such date) that:
i. Schedule 2 hereto includes all Patents and Patent Licenses
owned by each Co-Borrower in its own name as of the date hereof.
ii. Schedule 3 hereto includes all Trademarks and Trademark
Licenses owned by each Co-Borrower in its own name as of the date
hereof.
iii. To the best of such Co-Borrower's knowledge, each Patent
and Trademark is valid, subsisting, unexpired, enforceable and has not
been abandoned.
iv. None of such Patents and Trademarks is the subject of any
licensing or franchise agreement.
v. No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the
validity of any Patent or Trademark.
vi. No action or proceeding is pending (1) seeking to limit,
cancel or question the validity of any Patent or Trademark, or (2)
which, if adversely determined, would have a material adverse effect
on the value of any Patent or Trademark.
b. Covenants.
i. Each Co-Borrower (either itself or through licensees)
will, except with respect to any Trademark that such Co-Borrower shall
reasonably determine is of negligible economic value to it, (1)
continue to use each Trademark on each and every trademark class of
goods applicable to its current line as reflected in its current
catalogs, brochures and price lists in order to maintain such
Trademark in full force free from any claim of abandonment for non-
use, (2) maintain as in the past the quality of products and services
offered under such Trademark, (3) employ such Trademark with the
appropriate notice of registration, (4) not adopt or use any mark
which is confusingly similar or a colorable imitation of such
Trademark unless the Agent, for the ratable benefit of the Lenders,
shall obtain a perfected security interest in such mark pursuant to
this Agreement, and (5) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act
whereby any Trademark may become invalidated.
ii. Each Co-Borrower will not, except with respect to any
Patent that such Co-Borrower shall reasonably determine is of
negligible economic value to it, do any act, or omit to do any act,
whereby any Patent may become abandoned or dedicated.
iii. Each Co-Borrower will notify the Agent and the Lenders
immediately if it knows, or has reason to know, that any application
or registration relating to any Patent or Trademark may become
abandoned or dedicated, or of any adverse determination or development
(including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States
Patent and Trademark Office or any court or tribunal in any country)
regarding such Co-Borrower's ownership of any Patent or Trademark or
its right to register the same or to keep and maintain the same.
iv. Whenever any Co-Borrower, either by itself or through any
agent, employee, licensee or designee, shall file an application for
the registration of any Patent or Trademark with the United States
Patent and Trademark Office or any similar office or agency in any
other country or any political subdivision thereof, such Co-Borrower
shall report such filing to the Agent and the Lenders within five
Business Days after the last day of the fiscal quarter in which such
filing occurs. Upon request of the Agent, such Co-Borrower shall
execute and deliver any and all agreements, instruments, documents,
and papers as the Agent may request to evidence the Agent's and the
Lenders' security interest in any Patent or Trademark and the goodwill
and general intangibles of such Co-Borrower relating thereto or
represented thereby.
v. Each Co-Borrower will take all reasonable and necessary
steps, including, without limitation, in any proceeding before the
United States Patent and Trademark Office, or any similar office or
agency in any other country or any political subdivision thereof, to
maintain and pursue each application (and to obtain the relevant
registration) and to maintain each registration of the Patents and
Trademarks, including, without limitation, filing of applications for
renewal, affidavits of use and affidavits of incontestability.
vi. In the event that any Patent or Trademark of any Co-
Borrower included in the Collateral is infringed, misappropriated or
diluted by a third party, such Co-Borrower shall promptly notify the
Agent and the Lenders after it learns thereof and shall, unless such
Co-Borrower shall reasonably determine that such Patent or Trademark
is of negligible economic value to such Co-Borrower which
determination such Co-Borrower shall promptly report to the Agent and
the Lenders, promptly sue for infringement, misappropriation or
dilution, to seek injunctive relief where appropriate and to recover
any and all damages for such infringement, misappropriation or
dilution, or take such other actions as such Co-Borrower shall
reasonably deem appropriate under the circumstances to protect such
Patent or Trademark.
10.. Remedies.
a. Notice to Account Debtors. Upon the request of the Agent
at any time, the Co-Borrowers shall notify account debtors on the
Accounts that the Accounts have been assigned to the Agent for the
ratable benefit of the Lenders and that payments in respect thereof
shall be made directly to the Agent.
b. Proceeds to be Turned Over To Agent. In addition to the
rights of the Agent and the Lenders specified in subsection 5.3 with
respect to payments of Accounts, upon the request of the Agent at any
time, all Proceeds received by each Co-Borrower consisting of cash,
checks and other near-cash items shall be held by such Co-Borrower in
trust for the Agent and the Lenders, segregated from other funds of
such Co-Borrower, and shall, forthwith upon receipt by such Co-
Borrower, be turned over to the Agent in the exact form received by
such Co-Borrower (duly indorsed by such Co-Borrower to the Agent, if
required) and held by the Agent in a Collateral Account maintained
under the sole dominion and control of the Agent. All Proceeds while
held by the Agent in a Collateral Account (or by any Co-Borrower in
trust for the Agent and the Lenders) shall continue to be held as
collateral security for all the Obligations and shall not constitute
payment thereof until applied as provided in subsection 7.3.
c. Application of Proceeds. At any time at the Agent's
election, the Agent may apply all or any part of Proceeds held in any
Collateral Account in payment of the Obligations in such order as the
Agent may elect, and any part of such funds which the Agent elects not
so to apply and deems not required as collateral security for the
Obligations shall be paid over from time to time by the Agent to the
Co-Borrowers or to whomsoever may be lawfully entitled to receive the
same. Any balance of such Proceeds remaining after the Obligations
shall have been paid in full and the Credit Agreement shall have been
terminated shall be paid over to such Co-Borrower or to whomsoever may
be lawfully entitled to receive the same.
d. Code Remedies. At any time after the Obligations shall
have become due and payable (whether at maturity, upon demand or
otherwise), the Agent, on behalf of the Lenders, may exercise, in
addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of
a secured party under the Code. Without limiting the generality of
the foregoing, after the Obligations shall have become due and payable
(whether at maturity, upon demand or otherwise), the Agent, without
demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law
referred to below) to or upon any Co-Borrower or any other Person (all
and each of which demands, defenses, advertisements and notices are
hereby waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, lease, assign, give option or options to
purchase, or otherwise dispose of and deliver the Collateral or any
part thereof (or contract to do any of the foregoing), in one or more
parcels at public or private sale or sales, at any exchange, broker's
board or office of the Agent or any Lender or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it
may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Agent or any Lender shall have the
right upon any such public sale or sales, and, to the extent permitted
by law, upon any such private sale or sales, to purchase the whole or
any part of the Collateral so sold, free of any right or equity of
redemption in any Co-Borrower, which right or equity is hereby waived
or released. Each Co-Borrower further agrees, at the Agent's request,
to assemble the Collateral and make it available to the Agent at
places which the Agent shall reasonably select, whether at such Co-
Borrower's premises or elsewhere. The Agent shall apply the net
proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses
of every kind incurred therein or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the Agent and the Lenders hereunder,
including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Obligations,
in such order as the Agent may elect, and only after such application
and after the payment by the Agent of any other amount required by any
provision of law, including, without limitation, Section 9-504(1)(c)
of the Code, need the Agent account for the surplus, if any, to any
Co-Borrower. To the extent permitted by applicable law, each Co-
Borrower waives all claims, damages and demands it may acquire against
the Agent or any Lender arising out of the exercise by them of any
rights hereunder. If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall
be deemed reasonable and proper if given at least 10 days before such
sale or other disposition.
im Deficiency. The Co-Borrowers shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the
Collateral are insufficient to pay the Obligations and the reasonable
fees and disbursements of any attorneys employed by the Agent or any
Lender to collect such deficiency.
11.. Agent's Appointment as Attorney-in-Fact; Agent's
Performance of Co-Borrowers' Obligations.
a. Powers. Each Co-Borrower hereby irrevocably constitutes
and appoints the Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of such
Co-Borrower and in the name of such Co-Borrower or in its own name,
from time to time in the Agent's discretion, for the purpose of
carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the
purposes of this Agreement, and, without limiting the generality of
the foregoing, such Co-Borrower hereby gives the Agent the power and
right, on behalf of such Co-Borrower, without notice to or assent by
such Co-Borrower, to do the following:
i. At any time, in the name of such Co-Borrower or its own
name, or otherwise, to take possession of and indorse and collect any
checks, drafts, notes, acceptances or other instruments for the
payment of moneys due under any Account, Instrument or General
Intangible or with respect to any other Collateral and to file any
claim or to take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Agent for the purpose of
collecting any and all such moneys due under any Account, Instrument
or General Intangible or with respect to any other Collateral whenever
payable;
ii. in the case of any Patents or Trademarks, to execute and
deliver any and all agreements, instruments, documents, and papers as
the Agent may request to evidence the Agent's and the Lenders'
security interest in any Patent or Trademark and the goodwill and
general intangibles of such Co-Borrower relating thereto or
represented thereby;
iii. to pay or discharge taxes and Liens levied or placed on
or threatened against the Collateral, to effect any repairs or any
insurance called for by the terms of this Agreement and to pay all or
any part of the premiums therefor and the costs thereof;
iv. to execute, in connection with the sale provided for in
Section 7.4 hereof, any indorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral; and
v. at any time upon notice to the Co-Borrowers, (1) to direct
any party liable for any payment under any of the Collateral to make
payment of any and all moneys due or to become due thereunder directly
to the Agent or as the Agent shall direct; (2) to ask or demand for,
collect, receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect
of or arising out of any Collateral; (3) to sign and indorse any
invoices, freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of
the Collateral; (4) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction
to collect the Collateral or any thereof and to enforce any other
right in respect of any Collateral; (5) to defend any suit, action or
proceeding brought against such Co-Borrower with respect to any
Collateral; (6) to settle, compromise or adjust any such suit, action
or proceeding and, in connection therewith, to give such discharges or
releases as the Agent may deem appropriate; (7) to assign any Patent
or Trademark (along with the goodwill of the business to which any
such Patent or Trademark pertains), throughout the world for such term
or terms, on such conditions, and in such manner, as the Agent shall
in its sole discretion determine; and (8) generally, to sell,
transfer, pledge and make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as though the
Agent were the absolute owner thereof for all purposes, and to do, at
the Agent's option and such Co-Borrower's expense, at any time, or
from time to time, all acts and things which the Agent deems necessary
to protect, preserve or realize upon the Collateral and the Agent's
and the Lenders' security interests therein and to effect the intent
of this Agreement, all as fully and effectively as such Co-Borrower
might do.
b. Performance by Agent of Co-Borrowers's Obligations. If
any Co-Borrower fails to perform or comply with any of its agreements
contained herein, the Agent, at its option, but without any obligation
so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.
c. Co-Borrowers' Reimbursement Obligation. The reasonable
expenses of the Agent incurred in connection with actions undertaken
as provided in this Section, together with interest thereon at a rate
per annum equal to 2% above the Base Rate, from the date of payment by
the Agent to the date reimbursed by the Co-Borrowers, shall be payable
by such Co-Borrower to the Agent on demand.
d. Ratification; Power Coupled With An Interest. Each Co-
Borrower hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and
are irrevocable until this Agreement is terminated and the security
interests created hereby are released.
12.. Duty of Agent. The Agent's sole duty with respect to
the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the Code or otherwise, shall
be to deal with it in the same manner as the Agent deals with similar
property for its own account. Neither the Agent, any Lender nor any
of their respective directors, officers, employees or agents shall be
liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the
request of any Co-Borrower or any other Person or to take any other
action whatsoever with regard to the Collateral or any part thereof.
The powers conferred on the Agent and the Lenders hereunder are solely
to protect the Agent's and the Lenders' interests in the Collateral
and shall not impose any duty upon the Agent or any Lender to exercise
any such powers. The Agent and the Lenders shall be accountable only
for amounts that they actually receive as a result of the exercise of
such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Co-Borrower for any
act or failure to act hereunder, except for their own gross negligence
or willful misconduct.
13.. Execution of Financing Statements. Pursuant to Section
9-402 of the Code, each Co-Borrower authorizes the Agent to file
financing statements with respect to the Collateral without the
signature of such Co-Borrower in such form and in such filing offices
as the Agent reasonably determines appropriate to perfect the security
interests of the Agent under this Agreement. A carbon, photographic
or other reproduction of this Agreement shall be sufficient as a
financing statement for filing in any jurisdiction.
14.. Authority of Agent. Each Co-Borrower acknowledges that
the rights and responsibilities of the Agent under this Agreement with
respect to any action taken by the Agent or the exercise or non-
exercise by the Agent of any option, voting right, request, judgment
or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Agent and the Lenders, be
governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as
between the Agent and such Co-Borrower, the Agent shall be
conclusively presumed to be acting as agent for the Lenders with full
and valid authority so to act or refrain from acting, and such Co-
Borrower shall be under no obligation, or entitlement, to make any
inquiry respecting such authority.
15.. Notices. All notices, requests and demands to or upon
the Agent or any Co-Borrower to be effective shall be in writing
(including by telecopy) and shall be deemed to have been duly given or
made i. when delivered by hand or ii. 2 days after being deposited in
the mail, postage prepaid, or iii. if by telecopy, when received,
addressed to the Agent or such Co-Borrower at its address or
transmission number for notices provided in subsection 8.2 of the
Credit Agreement. The Agent and the Co-Borrowers may change their
addresses and transmission numbers for notices by notice in the manner
provided in this Section.
16.. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof,
and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
17.. Amendments in Writing; No Waiver; Cumulative Remedies.
a. Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise
modified except by a written instrument executed by each Co-Borrower
and the Agent, provided that any provision of this Agreement may be
waived by the Agent and the Lenders in a letter or agreement executed
by the Agent or by facsimile transmission from the Agent.
b. No Waiver by Course of Conduct. Neither the Agent nor any
Lender shall by any act (except by a written instrument pursuant to
subsection 14.1 hereof), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or in any breach of any of the terms and
conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Agent or any Lender, any right, power
or privilege hereunder shall operate as a waiver thereof. No single
or partial exercise of any right, power or privilege hereunder shall
preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. A waiver by the Agent or any Lender
of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Agent or such
Lender would otherwise have on any future occasion.
c. Remedies Cumulative. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and
are not exclusive of any other rights or remedies provided by law.
18.. Federal Communications Act. It is the intention of the
parties to comply with applicable provisions of the Communications Act
of 1934, as amended (the "Act"), and applicable provisions of the
Rules and Regulations of the FCC as may be in effect from time to time
(the "FCC Regulations"). Accordingly, it is agreed that,
notwithstanding any provision to the contrary in this Agreement, no
provision hereof shall be deemed to authorize or require any act or
failure to act which would violate the Act or the FCC Regulations,
including without limitation any restriction on alien ownership or
control of a broadcast license or licensee and any restriction on the
transfer of control or assignment of a broadcast license or licensee
without prior FCC approval. Notwithstanding anything in this
Agreement to the contrary, no sale of the Collateral or transfer
thereof to the Agent or to the name of the Agent's nominee shall be
effective without such consent, approval, or authorization of the FCC
as may be required by the Act and the FCC Regulations. Neither the
Agent nor any other Person other than the Co-Borrowers shall, so long
as and to the extent that such actions are inconsistent with the Act
or the FCC Regulations: act as attorney-in-fact or with a power of
attorney for any Co-Borrower; vote, interfere with the voting of,
control, sell or otherwise exercise dominion over, the stock of any of
the Co-Borrowers; or operate or exercise any control over the Stations
licensed to the Co-Borrowers, in each case without first having
received any prior written consent, approval or authorization of the
FCC as may be required by the Act and the FCC Regulations. In the
event any such consent, approval, or authorization shall be required,
the Co-Borrowers will execute, and use their best efforts to cause the
execution of, all such applications and other instruments as may be
necessary to obtain such consent, approval or authorization.
19.. Section Headings. The section and subsection headings
used in this Agreement are for convenience of reference only and are
not to affect the construction hereof or be taken into consideration
in the interpretation hereof.
20.. Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of each Co-Borrower and shall inure to
the benefit of the Agent and the Lenders and their successors and
assigns.
21.. Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the law of the State of
New York.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Security
Agreement to be duly executed and delivered as of the date first above
written.
ATLANTIC BROADCASTING CORPORATION,
as a Co-Borrower
By:
Title:
SOUTHEAST TEXAS BROADCASTING
CORPORATION, as a Co-Borrower
By:
Title:
TEXOMA BROADCASTING CORPORATION,
as a Co-Borrower
By:
Title:
TRI-STATE BROADCASTING CORPORATION,
as a Co-Borrower
By:
Title: Schedule 1
CHIEF EXECUTIVE OFFICE; CHIEF PLACE OF BUSINESS;
INVENTORY AND EQUIPMENT; RECORDS OF ACCOUNTS
Co-Borrower<PAGE>
Chief
Executive
Office
<PAGE>
Chief
Place of
Business<PAGE>
Location
of
Inventory
and
Equipment
<PAGE>
Location
Where
Records of
Accounts are
kept<PAGE>
Atlantic
Broadcasting
Corporation<PAGE>
<PAGE>
Southeast
Texas
Corporation<PAGE>
<PAGE>
Texoma
Broadcasting
Corporation<PAGE>
<PAGE>
Tri-State
Broadcasting
Corporation<PAGE>
Schedule 2
PATENTS AND PATENT LICENSES
Co-Borrower Patents Patent Licenses<PAGE>
Schedule 3
TRADEMARKS AND TRADEMARK LICENSES
Co-Borrower Trademarks Trademark Licenses
<PAGE>
Schedule 4
FILINGS REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
Uniform Commercial Code financing statements describing
the Collateral and naming the relevant Co-Borrower as Debtor and
the Agent as Secured Party will be filed in each jurisdiction
listed in Schedule 1 to the Security Agreement.
Patent and Trademark Filings
The Security Agreement, including Schedules 2 and 3
thereto, will be filed in the U.S. Copyright Office and the U.S.
Patent & Trademark Office.
<PAGE>
Exhibit D
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Line of Credit Agreement,
dated as of December __, 1993, (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"),
among Atlantic Broadcasting Corporation, Southeast Texas
Broadcasting Corporation, Texoma Broadcasting Corporation and
Tri-State Broadcasting Corporation, as co-borrowers, the Lenders
named therein and Bank of Montreal, as agent for the Lenders (in
such capacity, the "Agent"). Unless otherwise defined herein,
terms defined in the Credit Agreement and used herein shall have
the meanings given to them in the Credit Agreement.
(the "Assignor") and
(the "Assignee") agree as follows:
i. The Assignor hereby irrevocably sells and assigns
to the Assignee without recourse to the Assignor, and the
Assignee hereby irrevocably purchases and assumes from the
Assignor without recourse to the Assignor, as of the Effective
Date (as defined below), a ___% interest (the "Assigned
Interest") in and to the Assignor's rights and obligations under
the Credit Agreement in a principal amount as set forth on
Schedule 1.
ii. The Assignor (a) makes no representation or
warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in
connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of
the Credit Agreement, any other Loan Document or any other
instrument or document furnished pursuant thereto, other than
that it has not created any adverse claim upon the interest being
assigned by it hereunder and that such interest is free and clear
of any such adverse claim; (b) makes no representation or
warranty and assumes no responsibility with respect to the
financial condition of the Co-Borrowers or any other obligor or
the performance or observance by the Co-Borrowers or any other
obligor of any of their respective obligations under the Credit
Agreement or any other Loan Document or any other instrument or
document furnished pursuant hereto or thereto; and (c) attaches
the Note held by it and requests that the Agent exchange such
Note for a new Note payable to the Assignee and (if the Assignor
has retained any interest in the Assigned Facility) a new Note
payable to the Assignor in the respective amounts which reflect
the assignment being made hereby (and after giving effect to any
other assignments which have become effective on the Effective
Date).
iii. The Assignee (a) represents and warrants that it
is legally authorized to enter into this Assignment and
Acceptance; (b) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial
statements delivered pursuant to subsection 3.1 thereof and such
other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this
Assignment and Acceptance; (c) agrees that it will, independently
and without reliance upon the Assignor, the Agent or any other
Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit
Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; (d) appoints and
authorizes the Agent to take such action as agent on its behalf
and to exercise such powers and discretion under the Credit
Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto as are delegated to
the Agent by the terms thereof, together with such powers as are
incidental thereto; and (e) agrees that it will be bound by the
provisions of the Credit Agreement and will perform in accordance
with its terms all the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender
including, if it is organized under the laws of a jurisdiction
outside the United States, its obligation pursuant to paragraph
2.15(b) of the Credit Agreement.
iv. The effective date of this Assignment and
Acceptance shall be , 19 (the "Effective Date").
Following the execution of this Assignment and Acceptance, it
will be delivered to the Agent for acceptance by it and recording
by the Agent pursuant to subsection 8.6 of the Credit Agreement,
effective as of the Effective Date (which shall not, unless
otherwise agreed to by the Agent, be earlier than five Business
Days after the date of such acceptance and recording by the
Agent).
v. Upon such acceptance and recording, from and after
the Effective Date, the Agent shall make all payments in respect
of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignee whether such
amounts have accrued prior to the Effective Date or accrue
subsequent to the Effective Date. The Assignor and the Assignee
shall make all appropriate adjustments in payments by the Agent
for periods prior to the Effective Date or with respect to the
making of this assignment directly between themselves.
vi. From and after the Effective Date, (a) the
Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the
rights and obligations of a Lender thereunder and under the other
Loan Documents and shall be bound by the provisions thereof and
(b) the Assignor shall, to the extent provided in this Assignment
and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.
vii. This Assignment and Acceptance shall be governed
by and construed in accordance with the laws of the State of New
York.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed as of the date first
above written by their respective duly authorized officers on
Schedule 1 hereto.<PAGE>
Schedule 1
to Assignment and Acceptance
relating to the Credit Agreement, dated as of December , 1993,
among
Atlantic Broadcasting Corporation, Southeast Texas
Broadcasting Corporation, Texoma Broadcasting
Corporation and Tri-State Broadcasting
Corporation, as co-borrowers,
the Lenders named therein
and
Bank of Montreal, as agent for the Lenders
Name of Assignor:
Name of Assignee:
Effective Date of Assignment:
Principal
Amount Assigned<PAGE>
Line of Credit
Percentage Assigned<PAGE>
$ . %
[Name of Assignee]
By
Name:
Title:<PAGE>
[Name of Assignor]
By
Name:
Title:<PAGE>
Accepted:
Bank of Montreal, as Agent
By
Name:
Title:<PAGE>
LINE OF CREDIT AGREEMENT, dated as of December 21,
1993, among:
(i) ATLANTIC BROADCASTING CORPORATION, a Delaware
corporation ("Atlantic"), SOUTHEAST TEXAS BROADCASTING
CORPORATION, a Texas corporation ("Southeast"), TEXOMA
BROADCASTING CORPORATION, a Texas corporation
("Texoma"), and TRI-STATE BROADCASTING CORPORATION, a
Delaware corporation ("Tri-State"), jointly and
severally (collectively, the "Co-Borrowers" and each a
"Co-Borrower"),
(ii) the several banks and other financial
institutions from time to time parties to this
Agreement (the "Lenders") and
(iii) BANK OF MONTREAL, as agent for the Lenders
hereunder (in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, the Co-Borrowers have requested the Lenders to
make available a line of credit for the purposes and on the terms
and conditions set forth herein; and
WHEREAS, the Lenders are willing to make available a
line of credit for such purposes and on such terms and
conditions;
NOW THEREFORE, in consideration of the premises, the
Co-Borrowers, the Lenders and the Agent hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the
following terms shall have the following meanings:
"Affiliate": as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes
of this definition, "control" of a Person means the power,
directly or indirectly, to direct or cause the direction of
the management and policies of such Person, whether by
contract or otherwise.
"Agreement": this Line of Credit Agreement, as
amended, supplemented or otherwise modified from time to
time.
"Applicable Margin": for each Type of Loan, the rate
per annum set forth under the relevant column heading below:
Base Rate Loans Eurodollar Loans
0% 1.25%
"Assignee": as defined in subsection 8.6(c).
"Assignment and Acceptance": an assignment and
acceptance entered into by a Lender or an assignee,
substantially in the form of Exhibit D.
"Available Cash Flow": for any period of four
consecutive fiscal quarters, Operating Cash Flow for such
period minus the sum of the aggregate Restricted Payments
(other than approximately $5,350,000 of Restricted Payments
made on or about the Closing Date), Capital Expenditures and
taxes paid in cash by the Co-Borrowers during such period.
"Available Line of Credit": as to any Lender at any
time, an amount equal to the excess, if any, of (a) the
amount of such Lender's Line of Credit Amount over (b) the
aggregate principal amount of all Loans made by such Lender
then outstanding.
"Base Rate": for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the
greater of (a) the Prime Rate in effect on such day, and (b)
the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%. For purposes hereof: "Prime Rate" shall mean
the rate of interest per annum publicly announced from time
to time by the Agent as its prime rate in effect at its
principal office in New York City (each change in the Prime
Rate to be effective on the date such change is publicly
announced); and "Federal Funds Effective Rate" shall mean,
for any day, the weighted average of the rates on overnight
federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average
of the quotations for the day of such transactions received
by the Agent from three federal funds brokers of recognized
standing selected by it. If for any reason the Agent shall
have determined (which determination shall be conclusive
absent manifest error) that it is unable to ascertain the
Federal Funds Effective Rate for any reason, including the
inability or failure of the Agent to obtain sufficient
quotations in accordance with the terms hereof, the Base
Rate shall be determined without regard to clause (b) of the
first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist.
Any change in the Base Rate due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective
on the effective day of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.
"Base Rate Loans": Loans the rate of interest
applicable to which is based upon the Base Rate.
"Business": as defined in subsection 3.17.
"Borrowing Date": any Business Day specified in a
notice pursuant to subsection 2.3 as a date on which the Co-
Borrowers request the Lenders to make Loans hereunder.
"Business Day": a day other than a Saturday, Sunday or
other day on which commercial banks in New York City are
authorized or required by law to close.
"Capital Expenditure": any cash expenditure made for
the purpose of acquiring or constructing fixed assets, real
property or equipment which in accordance with GAAP would be
added as a debit to the fixed asset accounts of the Person
making such expenditure.
"Capital Stock": any and all shares, interests,
participations or other equivalents (however designated) of
capital stock of a corporation, any and all equivalent
ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the
foregoing.
"Closing Date": the date on which all of the
conditions precedent specified in subsection 4.1 are
satisfied.
"Code": the Internal Revenue Code of 1986, as amended
from time to time.
"Commonly Controlled Entity": an entity, whether or
not incorporated, which is under common control with any Co-
Borrower within the meaning of Section 4001(a)(14) of ERISA
or is part of a group which includes any Co-Borrower and
which is treated as a single employer under Section 414(b)
or 414(c) of the Code.
"Contractual Obligation": as to any Person, any
provision of any security issued by such Person or of any
agreement, instrument or other undertaking to which such
Person is a party or by which it or any of its property is
bound.
"Debt Service": for any period of four consecutive
fiscal quarters, the sum of (i) aggregate interest expense
of the Co-Borrowers for such period and (ii) the aggregate
amount of all reductions of the Line of Credit Amounts
required pursuant to subsections 2.5(b) and (c) during such
period.
"Default": a violation of, or the failure to observe
or perform, any agreement, covenant, representation or
condition of any Loan Party under the Loan Documents.
"Dollars" and "$": dollars in lawful currency of the
United States of America.
"Environmental Laws": any and all foreign, Federal,
state, local or municipal laws, rules, orders, regulations,
statutes, ordinances, codes, decrees, requirements of any
Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of
human health or the environment, as now or may at any time
hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as
applied to a Eurodollar Loan, the aggregate (without
duplication) of the rates (expressed as a decimal fraction)
of reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of
Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect
thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of such Board) maintained by a
member bank of the Federal Reserve System. Eurodollar Loans
shall be deemed to constitute Eurocurrency Liabilities and
to be subject to such reserve requirements without the
benefit of or credit for proration, exceptions or offsets
which may be available from time to time to any Lender under
Regulation D.
"Eurodollar Base Rate": with respect to each day
during each Interest Period pertaining to a Eurodollar Loan,
the rate per annum equal to the rate at which the Agent is
offered Dollar deposits at or about 10:00 A.M., New York
City time, two Working Days prior to the beginning of such
Interest Period in the interbank eurodollar market where the
eurodollar and foreign currency and exchange operations in
respect of its Eurodollar Loans are then being conducted for
delivery on the first day of such Interest Period for the
number of days comprised therein and in an amount comparable
to the amount of the Eurodollar Loan to be outstanding
during such Interest Period.
"Eurodollar Loans": Loans the rate of interest
applicable to which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during
each Interest Period pertaining to a Eurodollar Loan, a rate
per annum determined for such day in accordance with the
following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
1.00 - Eurocurrency Reserve Requirements
"FCC": the Federal Communications Commission or any
successor agency or authority.
"Financing Lease": any lease of property, real or
personal, the obligations of the lessee in respect of which
are required in accordance with GAAP to be capitalized on a
balance sheet of the lessee.
"GAAP": generally accepted accounting principles in
the United States of America in effect from time to time.
"Governmental Authority": any nation or government,
any state or other political subdivision thereof and any
entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
"Guarantee Obligation": as to any Person (the
"guaranteeing person"), any obligation of (a) the
guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) for
which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation to induce the
creation of such obligation, in either case guaranteeing or
in effect guaranteeing any indebtedness, leases, dividends
or other obligations (the "primary obligations") of any
other third Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without
limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect
security therefor, (ii) to advance or supply funds (1) for
the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the
owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Guarantee
Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business.
"Hazardous Materials": any hazardous materials,
hazardous wastes, hazardous constituents, hazardous or toxic
substances, petroleum products (including crude oil or any
fraction thereof), defined or regulated as such in or under
any Environmental Law.
"Indebtedness": of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services, (b) any
other indebtedness of such Person which is evidenced by a
note, bond, debenture or similar instrument and (c)
Guarantee Obligations in respect of Indebtedness of other
Persons.
"Insolvency": with respect to any Multiemployer Plan,
the condition that such Plan is insolvent within the meaning
of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intercompany Subordination Agreement": the
Intercompany Subordination Agreement to be executed and
delivered by each of the Pledgors and each of the
Co-Borrowers in the form of Exhibit F, as the same may be
amended, supplemented or otherwise modified from time to
time.
"Interest Payment Date": (a) as to any Base Rate Loan,
the last day of each March, June, September and December to
occur while such Loan is outstanding, (b) as to any
Eurodollar Loan having an Interest Period of three months or
less, the last day of such Interest Period and (c) as to any
Eurodollar Loan having an Interest Period longer than three
months, each day which is three months, or a whole multiple
thereof, after the first day of such Interest Period and the
last day of such Interest Period.
"Interest Period": with respect to any Eurodollar
Loan:
(i) initially, the period commencing on the
borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two,
three or six months thereafter, as selected by the Co-
Borrowers in their notice of borrowing or notice of
conversion, as the case may be, given with respect
thereto; and
(ii) thereafter, each period commencing on the
last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two,
three or six months thereafter, as selected by the Co-
Borrowers by irrevocable notice to the Agent not less
than three Working Days prior to the last day of the
then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to
Interest Periods are subject to the following:
(1) if any Interest Period pertaining to a
Eurodollar Loan would otherwise end on a day that is
not a Working Day, such Interest Period shall be
extended to the next succeeding Working Day unless the
result of such extension would be to carry such
Interest Period into another calendar month in which
event such Interest Period shall end on the immediately
preceding Working Day;
(2) any Interest Period that would otherwise
extend beyond the Termination Date shall end on the
Termination Date;
(3) any Interest Period pertaining to a Eurodollar
Loan that begins on the last Working Day of a calendar
month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Working Day
of a calendar month; and
(4) the Co-Borrowers shall select Interest Periods
so as not to require a payment or prepayment of any
Eurodollar Loan during an Interest Period for such
Loan.
"Lien": any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien
(statutory or other), charge or other security interest or
any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or
other title retention agreement and any Financing Lease
having substantially the same economic effect as any of the
foregoing).
"Line of Credit Amount": as to any Lender, the amount
of the line of credit made available by such Lender to the
Co-Borrowers hereunder, as such amount is set forth opposite
such Lender's name on Schedule 1.1 and as such amount may be
reduced from time to time in accordance with the provisions
of this Agreement.
"Line of Credit Percentage": as to any Lender at any
time, the percentage which such Lender's Line of Credit
Amount then constitutes of the aggregate Line of Credit
Amount (or, at any time after the line of credit made
available hereunder shall have expired or terminated, the
percentage which the aggregate principal amount of such
Lender's Loans then outstanding constitutes of the aggregate
principal amount of the Loans then outstanding).
"Line of Credit Period": the period from and including
the Closing Date to but not including the Termination Date
or such earlier date on which the Lenders shall, in their
sole and absolute discretion exercisable at any time,
terminate the lines of credit made available hereunder.
"Loan Documents": this Agreement, the Notes, the
Security Documents and the Intercompany Subordination
Agreement.
"Loans": all loans made pursuant to this Agreement.
"Loan Parties": each of the Co-Borrowers, each of the
Pledgors and PCC.
"Material Adverse Effect": a material adverse effect
on (a) the business, assets or condition (financial or
otherwise) of the Co-Borrowers taken as a whole or (b) the
validity or enforceability of this Agreement or any of the
other Loan Documents or the rights or remedies of the Agent
or any of the Lenders hereunder or thereunder.
"Material Environmental Amount": an amount payable by
the Co-Borrowers in excess of $200,000 for remedial costs,
compliance costs, compensatory damages, punitive damages,
fines, penalties or any combination thereof.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or
petroleum products or any hazardous or toxic substances,
materials or wastes, defined or regulated as such in or
under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde
insulation.
"Multiemployer Plan": a Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"Note": as defined in subsection 2.2.
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the
maturity of the Loans and interest accruing after the filing
of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to
any Co-Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the
Notes and all other obligations and liabilities of the Co-
Borrowers to the Agent or to the Lenders, whether direct or
indirect, absolute or contingent, due or to become due, or
now existing or hereafter incurred, which may arise under,
out of, or in connection with, this Agreement, the Notes or
the other Loan Documents and any other document made,
delivered or given in connection therewith or herewith,
whether on account of principal, interest, fees,
indemnities, costs, expenses (including, without limitation,
all fees and disbursements of counsel to the Agent or to the
Lenders that are required to be paid by the Co-Borrowers
pursuant to the terms of this Agreement) or otherwise.
"Operating Cash Flow": for any date of determination,
the aggregate net income of the Co-Borrowers for the four
most recently ended fiscal quarters of the Co-Borrowers,
plus the sum of the aggregate (i) barter expenses, (ii)
interest expense, (iii) depreciation, (iv) amortization, (v)
income taxes and (vi) other non-cash expenses of the Co-
Borrowers, in each case for such period, minus the sum of
the aggregate (x) barter revenue of and (y) actual payments
for programming made by, the Co-Borrowers, in each case for
such period, all determined in accordance with GAAP.
"PBGC": the Pension Benefit Guaranty Corporation (or
any successor corporation) established pursuant to Subtitle
A of Title IV of ERISA.
"Participant": as defined in subsection 8.6(b).
"PCC": Price Communications Corporation, a New York
corporation.
"Person": an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other
entity of whatever nature.
"Plan": at a particular time, any employee benefit
plan which is covered by ERISA and in respect of which any
Co-Borrower or a Commonly Controlled Entity is (or, if such
plan were terminated at such time, would under Section 4069
of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Pledgors": each of Atlas Broadcasting Corporation, a
New York corporation, and Continental Broadcasting
Corporation, a Delaware corporation, as the pledgors under
the Stock Pledge Agreement.
"Properties": as defined in subsection 3.17.
"Regulation U": Regulation U of the Board of Governors
of the Federal Reserve System as in effect from time to
time.
"Reorganization": with respect to any Multiemployer
Plan, the condition that such plan is in reorganization
within the meaning of Section 4241 of ERISA.
"Reportable Event": any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder,
other than those events as to which the thirty day notice
period is waived under subsections .13, .14, .16, .18, .19
or .20 of PBGC Reg. 2615.
"Required Lenders": at any time, Lenders the Line of
Credit Percentages of which aggregate more than 66-2/3%.
"Requirement of Law": as to any Person, the
Certificate of Incorporation and By-Laws or other
organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any
of its property or to which such Person or any of its
property is subject.
"Responsible Officer": as to any Person, the chief
executive officer, the president of such Person or, with
respect to financial matters, the chief financial officer of
such Person.
"Restricted Payments": as defined in subsection 5.7.
"Security Agreement": the Security Agreement to be
executed and delivered by the Co-Borrowers, substantially in
the form of Exhibit B, as the same may be amended,
supplemented or otherwise modified from time to time.
"Security Documents": the collective reference to the
Security Agreement, the Stock Pledge Agreement and all other
security documents hereafter delivered to the Agent granting
a Lien on any asset or assets of any Person to secure the
obligations and liabilities of the Co-Borrowers hereunder,
under the Notes and/or under any of the other Loan Documents
or to secure any guarantee of any such obligations and
liabilities.
"Single Employer Plan": any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"Station": a television station or AM or FM radio
station.
"Stock Pledge Agreement": the Stock Pledge Agreement
to be executed and delivered by the Pledgors substantially
in the form of Exhibit C, as the same may be amended,
supplemented or otherwise modified from time to time.
"Subordinated Intercompany Loans": the collective
reference to (i) the three intercompany loans made by
Continental Broadcasting Corporation to Southeast, Texoma
and Tri-State, in the principal amounts of approximately
$16,470,000, $17,265,000 and $22,185,000, respectively, on
November 30, 1993, and (ii) the intercompany loans made by
Atlas Broadcasting Corporation to Atlantic in the principal
amount of approximately $10,224,000 on November 30, 1993.
"Subsidiary": as to any Person, a corporation,
partnership or other entity of which shares of stock or
other ownership interests having ordinary voting power
(other than stock or such other ownership interests having
such power only by reason of the happening of a contingency)
to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity
are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or
more intermediaries, or both, by such Person. Unless
otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary
or Subsidiaries of PCC.
"Termination Date": December 31, 1997, or such earlier
date on which the Line of Credit Amounts shall be terminated
in accordance with subsection 2.5.
"Tranche": the collective reference to Eurodollar
Loans the Interest Periods with respect to all of which
begin on the same date and end on the same later date
(whether or not such Loans shall originally have been made
on the same day).
"Type": as to any Loan, its nature as an Base Rate
Loan or a Eurodollar Loan.
"Working Day": any Business Day on which dealings in
foreign currencies and exchange between banks may be carried
on in London, England.
1.2 Other Definitional Provisions. (a) Unless
otherwise specified therein, all terms defined in this Agreement
shall have the defined meanings when used in the Notes or any
certificate or other document made or delivered pursuant hereto.
(b) As used herein and in the Notes, and any
certificate or other document made or delivered pursuant hereto,
accounting terms relating to PCC and its Subsidiaries not defined
in subsection 1.1 and accounting terms partly defined in
subsection 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision
of this Agreement, and Section, subsection, Schedule and Exhibit
references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms of
such terms.
SECTION 2. AMOUNT AND TERMS OF LINE OF CREDIT
2.1 Line of Credit. (a) Subject to the terms and
conditions hereof, each Lender is pleased to make severally
available to the Co-Borrowers a line of credit in an amount
equal to such Lender's Line of Credit Amount. During the
Line of Credit Period the Co-Borrowers may, subject to the
Lenders' continued satisfaction with all matters related to
the credit, use the lines of credit made available hereunder
by borrowing, prepaying the Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions
hereof.
(b) The Loans may from time to time be (i)
Eurodollar Loans, (ii) Base Rate Loans or (iii) a combination
thereof, as determined by the Co-Borrowers and notified to
the Agent in accordance with subsections 2.3 and 2.7,
provided that no Loan shall be made as a Eurodollar Loan
after the day that is one month prior to the Termination
Date.
2.2 Notes. The Loans made by each Lender shall be
evidenced by a joint and several demand promissory note made
by the Co-Borrowers, substantially in the form of Exhibit A,
with appropriate insertions as to payee, date and principal
amount (a "Note"), payable to the order of such Lender and in
a principal amount equal to the lesser of (a) the initial
Line of Credit Amount of such Lender and (b) the aggregate
unpaid principal amount of all Loans made to the Co-Borrowers
by such Lender. Each Lender is hereby authorized to record
the date, Type and amount of each Loan made by such Lender to
the Co-Borrowers, each continuation thereof, each conversion
of all or a portion thereof to another Type, the date and
amount of each payment or prepayment of principal thereof
and, in the case of Eurodollar Loans, the length of each
Interest Period with respect thereto, on the schedule annexed
to and constituting a part of its Note, and any such
recordation shall constitute prima facie evidence of the
accuracy of the information so recorded, provided that the
failure by any Lender to make any such recordation shall not
affect any of the Obligations of the Co-Borrowers under such
Note or this Agreement. Each Note shall (x) be dated the
Closing Date, (y) be stated to mature on demand and (z)
provide for the payment of interest in accordance with
subsection 2.9.
2.3 Procedure for Borrowing. Subject to the
Lenders' continued satisfaction with all matters related to
the credit, the Co-Borrowers may borrow under the Line of
Credit Amount during the Line of Credit Period on any
Business Day, provided that the Co-Borrowers shall give the
Agent irrevocable notice (which notice must be received by
the Agent prior to 10:00 A.M., New York City time, (a) three
Working Days prior to the requested Borrowing Date, if all or
any part of the requested Loans are to be initially
Eurodollar Loans, or (b) one Business Day prior to the
requested Borrowing Date, otherwise), specifying (i) the
amount to be borrowed, (ii) the requested Borrowing Date,
(iii) whether the borrowing is to be of Eurodollar Loans,
Base Rate Loans or a combination thereof and (iv) if the
borrowing is to be entirely or partly of Eurodollar Loans,
the amount of such Type of Loan and the length of the initial
Interest Period therefor. Each borrowing hereunder shall be
in an amount equal to (x) in the case of Eurodollar Loans,
$500,000 or a whole multiple of $100,000 in excess thereof or
(y) in the case of Base Rate Loans, $100,000 or a whole
multiple of $100,000 in excess thereof. Upon receipt of any
such notice from the Co-Borrowers, the Agent shall promptly
notify each Lender thereof. Each Lender will, subject to
such Lender's continued satisfaction with all matters related
to the credit, make the pro-rata share of each borrowing
available to the Agent for the account of the Co-Borrowers at
the office of the Agent specified in subsection 8.2 prior to
11:00 A.M., New York City time, on the Borrowing Date
requested by the Co-Borrowers in funds immediately available
to Agent. Such borrowing will then be made available to the
Co-Borrowers by the Agent crediting the account of the Co-
Borrowers on the books of such office with the aggregate of
the amounts received by the Agent from the Lenders in like
funds as received by the Agent.
2.4 Fees. (a) The Co-Borrowers jointly and
severally agree to pay to the Agent for the account of each
Lender a line of credit fee for the Line of Credit Period,
computed at the rate of 1/2 of 1% per annum on the average
daily amount of the Available Line of Credit of such Lender
during the period for which payment is made, payable
quarterly in arrears on the last day of each March, June,
September and December and on the Termination Date,
commencing on the first of such dates to occur after the date
hereof.
(b) The Co-Borrowers shall pay on the Closing Date
to the Agent, a fee equal to 1.5% of the aggregate Line of
Credit Amounts.
2.5 Termination or Reduction of Line of Credit
Amounts. (a) The Co-Borrowers shall have the right, upon
not less than four Business Days' notice to the Agent, to
terminate the lines of credit made available hereunder or,
from time to time thereafter, to reduce the aggregate Line of
Credit Amount; provided that no such termination or reduction
shall be permitted if, after giving effect thereto and to any
prepayments of the Loans made on the effective date thereof,
the aggregate principal amount of the Loans then outstanding
would exceed the aggregate Line of Credit Amounts then in
effect; provided, further that no such reduction shall be
permitted until after the first anniversary of the Closing
Date; and provided, finally, that at the time of any such
termination before the first anniversary of the Closing Date
the Co-Borrowers shall pay all fees which would have accrued
through the first anniversary of the Closing Date pursuant to
subsection 2.4(a) if the lines of credit had continued in
effect through such first anniversary. Any such reduction
shall be in an amount equal to $100,000 or a whole multiple
thereof or, if less, the remaining Line of Credit Amounts and
shall reduce permanently the Line of Credit Amounts then in
effect. Voluntary reductions of the Line of Credit Amounts
shall be applied to the latest remaining scheduled reductions
of the Line of Credit Amounts set forth in subsection 2.5(b).
(b) The aggregate Line of Credit Amounts will be
automatically and permanently reduced on the last Business
Day of March, June, September and December in each fiscal
year set forth below, commencing on March 31, 1994 and ending
on December 31, 1997, by an amount equal to 25% of the amount
set forth below opposite such year:
Year Reduction Amount
1994 $2,000,000
1995 $2,500,000
1996 $2,500,000
1997 $3,000,000
(c) If any Co-Borrower shall sell any asset, the
aggregate Line of Credit Amounts will be permanently reduced
by the greater of (i) the fair market value of the asset so
sold and (ii) the aggregate cash consideration received
therefor. Such reduction shall be applied to the latest
remaining scheduled reductions of the Line of Credit Amounts
set forth in subsection 2.5(b).
(d) The Required Lenders shall have the right at
any time to terminate or reduce the aggregate Line of Credit
Amounts. Any such termination or reduction shall be
effective immediately upon notice to the Co-Borrowers and
shall permanently terminate or reduce, as the case may be,
the aggregate Line of Credit Amounts then in effect. Any
such reduction shall be applied to such remaining scheduled
reductions of the Line of Credit Amounts as the Required
Lenders shall specify in such notice.
2.6 Optional and Mandatory Prepayments. (a) The
Co-Borrowers may at any time and from time to time prepay the
Loans, in whole or in part, without premium or penalty (other
than as provided for in subsection 2.16), upon at least three
(in the case of Eurodollar Rate Loans) or one (in the case of
Base Rate Loans) Business Days' irrevocable notice to the
Agent, specifying the date and amount of prepayment and
whether the prepayment is of Eurodollar Loans, Base Rate
Loans or a combination thereof, and, if of a combination
thereof, the amount allocable to each. Upon receipt of any
such notice the Agent shall promptly notify each Lender
thereof. If any such notice is given, the amount specified
in such notice together with any amounts payable pursuant to
subsection 2.16 shall be due and payable on the date
specified therein. Partial prepayments shall be in an
aggregate principal amount of $100,000 or a whole multiple
thereof.
(b) If at any time (including, without limitation,
following a reduction in the Line of Credit Amounts pursuant
to subsection 2.5) the aggregate principal amount of the
Loans exceeds the aggregate Line of Credit Amounts then in
effect, the Co-Borrowers shall immediately repay the Loans in
an aggregate amount equal to such excess.
2.7 Conversion and Continuation Options. (a)
Subject to the Lenders' continued satisfaction with all
matters related to the credit, the Co-Borrowers may elect
from time to time to convert Eurodollar Loans to Base Rate
Loans by giving the Agent at least two Business Days' prior
irrevocable notice of such election, provided that any such
conversion of Eurodollar Loans may only be made on the last
day of an Interest Period with respect thereto. The Co-
Borrowers may elect from time to time to convert Base Rate
Loans to Eurodollar Loans by giving the Agent at least three
Working Days' prior irrevocable notice of such election. Any
such notice of conversion to Eurodollar Loans shall specify
the length of the initial Interest Period or Interest Periods
therefor. Upon receipt of any such notice the Agent shall
promptly notify each Lender thereof. All or any part of
outstanding Eurodollar Loans and Base Rate Loans may be
converted as provided herein, provided that (i) no Loan may
be converted into a Eurodollar Loan when the Agent or any
Lender has determined that such a conversion is not
appropriate, (ii) any such conversion may only be made if,
after giving effect thereto, subsection 2.8 shall not have
been contravened and (iii) no Loan may be converted into a
Eurodollar Loan after the date that is one month prior to the
Termination Date.
(b) Subject to the Lenders' continued satisfaction
with all matters related to the credit, any Eurodollar Loans
may be continued as such upon the expiration of the then
current Interest Period with respect thereto by the Co-
Borrowers giving notice to the Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth
in subsection 1.1, of the length of the next Interest Period
to be applicable to such Loans, provided that no Eurodollar
Loan may be continued as such (i) when the Agent or any
Lender has determined that such a continuation is not
appropriate, (ii) if, after giving effect thereto, subsection
2.8 would be contravened or (iii) after the date that is one
month prior to the Termination Date and provided, further,
that if the Co-Borrowers shall fail to give any required
notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding
proviso such Loans shall be automatically converted to Base
Rate Loans on the last day of such then expiring Interest
Period.
2.8 Minimum Amounts of Tranches. All borrowings,
conversions and continuations of Loans hereunder and all
selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, after
giving effect thereto, the aggregate principal amount of the
Loans comprising each Tranche shall be equal to $500,000 or a
whole multiple of $100,000 in excess thereof.
2.9 Interest Rates and Payment Dates. (a) Each
Eurodollar Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum
equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a
rate per annum equal to the Base Rate plus the Applicable
Margin.
(c) If all or a portion of (i) the principal
amount of any Loan, (ii) any interest payable thereon or
(iii) any line of credit fee or other amount payable
hereunder shall not be paid when due (whether at the stated
maturity, upon demand or otherwise), such overdue amount
shall bear interest at a rate per annum which is (x) in the
case of overdue principal, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of
this subsection plus 2% or (y) in the case of overdue
interest, line of credit fee or other amount, the Base Rate
plus 2%, in each case from the date of such non-payment until
such amount is paid in full (as well after as before
judgment).
(d) Interest shall be payable in arrears on each
Interest Payment Date and on the Termination Date, provided
that interest accruing pursuant to paragraph (c) of this
subsection shall be payable from time to time on demand.
2.10 Computation of Interest and Fees. Interest
on Base Rate Loans (when based on the Prime Rate) and
interest on overdue interest, line of credit fees and other
amounts payable hereunder shall be calculated on the basis of
a 365 day (or 366 day, as the case may be) year for the
actual days elapsed. Interest on Eurodollar Loans, Base Rate
Loans (when based on the Federal Funds Effective Rate) and
line of credit fees shall be calculated on the basis of a
360-day year for the actual days elapsed. The Agent shall as
soon as practicable notify the Co-Borrowers and the Lenders
of each determination of a Eurodollar Rate. Any change in
the interest rate on a Loan resulting from a change in the
Base Rate shall become effective as of the opening of
business on the day on which such change becomes effective.
The Agent shall as soon as practicable notify the Co-
Borrowers and the Lenders of the effective date and the
amount of each such change in interest rate.
2.11 Inability to Determine Interest Rate. If
prior to the first day of any Interest Period:
(a) the Agent shall have determined (which
determination shall be conclusive and binding upon the
Co-Borrowers) that, by reason of circumstances affecting
the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such
Interest Period, or
(b) the Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or
to be determined for such Interest Period will not
adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest
Period,
the Agent shall give telecopy or telephonic (which is
promptly confirmed in writing) notice thereof to the Co-
Borrowers and the Lenders as soon as practicable thereafter.
If such notice is given (x) any Eurodollar Loans requested to
be made on the first day of such Interest Period shall be
made as Base Rate Loans, (y) any Loans that were to have been
converted on the first day of such Interest Period to
Eurodollar Loans shall be continued as Base Rate Loans and
(z) any outstanding Eurodollar Loans shall be converted, on
the first day of such Interest Period, to Base Rate Loans.
Until such notice has been withdrawn by the Agent, no further
Eurodollar Loans shall be made or continued as such, nor
shall the Co-Borrowers have the right to convert Base Rate
Loans to Eurodollar Loans.
2.12 Pro Rata Treatment and Payments. (a) Each
borrowing by the Co-Borrowers from the Lenders hereunder,
each payment on account of any line of credit fee hereunder
and any reduction of the Line of Credit Amounts of the
Lenders shall be made pro rata according to the respective
Line of Credit Percentages of the Lenders. Each payment
(including each prepayment) by the Co-Borrowers on account of
principal of and interest on the Loans shall be made pro rata
according to the respective outstanding principal amounts of
the Loans then held by the Lenders. All payments (including
prepayments) to be made by the Co-Borrowers hereunder and
under the Notes, whether on account of principal, interest,
fees or otherwise, shall be made without set-off or
counterclaim and shall be made prior to 12:00 Noon, New York
City time, on the due date thereof to the Agent, for the
account of the Lenders, at the Agent's office specified in
subsection 8.2, in Dollars and in immediately available
funds. The Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If
any payment hereunder (other than payments on the Eurodollar
Loans) becomes due and payable on a day other than a Business
Day, such payment shall be extended to the next succeeding
Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate
during such extension. If any payment on a Eurodollar Loan
becomes due and payable on a day other than a Working Day,
the maturity thereof shall be extended to the next succeeding
Working Day (and interest thereon shall be payable at the
then applicable rate during such extension) unless the result
of such extension would be to extend such payment into
another calendar month, in which event such payment shall be
made on the immediately preceding Working Day.
(b) Unless the Agent shall have been notified in
writing by any Lender prior to a Borrowing Date that such
Lender will not make the amount that would constitute its
Line of Credit Percentage of the borrowing on such date
available to the Agent, the Agent may assume that such Lender
has made such amount available to the Agent on such Borrowing
Date, and the Agent may, in reliance upon such assumption,
make available to the Co-Borrowers a corresponding amount.
If such amount is made available to the Agent on a date after
such Borrowing Date, such Lender shall pay to the Agent on
demand an amount equal to the product of (i) the daily
average Federal Funds Effective Rate during such period,
times (ii) the amount of such Lender's Line of Credit
Percentage of such borrowing, times (iii) a fraction the
numerator of which is the number of days that elapse from and
including such Borrowing Date to the date on which such
Lender's Line of Credit Percentage of such borrowing shall
have become immediately available to the Agent and the
denominator of which is 360. A certificate of the Agent
submitted to any Lender with respect to any amounts owing
under this subsection shall be conclusive in the absence of
manifest error. If such Lender's Line of Credit Percentage
of such borrowing is not in fact made available to the Agent
by such Lender within three Business Days of such Borrowing
Date, the Agent shall be entitled to recover such amount with
interest thereon at a rate per annum equal to the higher of
(i) the rate applicable to such borrowing and (ii) the daily
average Federal Funds Effective Rate from the Co-Borrowers.
2.13 Illegality. Notwithstanding any other
provision herein, if the adoption of or any change in any
Requirement of Law or in the interpretation or application
thereof shall make it unlawful for any Lender to make or
maintain Eurodollar Loans as contemplated by this Agreement,
(a) the willingness of such Lender hereunder to make
Eurodollar Loans, continue Eurodollar Loans as such and
convert Base Rate Loans to Eurodollar Loans shall forthwith
be cancelled and (b) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to
Base Rate Loans on the respective last days of the then
current Interest Periods with respect to such Loans or within
such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not
the last day of the then current Interest Period with respect
thereto, the Co-Borrowers shall pay to such Lender such
amounts, if any, as may be required pursuant to subsection
2.16.
2.14 Requirements of Law. (a) If the adoption of
or any change in any Requirement of Law or in the
interpretation or application thereof or compliance by any
Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any
kind whatsoever with respect to this Agreement, any Note
or any Eurodollar Loan made by it, or change the basis
of taxation of payments to such Lender in respect
thereof (in each case except for taxes covered by
subsection 2.15 and changes in the rate of tax on the
overall net income of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar
requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition
of funds by, any office of such Lender which is not
otherwise included in the determination of the
Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other
condition;
and the result of any of the foregoing is to increase the
cost to such Lender, by an amount which such Lender deems to
be material, of making, converting into, continuing or
maintaining Eurodollar Loans or to reduce any amount
receivable hereunder in respect thereof, then, in any such
case, the Co-Borrowers shall promptly pay such Lender, upon
its demand, any additional amounts necessary to compensate
such Lender for such increased cost or reduced amount
receivable. If any Lender becomes entitled to claim any
additional amounts pursuant to this subsection, it shall
promptly notify the Co-Borrowers, through the Agent, of the
event by reason of which it has become so entitled. This
covenant shall survive the termination of this Agreement and
the payment of the Notes and all other amounts payable
hereunder.
(b) If any Lender shall have determined that the
adoption of or any change in any Requirement of Law regarding
capital adequacy or in the interpretation or application
thereof or compliance by such Lender or any corporation
controlling such Lender with any request or directive
regarding capital adequacy (whether or not having the force
of law) from any Governmental Authority made subsequent to
the date hereof does or shall have the effect of reducing the
rate of return on such Lender's or such corporation's capital
as a consequence of its obligations hereunder to a level
below that which such Lender or such corporation could have
achieved but for such change or compliance (taking into
consideration such Lender's or such corporation's policies
with respect to capital adequacy) by an amount deemed by such
Lender to be material, then from time to time, after
submission by such Lender to the Co-Borrowers (with a copy to
the Agent) of a written request therefore, the Co-Borrowers
shall pay to such Lender such additional amount or amounts as
will compensate such Lender for such reduction. This
covenant shall survive the termination of this Agreement and
the payment of the Notes and all other amounts payable
hereunder.
2.15 Taxes. (a) All payments made by the Co-
Borrowers under this Agreement and the Notes shall be made
free and clear of, and without deduction or withholding for
or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental
Authority, excluding, in the case of the Agent and each
Lender, taxes on the overall net income of the Agent or such
Lender and franchise taxes (imposed in lieu of such net
income taxes) imposed on the Agent or such Lender, as the
case may be, as a result of a present or former connection
between the jurisdiction of the government or taxing
authority imposing such tax and the Agent or such Lender
(excluding a connection arising solely from the Agent or such
Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this
Agreement or the Notes) or any political subdivision or
taxing authority thereof or therein (all such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions and
withholdings being hereinafter called "Taxes"). If any Taxes
are required to be withheld from any amounts payable to the
Agent or any Lender hereunder or under the Notes, the amounts
so payable to the Agent or such Lender shall be increased to
the extent necessary to yield to the Agent or such Lender
(after payment of all Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts
specified in this Agreement and the Notes. Whenever any
Taxes are payable by any Co-Borrower, as promptly as possible
thereafter the Co-Borrowers shall send to the Agent for its
own account or for the account of such Lender, as the case
may be, a certified copy, if available, of an original
official receipt received by the Co-Borrowers showing payment
thereof. If any Co-Borrower fails to pay any Taxes when due
to the appropriate taxing authority or fails to remit to the
Agent the required receipts or other required documentary
evidence, the Co-Borrowers shall indemnify the Agent and the
Lenders for any incremental taxes, interest or penalties that
may become payable by the Agent or any Lender as a result of
any such failure. The agreements in this subsection shall
survive the termination of this Agreement and the payment of
the Notes and all other amounts payable hereunder.
(b) Each Lender agrees that it will, on or prior
to the date of execution and delivery of this Agreement or
the date on which such Lender becomes a Lender pursuant to an
Assignment and Acceptance, as the case may be, deliver to the
Co-Borrowers and the Agent (i) if applicable, two duly
completed copies of United States Internal Revenue Service
Form 1001 or 4224 or successor applicable form, as the case
may be, and (ii) an Internal Revenue Service Form W-8 or W-9
or successor applicable form. Each such Lender also agrees
to deliver to the Co-Borrowers and the Agent two further
copies of the said Form 1001 or 4224, if applicable, and Form
W-8 or W-9, or successor applicable forms or other manner of
certification, as the case may be, on or before the date that
any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent
form previously delivered by it to the Co-Borrowers, and such
extensions or renewals thereof as may reasonably be requested
by the Co-Borrowers or the Agent, unless in any such case an
event (including, without limitation, any change in treaty,
law or regulation) has occurred prior to the date on which
any such delivery would otherwise be required which renders
all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with
respect to it and such Lender so advises the Co-Borrowers and
the Agent. Such Lender shall certify (i) in the case of a
Form 1001 or 4224, that it is entitled to receive payments
under this Agreement without deduction or withholding of any
United States federal income taxes and (ii) in the case of a
Form W-8 or W-9, that it is entitled to an exemption from
United States backup withholding tax. If the form provided
by a Lender at the time such Lender first becomes a party to
this Agreement indicates a United States interest withholding
tax rate in excess of the rate applicable to the Lender's
assignor on the date of the Assignment and Acceptance
pursuant to which it became a Lender, withholding tax
attributable solely to such excess rate shall be considered
excluded from Taxes.
2.16 Indemnity. The Co-Borrowers jointly and
severally agree to indemnify each Lender and to hold each
Lender harmless from any loss or expense which such Lender
may sustain or incur as a consequence of (a) default by the
Co-Borrowers in payment when due of the principal amount of
or interest on any Eurodollar Loan, (b) default by the Co-
Borrowers in making a borrowing of, conversion into or
continuation of Eurodollar Loans after the Co-Borrowers have
given a notice requesting the same in accordance with the
provisions of this Agreement, (c) default by the Co-Borrowers
in making any prepayment after the Co-Borrowers have given a
notice thereof in accordance with the provisions of this
Agreement or (d) the making of a prepayment of Eurodollar
Loans on a day which is not the last day of an Interest
Period with respect thereto, including, without limitation,
in each case, any such loss or expense arising from the
reemployment of funds obtained by it or from fees payable to
terminate the deposits from which such funds were obtained.
Calculation of all amounts payable to a Lender under this
subsection 2.16 shall be made as though such Lender had
actually funded its relevant Eurodollar Loan through the
purchase of a deposit bearing interest at the Eurodollar Rate
in an amount equal to the amount of such Eurodollar Loan and
having a maturity comparable to the relevant Interest Period;
provided, however, that each Lender may fund each of its
Eurodollar Loans in any manner it sees fit, and the foregoing
assumption shall be utilized only for the calculation of
amounts payable under this subsection 2.16. This covenant
shall survive the termination of this Agreement and the
payment of the Notes and all other amounts payable hereunder.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into
this Agreement and to induce the Lenders to make available
the line of credit hereunder, each Co-Borrower hereby
represents and warrants to the Agent and each Lender that:
3.1 Financial Condition. The consolidated balance
sheet of PCC and its consolidated Subsidiaries as at December
31, 1992 and the related consolidated statements of income
and of cash flows for the fiscal year ended on such date,
reported on by KPMG Peat Marwick, copies of which have
heretofore been furnished to each Lender, are complete and
correct and present fairly the consolidated financial
condition of PCC and its consolidated Subsidiaries as at such
date, and the consolidated results of their operations and
their consolidated cash flows for the fiscal year then ended.
The unaudited consolidated balance sheet of PCC and its
consolidated Subsidiaries as at September 30, 1993 and the
related unaudited consolidated statements of income and of
cash flows for the nine-month period ended on such date,
certified by a Responsible Officer of PCC, copies of which
have heretofore been furnished to each Lender, are complete
and correct and present fairly the consolidated financial
condition of PCC and its consolidated Subsidiaries as at such
date, and the consolidated results of their operations and
their consolidated cash flows for the nine-month period then
ended (subject to normal year-end audit adjustments). All
such financial statements, including the related schedules
and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except
as approved by such accountants or Responsible Officer, as
the case may be, and as disclosed therein). Neither PCC nor
any of its consolidated Subsidiaries had, at the date of the
most recent balance sheet referred to above, any material
Guarantee Obligation, contingent liability or liability for
taxes, or any long-term lease or unusual forward or long-term
commitment, including, without limitation, any interest rate
or foreign currency swap or exchange transaction, which is
not reflected in the foregoing statements or in the notes
thereto. During the period from September 30, 1993 to and
including the date hereof there has been no sale, transfer or
other disposition by PCC or any of its consolidated
Subsidiaries of any material part of its business or property
and no purchase or other acquisition of any business or
property (including any capital stock of any other Person)
material in relation to the consolidated financial condition
of PCC and its consolidated Subsidiaries at September 30,
1993, other than as set forth in Schedule 3.1.
3.2 No Change. Except as set forth on Schedule
3.1, since September 30, 1993, (a) there has been no
development or event which has had or could reasonably be
expected to have a Material Adverse Effect and (b) no
dividends or other distributions have been declared, paid or
made upon the Capital Stock of PCC nor has any of the Capital
Stock of PCC been redeemed, retired, purchased or otherwise
acquired for value by PCC or any of its Subsidiaries.
3.3 Corporate Existence; Compliance with Law.
Each of the Co-Borrowers (a) is duly organized, validly
existing and in good standing under the laws of the
jurisdiction of its incorporation, (b) has the corporate
power and authority, and the legal right, to own and operate
its property, to lease the property it operates as lessee and
to conduct the business in which it is currently engaged, (c)
is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of
its business requires such qualification and (d) is in
compliance with all Requirements of Law except to the extent
that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
3.4 Corporate Power; Authorization; Enforceable
Obligations. Each of the Co-Borrowers has the corporate
power and authority, and the legal right, to make, deliver
and perform the Loan Documents to which it is a party and to
borrow hereunder and has taken all necessary corporate action
to authorize the borrowings on the terms and conditions of
this Agreement and the Notes and to authorize the execution,
delivery and performance of the Loan Documents to which it is
a party. No consent or authorization of, filing with, notice
to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with
the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of the Loan Documents
to which any Co-Borrower is a party, other than consents,
authorizations, filings, notices and acts which have been
obtained, made or effected on or prior to the date hereof.
This Agreement has been, and each other Loan Document to
which it is a party will be, duly executed and delivered on
behalf of each Co-Borrower. This Agreement constitutes, and
each other Loan Document to which the Co-Borrowers are party
when executed and delivered will constitute, a legal, valid
and binding obligation of the Co-Borrowers enforceable
against the Co-Borrowers in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and
by general equitable principles (whether enforcement is
sought by proceedings in equity or at law).
3.5 No Legal Bar. The execution, delivery and
performance of the Loan Documents, the borrowings hereunder
and the use of the proceeds thereof will not violate any
material Requirement of Law or material Contractual
Obligation of any Co-Borrower and will not result in, or
require, the creation or imposition of any material Lien on
any of the Co-Borrowers' respective properties or revenues
pursuant to any such material Requirement of Law or material
Contractual Obligation.
3.6 No Material Litigation. No litigation,
investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the
Co-Borrowers, threatened by or against any Co-Borrower or
against any of the Co-Borrowers' respective properties or
revenues (a) with respect to any of the Loan Documents or any
of the transactions contemplated hereby or thereby, or (b)
which could reasonably be expected to have a Material Adverse
Effect.
3.7 No Default. No Co-Borrower is in default
under or with respect to any of its Contractual Obligations
in any respect which could reasonably be expected to have a
Material Adverse Effect.
3.8 Ownership of Property; Liens. Each of the Co-
Borrowers has good record and marketable title in fee simple
to, or a valid leasehold interest in, all its real property,
and good title to, or a valid leasehold interest in, all its
other property, and none of such property is subject to any
material Lien except pursuant to the Security Documents.
3.9 Intellectual Property. Each of the Co-
Borrowers owns, or is licensed to use, all trademarks,
tradenames, copyrights, technology, know-how and processes
necessary for the conduct of its business as currently
conducted except for those the failure to own or license
which could not reasonably be expected to have a Material
Adverse Effect (the "Intellectual Property"). No claim has
been asserted and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property,
nor does any Co-Borrower know of any valid basis for any such
claim. The use of such Intellectual Property by the Co-
Borrowers does not infringe on the rights of any Person,
except for such claims and infringements that, in the
aggregate, could not reasonably be expected to have a
Material Adverse Effect.
3.10 No Burdensome Restrictions. No Requirement
of Law or Contractual Obligation of any Co-Borrower could
reasonably be expected to have a Material Adverse Effect.
3.11 Taxes. Each of PCC and its Subsidiaries has
filed or caused to be filed all tax returns which, to the
knowledge of the Co-Borrowers, are required to be filed and
has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed
on it or any of its property by any Governmental Authority
(other than any the amount or validity of which are currently
being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have
been provided on the books of PCC or its Subsidiaries, as the
case may be); no tax Lien has been filed, and, to the
knowledge of the Co-Borrowers, no claim is being asserted,
with respect to any such tax, fee or other charge.
3.12 Federal Regulations. No part of the proceeds
of any Loans will be used for "purchasing" or "carrying" any
"margin stock" within the respective meanings of each of the
quoted terms under Regulation U of the Board of Governors of
the Federal Reserve System as now and from time to time
hereafter in effect or for any purpose which violates the
provisions of the Regulations of such Board of Governors.
3.13 ERISA. Neither a Reportable Event nor an
"accumulated funding deficiency" (within the meaning of
Section 412 of the Code or Section 302 of ERISA) has occurred
during the five-year period prior to the date on which this
representation is made or deemed made with respect to any
Plan, and each Plan has complied in all material respects
with the applicable provisions of ERISA and the Code. No
termination of a Single Employer Plan has occurred, and no
Lien in favor of the PBGC or a Plan has arisen, during such
five-year period. The present value of all accrued benefits
under each Single Employer Plan (based on those assumptions
used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation
is made or deemed made, exceed the value of the assets of
such Plan allocable to such accrued benefits. Neither any
Co-Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan,
and neither any Co-Borrower nor any Commonly Controlled
Entity would become subject to any liability under ERISA if
such Co-Borrower or any such Commonly Controlled Entity were
to withdraw completely from all Multiemployer Plans as of the
valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer
Plan is in Reorganization or Insolvent.
3.14 Investment Company Act; Other Regulations.
None of the Co-Borrowers is (a) an "investment company", or a
company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended or
(b) a "holding company" as defined in, or otherwise subject
to regulation under, the Public Utility Holding Company Act
of 1935, as amended. None of the Co-Borrowers is subject to
regulation under any Federal or State statute or regulation
which limits its ability to incur Indebtedness.
3.15 Subsidiaries. None of the Co-Borrowers has
any Subsidiaries. Each Co-Borrower is a wholly-owned
Subsidiary of PCC.
3.16 Purpose of Loans. The proceeds of the Loans
shall be used by the Co-Borrowers (i) to enable PCC to redeem
all of the currently outstanding 5% Senior Secured Notes of
PCC for an amount equal to approximately $5,350,000 and (ii)
for working capital purposes of the Co-Borrowers in the
ordinary course of business.
3.17 Environmental Matters. (a) The facilities
and properties owned, leased or operated by the Co-Borrowers
(the "Properties") do not contain, and have not previously
contained, any Materials of Environmental Concern in amounts
or concentrations which (i) constitute or constituted a
violation of, or (ii) could reasonably be expected to give
rise to liability under, any Environmental Law except in
either case insofar as such violation or liability, or any
aggregation thereof, is not reasonably likely to result in
the payment of a Material Environmental Amount.
(b) The Properties and all operations at the
Properties are in compliance, and have in the last five years
been in compliance, in all material respects with all
applicable Environmental Laws, and there is no contamination
at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the
business operated by the Co-Borrowers (the "Business") which
could materially interfere with the continued operation of
the Properties or materially impair the fair saleable value
thereof.
(c) None of the Co-Borrowers has received any
notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental
matters or compliance with Environmental Laws with regard to
any of the Properties or the Business, nor do the Co-
Borrowers have knowledge or reason to believe that any such
notice will be received or is being threatened except insofar
as such notice or threatened notice, or any aggregation
thereof, does not involve a matter or matters that is or are
reasonably likely to result in the payment of a Material
Environmental Amount.
(d) Materials of Environmental Concern have not
been transported or disposed of from the Properties in
violation of, or in a manner or to a location which could
reasonably be expected to give rise to liability under, any
Environmental Law, nor have any Materials of Environmental
Concern been generated, treated, stored or disposed of at, on
or under any of the Properties in violation of, or in a
manner that could reasonably be expected to give rise to
liability under, any applicable Environmental Law except
insofar as any such violation or liability referred to in
this paragraph, or any aggregation thereof, is not reasonably
likely to result in the payment of a Material Environmental
Amount.
(e) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of the
Co-Borrowers, threatened, under any Environmental Law to
which any Co-Borrower is or will be named as a party with
respect to the Properties or the Business, nor are there any
consent decrees or other decrees, consent orders,
administrative orders or other orders, or other
administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the
Business except insofar as such proceeding, action, decree,
order or other requirement, or any aggregation thereof, is
not reasonably likely to result in the payment of a Material
Environmental Amount.
(f) There has been no release or threat of release
of Materials of Environmental Concern at or from the
Properties, or arising from or related to the operations of
the Co-Borrowers in connection with the Properties or
otherwise in connection with the Business, in violation of or
in amounts or in a manner that could reasonably give rise to
liability under Environmental Laws except insofar as any such
violation or liability referred to in this paragraph, or any
aggregation thereof, is not reasonably likely to result in
the payment of a Material Environmental Amount.
3.18 Broadcast Licenses, etc. Set forth in
Schedule 3.18 hereto is a complete and correct list of all
FCC permits and/or licenses held by the Co-Borrowers, the
applicable expiration dates and permitted renewal periods (if
any) for each such permit or license, and the name of the
Person holding each such permit or license. In addition,
said Schedule 3.18 sets forth, with respect to each Station,
the respective frequency and call letters of such Station,
and the name of the Person owning the material assets used in
connection with the operation of such Station. Except as set
forth in Schedule 3.18 hereto, each Co-Borrower holds all FCC
licenses and permits necessary for the operation of its
Stations. Except as set forth in Schedule 3.18 hereto, the
Co-Borrowers are not aware of any basis for challenging or
questioning, or any circumstance which could impede or delay,
the timely renewal of any such license or permit. Except as
set forth in Schedule 3.18 hereto, each such license and
permit is valid and in full force and effect, and no Co-
Borrower has received any notice of proceedings relating to
the revocation, termination, suspension, non-renewal or
modification of any such license or permit.
3.19 Indebtedness. The Co-Borrowers have no
material Indebtedness other than (i) Indebtedness under this
Agreement, (ii) trade accounts payable in the ordinary course
of business and (iii) the Subordinated Intercompany Loans.
3.20 Stations. Atlantic owns and operates WIRK-FM
and WBZT-AM (West Palm Beach, Florida); Southeast owns and
operates KJAC-TV (Beaumont and Port Arthur, Texas); Texoma
owns and operates KFDX-TV (Wichita Falls, Texas); and
Tri-State owns and operates KSNF-TV (Joplin, Missouri).
Each of the foregoing representations and
warranties shall automatically be deemed to be restated by
each Co-Borrower on the date of each Loan as if made on such
date.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Effectiveness. The
effectiveness of this Agreement is subject to the
satisfaction of the following conditions precedent:
(a) Loan Documents. The Agent shall have received
(i) this Agreement, executed and delivered by a duly
authorized officer of each of the Co-Borrowers, with a
counterpart for each Lender, (ii) for the account of
each Lender, a Note conforming to the requirements
hereof and executed by a duly authorized officer of each
of the Co-Borrowers, (iii) the Stock Pledge Agreement,
executed and delivered by a duly authorized officer of
each of the Pledgors, with a counterpart or a conformed
copy for each Lender, (iv) the Security Agreement,
executed and delivered by a duly authorized officer of
each of the Co-Borrowers, with a counterpart or a
conformed copy for each Lender, and (v) the Intercompany
Subordination Agreement, executed and delivered by a
duly authorized officer of PCC, with a counterpart or a
conformed copy for each Lender.
(b) Corporate Proceedings of the Co-Borrowers.
The Agent shall have received, with a counterpart for
each Lender, a copy of the resolutions, in form and
substance satisfactory to the Agent, of the Board of
Directors of each of the Co-Borrowers authorizing (i)
the execution, delivery and performance of this
Agreement, the Notes and the other Loan Documents to
which such Co-Borrower is a party, (ii) the borrowings
contemplated hereunder and (iii) the granting by it of
the Liens created pursuant to the Security Documents to
which such Co-Borrower is a party, certified by the
Secretary or an Assistant Secretary of such Co-Borrower
as of the Closing Date, which certificate shall be in
form and substance satisfactory to the Agent and shall
state that the resolutions thereby certified have not
been amended, modified, revoked or rescinded.
(c) Corporate Proceedings of the Pledgors. The
Agent shall have received, with a counterpart for each
Lender, a copy of the resolutions, in form and substance
satisfactory to the Agent, of the Board of Directors of
each of the Pledgors authorizing (i) the execution,
delivery and performance of Stock Pledge Agreement and
(ii) the granting by it of the guarantees and Liens
created pursuant to the Stock Pledge Agreement,
certified by the Secretary or an Assistant Secretary of
such Pledgor as of the Closing Date, which certificate
shall be in form and substance satisfactory to the Agent
and shall state that the resolutions thereby certified
have not been amended, modified, revoked or rescinded.
(d) Incumbency Certificates. The Agent shall have
received, with a counterpart for each Lender, a
Certificate of each of the Loan Parties, dated the
Closing Date, as to the incumbency and signature of the
officers of such Loan Party executing any Loan Document
satisfactory in form and substance to the Agent,
executed by the President or any Vice President and the
Secretary or any Assistant Secretary of such Loan Party.
(e) Corporate Documents. The Agent shall
have received, with a counterpart for each Lender, true
and complete copies of the certificate of incorporation
and by-laws of each Loan Party, certified as of the
Closing Date as complete and correct copies thereof by
the Secretary or an Assistant Secretary of such Loan
Party.
(f) Fees. The Agent shall have received the fees
to be received on the Closing Date referred to in
subsection 2.4(b).
(g) Legal Opinions. The Agent shall have
received, with a counterpart for each Lender, one or
more executed legal opinions of Proskauer Rose Goetz &
Mendelsohn and/or other counsel to the Co-Borrowers and
the other Loan Parties reasonably satisfactory to the
Agent, substantially in the form of Exhibit E.
(h) Pledged Stock; Stock Powers. The Agent shall
have received the certificates representing the shares
pledged pursuant to the Stock Pledge Agreement, together
with an undated stock power for each such certificate
executed in blank by a duly authorized officer of the
pledgor thereof.
(i) Actions to Perfect Liens. The Agent shall
have received evidence in form and substance
satisfactory to it that all filings, recordings,
registrations and other actions, including, without
limitation, the filing of duly executed financing
statements on form UCC-1, necessary or, in the opinion
of the Agent, desirable to perfect the Liens created by
the Security Documents shall have been completed.
(j) Lien Searches. The Agent shall have received
the results of a recent search by a Person satisfactory
to the Agent, of the Uniform Commercial Code, judgement
and tax lien filings which may have been filed with
respect to personal property of each the Co-Borrowers,
and the results of such search shall be satisfactory to
the Agent.
SECTION 5. COVENANTS
The Co-Borrowers hereby agree that, so long as this
Agreement remains in effect, any Note remains outstanding and
unpaid or any other amount is owing to any Lender or the
Agent hereunder:
5.1 Financial Statements. The Co-Borrowers shall
cause to be furnished to each Lender:
(a) as soon as available, but in any event within
90 days after the end of each fiscal year of PCC, a copy
of the consolidated balance sheet of PCC and its
consolidated Subsidiaries as at the end of such year and
the related consolidated statements of income and
retained earnings and of cash flows for such year,
setting forth in each case in comparative form the
figures for the previous year, reported on without a
"going concern" or like qualification or exception, or
qualification arising out of the scope of the audit, by
KPMG Peat Marwick or other independent certified public
accountants of nationally recognized standing not
unacceptable to the Agent;
(b) as soon as available, but in any event within
60 days after the end of each fiscal quarter of PCC, a
copy of the unaudited consolidated balance sheet of PCC
and its consolidated Subsidiaries as at the end of such
quarter and the related unaudited consolidated
statements of income and retained earnings and of cash
flows for such quarter, setting forth in each case in
comparative form the figures for the previous year,
certified by a Responsible Officer of PCC as being
fairly stated in all material respects (subject to
normal year-end audit adjustments); and
(c) as soon as available, but in any event not
later than 30 days after the end of each of the first
eleven months of each fiscal year of PCC, the unaudited
balance sheet of each Co-Borrower as at the end of such
month and the related unaudited statements of income and
retained earnings and of cash flows of each Co-Borrower
for such month and the portion of the fiscal year
through the end of such month, setting forth in each
case in comparative form the figures for the previous
year and the figures projected in the applicable budget
provided pursuant to subsection 5.2(d), certified by a
Responsible Officer of PCC as being fairly stated in all
material respects (subject to normal year-end audit
adjustments);
all such financial statements shall be complete and correct
in all material respects and shall be prepared in reasonable
detail and in accordance with GAAP applied consistently
throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer,
as the case may be, and disclosed therein).
5.2 Certificates; Other Information. The Co-
Borrowers shall cause to be furnished to each Lender:
(a) concurrently with the delivery of the
financial statements referred to in subsection 5.1(a), a
certificate of the independent certified public
accountants reporting on such financial statements
stating that in making the examination necessary
therefor no knowledge was obtained of any Default,
except as specified in such certificate;
(b) concurrently with the delivery of the
financial statements referred to in subsection 5.1(a),
copies of each Co-Borrower's year-end unaudited
financial statements used in the preparation of such
statements;
(c) concurrently with the delivery of the
financial statements referred to in subsections 5.1(a),
5.1(b) and 5.1(c), a certificate of a Responsible
Officer stating that, to the best of such officer's
knowledge, no Default has occurred during such period,
except as specified in such certificate;
(d) not later than 30 days after the end of each
fiscal year of PCC, a copy of the projections by PCC of
the operating budget and cash flow budget of PCC and its
Subsidiaries for such fiscal year, such projections to
be accompanied by a certificate of a Responsible Officer
of PCC to the effect that such projections have been
prepared on the basis of sound financial planning
practice and that such officer has no reason to believe
they are incorrect or misleading in any material
respect; and
(e) promptly, such additional financial and other
information as any Lender may from time to time
reasonably request.
5.3 Notices. The Co-Borrowers shall promptly give
notice to the Agent and each Lender of:
(a) the occurrence of any Default;
(b) any (i) default or event of default under any
Contractual Obligation of any Co-Borrower or (ii)
non-frivolous litigation, investigation or proceeding
which may exist at any time between any Co-Borrower and
any Governmental Authority, which in either case, if not
cured or if adversely determined, as the case may be,
could reasonably be expected to have a Material Adverse
Effect;
(c) any non-frivolous litigation or proceeding
affecting any Co-Borrower in which the amount involved
is $500,000 or more and not covered by insurance or in
which injunctive or similar relief is sought;
(d) the following events, as soon as possible and
in any event within 30 days after any Co-Borrower knows
or has reason to know thereof: (i) the occurrence or
expected occurrence of any Reportable Event with respect
to any Plan, a failure to make any required contribution
to a Plan, the creation of any Lien in favor of the PBGC
or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan
or (ii) the institution of proceedings or the taking of
any other action by the PBGC or any Co-Borrower or any
Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the terminating,
Reorganization or Insolvency of, any Plan; and
(e) any development or event which could
reasonably be expected to have a Material Adverse
Effect.
Each notice pursuant to this subsection shall be accompanied
by a statement of a Responsible Officer setting forth details
of the occurrence referred to therein and stating what action
the Co-Borrowers propose to take with respect thereto.
5.4 Financial Condition Covenants. The Co-
Borrowers shall not permit at any time (a) the ratio of (i)
the aggregate Indebtedness of the Co-Borrowers to (ii)
Operating Cash Flow to exceed 2.0 to 1.0 or (b) the ratio of
(i) Available Cash Flow for any period of four consecutive
fiscal quarters to (ii) Debt Service for such period to be
less than 1.2 to 1.0.
5.5 Limitation on Indebtedness. The Co-Borrowers
shall not create, incur, assume or suffer to exist any
material Indebtedness, except (i) the Indebtedness under this
Agreement, (ii) trade accounts payable in the ordinary course
of business and (iii) the Subordinated Intercompany Loans.
5.6 Asset Sales. The Co-Borrowers shall not sell
any asset unless cash consideration is received in an amount
equal to the fair market value thereof.
5.7 Limitation on Restricted Payments. The Co-
Borrowers shall not declare or pay any dividend (other than
dividends payable solely in common stock of the Co-Borrowers)
on, or make any payment on account of, or set apart assets
for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of,
any shares of any class of Capital Stock of any Co-Borrower
or any warrants or options to purchase any such Capital
Stock, whether now or hereafter outstanding, or make any
other distribution in respect thereof, or make any optional
payment on the Subordinated Intercompany Loans, either
directly or indirectly, whether in cash or property or in
obligations of any Co-Borrower (such declarations, payments,
setting apart, purchases, redemptions, defeasances,
retirements, acquisitions, distributions and optional
payments being herein called "Restricted Payments"), except
for Restricted Payments permitted to be made pursuant to the
Intercompany Subordination Agreement.
SECTION 6. OFFERING BASIS
NOTWITHSTANDING ANY OTHER PROVISION IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT OR THE PAYMENT BY THE
CO-BORROWERS OF ANY FEES SPECIFIED HEREIN OR THE EXISTENCE OR
NONEXISTENCE OF ANY DEFAULT, ALL LOANS MADE BY EACH LENDER
SHALL BE PAYABLE ON WRITTEN DEMAND BY SUCH LENDER, AND EACH
LENDER SHALL HAVE THE RIGHT TO TERMINATE ITS LINE OF CREDIT
AND/OR REFUSE TO MAKE ANY REQUESTED LOAN AT ANY TIME FOR ANY
REASON, WITHOUT, IN ANY SUCH CASE, ANY PRIOR NOTICE
WHATSOEVER. THE CO-BORROWERS ACKNOWLEDGE THAT CERTAIN
COVENANTS HAVE BEEN INCLUDED IN SECTION 5 TO EMPHASIZE
CERTAIN MATTERS WHICH ARE OF PARTICULAR CONCERN TO THE
LENDERS BUT THAT SUCH INCLUSION SHALL NOT IN ANY WAY BE
UNDERSTOOD TO MEAN THAT THE RIGHT OF THE LENDERS TO DEMAND
PAYMENT OF OUTSTANDING LOANS OR TO TERMINATE THE LINE OF
CREDIT MADE AVAILABLE HEREUNDER OR TO REFUSE TO MAKE ANY
REQUESTED LOAN SHALL BE LIMITED TO TIMES WHEN THE CO-
BORROWERS ARE IN DEFAULT UNDER SUCH COVENANTS.
SECTION 7. THE AGENT
7.1 Appointment. Each Lender hereby irrevocably
designates and appoints Bank of Montreal as the Agent of such
Lender under this Agreement and the other Loan Documents, and
each such Lender irrevocably authorizes Bank of Montreal, as
the Agent for such Lender, to take such action on its behalf
under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties
as are expressly delegated to the Agent by the terms of this
Agreement and the other Loan Documents, together with such
other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or
any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations
or liabilities shall be read into this Agreement or any other
Loan Document or otherwise exist against the Agent.
7.2 Delegation of Duties. The Agent may execute
any of its duties under this Agreement and the other Loan
Documents by or through agents or attorneys-in-fact and shall
be entitled to advice of counsel concerning all matters
pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
7.3 Exculpatory Provisions. Neither the Agent nor
any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own
gross negligence or willful misconduct) or (ii) responsible
in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Co-
Borrower or any officer thereof contained in this Agreement
or any other Loan Document or in any certificate, report,
statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this
Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or the Notes or any other Loan
Document or for any failure of any Co-Borrower to perform its
obligations hereunder or thereunder. The Agent shall not be
under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other
Loan Document, or to inspect the properties, books or records
of any Co-Borrower.
7.4 Reliance by Agent. The Agent shall be
entitled to rely, and shall be fully protected in relying,
upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without
limitation, counsel to any Co-Borrower), independent
accountants and other experts selected by the Agent. The
Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been
filed with the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement
or any other Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or
continuing to take any such action except to the extent
arising solely from the gross negligence or willful
misconduct of the Agent. The Agent shall in all cases be
fully protected in acting, or in refraining from acting,
under this Agreement and the Notes and the other Loan
Documents in accordance with a request of the Required
Lenders, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Lenders
and all future holders of the Notes.
7.5 Notice of Default. The Agent shall not be
deemed to have knowledge or notice of the occurrence of any
Default hereunder unless the Agent has received notice from a
Lender or any Co-Borrower referring to this Agreement,
describing such Default and stating that such notice is a
"notice of default". In the event that the Agent receives
such a notice, the Agent shall promptly give notice thereof
to the Lenders. The Agent shall take such action with
respect to such Default as shall be reasonably directed by
the Required Lenders; provided that unless and until the
Agent shall have received such directions, the Agent may (but
shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall
deem advisable in the best interests of the Lenders.
7.6 Non-Reliance on Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Agent nor any
of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of any Loan Party,
shall be deemed to constitute any representation or warranty
by the Agent to any Lender. Each Lender represents to the
Agent that it has, independently and without reliance upon
the Agent or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations,
property, financial and other condition and creditworthiness
of each Loan Party and made its own decision to make its
Loans hereunder and enter into this Agreement. Each Lender
also represents that it will, independently and without
reliance upon the Agent or any other Lender, and based on
such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to
the business, operations, property, financial and other
condition and creditworthiness of each Loan Party. Except
for notices, reports and other documents expressly required
to be furnished to the Lenders by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning
the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party
which may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
7.7 Indemnification. The Lenders agree to
indemnify the Agent in its capacity as such (to the extent
not reimbursed by the Co-Borrowers and without limiting the
obligation of the Co-Borrowers to do so), ratably according
to their respective Line of Credit Percentages in effect on
the date on which indemnification is sought under this
subsection, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind
whatsoever which may at any time (including, without
limitation, at any time following the payment of the Notes)
be imposed on, incurred by or asserted against the Agent with
respect to or in any way arising out of the execution,
delivery, enforcement, performance or administration of this
Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action
taken or omitted by the Agent under or in connection with any
of the foregoing; provided that no Lender shall be liable for
the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the Agent's
gross negligence or willful misconduct. The agreements in
this subsection shall survive the payment of the Notes and
all other amounts payable hereunder.
7.8 Agent in Its Individual Capacity. The Agent
and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Co-
Borrowers as though the Agent were not the Agent hereunder
and under the other Loan Documents. With respect to its
Loans made or renewed by it and any Note issued to it, the
Agent shall have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not the Agent, and the
terms "Lender" and "Lenders" shall include the Agent in its
individual capacity.
7.9 Successor Agent. The Agent may resign as
Agent upon 10 days' notice to the Lenders. If the Agent
shall resign as Agent under this Agreement and the other Loan
Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders, whereupon such
successor agent shall succeed to the rights, powers and
duties of the Agent, and the term "Agent" shall mean such
successor agent effective upon such appointment and approval,
and the former Agent's rights, powers and duties as Agent
shall be terminated, without any other or further act or deed
on the part of such former Agent or any of the parties to
this Agreement or any holders of the Notes. After any
retiring Agent's resignation as Agent, the provisions of this
subsection shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this
Agreement and the other Loan Documents.
SECTION 8. MISCELLANEOUS
8.1 Amendments and Waivers. Neither this
Agreement, any Note, any other Loan Document, nor any terms
hereof or thereof may be amended, supplemented or modified
except in accordance with the provisions of this subsection.
The Required Lenders may, or, with the written consent of the
Required Lenders, the Agent may, from time to time, (a) enter
into with the Co-Borrowers written amendments, supplements or
modifications hereto and the other Loan Documents for the
purpose of adding any provisions to this Agreement or the
other Loan Documents or changing in any manner the rights of
the Lenders or of the Co-Borrowers hereunder or thereunder or
(b) waive, on such terms and conditions as the Required
Lenders or the Agent, as the case may be, may specify in such
instrument, any of the requirements of this Agreement or the
other Loan Documents; provided, however, that no such waiver
and no such amendment, supplement or modification shall (i)
reduce the amount or extend the scheduled date of maturity of
any Note or of any installment thereof, or reduce the stated
rate of any interest or fee payable hereunder or extend the
scheduled date of any payment thereof or increase the amount
or extend the expiration date of any Lender's Line of Credit
Amount, in each case without the consent of each Lender
affected thereby, or (ii) amend, modify or waive any
provision of this subsection or Section 6 or waive any
failure of the Co-Borrowers to make any payment of interest
or principal when due or reduce the percentage specified in
the definition of Required Lenders, or consent to the
assignment or transfer by any Co-Borrower of any of its
rights and obligations under this Agreement and the other
Loan Documents, in each case without the written consent of
all the Lenders, or (iii) amend, modify or waive any
provision of Section 7 without the written consent of the
then Agent. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the
Lenders and shall be binding upon each Co-Borrower, the
Lenders, the Agent and all future holders of the Notes.
8.2 Notices. All notices, requests and demands to
or upon the respective parties hereto to be effective shall
be in writing (including by telecopy), and, unless otherwise
expressly provided herein, shall be deemed to have been duly
given or made when delivered by hand, or 2 days after being
deposited in the mail, postage prepaid, or, in the case of
telecopy notice, when received, addressed as follows in the
case of the Co-Borrowers and the Agent, and as set forth in
Schedule I in the case of the other parties hereto, or to
such other address as may be hereafter notified by the
respective parties hereto and any future holders of the
Notes:
The Co-Borrowers: c/o Price Communications
Corporation
45 Rockefeller Plaza
New York, New York 10020
Attention: Robert Price,
President
Telecopy: (212) 397-3755
The Agent: Bank of Montreal
430 Park Avenue
New York, New York 10022
Attention: Gretchen Shugart
John Decoufle
Telecopy: (212) 605-1618
provided that any notice, request or demand to or upon the
Agent or the Lenders pursuant to subsection 2.3, 2.5, 2.6,
2.7 or 2.12 shall not be effective until received.
8.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Agent
or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
8.4 Survival of Representations and Warranties.
All representations and warranties made hereunder and in any
document, certificate or statement delivered pursuant hereto
or in connection herewith shall survive the execution and
delivery of this Agreement and the Notes.
8.5 Payment of Expenses and Taxes. Each Co-
Borrower jointly and severally agrees (a) to pay or reimburse
the Agent for all its reasonable out-of-pocket costs and
expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement
or modification to, this Agreement and the Notes and the
other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees
and disbursements of counsel to the Agent, (b) to pay or
reimburse each Lender and the Agent for all its reasonable
costs and expenses incurred in connection with the
enforcement or preservation of any rights under this
Agreement, the Notes, the other Loan Documents and any such
other documents, including, without limitation, the fees and
disbursements of counsel to the Agent and to the several
Lenders, and (c) to pay, indemnify, and hold each Lender and
the Agent harmless from, any and all recording and filing
fees and any and all liabilities with respect to, or
resulting from any delay by the Co-Borrowers in paying,
stamp, excise and other taxes, if any, which may be payable
or determined to be payable in connection with the execution
and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under
or in respect of, this Agreement, the Notes, the other Loan
Documents and any such other documents, and (d) to pay,
indemnify, and hold each Lender and the Agent harmless from
and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever
with respect to or in any way arising out of the execution,
delivery, enforcement, performance or administration of this
Agreement, the Notes the other Loan Documents and any such
other documents and the transactions contemplated hereby or
thereby (all the foregoing in this clause (d), collectively,
the "indemnified liabilities"); provided, that no Co-Borrower
shall have any obligation under this subsection 8.5 to the
Agent or any Lender with respect to costs, expenses, fees,
liabilities or other indemnified liabilities arising solely
from the gross negligence or willful misconduct of the party
to be indemnified. The agreements in this subsection shall
survive repayment of the Notes and all other amounts payable
hereunder.
8.6 Successors and Assigns; Participations;
Purchasing Lenders. (a) This Agreement shall be binding
upon and inure to the benefit of the Co-Borrowers, the
Lenders, the Agent, all future holders of the Notes and their
respective successors and assigns, except that no Co-Borrower
may assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of each
Lender.
(b) Any Lender may, in the ordinary course of its
commercial lending business and in accordance with applicable
law, at any time sell to one or more banks or other financial
or lending institution ("Participants") participating
interests in any Loan owing to such Lender, any Note held by
such Lender, any Line of Credit Amount of such Lender or any
other interest of such Lender hereunder and under the other
Loan Documents. In the event of any such sale by a Lender of
a participating interest to a Participant, such Lender's
obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender
shall remain the holder of any such Note for all purposes
under this Agreement and the other Loan Documents, and the
Co-Borrowers and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other
Loan Documents. Each Co-Borrower agrees that if amounts
outstanding under this Agreement and the Notes are due or
unpaid, or shall have been declared or shall have become due
and payable, each Participant shall be deemed to have the
right of setoff in respect of its participating interest in
amounts owing under this Agreement and any Note to the same
extent as if the amount of its participating interest were
owing directly to it as a Lender under this Agreement or any
Note, provided that, in purchasing such participating
interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in
subsection 8.7 as fully as if it were a Lender hereunder.
The Co-Borrower also agrees that each Participant shall be
entitled to the benefits of subsections 2.14, 2.15 and 2.16
with respect to its participation in the Line of Credit
Amounts and the Loans outstanding from time to time;
provided, that no Participant shall be entitled to receive
any greater amount pursuant to such subsections than the
transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by
such transferor Lender to such Participant had no such
transfer occurred. Participants shall not be granted any
voting rights or veto power over any action by the
participating Lender, except that such Lender may agree not
to (i) extend the maturity of its Note, (ii) reduce the
amount of any payment in respect thereof or (iii) reduce the
rate of any interest or fee.
(c) Any Lender may, in the ordinary course of its
commercial lending business and in accordance with applicable
law, at any time and from time to time assign to any Lender
or any Affiliate thereof or, with the consent of the Agent
(which shall not be unreasonably withheld), to an additional
bank or financial or lending institution (an "Assignee") all
or any part of its rights and obligations under this
Agreement and the Notes pursuant to an Assignment and
Acceptance, executed by such Assignee, such assigning Lender
(and, in the case of an Assignee that is not then a Lender or
an Affiliate thereof, by the Agent) and delivered to the
Agent for its acceptance and recording in the Register. Upon
such execution, delivery, acceptance and recording, from and
after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall
be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of
a Lender hereunder with Line of Credit Amounts as set forth
therein, and (y) the assigning Lender thereunder shall, to
the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and
obligations under this Agreement, such assigning Lender shall
cease to be a party hereto).
(d) The Agent shall maintain at its address
referred to in subsection 8.2 a copy of each Assignment and
Acceptance delivered to it and a register (the "Register")
for the recordation of the names and addresses of the Lenders
and the Line of Credit Amounts of, and principal amount of
the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence
of manifest error, and the Co-Borrowers, the Agent and the
Lenders may treat each Person whose name is recorded in the
Register as the owner of the Loan recorded therein for all
purposes of this Agreement. The Register shall be available
for inspection by the Co-Borrowers or any Lender at any
reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an Assignee
(and, in the case of an Assignee that is not then a Lender or
an affiliate thereof, by the Agents) the Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) on
the effective date determined pursuant thereto record the
information contained therein in the Register and give notice
of such acceptance and recordation to the Lenders and the Co-
Borrowers. On or prior to such effective date, the Co-
Borrowers, at their own expense, shall execute and deliver to
the Agent (in exchange for the Notes of the assigning Lender)
a new Note to the order of such Assignee in an amount equal
to the Line of Credit Amount assumed by such Purchasing
Lender pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained a Line of Credit Amount
hereunder, a Note to the order of the assigning Lender in an
amount equal to the Line of Credit Amount retained by such
Lender hereunder. Such new Notes shall be dated the Closing
Date and shall otherwise be in the form of the Note replaced
thereby.
(f) Subject to the provisions of subsection 8.16,
the Co-Borrowers authorize each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any
prospective Transferee any and all financial information in
such Lender's possession concerning the Co-Borrowers and
their Affiliates which has been delivered to such Lender by
or on behalf of the Co-Borrowers pursuant to this Agreement
or which has been delivered to such Lender by or on behalf of
the Co-Borrowers in connection with such Lender's credit
evaluation of the Co-Borrowers and their Affiliates prior to
becoming a party to this Agreement.
(g) Nothing herein shall prohibit any Lender from
pledging or assigning any Note to any Federal Reserve Bank in
accordance with applicable law.
8.7 Adjustments. If any Lender (a "benefitted
Lender") shall at any time receive any payment of all or part
of its Loans, or interest thereon, or receive any collateral
in respect thereof (whether voluntarily or involuntarily, by
set-off, pursuant to any bankruptcy or insolvency proceeding,
or otherwise), in a greater proportion than any such payment
to or collateral received by any other Lender, if any, in
respect of such other Lender's Loans, or interest thereon,
such benefitted Lender shall purchase for cash from the other
Lenders a participating interest in such portion of each such
other Lender's Loan, or shall provide such other Lenders with
the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause such benefitted Lender to
share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided, however,
that if all or any portion of such excess payment or benefits
is thereafter recovered from such benefitted Lender, such
purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but
without interest.
8.8 Counterparts. This Agreement may be executed
by one or more of the parties to this Agreement on any number
of separate counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by
all the parties shall be lodged with the Co-Borrowers and the
Agent.
8.9 Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating
the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other
jurisdiction.
8.10 Integration. This Agreement and the other
Loan Documents represent the agreement of each Co-Borrower,
the Agent and the Lenders with respect to the subject matter
hereof, and there are no promises, undertakings,
representations or warranties by the Agent or any Lender
relative to subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.
8.11 GOVERNING LAW. THIS AGREEMENT AND THE NOTES
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
8.12 Submission To Jurisdiction; Waivers. Each
Co-Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any
legal action or proceeding relating to this Agreement
and the other Loan Documents to which it is a party, or
for recognition and enforcement of any judgement in
respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern
District of New York, and appellate courts from any
thereof;
(b) consents that any such action or proceeding
may be brought in such courts and waives any objection
that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;
(c) agrees that service of process in any such
action or proceeding may be effected by mailing a copy
thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to
the Co-Borrower at its address set forth in subsection
8.2 or at such other address of which the Agent shall
have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the
right to effect service of process in any other manner
permitted by law or shall limit the right to sue in any
other jurisdiction; and
(e) waives, to the maximum extent not prohibited
by law, any right it may have to claim or recover in any
legal action or proceeding referred to in this
subsection any special, exemplary, punitive or
consequential damages.
8.13 Acknowledgements. Each Co-Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the
negotiation, execution and delivery of this Agreement
and the Notes and the other Loan Documents;
(b) neither the Agent nor any Lender has any
fiduciary relationship with or duty to such Co-Borrower
arising out of or in connection with this Agreement or
any of the other Loan Documents, and the relationship
between Agent and Lenders, on one hand, and such Co-
Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture exists among the Lenders or
among such Co-Borrower and the Lenders.
8.14 WAIVERS OF JURY TRIAL. EACH CO-BORROWER, THE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR THE NOTES OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
8.15 Joint and Several Liability. (a) Subject to
paragraph (b) of this subsection, each Co-Borrower hereby
agrees that the obligations of the Co-Borrowers hereunder and
under the other Loan Documents shall be joint and several in
all circumstances, notwithstanding anything herein or in such
other Loan Documents to the contrary. Without limiting the
generality of the foregoing, each Co-Borrower agrees that the
obligations of the Co-Borrowers hereunder and under the other
Loan Documents shall be enforceable against such Co-Borrower
even if this Agreement or any other Loan Document may be
unenforceable against any other Co-Borrower for any reason.
(b) Anything herein or in any Loan Document to the
contrary notwithstanding, the maximum liability of each Co-
Borrower for the obligations of the other Co-Borrowers shall
in no event exceed the amount on which such former Co-
Borrower can become liable under applicable federal and state
laws relating to the insolvency of debtors.
(c) Notwithstanding anything in this Agreement or
the other Loan Documents, each Co-Borrower further agrees
that any notice or action hereunder or under the other Loan
Documents which is required to be given to or by, or taken
by, one or more of the Co-Borrowers may be given to or by, or
taken by, any Co-Borrower alone, with or without the
knowledge or agreement of the other Co-Borrowers, and, if
such notice or action is so given or taken, all of the Co-
Borrowers shall be bound thereby as if such notice or action
was given to or by, or taken by, as the case may be, all of
the Co-Borrowers.
8.16 Confidentiality. Each Lender agrees to keep
confidential any non-public written or oral information (a)
provided to it by or on behalf of any Co-Borrower pursuant to
or in connection with this Agreement or (b) obtained by such
Lender based on a review of the books and records of any Co-
Borrower; provided that nothing herein shall prevent any
Lender from disclosing any such information (i) to the Agent
or any other Lender, (ii) to any Transferee or prospective
Transferree which agrees to comply with the provisions of
this subsection, provided that the Co-Borrowers shall be
promptly notified of any such disclosure to a Transferee or
prospective Transferee, (iii) to its employees, directors,
agents, attorneys, accountants and other professional
advisors, (iv) upon the request or demand of any Governmental
Authority having jurisdiction over such Lender, (v) in
response to any order of any court or other Governmental
Authority or as may otherwise be required pursuant to any
Requirement of Law, (vi) which has been publicly disclosed
other than in breach of this Agreement, or (vii) in
connection with the exercise of any remedy hereunder.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and delivered as of the
day and year first above written.
ATLANTIC BROADCASTING CORPORATION,
as a Co-Borrower
By:
Title:
SOUTHEAST TEXAS BROADCASTING
CORPORATION, as a Co-Borrower
By:
Title:
TEXOMA BROADCASTING CORPORATION,
as a Co-Borrower
By:
Title:
TRI-STATE BROADCASTING CORPORATION,
as a Co-Borrower
By:
Title:
BANK OF MONTREAL, as Agent
By:
Title:
BANK OF MONTREAL, CHICAGO BRANCH,
as a Lender
By:
Title:<PAGE>
SCHEDULE 1.1 TO
CREDIT AGREEMENT
ADDRESSES FOR NOTICES; LINE OF CREDIT AMOUNTS
BANK OF MONTREAL, CHICAGO BRANCH
Address for Notices:
115 South LaSalle Street
Chicago, Illinois 60603
Attention: Loan Accounting
with a copy to:
Bank of Montreal
430 Park Avenue
New York, New York 10022
Attention: Gretchen Shugart
John Decoufle
Telecopy: (212) 605-1618
Line of Credit Amount: $10,000,000
Line of Credit Percentage: 100%
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . 10
SECTION 2. AMOUNT AND TERMS OF . . . . . . . . . . . . . 11
2.1 Line of Credit. . . . . . . . . . . . . . . . . 11
2.2 Notes . . . . . . . . . . . . . . . . . . . . . 11
2.3 Procedure for Borrowing . . . . . . . . . . . . 11
2.4 Fees. . . . . . . . . . . . . . . . . . . . . . 12
2.5 Termination or Reduction of Line of Credit
Amounts. . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.6 Optional and Mandatory Prepayments. . . . . . . 13
2.7 Conversion and Continuation Options . . . . . . 13
2.8 Minimum Amounts of Tranches . . . . . . . . . . 14
2.9 Interest Rates and Payment Dates. . . . . . . . 14
2.10 Computation of Interest and Fees. . . . . . . . 15
2.11 Inability to Determine Interest Rate. . . . . . 15
2.12 Pro Rata Treatment and Payments . . . . . . . . 16
2.13 Illegality. . . . . . . . . . . . . . . . . . . 17
2.14 Requirements of Law . . . . . . . . . . . . . . 17
2.15 Taxes . . . . . . . . . . . . . . . . . . . . . 18
2.16 Indemnity . . . . . . . . . . . . . . . . . . . 19
SECTION 3. REPRESENTATIONS AND WARRANTIES . . . . . . . . 20
3.1 Financial Condition . . . . . . . . . . . . . . 20
3.2 No Change . . . . . . . . . . . . . . . . . . . 20
3.3 Corporate Existence; Compliance with Law. . . . 21
3.4 Corporate Power; Authorization; Enforceable
Obligations. . . . . . . . . . . . . . . . . . . . . . . . 21
3.5 No Legal Bar. . . . . . . . . . . . . . . . . . 21
3.6 No Material Litigation. . . . . . . . . . . . . 21
3.7 No Default. . . . . . . . . . . . . . . . . . . 22
3.8 Ownership of Property; Liens. . . . . . . . . . 22
3.9 Intellectual Property . . . . . . . . . . . . . 22
3.10 No Burdensome Restrictions. . . . . . . . . . . 22
3.11 Taxes . . . . . . . . . . . . . . . . . . . . . 22
3.12 Federal Regulations . . . . . . . . . . . . . . 22
3.13 ERISA . . . . . . . . . . . . . . . . . . . . . 23
3.14 Investment Company Act; Other Regulations . . . 23
3.15 Subsidiaries. . . . . . . . . . . . . . . . . . 23
3.16 Purpose of Loans. . . . . . . . . . . . . . . . 23
3.17 Environmental Matters . . . . . . . . . . . . . 23
3.18 Broadcast Licenses, etc.. . . . . . . . . . . . 24
3.19 Indebtedness. . . . . . . . . . . . . . . . . . 25
3.20 Stations. . . . . . . . . . . . . . . . . . . . 25
SECTION 4. CONDITIONS PRECEDENT . . . . . . . . . . . . . 25
4.1 Conditions to Effectiveness.. . . . . . . . . . 25
SECTION 5. COVENANTS. . . . . . . . . . . . . . . . . . . 27
5.1 Financial Statements. . . . . . . . . . . . . . 27
5.2 Certificates; Other Information . . . . . . . . 28
5.3 Notices . . . . . . . . . . . . . . . . . . . . 28
5.4 Financial Condition Covenants . . . . . . . . . 29
5.5 Limitation on Indebtedness. . . . . . . . . . . 29
5.6 Asset Sales . . . . . . . . . . . . . . . . . . 29
5.7 Limitation on Restricted Payments . . . . . . . 29
SECTION 7. THE AGENT. . . . . . . . . . . . . . . . . . . 30
7.1 Appointment . . . . . . . . . . . . . . . . . . 30
7.2 Delegation of Duties. . . . . . . . . . . . . . 31
7.3 Exculpatory Provisions. . . . . . . . . . . . . 31
7.4 Reliance by Agent . . . . . . . . . . . . . . . 31
7.5 Notice of Default . . . . . . . . . . . . . . . 31
7.6 Non-Reliance on Agent and Other Lenders . . . . 32
7.7 Indemnification . . . . . . . . . . . . . . . . 32
7.8 Agent in Its Individual Capacity. . . . . . . . 33
7.9 Successor Agent . . . . . . . . . . . . . . . . 33
SECTION 8. MISCELLANEOUS. . . . . . . . . . . . . . . . . 33
8.1 Amendments and Waivers. . . . . . . . . . . . . 33
8.2 Notices . . . . . . . . . . . . . . . . . . . . 34
8.3 No Waiver; Cumulative Remedies. . . . . . . . . 34
8.4 Survival of Representations and Warranties. . . 34
8.5 Payment of Expenses and Taxes . . . . . . . . . 35
8.6 Successors and Assigns; Participations; Purchasing
Lenders. . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.7 Adjustments . . . . . . . . . . . . . . . . . . 37
8.8 Counterparts. . . . . . . . . . . . . . . . . . 38
8.9 Severability. . . . . . . . . . . . . . . . . . 38
8.10 Integration . . . . . . . . . . . . . . . . . . 38
8.11 GOVERNING LAW . . . . . . . . . . . . . . . . . 38
8.12 Submission To Jurisdiction; Waivers . . . . . . 38
8.13 Acknowledgements. . . . . . . . . . . . . . . . 39
8.14 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . 39
8.15 Joint and Several Liability . . . . . . . . . . 39
8.16 Confidentiality . . . . . . . . . . . . . . . . 40
SCHEDULES
1.1 Line of Credit Amounts; Addresses for Notices
3.1 Certain Transactions
3.18 Broadcast Licenses, Etc.
EXHIBITS
A- Note
B- Security Agreement
C- Stock Pledge Agreement
D- Assignment and Acceptance
E- Opinions
F- Intercompany Subordination Agreement<PAGE>
EXECUTION COPY
LINE OF CREDIT AGREEMENT
among
Atlantic Broadcasting Corporation,
Southeast Texas Broadcasting Corporation,
Texoma Broadcasting Corporation,
Tri-State Broadcasting Corporation,
as Co-Borrowers,
The Several Lenders
from Time to Time Parties Hereto,
and
BANK OF MONTREAL,
as Agent
Dated as of December 21, 1993
<PAGE>
Exhibit C
STOCK PLEDGE AGREEMENT
STOCK PLEDGE AGREEMENT, dated as of December 21, 1993, made by
ATLAS BROADCASTING CORPORATION, a New York corporation, and
CONTINENTAL BROADCASTING CORPORATION, a Delaware corporation (each a
"Pledgor"; collectively, the "Pledgors"), in favor of Bank of
Montreal, as Agent (in such capacity, the "Agent") for the Lenders
parties to the Line of Credit Agreement, dated as of the date hereof
(as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement"), among the Co-Borrowers (as defined herein),
the Agent and such Lenders.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make available a line of credit to the Co-
Borrowers upon the terms and subject to the conditions set forth
therein;
WHEREAS, it is a condition precedent to the effectiveness of
the Credit Agreement that the Pledgors shall have executed and
delivered this Pledge Agreement to the Agent for the ratable benefit
of the Lenders;
WHEREAS, each Co-Borrower is wholly-owned direct subsidiary of
a Pledgor, and it is to the advantage of the Pledgors that the
Lenders make available a line of credit to the Co-Borrowers; and
WHEREAS, the Pledgors are the legal and beneficial owners of
the shares of Pledged Stock (as hereinafter defined).
NOW, THEREFORE, in consideration of the premises and to induce
the Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make available a line of credit thereunder,
each Pledgor hereby agrees with the Agent, for the ratable benefit of
the Lenders, as follows:
1. Defined Terms. (a) Unless otherwise defined herein,
terms defined in the Credit Agreement and used herein shall have the
meanings given to them in the Credit Agreement.
(b) The following terms shall have the following meanings:
"Agreement": this Pledge Agreement, as the same may be
amended, modified or otherwise supplemented from time to time.
"Code": the Uniform Commercial Code from time to time in
effect in the State of New York.
"Co-Borrowers": the collective reference to the "Co-
Borrowers" under the Credit Agreement and identified on Schedule 1
attached hereto as the issuers of the Pledged Stock; individually,
each a "Co-Borrower."
"Collateral": the Pledged Stock and all Proceeds.
"Collateral Account": any account established to hold money
Proceeds, maintained under the sole dominion and control of the
Agent, subject to withdrawal by the Agent for the account of the
Lenders only as provided in paragraph 9(a).
"Pledged Stock": the shares of capital stock listed on
Schedule 1 hereto, together with all stock certificates, options or
rights of any nature whatsoever that may be issued or granted by any
Co-Borrower to the Pledgors while this Agreement is in effect.
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New
York on the date hereof and, in any event, shall include, without
limitation, all dividends or other income from the Pledged Stock,
collections thereon or distributions with respect thereto.
"Secured Obligations": the collective reference to (a) the
Obligations and (b) all obligations and liabilities of any Pledgor
which may arise under or in connection with this Agreement whether on
account of reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Agent or to the Lenders that are
required to be paid by the Pledgors pursuant to the terms of this
Agreement.
"Securities Act": the Securities Act of 1933, as amended.
(c) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and section and paragraph references are to this Agreement
unless otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such
terms.
2. Guarantee. (a) Subject to the provisions of paragraphs
2(b) and 2(c) below, each Pledgor hereby unconditionally and
irrevocably guarantees to the Agent, for the ratable benefit of the
Lenders and their respective successors, indorsees, transferees and
assigns, the prompt and complete payment and performance by the Co-
Borrowers when due (whether at the stated maturity, by acceleration
or otherwise) of the Obligations.
(b) The Pledgors shall have no personal liability for payment
of the Obligations, and in any action or suit to collect the
Obligations the Agent and the Lenders shall not seek any in personam
judgment against the Pledgors or any judgment for a deficiency but
shall look solely to the security interests hereunder and the
collateral described herein for payment of the Obligations. Nothing
contained in this Section shall be construed to impair the validity
of the Obligations or this Agreement or affect or impair in any way
the right of the Agent and the Lenders to exercise their rights and
remedies under the Credit Agreement, the Notes and any other Loan
Documents in accordance with their terms.
(c) The maximum liability of each Pledgor hereunder shall in
no event exceed the amount which can be guaranteed by such Pledgor
under applicable federal and state laws relating to the insolvency of
debtors.
3. Pledge; Grant of Security Interest. The Pledgors hereby
deliver to the Agent, for the ratable benefit of the Lenders, all the
Pledged Stock and hereby grant to Agent, for the ratable benefit of
the Lenders, a first security interest in the Collateral, as
collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration
or otherwise) of the Secured Obligations.
4. Stock Powers. Concurrently with the delivery to the Agent
of each certificate representing one or more shares of Pledged Stock
to the Agent, the Pledgor thereof shall deliver an undated stock
power covering such certificate, duly executed in blank by such
Pledgor with, if the Agent so requests, signature guaranteed.
5. Representations and Warranties. Each Pledgor represents
and warrants that:
(a) Such Pledgor has the corporate power and authority and
the legal right to execute and deliver, to perform its obligations
under, and to grant the security interest in the Collateral pursuant
to, this Agreement and has taken all necessary corporate action to
authorize its execution, delivery and performance of, and grant of
the security interest in the Collateral pursuant to, this Agreement.
(b) This Agreement constitutes a legal, valid and binding
obligation of such Pledgor, enforceable in accordance with its terms,
and upon delivery to the Agent of the stock certificates evidencing
the Pledged Stock, the security interest created pursuant to this
Agreement will constitute a valid, perfected first priority security
interest in the Collateral, enforceable in accordance with its terms
against all creditors of such Pledgor and any Persons purporting to
purchase any Collateral from such Pledgor, except in each case as
enforceability may be affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or
at law) and an implied covenant of good faith and fair dealing.
(c) The execution, delivery and performance of this Agreement
will not violate any provision of any Requirement of Law or
Contractual Obligation of such Pledgor and will not result in the
creation or imposition of any Lien on any of the properties or
revenues of such Pledgor pursuant to any Requirement of Law or
Contractual Obligation of such Pledgor, except the security interest
created by this Agreement.
(d) No consent or authorization of, filing with, or other act
by or in respect of, any arbitrator or Governmental Authority or any
other Person (including, without limitation, any stockholder or
creditor of such Pledgor), is required in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement, other than consents, authorizations, filings and acts
which have been made, obtained or effected on or prior to the date
hereof.
(e) No litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority is pending or, to the
knowledge of such Pledgor, threatened by or against such Pledgor or
against any of its properties or revenues with respect to this
Agreement or any of the transactions contemplated hereby.
(f) The shares of Pledged Stock constitute all the issued and
outstanding shares of all classes of the capital stock of each Co-
Borrower.
(g) All the shares of the Pledged Stock have been duly and
validly issued and are fully paid and nonassessable.
(h) Such Pledgor is the record and beneficial owner of, and
has good and marketable title to, the Pledged Stock pledged by it,
free of any and all Liens or options in favor of, or claims of, any
other Person, except the security interest created by this Agreement.
6. Covenants. Each Pledgor covenants and agrees with the
Agent and the Lenders that, from and after the date of this Agreement
until this Agreement is terminated and the security interests created
hereby are released:
(a) If such Pledgor shall, as a result of its ownership of
the Pledged Stock, become entitled to receive or shall receive any
stock certificate (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with
any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or
rights, whether in addition to, in substitution of, as a conversion
of, or in exchange for any shares of the Pledged Stock, or otherwise
in respect thereof, such Pledgor shall accept the same as the agent
of the Agent and the Lenders, hold the same in trust for the Agent
and the Lenders and deliver the same forthwith to the Agent in the
exact form received, duly indorsed by such Pledgor to the Agent, if
required, together with an undated stock power covering such
certificate duly executed in blank by such Pledgor and with, if the
Agent so requests, signature guaranteed, to be held by the Agent,
subject to the terms hereof, as additional collateral security for
the Secured Obligations. Any sums paid upon or in respect of the
Pledged Stock upon the liquidation or dissolution of any Co-Borrower
shall be paid over to the Agent to be held by it hereunder as
additional collateral security for the Secured Obligations, and in
case any distribution of capital shall be made on or in respect of
the Pledged Stock or any property shall be distributed upon or with
respect to the Pledged Stock pursuant to the recapitalization or
reclassification of the capital of any Co-Borrower or pursuant to the
reorganization thereof, the property so distributed shall be
delivered to the Agent to be held by it hereunder as additional
collateral security for the Obligations. If any sums of money or
property so paid or distributed in respect of the Pledged Stock shall
be received by such Pledgor, such Pledgor shall, until such money or
property is paid or delivered to the Agent, hold such money or
property in trust for the Lenders, segregated from other funds of the
Pledgor, as additional collateral security for the Secured
Obligations.
(b) Without the prior written consent of the Agent, such
Pledgor will not (1) vote to enable, or take any other action to
permit, any Co-Borrower to issue any stock or other equity securities
of any nature or to issue any other securities convertible into or
granting the right to purchase or exchange for any stock or other
equity securities of any nature of any Co-Borrower, (2) sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with
respect to, the Collateral, (3) create, incur or permit to exist any
Lien or option in favor of, or any claim of any Person with respect
to, any of the Collateral, or any interest therein, except for the
security interest created by this Agreement or (4) enter into any
agreement or undertaking restricting the right or ability of any
Pledgor or the Agent to sell, assign or transfer any of the
Collateral.
(c) Such Pledgor shall maintain the security interest created
by this Agreement as a first, perfected security interest and shall
defend such security interest against claims and demands of all
Persons whomsoever. At any time and from time to time, upon the
written request of the Agent, and at the sole expense of such
Pledgor, such Pledgor will promptly and duly execute and deliver such
further instruments and documents and take such further actions as
the Agent may reasonably request for the purposes of obtaining or
preserving the full benefits of this Agreement and of the rights and
powers herein granted. If any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any
promissory note, other instrument or chattel paper, such note,
instrument or chattel paper shall be immediately delivered to the
Agent, duly endorsed in a manner satisfactory to the Agent, to be
held as Collateral pursuant to this Agreement.
(d) Such Pledgor shall pay, and save the Agent and the
Lenders harmless from, any and all liabilities with respect to, or
resulting from any delay by the Pledgors in paying, any and all
stamp, excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the Collateral or in
connection with any of the transactions contemplated by this
Agreement.
7. Voting Rights. Unless the Agent shall have given notice
to any Pledgor of the Agent's intent to exercise its corresponding
rights pursuant to Section 8 below, such Pledgor shall be permitted
to exercise all voting and corporate rights with respect to the
Pledged Stock; provided, however, that no vote shall be cast or
corporate right exercised or other action taken which, in the Agent's
judgment, would impair the Collateral or which would be inconsistent
with or result in any violation of any material provision of the
Credit Agreement, the Notes, this Agreement or any other Loan
Document.
8. Rights of the Lenders and the Agent. (a) All money
Proceeds received by the Agent hereunder shall be held by the Agent
for the benefit of the Lenders in a Collateral Account. All Proceeds
while held by the Agent in a Collateral Account (or by the Pledgors
in trust for the Agent and the Lenders) shall continue to be held as
collateral security for all the Secured Obligations and shall not
constitute payment thereof until applied as provided in paragraph
9(a).
(b) If the Agent shall give notice of its intent to exercise
such rights to any Pledgor, (1) the Agent shall have the right to
receive any and all cash dividends paid in respect of the Pledged
Stock and make application thereof to the Secured Obligations in such
order as the Agent may determine, and (2) all shares of the Pledged
Stock shall be registered in the name of the Agent or its nominee,
and the Agent or its nominee may thereafter exercise (A) all voting,
corporate and other rights pertaining to such shares of the Pledged
Stock at any meeting of shareholders of any Co-Borrower or otherwise
and (B) any and all rights of conversion, exchange, subscription and
any other rights, privileges or options pertaining to such shares of
the Pledged Stock as if it were the absolute owner thereof
(including, without limitation, the right to exchange at its
discretion any and all of the Pledged Stock upon the merger,
consolidation, reorganization, recapitalization or other, fundamental
change in the corporate structure of any Co-Borrower or upon the
exercise by such Pledgor or the Agent of any right, privilege or
option pertaining to such shares of the Pledged Stock, and in
connection therewith, the right to deposit and deliver any and all of
the Pledged Stock with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions
as the Agent may determine), all without liability except to account
for property actually received by it, but the Agent shall have no
duty to any Pledgor to exercise any such right, privilege or option
and shall not be responsible for any failure to do so or delay in so
doing.
9. Remedies. (a) At any time at the Agent's election, the
Agent may apply all or any part of Proceeds held in any Collateral
Account in payment of the Secured Obligations in such order as the
Agent may elect.
(b) At any time after the Obligations shall have become due
and payable (whether at maturity, upon demand or otherwise), the
Agent, on behalf of the Lenders, may exercise, in addition to all
other rights and remedies granted in this Agreement and in any other
instrument or agreement securing, evidencing or relating to the
Secured Obligations, all rights and remedies of a secured party under
the Code. Without limiting the generality of the foregoing, after
the Obligations shall have become due and payable (whether at
maturity, upon demand or otherwise), the Agent, without demand of
performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to
below) to or upon any Pledgor or any other Person (all and each of
which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, assign, give option or options to purchase
or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more
parcels at public or private sale or sales, in the over-the-counter
market, at any exchange, broker's board or office of the Agent or any
Lender or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk.
The Agent, the Lenders and PCC shall have the right upon any such
public sale or sales, and, to the extent permitted by law, upon any
such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in any
Pledgor, which right or equity is hereby waived or released. The
Agent shall apply any Proceeds from time to time held by it and the
net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all reasonable
costs and expenses of every kind incurred in respect thereof or
incidental to the care or safekeeping of any of the Collateral or in
any way relating to the Collateral or the rights of the Agent and the
Lenders hereunder, including, without limitation, reasonable
attorneys' fees and disbursements of counsel to the Agent, to the
payment in whole or in part of the Secured Obligations, in such order
as the Agent may elect, and only after such application and after the
payment by the Agent of any other amount required by any provision of
law, including, without limitation, Section 9-504(1)(c) of the Code,
need the Agent account for the surplus, if any, to any Pledgor. To
the extent permitted by applicable law, each Pledgor waives all
claims, damages and demands it may acquire against the Agent or any
Lender arising out of the exercise by them of any rights hereunder.
If any notice of a proposed sale or other disposition of Collateral
shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other
disposition. Each Pledgor waives and agrees not to assert any rights
or privileges which it may acquire under Section 9-112 of the Code.
10. Registration Rights; Private Sales. (a) If the Agent
shall determine to exercise its right to sell any or all of the
Pledged Stock pursuant to Section 9 hereof, and if in the opinion of
the Agent it is necessary or advisable to have the Pledged Stock, or
that portion thereof to be sold, registered under the provisions of
the Securities Act, the Pledgors will cause the Co-Borrower thereof
to (1) execute and deliver, and cause the directors and officers of
such Co-Borrower to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be,
in the opinion of the Agent, necessary or advisable to register the
Pledged Stock, or that portion thereof to be sold, under the
provisions of the Securities Act, (2) to use their best efforts to
cause the registration statement relating thereto to become effective
and to remain effective for a period of one year from the date of the
first public offering of the Pledged Stock, or that portion thereof
to be sold, and (3) to make all amendments thereto and/or to the
related prospectus which, in the opinion of the Agent, are necessary
or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and
Exchange Commission applicable thereto. The Pledgors agree to cause
the such Co-Borrower to comply with the provisions of the securities
or "Blue Sky" laws of any and all jurisdictions which the Agent shall
designate and to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited) which
will satisfy the provisions of Section 11(a) of the Securities Act.
(b) The Pledgors recognize that the Agent may be unable to
effect a public sale of any or all the Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable
state securities laws or otherwise, and may be compelled to resort to
one or more private sales thereof to a restricted group of purchasers
which will be obliged to agree, among other things, to acquire such
securities for their own account for investment and not with a view
to the distribution or resale thereof. The Pledgors acknowledge and
agree that any such private sale may result in prices and other terms
less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable
manner. The Agent shall be under no obligation to delay a sale of
any of the Pledged Stock for the period of time necessary to permit
the Co-Borrower thereof to register such securities for public sale
under the Securities Act, or under applicable state securities laws,
even if such Co-Borrower would agree to do so.
(c) The Pledgors further agree to use their best efforts to
do or cause to be done all such other acts as may be necessary to
make such sale or sales of all or any portion of the Pledged Stock
pursuant to this Section valid and binding and in compliance with any
and all other applicable Requirements of Law. The Pledgors further
agree that a breach of any of the covenants contained in this Section
will cause irreparable injury to the Agent and the Lenders, that the
Agent and the Lenders have no adequate remedy at law in respect of
such breach and, as a consequence, that each and every covenant
contained in this Section shall be specifically enforceable against
each Pledgor, and each Pledgor hereby waives and agrees not to assert
any defenses against an action for specific performance of such
covenants.
11. Irrevocable Authorization and Instruction to Co-Borrower
. The Pledgors hereby authorize and instruct each Co-Borrower to
comply with any reasonable instruction received by it from the Agent
in writing that is otherwise in accordance with the terms of this
Agreement, without any other or further instructions from the
Pledgors, and the Pledgors agree that each Co-Borrower shall be fully
protected in so complying.
12. No Subrogation. Notwithstanding anything to the contrary
in this Agreement, each Pledgor hereby irrevocably waives all rights
which may have risen in connection with such Pledgor to be subrogated
to any of the rights (whether contractual, under the Bankruptcy Code,
including Section 509 thereof, under common law or otherwise) of the
Agent or the Lenders against the Co-Borrowers or against any
collateral security or guarantee or right of offset held by the Agent
or the Lenders for the payment of the Obligations. Each Pledgor
hereby further irrevocably waives all contractual, common law,
statutory or other rights of reimbursement, contribution, exoneration
or indemnity (or any similar right) from or against any Co-Borrower
or any other Person which may have arisen in connection with this
Agreement. So long as the Obligations remain outstanding, if any
amount shall be paid or on behalf of any Co-Borrower to any Pledgor
on account of any of the rights waived in this paragraph, such amount
shall be held by such Pledgor in trust, segregated from other funds
of such Pledgor, and shall, forthwith upon receipt by such Pledgor,
be turned over to the Agent for the ratable benefit of the Lenders in
the exact form received by such Pledgor (duly indorsed such Pledgor
to the Agent, if required), to be applied against the Secured
Obligations, whether matured or unmatured, in such order as the Agent
may determine. The provisions of this paragraph shall survive the
term of this Agreement and the payment in full of the Obligations and
the termination of the line of credit thereunder.
13. Amendments, etc. with respect to the Obligations; Waiver
of Rights. (a) Subject to the provisions of subsection 21 hereof
concerning waivers, amendments, supplementations and other
modifications of this Agreement, each Pledgor shall remain obligated
hereunder, and the Collateral shall remain subject to the security
interests granted hereby, notwithstanding that, without any
reservation of rights against any Pledgor, and without notice to or
further assent by any Pledgor, any demand for payment of any of the
Obligations made by the Agent or any Lender may be rescinded by the
Agent or such Lender, and any of the Obligations continued, and the
Obligations, or the liability of any Co-Borrower or any other Person
upon or for any part thereof, or any collateral security or guarantee
therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered, or released by the
Agent or any Lender, and the Credit Agreement, the Notes, the other
Loan Documents and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or
terminated, in whole or part, as the Lenders (or the Required
Lenders, as the case may be) may deem advisable from time to time,
and any guarantee, right of offset or other collateral security at
any time held by the Agent or any Lender for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released.
Neither the Agent nor any Lender shall have any obligation to
protect, secure, perfect or insure any other Lien at any time held by
it as security for the Obligations or any property subject thereto.
Each Pledgor waives any and all notice of the creation, renewal,
extension or accrual of any of the Obligations and notice of or proof
of reliance by the Agent or any Lender upon this Agreement; the
Obligations, and any of them, shall be deemed conclusively to have
been created, contracted or incurred in reliance upon this Agreement;
and all dealings between the Co-Borrowers and the Pledgors, on the
one hand, and the Agent and the Lenders, on the other, likewise shall
be conclusively presumed to have been had or consummated in reliance
upon this Agreement. Each Pledgor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or
upon any Co-Borrower or any Pledgor with respect to the Obligations.
When pursuing its rights and remedies hereunder against any Pledgor,
the Agent and any Lender may, but shall be under no obligation to,
pursue such rights and remedies as it may have against any Co-
Borrower or any other Person or against any collateral security or
guarantee for the Obligations or any right of offset with respect
thereto, and any failure by the Agent or any Lender to pursue such
other rights or remedies or to collect any payments from any Co-
Borrower or any such other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of
offset, or any release of any Co-Borrower or any such other Person or
of any such collateral security, guarantee or right of offset, shall
not relieve such Pledgor of any liability hereunder, and shall not
impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Agent or any Lender against such
Pledgor or the Collateral.
(b) Anything herein to the contrary notwithstanding, the
maximum amount which the Agent and the Lenders are permitted to
realize against any Pledgor hereunder shall in no event exceed the
amount which can be guaranteed by such Pledgor under applicable
federal and state laws relating to the insolvency of debtors.
14. Agent's Appointment as Attorney-in-Fact. (a) Each
Pledgor hereby irrevocably constitutes and appoints the Agent and any
officer or agent of the Agent, with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of such Pledgor and in the name of
such Pledgor or in the Agent's own name, from time to time in the
Agent's discretion, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute any
and all documents and instruments which may be necessary or desirable
to accomplish the purposes of this Agreement, including, without
limitation, any financing statements, endorsements, assignments or
other instruments of transfer.
(b) Each Pledgor hereby ratifies all that said attorneys
shall lawfully do or cause to be done pursuant to the power of
attorney granted in paragraph 14(a). All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and
are irrevocable until this Agreement is terminated and the security
interests created hereby are released.
15. Duty of Agent. The Agent's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in
its possession, under Section 9-207 of the Code or otherwise, shall
be to deal with it in the same manner as the Agent deals with similar
securities and property for its own account, except that the Agent
shall have no obligation to invest funds held in any Collateral
Account and may hold the same as demand deposits. Neither the Agent,
any Lender nor any of their respective directors, officers, employees
or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Pledgor or any other Person or to take any
other action whatsoever with regard to the Collateral or any part
thereof.
16. Execution of Financing Statements. Pursuant to Section
9-402 of the Code, each Pledgor authorizes the Agent to file
financing statements with respect to the Collateral without the
signature of such Pledgor in such form and in such filing offices as
the Agent reasonably determines appropriate to perfect the security
interests of the Agent under this Agreement. A carbon, photographic
or other reproduction of this Agreement shall be sufficient as a
financing statement for filing in any jurisdiction.
17. Authority of Agent. The Pledgors acknowledge that the
rights and responsibilities of the Agent under this Agreement with
respect to any action taken by the Agent or the exercise or non-
exercise by the Agent of any option, voting right, request, judgment
or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Agent and the Lenders, be
governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as
between the Agent and the Pledgors, the Agent shall be conclusively
presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and neither any Pledgor
nor any Co-Borrower shall be under any obligation, or entitlement,
to make any inquiry respecting such authority.
18. Notices. All notices, requests and demands to or upon
the Agent or any Pledgor to be effective shall be in writing
(including by telecopy) and shall be deemed to have been duly given
or made (1) when delivered by hand or (2) 2 days after being
deposited in the mail, postage prepaid, or (3) if by telecopy, when
received, addressed as follows:
(a) if to the Agent, at its address or transmission number
for notices provided in subsection 8.2 of the Credit Agreement; and
(b) if to any Pledgor, at the address or transmission number
for notices set forth on the signature page hereto.
The Agent and the Pledgors may change their addresses and
transmission numbers for notices by notice in the manner provided in
this Section.
19. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
20. Integration. This Agreement represents the agreement of
the Pledgors with respect to the subject matter hereof and there are
no promises or representations by the Agent or any Lender relative to
the subject matter hereof not reflected herein.
21. Amendments in Writing; No Waiver; Cumulative Remedies.
(a) None of the terms or provisions of this Agreement may be waived,
amended, supplemented or otherwise modified except by a written
instrument executed by each Pledgor and the Agent, provided that any
right of the Agent or the Lenders under this Agreement may be waived
by the Agent and the Lenders in a letter or agreement executed by the
Agent or by facsimile transmission from the Agent.
(b) Neither the Agent nor any Lender shall by any act (except
by a written instrument pursuant to paragraph 21(a) hereof), delay,
indulgence, omission or otherwise be deemed to have waived any right
or remedy hereunder or to have acquiesced in any Default or in any
breach of any of the terms and conditions hereof. No failure to
exercise, nor any delay in exercising, on the part of the Agent or
any Lender, any right, power or privilege hereunder shall operate as
a waiver thereof. No single or partial exercise of any right, power
or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A
waiver by the Agent or any Lender of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy
which the Agent or such Lender would otherwise have on any
future occasion.
(c) The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.
22 Federal Communications Act. It is the intention of the
parties to comply with applicable provisions of the Communications
Act of 1934, as amended (the "Act"), and applicable provisions of the
Rules and Regulations of the FCC as may be in effect from time to
time (the "FCC Regulations"). Accordingly, it is agreed that,
notwithstanding any provision to the contrary in this Agreement, no
provision hereof shall be deemed to authorize or require any act or
failure to act which would violate the Act or the FCC Regulations,
including without limitation any restriction on alien ownership or
control of a broadcast license or licensee and any restriction on the
transfer of control or assignment of a broadcast license or licensee
without prior FCC approval. Notwithstanding anything in this
Agreement to the contrary, no sale of the Collateral or transfer
thereof to the Agent or to the name of the Agent's nominee shall be
effective without such consent, approval, or authorization of the FCC
as may be required by the Act and the FCC Regulations. Neither the
Agent nor any other Person other than the Co-Borrowers and the
Pledgors shall, so long as and to the extent that such actions are
inconsistent with the Act or the FCC Regulations: act as attorney-
in-fact or with a power of attorney for any Pledgor or any Co-
Borrower; vote, interfere with the voting of, control, sell or
otherwise exercise dominion over, the stock of any of the Pledgors or
Co-Borrowers; or operate or exercise any control over the Stations
licensed to the Co-Borrowers, in each case without first having
received any prior written consent, approval or authorization of the
FCC as may be required by the Act and the FCC Regulations. In the
event any such consent, approval, or authorization shall be required,
the Co-Borrowers and the Pledgors will execute, and use their best
efforts to cause the execution of, all such applications and other
instruments as may be necessary to obtain such consent, approval or
authorization.
23. Section Headings. The section headings used in this
Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the
interpretation hereof.
24. Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of each Pledgor and shall inure to
the benefit of the Agent and the Lenders and their successors and
assigns.
25. Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the law of the State of
New York.
<PAGE>
IN WITNESS WHEREOF, each of the undersigned has caused this
Agreement to be duly executed and delivered as of the date first
above written.
ATLAS BROADCASTING CORPORATION
By:
Title:
CONTINENTAL BROADCASTING
CORPORATION
By:
Title:
Address for Notices for each Pledgor:
c/o Price Communications
Corporation
45 Rockefeller Plaza
New York, New York 10020
Attention: Robert Price, President
Telecopy: (212) 397-3755
<PAGE>
ACKNOWLEDGEMENT AND CONSENT
Each of the undersigned hereby acknowledges receipt of a copy
of the Stock Pledge Agreement dated as of December 21, 1993, made by
Atlas Broadcasting Corporation and Continental Broadcasting
Corporation for the benefit of Bank of Montreal, Chicago Branch, as
Agent (the "Pledge Agreement"). Each of the undersigned agrees for
the benefit of the Agent and the Lenders as follows:
1. The undersigned will be bound by the terms of the Pledge
Agreement and will comply with such terms insofar as such terms are
applicable to the undersigned.
2. The undersigned will notify the Agent promptly in writing
of the occurrence of any of the events described in paragraph 6(a) of
the Pledge Agreement.
3. The terms of paragraph 10(c) of the Pledge Agreement shall
apply to it, mutatis mutandis, with respect to all actions that may
be required of it under or pursuant to or arising out of Section 10
of the Pledge Agreement.
ATLANTIC BROADCASTING CORPORATION
By:
Title:
SOUTHEAST TEXAS BROADCASTING
CORPORATION
By:
Title:
TEXOMA BROADCASTING CORPORATION
By:
Title:
TRI-STATE BROADCASTING CORPORATION
By:
Title:
Address for Notices:
c/o Price Communications
Corporation
45 Rockefeller Plaza
New York, New York 10020
Attention: Robert Price, President
Telecopy: (212) 397-3755
<PAGE>
SCHEDULE 1
TO PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
Pledgor<PAGE>
Issuer<PAGE>
Stock
Certificate
No.<PAGE>
No. of
Shares<PAGE>
Atlas Broadcasting
Corporation<PAGE>
Atlantic
Broadcasting
Corporation<PAGE>
Continental
Broadcasting
Corporation<PAGE>
Tri-State
Broadcasting
Corporation<PAGE>
Texoma
Broadcasting
Corporation<PAGE>
Southeast
Texas
Broadcasting
Corporation<PAGE>
<PAGE>
Exhibit F
INTERCOMPANY SUBORDINATION AGREEMENT
INTERCOMPANY SUBORDINATION AGREEMENT, dated as of December 21,
1993 (this "Agreement"), among CONTINENTAL BROADCASTING CORPORATION,
a Delaware corporation ("Continental"); ATLAS BROADCASTING
CORPORATION, a New York corporation ("Atlas"; together with
Continental and their successors and assigns, the "Subordinated
Creditors"); ATLANTIC BROADCASTING CORPORATION, a Delaware
corporation and a wholly-owned subsidiary of Atlas ("Atlantic");
SOUTHEAST TEXAS BROADCASTING CORPORATION, a Texas corporation
("Southeast"), TEXOMA BROADCASTING CORPORATION, a Texas corporation
("Texoma"), and TRI-STATE BROADCASTING CORPORATION, a Delaware
corporation ("Tri-State"), each a wholly-owned subsidiary of
Continental (collectively with Atlantic, the "Co-Borrowers"); and
BANK OF MONTREAL, as Agent (the "Agent").
W I T N E S S E T H
WHEREAS, the Co-Borrowers and the Agent are parties to the
Line of Credit Agreement, dated as of the date hereof, among the Co-
Borrowers, the Lenders named therein and the Agent (as the same may
from time to time be amended, modified or otherwise supplemented, and
any extension, renewal or refinancing thereof, the "Credit
Agreement"); and
WHEREAS, it is a condition precedent under the Credit
Agreement that the parties hereto execute this Agreement;
NOW, THEREFORE, for good and valuable consideration, the
parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Terms defined in the Credit Agreement shall have their
defined meanings when used herein unless otherwise defined herein,
and the following terms shall have the following meanings:
"Senior Creditors" shall mean the Agent and the Lenders
together with their successors, transferees and assigns.
"Senior Loans" shall mean collectively the Loans and any
extension, renewal, refunding or refinancing thereof.
"Senior Obligations" shall mean the Obligations.
"Subordinated Debt" shall mean all Indebtedness of any Co-
Borrower to either Subordinated Creditor, now existing or hereafter
incurred.
1.2 (a) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to
this Agreement as a whole and not to any particular provision of this
Agreement, and Section, subsection, Schedule and Exhibit references
are to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such
terms.
SECTION 2. SUBORDINATION
2.1 The Subordinated Creditors and the Co-Borrowers agree,
for themselves and their respective successors and assigns, that the
Subordinated Debt is expressly subordinate and junior in right of
payment (as defined in subsection 2.2) to all Senior Obligations.
2.2 "Subordinate and junior in right of payment" shall mean
that:
(i) No part of the Subordinated Debt shall have any claim to
the assets of any of the Co-Borrowers on a parity with or prior to
the claim of the Senior Obligations. If (a) at the time of or as a
result of giving effect to any payment on account of principal of,
premium (if any) or interest on Subordinated Debt there shall exist
any Default (including, without limitation, a Default under
subsection 5.4 of the Credit Agreement) or (b) any Senior Creditor
shall have demanded payment on, or any amount has become due and
remains unpaid with respect to, any Senior Debt, the Subordinated
Creditors will not take, demand or receive from the Co-Borrowers,
and the Co-Borrowers will not make, give or permit, directly or
indirectly, by set-off, redemption, purchase or in any other
manner, any payment, prepayment, security, guarantee or collateral
for the whole or any part of the Subordinated Debt, and the
Subordinated Creditors will not accelerate for any reason the
scheduled maturities, or otherwise demand payment, of any amount
owing from the Co-Borrowers to the Subordinated Creditors. If any
of the conditions or events described in clauses (a) or (b) shall
not have occurred and be continuing, or shall not occur or be
continuing as a result thereof, the Co-Borrowers may make, and the
Subordinated Creditors may receive, payments on account of
principal of, premium (if any) or interest on any Subordinated Debt
in accordance with the terms thereof.
(ii) (A) In the event of any distribution, division or
application, partial or complete, voluntary or involuntary, by
operation of law or otherwise, of all or any substantial part of
the property, assets or business of any Co-Borrower or the proceeds
thereof to any creditor or creditors of any Co-Borrower or (B) upon
any indebtedness of any Co-Borrower becoming due and payable by
reason of any liquidation, dissolution or other winding-up of any
Co-Borrower or its business or by reason of any sale, receivership,
insolvency, reorganization or bankruptcy proceedings, assignment
for the benefit of creditors, arrangement or any proceeding by or
against any Co-Borrower for any relief under any bankruptcy,
reorganization or insolvency law or laws, Federal or state, or any
law, Federal or state, relating to the relief of debtors,
readjustment or indebtedness, reorganization, composition, or
extension, or (C) in the event that any of the Subordinated Debt is
declared due and payable prior to its stated maturity or by demand
of either Subordinated Creditor (under circumstances when the
preceding clause (A) or (B) shall not be applicable), or (D) in the
event that any of the Senior Obligations have become, or have been
declared to be, due and payable (and have not been paid in
accordance with their terms), then and in any such event, any
payment or distribution of any kind or character, whether in cash,
property or securities which, but for the subordination provisions
contained herein, would otherwise be payable or deliverable to such
Subordinated Creditor upon or in respect of the Subordinated Debt,
shall instead be paid over or delivered to the Agent on behalf of
the Senior Creditors, and such Subordinated Creditor shall not
receive any such payment or distribution or any benefit therefrom
unless and until the Senior Obligations shall have been fully paid
in cash or cash equivalents and satisfied and the line of credit
under the Credit Agreement shall have expired or been terminated.
SECTION 3. PAYMENTS; SUBROGATION
3.1 The Subordinated Creditors and the Co-Borrowers
irrevocably authorize and empower (without imposing any obligation
on) the Senior Creditors or the Agent on behalf of the Senior
Creditors, under the circumstances set forth in clause (A) or (B) of
subsection 2.2(ii), to demand, sue for, collect and receive every
such payment or distribution referred to in such subsection and give
acquittance therefor, and file claims and proofs of claim in any
statutory or non-statutory proceeding, to vote the Subordinated Debt
in the sole discretion of the Senior Creditors or the Agent, as the
case may be, in connection with any resolution, arrangement, plan of
reorganization, compromise, settlement or extension and to take such
other action (including, without limitation, the right to participate
in any composition of creditors and the right to vote such
Subordinated Debt at creditors' meetings for the election of
trustees, acceptances of plans and otherwise) and take such other
proceedings, in their own names as Senior Creditors, or Agent, as the
case may be, or in the name of either Subordinated Creditor or
otherwise, as the Senior Creditors or the Agent, as the case may be,
may deem necessary or advisable for the enforcement of the provisions
of this Agreement. The Subordinated Creditors hereby agree, under
the circumstances set forth in clause (A) or (B) of subsection
2.2(ii), duly and promptly to take such action as may be requested at
any time and from time to time by the Senior Creditors or the Agent,
in order to enable the Senior Creditors or the Agent, as the case may
be, to enforce all claims upon or in respect of the Subordinated
Debt, and all such powers of attorney and the filing of appropriate
proofs of claim in respect of the Subordinated Debt and to collect
and receive any and all payments or distributions which may be
payable or deliverable any time upon or in respect of the
Subordinated Debt.
3.2 Should any payment or distribution or security, or the
proceeds of any thereof, be collected or received by either
Subordinated Creditor in respect of the Subordinated Debt, and such
collection or receipt is not expressly permitted hereunder, such
Subordinated Creditor will forthwith turn over the same to the Agent,
for the account of the Senior Creditors, in the form received (except
for the endorsement or the assignment of such Subordinated Creditor
when necessary) and, until so turned over, the same shall be held in
trust by such Subordinated Creditor as the property of the Senior
Creditors.
3.3 Notwithstanding anything to the contrary in this
Agreement, the Subordinated Creditors hereby irrevocably waive all
rights to be subrogated to any of the rights (whether contractual,
under the Bankruptcy Code, including Section 509 thereof, under
common law or otherwise) of the Agent or the Senior Creditors against
the Co-Borrowers or against any collateral security or guarantee or
right of offset held by the Agent or the Senior Creditors for the
payment of the Senior Obligations. The Subordinated Creditors hereby
further irrevocably waive all contractual, common law, statutory or
other rights of reimbursement, contribution, exoneration or indemnity
(or any similar right) from or against any Co-Borrower or any other
Person which may have arisen in connection with this Agreement.
3.4 If either Subordinated Creditor, in violation of the
provisions herein set forth, shall commence, prosecute or participate
in any suit, action, case or proceeding against the Co-Borrowers, the
Co-Borrowers may interpose as a defense or plea the provisions set
forth herein, and any Senior Creditor or the Agent, may intervene and
interpose such defense or plea in its own name or in the name of the
Co-Borrowers, and shall, in any event, be entitled to restrain the
enforcement of the payment provisions hereof in its own name or in
the name of the Co-Borrowers, as the case may be, in the same suit,
action, case or proceeding or in any independent suit, action, case
or proceeding.
3.5 Each Subordinated Creditor hereby authorizes and directs
each Co-Borrower on its behalf to take such further action as may be
reasonably necessary or appropriate to effectuate the subordination
as provided herein and appoints each Co-Borrower its attorney-in-fact
for any and all such purposes.
3.6 The obligations of the Subordinated Creditors under this
Agreement shall continue to be effective, or be reinstated, as the
case may be, if at any time any payment in respect of any Senior
Obligations, or any other payment to any Senior Creditor, is
rescinded or must otherwise be restored or returned by such Senior
Creditor upon the occurrence of any proceeding referred to in Section
2.2(ii)(B) hereof, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer
for, any Co-Borrower or any substantial part of its property, or
otherwise, all as though such payment had not been made.
SECTION 4. REPRESENTATIONS AND WARRANTIES
Each Subordinated Creditor represents and warrants to the
Senior Creditors that:
(a) such Subordinated Creditor has full power, authority and
legal right to execute, deliver and perform this Agreement, and the
execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of such
Subordinated Creditor, do not require any approval or consent
(other than approvals and consents which have been obtained) of any
trustee or holders of any indebtedness or obligations of such
Subordinated Creditor and will not violate any provision of law,
governmental regulation, order or decree or any provisions of any
indenture, mortgage, contract or other agreement to which such
Subordinated Creditor is party or by which it is bound;
(b) no consent, license, approval or authorization of, or
registration or declaration with, any governmental instrumentality,
domestic or foreign, is required in connection with the execution,
delivery and performance by such Subordinated Creditor of this
Agreement, other than consents, licenses, approvals,
authorizations, registrations and declarations which have been
obtained, made or effected on or prior to the date hereof;
(c) this Agreement constitutes a legal, valid and binding
obligation of such Subordinated Creditor enforceable in accordance
with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (whether enforcement
is sought by proceedings in equity or at law); and
(d) the amounts of Subordinated Debt outstanding on November
30, 1993 with respect to Atlantic, Southeast, Texoma and Tri-State,
rounded to the nearest thousand dollars, were $10,224,000,
$16,470,000, $17,265,000, and $22,185,000, respectively; there has
been no material change in any such amount during the period from
November 30, 1993 to the date of this Agreement.
SECTION 5. AMENDMENTS AND WAIVERS
5.1 Subject to the provisions of subsection 7.7 hereof
concerning waivers, amendments, supplementations and other
modifications of this Agreement, the Subordinated Creditors consent
that, without the necessity of any reservation of rights against the
Subordinated Creditors, and without notice to or further assent by
the Subordinated Creditors, (a) any demand for payment of any of the
Senior Obligations made by the Senior Creditors or the Agent, may be
rescinded in whole or in part by the Senior Creditors, or, with the
written consent of the Senior Creditors, the Agent, and any of the
Senior Obligations may be continued, and the Senior Obligations, or
the liability of the Co-Borrowers or any other party upon or for any
part thereof, or any collateral security or guaranty therefor or
right of offset with respect thereto, or any obligation or liability
of the Co-Borrowers or any other party under the Credit Agreement,
may, from time to time, in whole or in part, be renewed, extended,
modified, demanded for, compromised, waived, surrendered, or released
by the Senior Creditors or the Agent, and (b) the Credit Agreement,
the Notes, the other Loan Documents and any other document or
instrument evidencing or governing the terms of any other Senior
Obligations or any collateral security documents or guaranties or
documents in connection therewith may be amended, modified,
supplemented, extended or terminated, in whole or in part, as the
Senior Creditors or the Agent, may deem advisable from time to time,
and any collateral security at any time held by the Senior Creditors
for the payment of any of the Senior Obligations may be sold,
exchanged, waived, surrendered or released, in each case all without
notice to or further assent by the Subordinated Creditors, which will
remain bound under this Agreement, and all without impairing,
abridging, releasing or affecting the subordination provided for
herein, notwithstanding any such renewal, extension, modification,
demand, compromise, amendment, supplement, termination, sale,
exchange, waiver, surrender or release. The Subordinated Creditors
waive any and all notice of the creation, renewal, extension or
accrual of any of the Senior Obligations and notice of or proof of
reliance by the Senior Creditors upon this Agreement, and the Senior
Obligations, and any of them, shall conclusively be deemed to have
been created, contracted or incurred in reliance upon this Agreement,
and all dealings between the Co-Borrowers and the Senior Creditors
shall be deemed to have been consummated in reliance upon this
Agreement. The Subordinated Creditors acknowledge and agree that the
Senior Creditors have relied upon the subordination provided for
herein in entering into the Credit Agreement and in making the line
of credit available thereunder. The Subordinated Creditors waive
notice of or proof of reliance on this Agreement and protest, demand
for payment and notice of default.
SECTION 6. COVENANTS
6.1 The Subordinated Creditors will not create or incur in
favor of any transferee any security interest, lien, charge or other
encumbrance whatsoever upon any Subordinated Debt.
6.2 The Subordinated Creditors will not sell, assign or
otherwise transfer any or all of their right, title and interest in
and to the Subordinated Debt; provided that any Subordinated Creditor
may transfer its interest in and to any Subordinated Debt to any
Affiliate of such Subordinated Creditor which executes such documents
and takes such actions as the Agent shall request in order to ensure
that such Subordinated Debt and such Affiliate are subject to the
terms hereof.
6.3 The Subordinated Creditors will not, without the written
consent of the Required Lenders, amend, supplement or otherwise
modify any material agreement, instrument or other document
evidencing or governing any Subordinated Debt.
6.4 The Subordinated Creditors will not take, demand or
receive, and the Co-Borrowers will not make, any Restricted Payments
if, after giving effect thereto, there would exist any Default
(including, without limitation, a Default under subsection 5.4 of the
Credit Agreement). So long as any Subordinated Debt of a given Co-
Borrower is outstanding, the Subordinated Creditor holding such
Subordinated Debt will not take, demand or receive, and such Co-
Borrower shall not make any Restricted Payment, other than payments
on such Subordinated Debt permitted under subsection 2.2.
SECTION 7. MISCELLANEOUS
7.1 No failure to exercise, and no delay in exercising on the
part of the Senior Creditors from time to time of, any of the Senior
Obligations, or of any right, power or privilege under this Agreement
shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege under this Agreement
preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies provided in
this Agreement and in any agreement relating to any of the Senior
Obligations and all other agreements, instruments and documents
referred to in any of the foregoing are cumulative and shall not be
exclusive of any rights or remedies provided by law.
7.2 The Subordinated Creditors agree to execute and deliver
such further documents and to do such other acts and things as the
Senior Creditors or the Agent may reasonably request in order fully
to effect the purposes of this Agreement.
7.3 All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing
(including by telecopy) and, unless otherwise expressly provided
therein, shall be deemed to have been duly given or made when
delivered by hand, or 2 days after being deposited in the mail,
postage prepaid, or, in the case of telecopy notice, received,
addressed as set forth in subsection 8.2 of the Credit Agreement by
the parties signatory hereto or to such other address as may be
hereafter notified by the respective parties hereto and their
respective successors, transferees and assigns.
7.4 THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
AND SHALL BE BINDING UPON THE SUBORDINATED CREDITORS, THE CO-
BORROWERS AND THEIR RESPECTIVE SUCCESSORS, TRANSFEREES AND ASSIGNS
AND SHALL INURE TO THE BENEFIT OF THE SENIOR CREDITORS, AND ITS
SUCCESSORS, TRANSFEREES AND ASSIGNS.
7.5 The Senior Creditors or the Agent have not made to the
Subordinated Creditors and do not hereby or otherwise make to the
Subordinated Creditors any warranties, express or implied, nor do
they assume any liability to the Subordinated Creditors with respect
to: (a) obligations under any instruments or guarantee; (b) the
enforceability, validity, value or collectibility of the Senior
Obligations, any collateral therefor, or any guarantee or security
which may have been granted in connection with any of the Senior
Obligations; or (c) the Co-Borrowers' or any Affiliate's title or
right to deliver any collateral or security. Neither the Senior
Creditors nor the Agent shall be liable to the Subordinated Creditors
for any action or failure to act or any error of judgment,
negligence, or oversight whatsoever on the part of the Senior
Creditors or the Agent or their agents, officers, employees or
attorneys with respect to any transaction relating to the foregoing
agreements or security or guarantees therefor.
7.6 This Agreement may be executed by the parties hereto in
any number of separate counterparts all of which taken together shall
constitute one and the same instrument.
7.7 This Agreement is for the benefit of the Senior Creditors
and their respective successors and assigns as holders from time to
time of Senior Obligations. None of the terms or provisions of this
Agreement may be waived, amended, supplemented, or otherwise modified
except by a written instrument executed by each of the Subordinated
Creditors and the Agent, provided that any right of the Agent or the
Lenders under this Agreement may be waived by the Agent and the
Lenders in a letter or agreement executed by the Agent or by
facsimile transmission from the Agent. The Subordinated Debt may not
be amended, modified or supplemented without the prior written
consent of the Agent.
7.8 Neither the Subordinated Creditors nor any Co-Borrower
shall permit any Subordinated Debt to be evidenced by any promissory
note or other instrument unless such instrument specifically refers
to the terms of this Agreement.
t,B This Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York.<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and year
first above written.
CONTINENTAL BROADCASTING CORPORATION
By:
Title:
ATLAS BROADCASTING CORPORATION
By:
Title:
ATLANTIC BROADCASTING CORPORATION
By:
Title:
SOUTHEAST TEXAS BROADCASTING CORPORATION
By:
Title:
TEXOMA BROADCASTING CORPORATION
By:
Title:
TRI-STATE BROADCASTING CORPORATION
By:
Title:
BANK OF MONTREAL, as Agent
By:
Title:
Agreement, made this 19th day of November, 1993,
between Price Communications Corporation, a New York corporation
("PCC"), Apple Publishing Corporation, a Delaware corporation
("Apple") (PCC and Apple together, the "Buyers"), the persons and
entities listed on Exhibit A hereto (to the extent Huff
Management, as defined below, exercises discretion in the
management of all or a portion of their respective assets)
(collectively, the "Sellers"), and W.R. Huff Asset Management
Co., L.P., a Delaware limited partnership ("Huff Management").
1. Purchase and Sale
1.1. At the Closing (as defined in Section 2.2 hereof)
each of the Sellers hereby agrees to sell to the Buyers (and Huff
Management agrees to cause the Sellers to sell to the Buyers),
and the Buyers hereby agree to buy from the Sellers, the shares
of Common Stock of PCC, $.01 par value (the "Common Stock"), set
forth opposite the names of the respective Sellers on Exhibit A
hereto (and aggregating 2,249,082 shares of Common Stock;
collectively, the "Price Stock"), pursuant and subject to the
terms and conditions set forth in this Agreement.
2. Purchase Price; Closing
2.1. In aggregate consideration of the sale,
assignment, transfer, conveyance and delivery by the Sellers of
the Price Stock, the Buyers at the Closing will (i) pay and
deliver to the Sellers $8,434,057.50 in cash (the "Cash
Portion"), and (ii) will sell, assign, transfer, convey and
deliver 100 shares of common stock of Price Publishing
Corporation, a Delaware corporation ("PPC"), (the "Stock
Portion") (the Cash Portion and the Stock Portion together, the
"Purchase Price").
2.2. The consummation of the transactions contemplated
in Sections 1 and 2.1 hereof shall occur at a closing (the
"Closing") which shall take place promptly and as soon as
practicable after the execution hereof, but in any event no later
than November __, 1993, or shall occur on such later date as PCC
and Huff Management may mutually agree upon in writing, at a
convenient location mutually satisfactory to PCC and Huff
Management. If the Closing has not occurred by the end of
business on December 31, 1993, the Buyers may (if they are not
then in material breach of, and are then ready, willing and able
to tender performance of their obligations under, this Agreement)
or Huff Management may (if it and the Sellers are not then in
material breach of, and are then ready, willing and able to
tender performance of their obligations under, this Agreement)
terminate this Agreement in its entirety, in which event this
Agreement shall be of no further force or effect whatsoever,
without any further liability hereunder whatsoever to any party
hereto including, without limitation, any liability that would
otherwise result from a termination hereof, but excluding any
liability of Buyers under Section 10.1 below which shall remain
in full force and effect; provided, however, that notwithstanding
the foregoing, this Agreement shall remain in full force and
effect after December 31, 1993 in the event the Closing has not
occurred as a result of the issuance of a temporary restraining
order or preliminary or permanent injunction by a court of
competent jurisdiction or governmental authority or body
enjoining or declaring void or illegal the transactions
contemplated by this Agreement (any of the foregoing an
"Injunction"); and provided further that notwithstanding the
preceding proviso if the Closing has not occurred by the end of
business on June 30, 1994 for any reason (including the existence
of an Injunction) the Buyers may (if they are not then in
material breach of this Agreement, and (other than by reason of
the existence of an Injunction) are then ready, willing and able
to tender performance of their obligations under this Agreement)
or Huff Management may (if it and the Sellers are not then in
material breach of this Agreement, and (other than by reason of
the existence of an Injunction) are then ready, willing and able
to tender performance of their obligations under this Agreement)
terminate this Agreement in its entirety in which event this
Agreement shall be of no further force or effect whatsoever,
without any further liability hereunder whatsoever to any party
hereto including without limitation any liability that would
otherwise result from a termination hereof, but excluding any
liability of Buyers under Section 10.1 below which shall remain
in full force and effect.
2.3. At the Closing, the first event to occur shall be
that Apple shall sell, assign, transfer, convey and deliver (and
PCC shall cause Apple to sell, assign, transfer, convey and
deliver) to the Sellers, in accordance with the instructions of
Huff Management, the stock certificates, duly endorsed in
negotiable form or with stock powers attached, representing the
Stock Portion of the Purchase Price. Subsequently, at the
Closing, PCC shall pay to the Sellers, in accordance with the
instructions of Huff Management, the Cash Portion of the Purchase
Price by wire transfer of immediately available funds, and the
Sellers shall deliver (and Huff Management will cause the Sellers
to deliver) to the Buyers their respective stock certificates,
duly endorsed in negotiable form or with stock powers attached
and with signatures guaranteed, representing the Price Stock.
The shares of Price Stock so acquired shall be held in the
treasury of PCC and reserved for reissuance pursuant to Section
11.4.
2.4. In the event that within 12 months after the
Closing, (a) more than 40% of the shares of Common Stock of PCC
then outstanding are acquired in one or more transactions
(including in transactions occurring within three months prior to
the Closing) by the same person (or its affiliates as defined in
Section 3.2 below) or any "group" within the meaning of Section
13(d)(3) of the Exchange Act (as defined in Section 3.1 below)
for a consideration in excess of $3.75 per share of Common Stock;
(b) PCC merges or consolidates or enters into any other business
combination transaction with or into another entity (other than a
wholly-owned subsidiary of PCC, in which case PCC is the
survivor, or for the sole purpose of reincorporation in another
jurisdiction, in which case the stockholders of the surviving
entity must be identical to those of PCC immediately before such
merger or consolidation) for a consideration paid to the then
holders of Common Stock in excess of $3.75 per share; (c) all or
substantially all of the assets of PCC are sold, leased or
otherwise disposed of in one or more transactions, or PCC
liquidates, dissolves or makes an extraordinary dividend or
distribution to its shareholders, and in connection therewith the
then holders of Common Stock receive (in one or more
distributions) a consideration for such shares (whether as a
liquidating dividend or otherwise) in excess in the aggregate of
$3.75 per share; and/or (d) any person (or its affiliates) or any
group (other than the chief executive officer of PCC on the date
of this Agreement, his affiliates, and any group of which he is
one of the controlling members) obtains (by contract or
otherwise) the ability to designate or appoint a majority of the
directors on PCC's Board of Directors or otherwise comes to
control a majority of such directors then in office, then in any
such case PCC shall pay to the Sellers, to such account as may be
specified by Huff Management, an aggregate amount in cash equal
to, (x) the amount by which the consideration received per share
of Common Stock by the holders thereof in such transactions
described in clause (a), (b) and/or (c) above exceeds $3.75 per
share of Common Stock, or the amount by which the average listed
market price of PCC's Common Stock, during the 20 days following
the initial public disclosure of any of the circumstances
described in clause (d) above, exceeds $3.75 per share of Common
Stock, then (as the case may be), such excess multiplied by (y)
2,249,082. In the event that an agreement or letter of intent
shall have been entered into or an understanding reached (by PCC
and/or any subsidiary thereof and/or, in the case of clause (a)
above, the seller(s) of the Common Stock in the transactions
described in such clause (a)) prior to the expiration of the
aforementioned 12-month period, then, with respect to any
transaction(s) described in clause (a), (b), (c) or (d) above
contemplated by such agreement, letter of intent or
understanding, the obligations of PCC under this Section 2.4
shall remain in effect after the expiration of such period solely
with respect to the transaction(s) contemplated by such
agreement, letter of intent or understanding, as the same may
thereafter be modified or amended. The payment(s) to the Sellers
described in the preceding sentence shall be made (i) immediately
after the first acquisition described in clause (a) above which
is in excess of the 40% threshold described therein and
immediately after any subsequent such acquisitions described in
clause (a) above within the aforesaid 12-month period for a
consideration per share of Common Stock in excess of $3.75; (ii)
simultaneously with the consummation of any merger or
consolidation described in clause (b) above; (iii) simultaneously
with the receipt by the then holders of PCC Common Stock of
consideration described in clause (c) above or (iv) within 5 days
of the end of the 20-day period referred to above in respect of
clause (d). In the event any payment to Sellers under this
Section 2.4 arises from a transaction described in clause (a),
(b) and/or (c) above in which the per share consideration
received by the holders of Common Stock is in varying amounts,
such payment to the Sellers under this Section 2.4 shall be based
on the weighted average of such consideration received. The
parties intend and agree that, for any interpretation of clauses
(a), (b), (c) and/or (d) above, such clauses shall be broadly
interpreted. In the event that after Sellers have become
entitled to a payment under this Section 2.4, one or more
subsequent transactions described under clause (a), (b) and/or
(c) above occurs within the aforesaid 12-month period (for
example, a tender offer followed by a merger), such subsequent
transaction(s) shall result in additional payment(s) to Sellers
only if and to the extent the weighted average of the per share
consideration received in all such transactions by holders of
Common Stock exceeds the weighted average of the per share
consideration taken into account in calculating prior payment(s)
to the Sellers under this Section 2.4, so that, for example, in
the event of a tender offer at $4.75 per share (resulting in a
$2,249,082 payment to Sellers under this Section 2.4) followed by
a merger (at a price resulting in weighted average per share
consideration received by holders of Common Stock of $5.75 in
both such tender offer and merger), the Sellers would be entitled
under this Section 2.4 to an additional payment of $2,249,082.
In the event all or a portion of the consideration received by
the then holders of Common Stock in the transaction(s) described
in clause (a), (b) and/or (c) above is in a form other than cash,
then the payment(s) to the Sellers under this Section 2.4 in
respect of such non-cash consideration shall be based on the fair
market value of such non-cash consideration as determined by PCC
and Huff Management or, upon the request of PCC or Huff
Management, shall be promptly determined by Morgan Stanley & Co.,
Incorporated, or upon the unavailability of Morgan Stanley & Co.,
Incorporated, such other investment banking firm as shall be
selected by Huff Management and shall be reasonably acceptable to
PCC (Morgan Stanley & Co., Incorporated or such other firm being
herein referred to as "Morgan Stanley"), which determination by
PCC and Huff Management or Morgan Stanley shall be conclusive and
binding on all parties hereto. (All fees and expenses of Morgan
Stanley incurred pursuant to this Agreement shall be borne by
PCC.) The $3.75 per share price referred to in this Section 2.4
(and the 2,249,082 figure in the first sentence of this
Section 2.4) shall be appropriately adjusted in the event of a
stock split, stock dividend, recapitalization or similar
transaction involving the Common Stock; the determination of PCC
and Huff Management (or, if either PCC or Huff Management so
requests, the determination of Morgan Stanley) as to such
adjustment shall be conclusive and binding on all parties hereto.
3. Representations and Warranties by the Sellers and Huff
Management
3.1. Each of the Sellers severally represents and
warrants to the Buyers that the shares of Price Stock set forth
opposite such Seller's name on Exhibit A are owned of record and
"beneficially" (which term, and all variations thereof, includes
for purposes of this Agreement the meaning given in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) (or such shares are held by such Seller as
nominee for the beneficial owner(s) thereof, with the Seller
having the full right and power to sell such shares on behalf of
such owner(s) pursuant to this Agreement and otherwise to enter
into and perform this Agreement on behalf of such owner(s)), free
and clear of all liens, claims, charges and encumbrances.
3.2. Huff Management hereby represents and warrants to
the Buyers that (i) the shares of Price Stock set forth opposite
each Seller's name on Exhibit A are owned beneficially and of
record by such Seller (or such shares are held by such Seller as
nominee for the beneficial owner(s) thereof, with the Seller
having the full right and power to sell such shares on behalf of
such owner(s) pursuant to this Agreement and otherwise to enter
into and perform this Agreement on behalf of such owner(s)), free
and clear of all liens, claims, charges and encumbrances, (ii)
other than such shares, there are no shares of Common Stock owned
beneficially or of record or held as nominee by Huff Management,
William R. Huff ("Huff") or by any "affiliate" (which term shall
have the meaning given under Rule 405 under the Securities Act of
1933, as amended) of Huff Management or Huff, or with respect to
which Common Stock Huff Management, Huff or any affiliate of Huff
Management or Huff acts as investment advisor, fiduciary, agent
or trustee, and (iii) neither Huff Management, Huff nor any
affiliate of Huff Management or Huff, has any option or rights to
acquire any shares of Common Stock.
3.3. Huff Management hereby represents and warrants to
the Buyers that, subject to the limitation set forth in
Section 21 below, under its investment advisory or other
agreements with Sellers Huff Management has full legal power and
authority to act on behalf of each of the Sellers listed on
Exhibit A with respect to all of such Seller's shares of Price
Stock listed on such Exhibit (and that Huff Management exercises
discretion in the management of such shares), including without
limitation the full legal power and authority to execute, deliver
and perform this Agreement on behalf of the Sellers.
4. Representations and Warranties of the Buyers
4.1. The Buyers jointly and severally represent and
warrant to the Sellers and Huff Management that (i) the shares of
the Stock Portion of the Purchase Price represent all of the
issued and outstanding shares of PPC and are owned beneficially
and of record by Apple free and clear of all liens, claims,
charges and encumbrances, there are no outstanding options or
rights to acquire any of PPC's securities, and PPC owns,
beneficially and of record, 24,999 shares of common stock of
National Law Publishing Company, Inc. ("National Law") free and
clear of all liens, claims, charges and encumbrances (one share
of National Law common stock (the "PCC Law Journal Share") having
been sold by PPC to PCC, which share, subject to the option
described below in Section 22, shall be held at all times by PCC
free and clear of all liens, claims, charges and encumbrances),
all of the foregoing except as such liens, claims, charges,
encumbrances, options and/or rights may be provided in that
certain Amended and Restated Shareholders Agreement, dated as of
May 8, 1992, by and among Apollo Investment Fund, L.P., PCC, PPC,
National Law, and The New York Law Publishing Company (the
"Shareholders Agreement"); and (ii) other than such National Law
shares, PPC has no other assets of any nature whatsoever, whether
personal or real, tangible or intangible, nor any liabilities of
any nature, whether choate or inchoate, known or unknown,
contingent or liquidated.
4.2. The Buyers jointly and severally represent and
warrant to the Sellers and Huff Management that the execution,
delivery and performance by Buyers of this Agreement will prior
to the Closing be duly authorized by all necessary corporate
action of Buyers and that they have all necessary corporate power
to so execute, deliver and perform this Agreement.
4.3. Buyers jointly and severally represent and
warrant to the Sellers and Huff Management that (i) each of PPC
and PCC has timely filed all tax returns and other reports
relating to PPC required by any taxing authorities, and all
taxes, interest and penalties relating to PPC have been paid when
due; (ii) there are no matters under discussion with any taxing
authority in respect of any tax relating to PPC and there are no
agreements for the extension of time for assessment of any taxes
relating to PPC; and (iii) all unpaid taxes relating to PPC for
any period prior to the Closing will be paid when due by Buyers.
4.4. The Buyers jointly and severally represent and
warrant to the Sellers and Huff Management that (i) the
performance by PCC and Apple of this Agreement, including the
sale hereunder to the Sellers of the Stock Portion of the
Purchase Price, is an authorized and valid transfer in accordance
with any and all agreements, contracts, laws, regulations and
orders thereby entitling the Sellers to all the rights and
benefits of ownership to which PPC, Apple and/or their affiliates
are entitled, including specifically, but not limited to, all
rights, benefits and entitlements afforded to PPC and/or PCC
under the Shareholders Agreement, and (ii) such sale of the Stock
Portion of the Purchase Price to the Sellers, the sole asset of
PPC being 24,999 shares of National Law common stock (National
Law being the parent company of The New York Law Publishing
Company), complies in all respects with, and does not violate any
provision of, any agreement to which PCC, Apple or PPC is a
party, including without limitation, the Shareholders Agreement
and such sale is not subject to the rights of first refusal set
forth in Section 1 of the Shareholders Agreement.
Notwithstanding the foregoing or anything to the contrary
contained in this Agreement, the Sellers and Huff Management
hereby agree that the only remedies of any Seller and/or Huff
Management for breach or alleged breach of any warranty contained
in this Section 4.4 or for any misrepresentation or alleged
misrepresentation contained in this Section 4.4 are the
provisions of Sections 10 and 11 below, that no such breach or
alleged breach or misrepresentation or alleged misrepresentation
shall be deemed a breach of this Agreement or give rise to any
other rights on the part of any Seller and/or Huff Management,
including without limitation the right to argue that a condition
to Closing (other than Section 7.3, if applicable by its terms)
hereunder has failed to occur, and that such remedies shall exist
only if and to the extent expressly provided under the express
terms of Sections 10 and 11 below. Nothing in this Section 4.4
shall be deemed to expand the provisions of Sections 10 and 11 as
expressly written.
5. Covenants of the Sellers, Etc.
5.1. Huff Management on behalf of the Sellers
covenants and agrees that it will cause the irrevocable
resignations, each effective no later than at the Closing
hereunder, of each of the following Directors from PCC's Board:
Jeffrey L. Berenson, Donna Burns Charlton, Charles Howard, and
Marvin Saffian (the "Resigning Directors").
5.2. In furtherance of Section 5.1 above, the
Resigning Directors are delivering to the Buyers by the Closing
resignations in the form of Exhibit B hereto.
5.3. For a period of two years after the date of this
Agreement, Huff Management covenants and agrees that it will,
without any charge to PCC and consistent with Huff Management's
duties as adviser to the Sellers and its other clients, provide
financial advisory and consulting services, as reasonably
requested by PCC from time to time and agreed to by Huff
Management, with respect to PCC's attempts to realize on its
preferred stock, subordinated debt and common stock investments
in Fairmont Communications Corporation and Northstar Television
Group, with respect to repurchases and/or redemptions by PCC of
its 5% Senior Secured Notes due 1999, and with respect to any
other financial advisory matters agreed upon as aforesaid.
5.4. For a period of five years after the date of this
Agreement, Huff Management covenants and agrees that, except as
provided in Section 5.3 above (and insofar as compliance by Huff
Management with this Section 5.3 is not in violation of law
applicable to it as an investment adviser and fiduciary), neither
it nor Huff nor any of their affiliates will, knowingly or
intentionally, in any manner, alone or in concert with others,
directly or indirectly, including without limitation with any
Seller, (whether or not pursuant to any legally binding agreement
or commitment), and whether for their own accounts or for the
account of any Seller or any other person or entity, without the
prior written approval of the Board of Directors of PCC, (i)
acquire, or offer to acquire, or negotiate with respect to the
acquisition of, record or beneficial ownership of any capital
stock, debt securities, indebtedness or any securities of PCC or
of any subsidiary of PCC (any of the foregoing, "PCC securities")
or any options or other rights to acquire PCC securities or any
other interest in PCC or any subsidiary thereof or any assets of
PCC or any subsidiary of PCC, (ii) offer to enter into any
acquisition or other business combination transaction relating to
PCC or any subsidiary of PCC (or hold negotiations with respect
to the foregoing), (iii) participate in or encourage the
formation of any "group" (within the meaning of Section 13(d)(3)
of the Exchange Act) which owns or seeks or offers to acquire
record or beneficial ownership of voting securities of PCC
(including rights to acquire such voting securities) or which
seeks or offers to affect control of PCC, (iv) make, or in any
way participate, in any "solicitation" of "proxies" (as such
terms are used in the proxy rules of the Securities and Exchange
Commission) or become a "participant" in any "election contest"
(as such terms are defined or used in Regulation 14a-11 under the
Exchange Act) to vote, or seek to advise or influence any person
or entity with respect to the voting of any PCC securities, (v)
otherwise act, alone or in concert with others, to seek to
control or influence the management, the Board of Directors or
the policies of PCC, (vi) propose, or publicly announce or
otherwise disclose an intent to propose or publicly announce or
otherwise disclose any request for permission or any consent in
respect of, any of the foregoing, or (vii) advise, assist or
encourage any other person or entity in connection with any of
the foregoing, including without limitation any Seller or any
person or entity with respect to which Huff Management or any of
its affiliates acts as investment advisor, fiduciary, agent or
trustee. The parties recognize that when Huff Management takes
on new clients, or accepts new assets for management from
existing clients' other portfolios, it does not have control over
the securities in such new clients' pre-existing portfolios or in
such existing clients' other portfolios. The parties agree that
the existence of PCC securities in either such portfolios taken
on in the ordinary course of Huff Management's business and
without the intent to evade the provisions of this Section 5.4
above shall not be deemed a breach of this Section 5.4.
6. Conditions to the Buyers' Obligations
All obligations of the Buyers under this Agreement are
subject to the fulfillment, at the Closing, of the following
conditions (any or all of which may be waived in writing by PCC
in its sole discretion, which waiver shall be conclusive and
binding on Apple):
6.1. PCC's and Apple's Boards of Directors (and Apple's
shareholders) shall have unanimously (other than the Resigning
Directors in the case of PCC's Board) approved the purchase of
the Price Stock and the other transactions contemplated by this
Agreement;
6.2. Ms. Kim I. Pressman shall have been elected as a
Director of PCC, such election to be effective no later than at
the Closing, and which election shall remain in full force and
effect at the Closing;
6.3. the irrevocable resignations of the Resigning
Directors shall be in full force and effect, such resignations to
be effective no later than at the Closing and to remain in effect
at the Closing;
6.4. PCC, Apple and PPC shall have executed and
delivered to the other mutual releases in the form of Exhibit C
hereto;
6.5. no temporary restraining order or preliminary or
permanent injunction shall have been issued by a court of
competent jurisdiction or governmental authority or body and
remain in effect prohibiting or enjoining or declaring void or
illegal the transactions contemplated by this Agreement; and
6.6. the representations and warranties of Sellers and
Huff Management in this Agreement shall be true in all material
respects as of the Closing as though such representations and
warranties were made at and as of such time.
7. Conditions to the Sellers' Obligations
All obligations of the Sellers and Huff Management
under this Agreement are subject to the fulfillment, at the
Closing, of the following conditions (any or all of which may be
waived in writing by Huff Management in its sole discretion,
which waiver shall be conclusive and binding on the Sellers):
7.1. PCC's and Apple's Boards of Directors (and
Apple's shareholders) shall have unanimously (other than the
Resigning Directors in the case of PCC's Board) approved the
purchase of the Price Stock and the other transactions
contemplated by this Agreement;
7.2. PCC, Apple and PPC shall have executed and
delivered to the other mutual releases in the form of Exhibit C
hereto;
7.3. no temporary restraining order or preliminary or
permanent injunction shall have been issued by a court of
competent jurisdiction or governmental authority or body and
remain in effect prohibiting or enjoining or declaring void or
illegal the transactions contemplated by this Agreement;
7.4. no material change shall have occurred from the
date of this Agreement to the Closing in the business, financial
results or financial position of PCC and its subsidiaries; and
7.5. the representations and warranties of Buyers in
this Agreement shall be true in all material respects as of the
Closing as though such representations and warranties were made
at and as of such time.
8. Remedies
8.1. The Sellers and Huff Management agree that money
damages alone will be an inadequate remedy for the Buyers in the
event of a breach by the Sellers and/or Huff Management of their
respective obligations under the terms of this Agreement and
that, in addition to monetary damages, if so elected by the
Buyers, their respective obligations under this Agreement,
including, without limitation, the obligation of the Sellers to
sell the Price Stock to the Buyers, and the obligation of Huff
Management to cause the Sellers to sell the Price Stock to the
Buyers, shall be specifically enforceable against the Sellers
and/or Huff Management, as the case may be, by injunction
(without the requirement of proving actual damages, posting any
bond or furnishing other security) or otherwise as a court of
competent jurisdiction may determine.
8.2. The Buyers agree that money damages alone will be
an inadequate remedy for the Sellers and Huff Management in the
event of a breach by PCC and/or Apple of their respective
obligations under the terms of this Agreement and that, in
addition to monetary damages, if so elected by the Sellers or
Huff Management, their respective obligations under this
Agreement, including, without limitation, the obligation of PCC
to pay the Cash Portion of the Purchase Price, the obligation of
Apple to deliver the Stock Portion of the Purchase Price and the
obligation of PCC to cause Apple to deliver the Stock Portion to
the Sellers shall be specifically enforceable against PCC and/or
Apple, as the case may be, by injunction (without the requirement
of proving actual damages, posting any bond or furnishing other
security) or otherwise as a court of competent jurisdiction may
determine.
9. Releases
9.1. In contemplation of the good and valuable
consideration being exchanged by the parties hereto, the parties
agree effective upon the Closing, as follows:
(a) the Buyers hereby forever and completely
release and discharge each of Huff Management, the Sellers and
Huff, and their respective officers, directors, partners,
fiduciaries, employees, securityholders, owners, affiliates and
agents, if any, and each of the Resigning Directors, from any and
all claims, suits, charges, judgments, liabilities or obligations
of any kind whatsoever, arising in any connection, whether now
existing or hereafter arising, upon or by reason of any matter,
cause or thing whatsoever prior to the Closing, known or unknown,
and furthermore the Buyers acknowledge that upon the Closing,
none of Huff Management or Huff or any Seller nor any of their
respective officers, directors, partners, fiduciaries, employees,
securityholders, owners, affiliates or agents, if any, nor any
Resigning Director shall have any obligation or liability of any
kind whatsoever, to the Buyers.
(b) the Sellers and Huff Management hereby
forever and completely release and discharge the Buyers and each
of their respective officers, directors, employees,
securityholders, owners, affiliates and agents, if any, from any
and all claims, suits, charges, judgments, liabilities or
obligations of any kind whatsoever, arising in any connection,
whether now existing or hereafter arising, upon or by reason of
any matter, cause or thing whatsoever prior to the Closing, known
or unknown, and furthermore the Sellers and Huff Management
acknowledge that upon the Closing, neither of the Buyers nor any
of their respective officers, directors, employees,
securityholders, owners, affiliates or agents, if any, shall have
any obligation or liability of any kind whatsoever, to any of the
Sellers, Huff or Huff Management.
9.2. Notwithstanding anything in this Agreement to the
contrary (including without limitation Section 9.1, but subject
to the last two sentences of Section 4.4), no party hereto shall
be barred from asserting, or be held to have released, forfeited
or waived the right to assert, any claim, suit, charge, or other
liability of any nature whatsoever arising in connection with
this Agreement against any other party to this Agreement, whether
based upon representation, warranty, covenant or otherwise. The
provisions of this Section 9.2 shall survive the Closing for a
period of six years and one day from the date of the first of any
public disclosure (consistent with Section 17 below) concerning
this Agreement and the transactions contemplated hereby.
10. Indemnification
10.1. The Buyers hereby jointly and severally
indemnify and agree to hold the Sellers and Huff Management and
their respective directors, officers, partners, fiduciaries,
employees and agents (collectively, the "Indemnitees") harmless
in respect of (i) any out-of-pocket losses, damages, costs or
expenses (exclusive of legal fees and expenses) arising out of
any shareholders derivative or other litigation brought against
any of the Indemnitees by holders of PCC Common Stock or other
PCC securities arising out of any claim or assertion relating to
the transactions contemplated by this Agreement or any claim or
assertion by the Trustee and/or the holders of any Notes referred
to below that this Agreement or the Security Agreement (as
defined in Section 11.7) breach or give rise to a default, event
of default or a right of declaration of default under that
certain Indenture dated as of December 30, 1992, between PCC and
IBJ Schroder Bank & Trust Company, as Trustee, relating to
Price's 5% Senior Secured Notes (collectively, a "Note Claim")
(for all purposes of this Section 10 a litigation shall be deemed
brought against an Indemnitee if, without limitation, such
litigation is initially brought against PCC or any subsidiary
thereof or any officer or director thereof and such Indemnitee is
joined as a party, whether by interpleader or otherwise); and
(ii) reasonable legal fees and expenses incurred by a single law
firm representing Sellers and/or Huff Management and/or other
Indemnitees in any (a) litigation brought by or against any of
the Indemnitees arising out of any claim or assertion that this
Agreement or the transactions provided herein are in violation of
any agreement to which PCC or any of its subsidiaries are parties
or by which they are otherwise bound (including without
limitation the Shareholders Agreement), (b) litigation brought by
or against any of the Indemnitees arising out of any claim or
assertion that the Sellers and/or Huff Management may not
exercise all rights, benefits or protections of "Price", or when
the term "Shareholder" includes Price, all rights of such
Shareholder, under the Shareholders Agreement, or any similar
right, benefit or protection under the Shareholders Agreement
(all such rights, benefits or protections collectively, the
"Shareholder Rights"), or that the transactions set forth herein
give rise to any right of first refusal, (c) litigation brought
by or against any of the Indemnitees arising out of any attempt
to conduct the business or affairs of National Law or The
New York Law Publishing Company or their respective subsidiaries
in a manner which disregards or fails to recognize the right of
the Sellers and/or Huff Management to exercise any or all of the
Shareholder Rights, (d) shareholders derivative or other
litigation brought against any of the Indemnitees by holders of
PCC Common Stock or of other PCC securities arising out of any
claim or assertion relating to the transactions contemplated by
this Agreement, or (e) a Note Claim brought against any of the
Indemnitees; provided, however, that the single law firm
representing the Sellers and/or Huff Management and/or other
Indemnitees as aforesaid shall be Dennis Drebsky, Esq. and his
firm or, upon the unavailability of Mr. Drebsky to serve in such
capacity, other counsel selected by Huff Management and
reasonably acceptable to PCC. Buyers shall immediately advance
to the appropriate counsel or other appropriate party, or at the
Indemnitees' direction, all amounts payable under the preceding
sentence, upon receipt of an invoice for reasonable costs or
expenses, including legal fees, in any such amounts, as they are
incurred.
11. Rescission and Buyout Rights
11.1. As used in this Section 11, the following terms
shall have the following meanings:
"Declaratory Litigation" shall mean any action or
proceeding commenced by Huff Management (for itself and/or on
behalf of any Indemnitee) which seeks to establish (in the face
of contrary assertions by any party to the Shareholders
Agreement) (i) that the transactions contemplated by this
Agreement are in compliance with the Shareholders Agreement
(including, without limitation, that the transactions set forth
herein do not give rise to any right of first refusal) or (ii)
its (or their) ability to exercise the Shareholder Rights.
"Final Adverse Judgment" shall mean a final non-
appealable adverse judgment by a court of competent jurisdiction
that (or in substance that) (i) the transactions contemplated by
this Agreement are not in compliance with the Shareholders
Agreement (including, without limitation, that the transactions
set forth herein give rise to any right of first refusal) or (ii)
Huff Management and/or Sellers do not possess the Shareholder
Rights.
"Litigation" shall mean a proceeding or action brought
against an Indemnitee by any party to the Shareholders Agreement
alleging that (or in substance that) (i) the transactions
provided in this Agreement are in violation of the Shareholders
Agreement (including, without limitation, any litigation alleging
that the transactions set forth herein give rise to any right of
first refusal) or (ii) Huff Management and/or Sellers do not
possess the Shareholder Rights.
"Pending" shall mean, at any applicable time, that a
Litigation is currently pending. Any settlement of a Litigation
by an Indemnitee shall provide that such Litigation shall be
forthwith withdrawn or dismissed with prejudice so that such
Litigation shall no longer be pending.
"Rescission Notice" shall mean a notice by Huff
Management to Buyers which (if given within 30 days of one or
more of the events described in Section 11.2 below) may elect, on
behalf of the Sellers, (i) subject to Buyers' Buyout Option set
forth in Section 11.5 below and unless such notice is a Second
Rescission Notice (as defined below), to rescind the transactions
contemplated hereby as provided in Section 11.4 hereof (the
"Rescission Option") or (ii) to be paid a cash amount, as
provided in Section 11.3 hereof, in lieu of rescinding the
transactions contemplated hereby (the "Cash Option").
11.2. Huff Management, at its sole option, may provide
a Rescission Notice to PCC in the event that (a) a Litigation is
Pending at the end of the one year period following the Closing
(the "One Year Period") or (b) any Indemnitee has suffered, in
some material respect, a Final Adverse Judgment within the two
year period following the Closing (the "Two Year Period"). Huff
Management, as its sole option, may thereafter provide a second
Rescission Notice (the "Second Rescission Notice") in the event
that (i) a Rescission Notice was previously given under clause
(a) of this Section 11.2 above which exercised the Cash Option or
in response to which PCC exercised the Buyout Option (as
hereinafter defined) and (ii) either (x) a Litigation is Pending
at the end of the Two Year Period or (y) any Indemnitee has
suffered a Final Adverse Judgment during the Two Year Period.
The One Year Period and/or the Two Year Period may be extended
for an additional six months if within the One Year Period or Two
Year Period, as applicable, a Litigation has been brought and is
dismissed or withdrawn without prejudice but reinstated or
refiled in substance within such six month period, but such
extension shall apply only in respect of any such refiled or
reinstated Litigation; the date by which any Rescission Notice
shall be required to be given shall be measured from the end of
the One Year Period or Two Year Period, as applicable, as so
extended. Notwithstanding anything to the contrary contained in
this Agreement, Huff Management and Sellers hereby agree that the
Second Rescission Notice may only elect the Cash Option (and may
in no event elect the Rescission Option).
11.3. In the event a Rescission Notice is delivered
pursuant to Section 11.2(a) which elects a Cash Option, PCC shall
pay to the Sellers the sum of one million five hundred thousand
dollars ($1,500,000). In the event a Rescission Notice is
delivered pursuant to Section 11.2(b) which elects a Cash Option,
PCC shall pay to the Sellers the sum of $2,000,000 minus any
amount theretofore paid pursuant to the first sentence of this
Section 11.3. In the event a Second Rescission Notice is
delivered, PCC shall pay the Sellers the sum of five hundred
thousand dollars ($500,000). Each payment due under this Section
11.3 shall be made within thirty (30) days of the delivery of the
applicable Rescission Notice or Second Rescission Notice, as the
case may be, in immediately available funds to such accounts as
Huff Management may designate in writing to PCC for such purpose
(which designation may be contained in such Rescission Notice).
In no event shall the aggregate payments by Buyers under this
Section 11.3 and Sections 11.5 and 11.7 below exceed an aggregate
of $2,000,000.
11.4. In the event a Rescission Notice states that
Huff Management is electing its and the Sellers' "Rescission
Option", the parties hereto shall, subject to the "Buyout Option"
rights of PCC set forth in Section 11.5 below, proceed as
promptly as practicable to the complete rescission of the
transactions theretofore completed under this Agreement, so that
in all material respects the parties hereto are restored to the
status quo before the consummation of such transactions. Without
limiting the foregoing, in the event of any exercise of a
Rescission Option, subject to the "Buyout Option" rights of PCC
set forth in Section 11.5 below, at a closing (the "Rescission
Closing") held at the earliest practicable time after the giving
of the Rescission Notice: (i) the Buyers shall issue, assign,
transfer, convey and deliver, as appropriate, to the Sellers
2,249,082 shares of Common Stock (which 2,249,082 share figure
shall be appropriately adjusted in the event of a stock split,
stock dividend, recapitalization or similar transaction involving
the Common Stock; the determination of PCC and Huff Management
(or if either PCC or Huff Management so requests, the
determination of Morgan Stanley) as to such adjustment being
conclusive and binding on all parties hereto), and, to the extent
necessary, PCC shall as promptly as practicable use all best
efforts to amend any existing registration statement or to file a
new registration statement under the Securities Act of 1933, as
amended, with respect to such shares and to cause any such
registration statement to become effective and remain effective
and to take such other reasonable steps so as to ensure the
holders of such shares access to the public securities markets in
the same fashion as currently exists; (ii) the Sellers shall
assign, transfer, convey and deliver to Apple the Stock Portion
of the Purchase Price accompanied by the joint and several
representations and warranties of the Sellers and Huff Management
to Buyers the same as the representations and warranties of the
Buyers set forth in Section 4.1 above except that the reference
to Apple therein shall be changed to the Sellers and such
representations and warranties shall contain such confirmation as
may be reasonably requested by the Buyers that the 24,999 shares
of National Law common stock referred to in Section 4.1 then
represents all shares of capital stock or other property to which
the Sellers, their affiliates, and their successors and assigns
have become entitled by virtue of or in connection with ownership
of such 24,999 shares; (iii) the Sellers shall pay to PCC by wire
transfer of immediately available funds the cash sum of
$8,434,057.50; (iv) PCC shall use all best efforts to cause the
election at the earliest practicable time of three designees of
Huff Management to the Board of Directors of PCC and, in
furtherance of such election, to cause the resignation of any
directors elected to fill the vacancies caused by the
resignations of three of the Resigning Directors hereunder; (v)
the Sellers shall return to PCC any payment made by PCC to them
under Section 2.4 above; and (vi) the parties shall execute and
deliver stock powers and such other documents as may be
reasonably requested by PCC or Huff Management in order to
effectuate the transactions at the Rescission Closing. Effective
upon any Rescission Closing, this Agreement (other than the
provisions of Sections 10, 16 and 20) shall be immediately and
completed terminated, without any further liability hereunder
whatsoever by any party hereto.
11.5. Notwithstanding anything to the contrary in this
Section 11 or otherwise in this Agreement, PCC may, at its sole
option (the "Buyout Option"), give written notice (the "Buyout
Notice") to Huff Management at any time within 30 days after
PCC's receipt of any Rescission Notice containing Huff
Management's exercise of the Rescission Option that the Buyers
desire in lieu of proceeding with the rescission described above,
to pay the Sellers a cash sum(s), as set forth below (a "Buyout
Notice"). In the event a Buyout Notice is delivered, PCC shall
immediately pay to the Sellers the amount which would have been
due pursuant to Section 11.3 above if a Cash Option had been
elected in the Rescission Notice (the "Buyout Payment"). Upon
payment of a Buyout Payment (or any amount specified in the first
or second sentence of Section 11.3) all rights of rescission of
Sellers and Huff Management under this Section 11 shall be
terminated for all time and in all respects. Each payment due
under this Section 11.5 shall be made immediately after receiving
from Huff Management written instructions as to the accounts to
which such sum shall be paid by wire transfer of immediately
available funds to such account. Notwithstanding anything to the
contrary contained in this Agreement, Huff Management and Sellers
hereby agree that they shall not be entitled to enforce a
Rescission Option elected in a Rescission Notice if PCC duly
elects the Buyout Option and performs its obligations under this
Section 11.5.
11.6. In the event the Closing under this Agreement is
consummated and no Litigation has been brought against any
Indemnitee, Huff Management, as its sole option, may provide a
notice requiring payment (a "Payment Notice") to PCC, within
thirty days after the Final Adverse Judgment referred to below,
in the event Huff Management, on behalf of Sellers in good faith
brings any Declaratory Litigation within the One Year Period and,
despite Huff Management's prosecution of such Declaratory
Litigation with reasonable diligence, suffers, in some material
respect, a Final Adverse Judgment in such Declaratory Litigation
within the Two Year Period. In the event a Payment Notice is
delivered, PCC shall pay to Sellers the sum of $1,500,000. Any
payment due under this Section 11.6 shall be made by wire
transfer of immediately available funds, within 30 days after
delivery of the Payment Notice to such accounts as Huff
Management may designate in writing for such purpose. Any amount
paid to Sellers by PCC under Section 11.3 or 11.5 above shall
offset and reduce any amount required to be paid by PCC to the
Sellers under this Section 11.6, and any amount paid by PCC to
Sellers under this Section 11.6 shall offset and reduce any
amount required to be paid by PCC to Sellers under Section 11.3
or 11.5 above.
11.7. PCC shall, and shall cause its wholly-owned
subsidiaries Republic Broadcasting Corporation, Atlas
Broadcasting Corporation and Continental Broadcasting
Corporation, to pledge to Huff Management and Sellers as
collateral security for the obligations of Buyers under Sections
11.3, 11.5 and 11.6 above, under an agreement (the "Security
Agreement") reasonably acceptable to Huff Management, all of the
issued and outstanding shares of capital stock of PCC's
subsidiaries owning broadcasting properties (such shares
collectively the "Stock Collateral"); the execution and delivery
of the Security Agreement and the pledge of the Stock Collateral
as aforesaid being conditions to the obligations of Sellers and
Huff Management to consummate at the Closing the transactions
hereunder. PCC shall have the right and obligation to substitute
for the Stock Collateral either cash collateral and/or
irrevocable standby letter(s) of credit described in the Security
Agreement in an aggregate amount equal to $1,500,000, as provided
in the Security Agreement. PCC shall use its best efforts to
accomplish such substitution at the earliest practicable time and
in any event within 45 days from the date of this Agreement; in
the event such substitution does not occur within said 45 day
period the payments under 11.3, 11.5 and 11.6 (and each payment
thereafter under Sections 11.3, 11.5 and 11.6 until such
substitution occurs) shall be increased by $50,000 and shall
increase by an additional $50,000 for each subsequent 45 day
period in which such substitution does not occur.
12. Further Assurances
Each of the Buyers, the Sellers and Huff Management
shall do or cause to be done all such acts and things (including,
without limitation, voting at any meeting, executing any written
consent or participating in any consensual action) and shall
execute and deliver all such agreements, certificates,
instruments, proxies, consents and other documents as the Buyers
or Huff Management, as the case may be, may reasonably request in
order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
13. Change of Name
The Board of Directors and shareholders of PPC have
approved a resolution to amend the Certificate of Incorporation
of PPC to change its corporate name to a name not including the
word "Price", and Buyers shall file such amendment with the
appropriate authorities immediately after the Closing.
14. Amendment
This Agreement may be amended by the parties hereto at
any time, but only by an instrument in writing duly executed and
delivered on behalf of each of the parties hereto.
15. Headings
Section headings are included solely for convenience
and are not to be considered to be part of this Agreement and are
not intended to be accurate descriptions of the contents thereof.
16. Successors and Assigns
This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective transferees,
successors and assigns; provided that neither the Sellers nor
Huff Management may assign their rights or obligations hereunder
without the prior written consent of the Buyers; and, provided
further, that the Buyers may not assign their rights or
obligations hereunder without the prior written consent of Huff
Management, except that the Buyers may assign their rights and
obligations hereunder to a wholly-owned subsidiary of the Buyers
as long as the Buyers remains fully liable to the Sellers and to
Huff Management hereunder.
17. Public Announcement
The Buyers, on the one hand, and the Sellers and Huff
Management, on the other hand, agree that except as required by
law, no public disclosure or announcement will be made with
respect to the transactions set forth herein unless PCC and Huff
Management consent to such announcement, which consent shall not
be unreasonably withheld.
18. Entire Agreement
This Agreement, together with the Exhibits hereto,
constitutes the entire agreement between the parties hereto
pertaining to the subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions, if any,
whether oral or written, of the parties.
19. Counterparts
This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one instrument.
20. Governing Law
All questions as to the interpretation and effect of
this Agreement shall be determined under the laws of the State of
New York, excluding the choice of law principles thereof.
21. Investment Advisory Agreements
Buyers acknowledge that the respective investment
advisory agreements between Huff Management and Sellers in effect
permit any Seller to withdraw at any time prior to the Closing
from its obligation to sell its respective Price Stock under this
Agreement, and the parties to this Agreement agree that any
Seller so withdrawing and delivering written notice of such
withdrawal to PCC prior to the Closing (and Huff Management in
respect of any such Seller) shall not have any further rights or
obligations under this Agreement. In the event of any withdrawal
as aforesaid, Buyers may, at their option, terminate this
Agreement in its entirety by written notice to Huff Management,
in which event no party shall have any liability hereunder. Huff
Management agrees, subject to its responsibilities under law, not
to encourage any Seller to exercise such right of withdrawal.
22. Option; Shareholder Rights
PCC hereby grants Huff Management the irrevocable
option exercisable on one business day's written notice to PCC to
purchase for $900.00 the PCC Law Journal Share at any time on or
prior to the day ten years after the Closing, and will not
otherwise sell, assign, transfer, convey, deliver, pledge or
otherwise dispose of or encumber the PCC Law Journal Share by any
means whatsoever. PCC hereby agrees (i) to take any and all
action reasonably requested by Huff Management to cooperate with
Huff Management and/or the Sellers in asserting on their own
behalf the Shareholder Rights, including without limitation
joining in any assertion by PPC or Huff Management of the
Shareholder Rights, or giving any notice in connection therewith,
and (ii) to exercise for the maximum period permitted by law the
voting rights attendant to the PCC Law Journal Share only in
accordance with the written direction of Huff Management.
<PAGE>
IN WITNESS WHEREOF, the Buyers, each of the Sellers and
Huff Management have caused this Agreement to be executed on the
date first written above.
PRICE COMMUNICATIONS CORPORATION
By:_________________________________
Robert Price, President
APPLE PUBLISHING CORPORATION
By:_________________________________
Robert Price, President
THE SELLERS LISTED ON SCHEDULE A HERETO
By: W.R. Huff Asset Management Co.,
L.P., under authority given in the
respective investment advisory
agreements between W.R. Huff Asset
Management Co., L.P. and such
Sellers
By:________________________________
William R. Huff, its general partner
W.R. HUFF ASSET MANAGEMENT CO., L.P.
By:_________________________________
William R. Huff, its general partner<PAGE>
EXHIBIT A
The Sellers
Seller No. of Shares of Common Stock
TOTAL 2,249,082<PAGE>
EXHIBIT B
Form of Resignation<PAGE>
EXHIBIT C
Form of Mutual Release --
between Price Communications, Apple
and Price Publishing
INDEMNIFICATION AGREEMENT
THIS AGREEMENT, effective as of the ________ day of
October, 1993, is between Price Communications Corporation, a New
York corporation (the "Company"), and _________________ (the
"Indemnitee").
WHEREAS, it is essential to the Company to retain and
attract as directors and officers of the Company the most capable
persons available; and
WHEREAS, Indemnitee is a director and/or officer of the
Company; and
WHEREAS, both the Company and Indemnitee recognize the
increased risk of litigation and other claims being asserted
against directors and officers of companies in today's environ-
ment; and
WHEREAS, basic protection against undue risk of person-
al liability of directors and officers heretofore has been
provided for many companies through insurance coverage providing
reasonable protection at reasonable cost, but as a result of
substantial changes in the marketplace for such insurance it has
become increasingly more difficult to obtain such insurance on
terms providing reasonable protection at reasonable cost; and
WHEREAS, the Company for many years has not had direct-
ors' and officers' liability insurance coverage, and despite
extensive efforts to obtain such coverage since consummation of
its plan of reorganization on December 30, 1992 has to date been
unable to obtain insurance with such coverage and in amounts it
deems prudent, and it is uncertain whether, at what times and at
what cost such insurance will become available and to the extent
available, whether prudent in amount and coverage; and
WHEREAS, the Restated Certificate of Incorporation of
the Company requires the Company to indemnify directors to the
fullest extent permitted by law and Indemnitee has been serving
and continues to serve as a director and/or officer of the
Company, in part in reliance on such Restated Certificate of
Incorporation; and
WHEREAS, in recognition of Indemnitee's need for
substantial protection against personal liability in order to
ensure Indemnitee's continued service to the Company in an
effective manner, the difficulty in obtaining satisfactory
directors' and officers' liability insurance coverage, and
Indemnitee's reliance on the aforesaid Restated Certificate of
Incorporation and, in part, to provide Indemnitee with specific
contractual assurance that the protection promised by such
Restated Certificate of Incorporation will be available to
Indemnitee, the Company desires to provide in this Agreement for
the indemnification of and the advance of expenses to Indemnitee
to the fullest extent (whether partial or complete) permitted by
law, as set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and of
Indemnitee continuing to serve the Company directly or, at the
Company's request, with another enterprise, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Certain Definitions.
(a) Claim: Any threatened, pending or completed
action, suit or proceeding, and any appeal thereof, whether
civil, criminal, administrative or investigative and whether or
not Indemnitee is a party thereto, and/or any inquiry or investi-
gation, whether initiated or conducted by the Company or any
other party, that Indemnitee in good faith believes might lead to
the institution of any such action, suit or proceeding.
(b) Expenses: Include attorneys', experts' and
accountants' fees and all other fees, costs, expenses and obliga-
tions paid or incurred or anticipated by Indemnitee to be in-
curred in connection with investigating, defending, being a
witness in or participating in (including on appeal and regard-
less of whether Indemnitee is a party thereto), or preparing to
defend, be a witness in or participate in any Claim relating to
any Indemnifiable Event, including without limitation in connec-
tion with any such Claim in advance of its final disposition.
(c) Indemnifiable Event: Any event, occurrence or
circumstance (regardless of whether any such event, occurrence or
circumstance occurred prior to the date of this Agreement or
occurs on or after such date) related to or arising in any way
out of or in connection with the fact that Indemnitee is or was a
director, officer, employee, agent or fiduciary of the Company,
or is or was serving at the request of the Company as a director,
officer, partner, employee, trustee, agent, fiduciary or in any
other capacity of another corporation, partnership, joint ven-
ture, employee benefit plan, trust or other enterprise, or by
reason of anything done or not done by Indemnitee in any such
capacity.
(d) Reviewing Party: Any person or body consisting of
a member or members of the Company's Board of Directors or the
Special Independent Counsel referred to in Section 3 (or, to the
fullest extent permitted by law, any other person or body ap-
pointed by the Board), who is not a party to the particular Claim
for which Indemnitee is seeking indemnification. Nothing in this
Agreement shall be deemed to require the Company's Board of
Directors to appoint a Reviewing Party, except insofar as a
Special Independent Counsel has been requested by the Indemnitee
under Section 3 below.
2. Basic Indemnification Arrangement.
(a) In the event Indemnitee was, is or becomes a party
to or witness or other participant in, or is threatened to be
made a party to or witness or other participant in, a Claim by
reason of (or arising in part out of) an Indemnifiable Event, the
Company shall indemnify Indemnitee to the fullest extent permit-
ted by law, as soon as practicable but in any event no later than
ten days after written demand is presented to the Company,
against any and all Expenses, costs, liabilities, losses, judg-
ments, fines, penalties and amounts paid in settlement (including
all interest, assessments and other charges paid or payable in
connection with or in respect of such Expenses, judgments, fines,
penalties (including excise taxes or penalties under the Employee
Retirement Income Security Act of 1974, as amended) or amounts
paid or to be paid in settlement). If so requested by Indemni-
tee, the Company shall advance (within two business days of such
request) any and all Expenses (including amounts not yet paid or
incurred but reasonably anticipated by the Indemnitee to be
incurred) to, or at the direction of, Indemnitee (an "Expense Ad-
vance").
(b) Notwithstanding the foregoing, (i) the obligations
of the Company under Section 2(a) shall be subject to the condi-
tion that any Reviewing Party shall not have determined (in a
written opinion, in any case in which the Special Independent
Counsel referred to in Section 3 hereof is involved) that Indem-
nitee would not be permitted to be indemnified under applicable
law, and (ii) the obligation of the Company under Section 2(a) to
make an Expense Advance where Indemnitee is a party defending the
claim to which such Expense Advance relates in advance of the
final disposition of such Claim shall be subject to the condition
that if, when and to the extent that any Reviewing Party (or, if
applicable law does not permit such determination to be made by
such Reviewing Party, a court of competent jurisdiction in a
final judicial determination as to which all rights of appeal
therefrom have been exhausted or lapsed) determines (x) that
Indemnitee would not be permitted to be so indemnified under
applicable law, the Company shall be entitled to be reimbursed by
Indemnitee (who hereby agrees to reimburse the Company) for all
such amounts theretofore paid or (y) that where indemnification
is granted, to the extent the Expense Advance so advanced by the
Company or allowed by a court exceeds the indemnification to
which Indemnitee is entitled, the Company shall be entitled to be
reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) to such extent; provided, however, that if Indemnitee
has commenced legal proceedings in a court of competent jurisdic-
tion to secure a determination that Indemnitee should be indemni-
fied under applicable law, any determination made by any Review-
ing Party that Indemnitee would not be permitted to be indemni-
fied under applicable law shall not be binding (and shall not
create a presumption and shall not be evidence that Indemnitee
would not be permitted to be indemnified) and, without limiting
the foregoing, Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determina-
tion is made with respect thereto (as to which all rights of
appeal therefrom have been exhausted or lapsed). If there is not
a request by Indemnitee pursuant to Section 3 hereof, a Reviewing
Party may be selected by the Board of Directors, and if there has
been such a request by Indemnitee, the Special Independent
Counsel referred to in Section 3 shall be selected as the Review-
ing Party; in the event the Board of Directors desires to select
a Reviewing Party prior to a request for a Special Independent
Counsel by Indemnitee, the Board of Directors shall give Indemni-
tee written notice of the identity of the proposed Reviewing
Party and the Indemnitee may request at any time prior to 30 days
after receipt of such notice that a Special Independent Counsel
be selected as Reviewing Party instead of the Reviewing Party
proposed by the Board of Directors. If any Reviewing Party
determines that Indemnitee substantively would not be permitted
to be indemnified in whole or in part under applicable law,
Indemnitee shall have the right (without limiting any right
Indemnitee may have to commence litigation in any other court of
competent jurisdiction) to commence litigation in any court in
the State of New York having subject matter jurisdiction thereof
and in which venue is proper seeking an initial determination by
the court or challenging any such determination by any Reviewing
Party or any aspect thereof, including the legal or factual basis
therefor, and the Company hereby consents to service of process
and to appear in any such proceeding. Any determination by a
Reviewing Party otherwise shall be conclusive and binding on the
Company and Indemnitee. In the absence of a determination by a
Reviewing Party (or a final judicial determination, as to which
all rights of appeal therefrom have been exhausted or lapsed)
that Indemnitee would not be permitted to be indemnified under
applicable law, the Company shall be required to timely make all
payments and/or advances to or at the direction of Indemnitee
provided under this Agreement. In the event any such payment is
not timely made (after giving effect to any grace period express-
ly set forth in this Agreement), without limiting Indemnitee's
other rights and remedies, all such unpaid amounts shall bear
interest payable by the Company on demand at the rate of 12% per
annum.
3. Special Independent Counsel. The Company agrees
if Indemnitee shall so request, then with respect to all matters
arising concerning the rights of Indemnitee to indemnity payments
and Expense Advances under this Agreement, the Company shall seek
legal advice only from "Special Independent Counsel" selected by
Indemnitee and approved by the Company (which approval shall not
be unreasonably withheld or delayed), and who has not otherwise
performed services for the Company or Indemnitee within the last
five years (other than in connection with such matters). Such
Special Independent Counsel, among other things, shall render its
written opinion to the Company, its Board of Directors and
Indemnitee as to whether and to what extent the Indemnitee would
be permitted to be indemnified under applicable law, and, if such
an opinion is rendered, any determination by the Company or its
Board of Directors shall be based solely on such opinion. The
Company agrees to pay the reasonable fees and expenses of the
Special Independent Counsel referred to above and to fully
indemnify such Special Independent Counsel against any and all
expenses (including attorneys' fees), claims, liabilities and
damages arising out of or relating to this Agreement or its
engagement pursuant hereto.
4. Indemnification for Additional Expenses. To the
fullest extent permitted by law, the Company shall indemnify
Indemnitee against any and all Expenses and, if requested by
Indemnitee, shall (within two business days of such request)
advance such Expenses to or at the direction of Indemnitee, which
are incurred or to be incurred by Indemnitee in connection with
any action brought by Indemnitee for (or any Claim asserted
against Indemnitee relating to) (i) indemnification or advance
payment of Expenses by the Company under this Agreement or any
other agreement, the Company's By-laws, Restated Certificate of
Incorporation or applicable law now or hereafter in effect
relating to Claims for Indemnifiable Events and/or (ii) recovery
under any directors' and officers' liability insurance policies
maintained by the Company, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification,
Expense advance or insurance recovery, as the case may be.
5. Partial Indemnity, Burden of Proof, Etc.
(a) If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a
portion of the Expenses, judgments, fines, penalties and amounts
paid or incurred in settlement of a Claim but not, however, for
all of the total amount thereof, the Company shall nevertheless
indemnify Indemnitee for the portion thereof to which Indemnitee
is entitled. Moreover, to the fullest extent permitted by law
and notwithstanding any other provision of this Agreement, to the
extent that Indemnitee has been successful on the merits or
otherwise, in defense, including dismissal without prejudice, of
any or all Claims relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter therein,
Indemnitee shall be indemnified against all Expenses incurred in
connection with such defense and not solely for any portion of
such Expenses attributable to the portion of the defense with
respect to which Indemnitee was successful.
(b) In connection with any determination by the
Reviewing Party, a court or otherwise as to whether Indemnitee is
entitled to be indemnified hereunder (including in connection
with an Expense Advance) the burden of proof shall be on the
Company to establish that Indemnitee is not so entitled (regard-
less, with respect to any determination by a court or other body,
of any determination by the Reviewing Party that the Indemnitee
is not entitled to indemnification).
6. No Presumption. For purposes of this Agreement,
to the fullest extent permitted by law, the termination of any
Claim, action, suit or proceeding, by judgment, order, settlement
(whether with or without court approval) or conviction, or upon a
plea of nolo contendere, or its equivalent, shall not create a
presumption and shall not itself be evidence that Indemnitee did
not meet any particular standard of conduct or have any par-
ticular belief or that a court has determined that indemnifica-
tion is not permitted by applicable law.
7. Non-exclusivity, Etc. The rights of Indemnitee
hereunder shall be in addition to any other rights Indemnitee may
have under the Company's Restated Certificate of Incorporation or
By-laws, the New York Business Corporation Law, any applicable
insurance policy, any trust agreement providing for payment of
indemnification obligations and advances, or otherwise. To the
extent that a change in the New York Business Corporation Law
(whether by statute or judicial decision) permits greater indem-
nification by agreement than would be afforded currently under
the Company's Restated Certificate of Incorporation or this
Agreement, to the fullest extent permitted by law, it is the
agreement of the parties hereto that Indemnitee shall enjoy by
this Agreement the greater benefits so afforded by such change
immediately upon the occurrence of such change without further
action by the Company or Indemnitee; provided, however, that no
reduction in indemnification under the New York Business Corpora-
tion Law (whether by statute or judicial decision) shall reduce
the benefits afforded under this Agreement immediately prior to
such reduction.
8. Liability Insurance. To the extent the Company
maintains an insurance policy or policies providing directors'
and officers' liability insurance, Indemnitee shall be covered by
such policy or policies, in accordance with its or their terms,
to the maximum extent of the coverage available for any director,
officer or employee of the Company.
<PAGE>
9. Period of Limitations. No legal action shall be
brought and no cause of action shall be asserted by or in the
right of the Company or any affiliate of the Company against
Indemnitee, Indemnitee's spouse, heirs, executors or personal or
legal representatives after the expiration of one year from the
date of accrual of such cause of action, and any claim or cause
of action of the Company or its affiliate shall be extinguished
and deemed released unless asserted by the timely filing of a
legal action within such one year period; provided, however, that
if any shorter period of limitations is otherwise applicable to
any such cause of action such shorter period shall govern.
10. Amendments, Etc. No supplement, modification or
amendment of this Agreement shall be binding unless executed in
writing by both of the parties hereto other than any increase in
indemnification provided by state law under Sections 7 or 15
hereof. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provi-
sions hereof (whether or not similar) nor shall such waiver con-
stitute a continuing waiver.
11. Subrogation. In the event of payment or advance
under this Agreement, the Company shall be subrogated to the
extent of such payment or advance to all of the rights of recov-
ery of Indemnitee, who shall execute all papers required and
shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the
Company effectively to bring suit to enforce such rights.
12. No Duplication of Payments. The Company shall not
be liable under this Agreement to make any payment in connection
with any Claim made against Indemnitee to the extent Indemnitee
has otherwise actually received payment (under any insurance
policy, Restated Certificate of Incorporation, By-law, trust
agreement for payment of indemnification obligations and advanc-
es, or otherwise) of the amounts otherwise indemnifiable hereun-
der.
13. Binding Effect, Etc. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by
the parties hereto and their respective successors, assigns,
including any direct or indirect successors by purchase, merger,
consolidation or otherwise to all or substantially all of the
business and/or assets of the Company, spouses, heirs, and
personal and legal representatives. The Company shall require
and cause any successor (whether direct or indirect by purchase,
merger, consolidation or otherwise) to all, substantially all of
the business and/or assets of the Company, by written agreement
in form and substance satisfactory to the Indemnitee, expressly
to assume and agree to perform this Agreement in the same manner
and to the same extent that the Company would be required to
perform if no such succession had taken place. This Agreement
shall continue in effect regardless of whether Indemnitee contin-
ues to serve as an officer, director, employee, trustee, agent or
fiduciary of the Company or of any other enterprise at the Com-
pany's request.
14. Severability. The provisions of this Agreement
shall be severable in the event that any of the provisions hereof
(including any provision within a single section, paragraph or
sentence) are held by a court of competent jurisdiction to be
invalid, void or otherwise unenforceable in any respect, and the
validity and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in
any way impaired, and shall remain enforceable to the fullest
extent permitted by law.
15. Governing Law. This Agreement shall be governed
by and construed and enforced in accordance with the laws of the
State of New York applicable to contracts made and to be per-
formed in such State without giving effect to the principles of
conflicts of laws. Without limiting the provisions of Section 13
above, in the event the Company is reincorporated as a Delaware
corporation, this Agreement shall remain in full force and effect
and the reference in the immediately preceding sentence to "New
York" shall be changed to "Delaware" and the references in this
Agreement to the "New York Business Corporation Law" shall be
changed to the "Delaware General Corporation Law."
IN WITNESS WHEREOF, the parties hereto have duly
executed and delivered this Agreement.
PRICE COMMUNICATIONS CORPORATION
By:
INDEMNITEE
RESTATED BY-LAWS
OF
PRICE COMMUNICATIONS CORPORATION
ARTICLE I
OFFICES
Section 1. Principal Office. The principal office of Price
Communications Corporation (the "Corporation") shall be in the
County of New York, State of New York.
Section 2. Other Offices. The Corporation may also have an
office or offices and keep the books and records of the Corpora-
tion, except as otherwise may be required by law, in such other
place or places, either within or without the State of New York,
as the Board of Directors of the Corporation may from time to
time determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. Place of Meetings. All meetings of holders of
shares of capital stock of the Corporation shall be held at such
place or places, within or without the State of New York, as may
from time to time be fixed by the Board of Directors and stated
in the notice of the meeting.
Section 2. Annual Meetings. An annual meeting of share-
holders for the election of directors and for the transaction of
such other business as may properly come before the meeting (an
"Annual Meeting") shall be held on such date as may be fixed by
the Board of Directors and stated in the notice of the meeting.
Section 3. Special Meetings. Special meetings of share-
holders may be called only as provided in the Restated
Certificate of Incorporation of the Corporation.
Section 4. Notice of Meetings. Except as otherwise may be
required by law, notice of a meeting of shareholders, whether an
Annual Meeting or a special meeting, shall be in writing, shall
state the purpose or purposes of the meeting, the place, date and
hour of the meeting and, unless it is an Annual Meeting, shall
indicate that the notice is being issued by or at the direction
of the person or persons calling the meeting, and a copy thereof
shall be delivered or sent by mail, not less than 10 nor more
than 50 days before the date of said meeting, to each shareholder
entitled to vote at such meeting. If mailed, the notice shall be
directed to such shareholder at his or her address as it appears
on the stock records of the Corporation, unless such shareholder
shall have filed with the Secretary a written request that
notices be mailed to some other address, in which case it shall
be directed to him or her at such other address. Notice of an
adjourned meeting need not be given if the time and place to
which the meeting is to be adjourned was announced at the meeting
at which the adjournment was taken, unless the Board shall fix a
new record date for such adjourned meeting after the adjournment.
Section 5. Quorum. At each meeting of shareholders of the
Corporation, the presence in person or by proxy holders of shares
having a majority of the voting power of the capital stock of the
Corporation issued and outstanding and entitled to vote thereat
shall constitute a quorum for the transaction of business, except
as otherwise provided by law.
Section 6. Adjournments. Any meeting of shareholders may
be adjourned to a designated time and place by a vote of a
majority in interest of the shareholders present in person or by
proxy and entitled to vote thereon, even if less than a quorum is
present.
Section 7. Order of Business.
(a) At any Annual Meeting of shareholders, only such
business shall be conducted as shall have been brought before the
Annual Meeting (i) by or at the direction of the Board of
Directors or (ii) by any shareholder who complies with the
procedures set forth in this Section 7. At any special meeting,
only such business shall be conducted as shall have been set
forth in the notice of such meeting.
(b) For business properly to be brought before a
meeting by a shareholder, the shareholder must have given timely
notice thereof in proper written form to the Secretary of the
Corporation. To be timely, a shareholder's notice must be
delivered to or mailed and received at the principal executive
offices of the Corporation not less than 50 days nor more than 90
days prior to the meeting at which such business will be
considered; provided, however, that if less than 50 days' notice
or prior public disclosure of the date of the meeting is given or
made to shareholders, notice by the shareholder to be timely must
be received not later than the close of business on the earlier
of (i) the tenth day following the day on which such notice of
the date of the meeting was mailed or such public disclosure was
made or (ii) the last business day prior to the meeting date. To
be in proper written form, a shareholder's notice to the
Secretary shall set forth in writing as to each matter the
shareholder proposes to bring before the meeting: (i) a brief
description of the business desired to be brought before the
meeting and the reasons for conducting such business at the
meeting; (ii) the name and address, as they appear on the
Corporation's books, of the shareholder or shareholders proposing
such business; (iii) the class and number of shares of the
Corporation which are beneficially owned by such shareholder or
shareholders, and (iv) any material interest of such shareholders
in such business. Notwithstanding anything else in the By-laws
to the contrary, no business shall be conducted at a meeting of
shareholders except in accordance with the procedures set forth
in this Section 7. The chairman of a meeting shall, if the facts
warrant, determine that business was not properly brought before
the meeting in accordance with the provisions of this Section 7
and, if he should so determine, he shall so declare to the
meeting and any such business not properly brought before the
meeting shall not be transacted.
Section 8. Voting. At each meeting of shareholders, each
holder of a share of Common Stock (as defined in the Corpora-
tion's Restated Certificate of Incorporation) of the Corporation
shall be entitled to one vote for each share of Common Stock
standing in his name on the stock records of the Corporation (i)
at the time fixed pursuant to Section 6 of Article VI of these
By-laws as the record date for the determination of shareholders
entitled to vote at such meeting, or (ii) if no such record date
shall have been fixed, then at the close of business on the day
next preceding the day on which notice thereof shall be given.
At each meeting of shareholders, except as otherwise provided in
Section 3 of Article III of these By-laws and except in cases
where a greater vote is required by law or by the Restated
Certificate of Incorporation of the Corporation, all matters
shall be decided by a majority of the votes cast at such meeting
by the holders of shares of Common Stock present or represented
by proxy and entitled to vote thereon, a quorum being present.
Section 9. Inspectors. For each election of directors by
the shareholders and in any other case in which it shall be
advisable, in the opinion of the Board, that the voting upon any
matter shall be conducted by inspectors of election, the Board
shall appoint two inspectors of election. If any inspector
appointed by the Board shall be unwilling or unable to serve, or
if the Board shall fail to appoint inspectors, the chairman of
the meeting shall appoint the necessary inspector or inspectors.
Before entering upon the discharge of their duties, the
inspectors so appointed shall be sworn faithfully to execute the
duties of inspectors with strict impartiality and according to
the best of their ability, and such oath shall be subscribed by
them. The inspectors shall (i) determine the number of shares of
capital stock of the Corporation outstanding and the voting power
of each of the shares represented at the meeting, the existence
of a quorum and the validity and effect of proxies, (ii) receive
the votes, ballots or consents, (iii) hear and determine all
challenges and questions arising in connection with the right to
vote, (iv) count and tabulate all votes, ballots or consents and
determine the result, and (v) do such acts as are proper to
conduct the election or vote with fairness to all shareholders.
On request of the chairman of the meeting or any shareholder
entitled to vote thereat, the inspectors shall make a report in
writing of any challenge, question or matter determined by them
and shall execute a certificate of any fact found by them. No
director or candidate for the office of director shall act as an
inspector of election of directors. Inspectors need not be
shareholders.
ARTICLE III
DIRECTORS
Section 1. Powers. The business of the Corporation shall
be managed under the direction of the Board of Directors. The
Board may exercise all such authority and powers of the Corpora-
tion and do all such lawful acts and things as are not by law or
otherwise directed or required to be exercised or done by the
shareholders.
Section 2. Number, Election and Terms. The authorized
number of directors shall be set as provided in the Restated
Certificate of Incorporation of the Corporation.
Section 3. Nominations of Directors; Elections. Nomina-
tions for the election of directors may be made by the Board of
Directors or a committee appointed by the Board, or by any share-
holder entitled to vote generally in the election of directors
who complies with the procedures set forth in this Section 3.
Directors shall be at least 21 years of age. Directors need not
be shareholders. At each meeting of shareholders for the elec-
tion of directors at which a quorum is present, the persons re-
ceiving a plurality of the votes cast shall be elected directors.
All nominations by shareholders shall be made pursuant to timely
notice in proper written form to the Secretary of the Corpora-
tion. To be timely, a shareholder's notice shall be delivered to
or mailed and received at the principal executive offices of the
Corporation not less than 50 days nor more than 90 days prior to
the meeting; provided, however, that if less than 50 days' notice
or prior public disclosure of the date of the meeting is given or
made to shareholders, notice by the shareholder to be timely must
be so received not later than the close of business on the
earlier of (i) the tenth day following the day on which such
notice of the date of the meeting was mailed or such public
disclosure was made or (ii) the last business day prior to the
meeting date. To be in proper written form, a shareholder's
notice to the Secretary shall set forth in writing (i) as to each
person whom the shareholder proposes to nominate for election or
reelection as a director, all information relating to such person
that is required to be disclosed in connection with the
solicitation of proxies for election of directors, or is
otherwise required, in each case pursuant to Regulation 14A under
the Securities Exchange Act of 1934, as amended, or any successor
regulation or law, including, without limitation, such person's
written consent to being named in the proxy statement as a
nominee and to serving as director if elected; and (ii) as to the
shareholder or shareholders giving the notice, (x) the name and
address, as they appear on the Corporation's books, of such
shareholder or shareholders and (y) the class and number of
shares of the Corporation which are beneficially owned by such
shareholder or shareholders. If a shareholder seeks to nominate
one or more directors, the Secretary shall appoint two
inspectors, who shall not be affiliated with the Corporation, to
determine whether a shareholder has complied with this Section 3.
If the inspectors shall determine that a shareholder has not
complied with this Section 3, the inspectors shall direct the
chairman of the meeting to declare to the meeting that the
nomination was not made in accordance with the procedures
prescribed by the By-laws of the Corporation, and the defective
nomination shall be disregarded.
Section 4. Place of Meetings. Meetings of the Board shall
be held at the Corporation's office in the State of New York or
at such other place, within or without such State, as the Board
may from time to time determine or as shall be specified or fixed
in the notice or waiver of notice of any such meeting.
Section 5. Regular Meetings. Regular meetings of the Board
shall be held in accordance with a yearly meeting schedule as
determined by the Board; or such meetings may be held on such
other days and at such other times as the Board may from time to
time determine. Notice of regular meetings of the Board need not
be given except as otherwise required by these By-laws.
Section 6. Special Meetings. Special meetings of the Board
may be called by the Chairman of the Board or the President and
shall be called by the Secretary at the request of any two of the
other directors.
Section 7. Notice of Meetings. Notice of each special
meeting of the Board (and of each regular meeting for which
notice shall be required), stating the time, place and purposes
thereof, shall be mailed to each director, addressed to him at
his residence or usual place of business, or shall be sent to him
by telex, cable or telegram so addressed, or shall be given
personally or by telephone, on five business days' notice.
Section 8. Quorum and Manner of Acting. The presence of a
majority of the entire Board of Directors shall be necessary and
sufficient to constitute a quorum for the transaction of business
at any meeting of the Board. If a quorum shall not be present at
any meeting of the Board, a majority of the directors present
thereat may adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be
present. Except where a different vote is expressly required or
permitted by the New York Business Corporation Law or the
Restated Certificate of Incorporation of the Corporation, the act
of a majority of the directors present at any meeting at which a
quorum is present shall be the act of the Board. Any action
required or permitted to be taken by the Board may be taken
without a meeting if all the directors consent in writing to the
adoption of a resolution authorizing the action. The resolution
and the written consent thereto by the directors shall be filed
with the minutes of the proceedings of the Board. Any one or
more directors may participate in any meeting of the Board by
means of a conference telephone or similar communications
equipment allowing all persons participating in the meeting to
hear each other at the same time. Participation by such means
shall be deemed to constitute presence in person at a meeting of
the Board.
Section 9. Resignation. Any director may resign at any
time by giving written notice to the Corporation. Written notice
to the Board, the Chairman of the Board, the President or the
Secretary shall be deemed to constitute notice to the
Corporation. Such resignation shall take effect upon receipt of
such notice or at any later time specified therein and, unless
otherwise specified therein, acceptance of such resignation shall
not be necessary to make it effective.
Section 10. Removal of Directors. Directors may be removed
only as provided in the Restated Certificate of Incorporation of
the Corporation.
Section 11. Vacancies. Any vacancy among the members of
the Board of Directors, whether caused by death, resignation,
removal or any other cause, may be filled by majority vote of the
Directors then in office or by shareholder vote.
Section 12. Compensation of Directors. The Corporation
shall pay each director who is not also an officer or employee of
the Corporation a fee of $7,000 per annum plus $2,000 for each
Board or committee meeting attended, up to an aggregate amount,
for annual and meeting fees taken together, of $15,000 per annum,
and shall reimburse each director for his or her reasonable
expenses.
Section 13. Board Observer. W.R. Huff Asset Management,
L.P. ("Huff") shall have the right to designate an individual to
sit as an observer of the Board of Directors and all Committees
of the Board for so long as the aggregate number of shares of
Common Stock with respect to which Huff (i) is a beneficial owner
as defined in Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, or (ii) has been engaged by one or more
such beneficial owners to provide investment advice, equals or
exceeds 5% of the Corporation's outstanding Common Stock.
Section 14. Investments. Except upon the affirmative vote
of at least seven directors (or, at any time that there are fewer
than ten members serving on the Board of Directors, the minimum
number of directors constituting at least two-thirds of all
directors then in office), the Corporation may only invest or
engage in a series of investments in the following:
(a) the purchase and sale of United States Treasury
Bonds, Bills and Notes with a remaining maturity of one year or
less;
(b) the purchase and sale of interests in investment
companies (registered under the Investment Company Act of 1940)
approved by the Finance Committee, that are organized in the
United States, and the investment of the assets of which is made
principally in United States Treasury Bonds, Bills and Notes with
an average remaining maturity of one year or less;
(c) one or more ordinary, simple-interest bearing
savings accounts at Chemical Bank (so long as Chemical Bank
retains at least an "A" rating from Standard and Poor's
Corporation ("S&P") and Moody's Investors Services, Inc.
("Moody's")) and/or at a federally insured, money center bank or
banks located in the State of New York and (i) rated "AAA" by S&P
and "Aaa" by Moody's or (ii) otherwise approved by the Finance
Committee (Chemical Bank (so long as it retains ratings as
aforesaid) and/or such other bank or banks being herein referred
to as the "Bank(s)"), which accounts shall not include any money
market, index matching or other investment vehicles (the
foregoing being by way of example and not limitation);
(d) one or more ordinary, simple-interest bearing or
non-interest bearing checking accounts at the Bank(s), which
accounts, if interest bearing, shall likewise not include any
money market or other investment vehicles (the foregoing being by
way of example and not limitation); and
(e) one or more money market or similar accounts
approved by the Finance Committee.
As used in this Section 14, the terms "invest" and
"investment" shall be construed broadly and shall include,
without limitation, any transaction, pledge, disposition or use
(or any commitment thereto) of any of the Corporation's cash,
cash equivalent and portfolio securities assets with the apparent
purpose or intent of achieving interest income, capital gains or
other returns not directly related or attributable to the primary
business operations of the Corporation or its subsidiaries, but
shall exclude (i) the purchase of equity or debt securities
issued by the Corporation or any subsidiary thereof; (ii) the
receipt by the Corporation of any equity or debt securities in
connection with the acquisition by a person or entity of any
stock or assets of the Corporation or any subsidiary of the
Corporation or the financing of such acquisition; (iii) the
extension of trade credit by the Corporation or its subsidiaries
in accordance with its or their normal practices; or (iv) the
purchase by the Corporation of any equity or voting securities in
any entity in which the Corporation has or is seeking (A)
ownership of 20% or more of any class of equity securities or
voting power and/or (B) the right to designate a member of the
board of directors or other governing body. As used in this
Section 14, the terms "purchase" and "sale" shall mean simple
purchases and sales and shall exclude, without limitation,
options, puts, calls, short positions, repurchase agreements,
future contracts, and similar positions. The Corporation's
subsidiaries shall follow and comply with substantially similar
investment guidelines and restrictions (with the subsidiaries'
Banks(s) being located in jurisdictions covenient to the
operations thereof), which, if they differ from the foregoing,
shall be approved in advance by the Finance Committee; provided,
however, that without the approval of the Finance Committee the
Corporation's subsidiaries may invest in bank accounts of the
nature described in clause (c) or (d) above and which are fully
insured by the Federal Deposit Insurance Corporation or other
federal deposit insurance and/or utilize any bank(s) which are
rated at least "A" by S&P or Moody's. Any questions or
ambiguities that may arise with respect to the guidelines and
restrictions contained in this Section 14 or Article NINTH of the
Corporation's Restated Certificate of Incorporation, shall be
resolved by the Finance Committee.
Section 15. Indemnification. Without limiting the other
rights of any director, officer or other person seeking
indemnification or advancement or reimbursement of expenses, the
Corporation has the authority, with the approval of the Board of
Directors of the Corporation, to provide for such indemnification
or advancement or reimbursement of expenses pursuant to
agreement.
ARTICLE IV
COMMITTEES OF THE BOARD
Section 1. Appointment of Executive Committee. The Board
may not designate an Executive Committee of the Board, or any
other Committee having powers or authority of a type or scope
generally exercised by an executive committee or a full board of
directors.
<PAGE>
Section 2. Appointment of Audit Committee.
(a) Subject to the provisions of Section 2(b), the
Board may, by resolution adopted by the affirmative vote of a
majority of the entire Board, designate an Audit Committee of the
Board which shall consist of such members as the Board shall
determine. The Audit Committee shall (i) make recommendations to
the Board as to the independent accountants to be appointed by
the Board; (ii) review with the independent accountants the scope
of their examination; (iii) receive the reports of the indepen-
dent accountants and meet with representatives of such
accountants for the purpose of reviewing and considering
questions relating to their examination and such reports; (iv)
review, either directly or through the independent accountants,
the internal accounting and auditing procedures of the Corpora-
tion; and (v) perform such other functions as may be assigned to
it from time to time by the affirmative vote of a majority of the
entire Board. The Audit Committee may determine its manner of
acting and fix the time and place of its meetings, unless the
Board, by the affirmative vote of a majority of the entire Board,
shall otherwise provide. A majority of the members of the Audit
Committee shall constitute a quorum for the transaction of
business by the committee, and the act of a majority of the
members of the committee present at a meeting which a quorum
shall be present shall be the act of the committee.
(b) Until the third anniversary of the Confirmation
Date, as defined in the Corporation's Plan of Reorganization
under Chapter 11 of the United States Bankruptcy Code, Case No.
91-B-13937(BRL), United States Bankruptcy Court for the Southern
District of New York (the "Third Anniversary"), the Board shall
designate an Audit Committee consisting of the Chairman of the
Board and at least two additional members, none of which
additional members shall be employees of the Company or designees
of such employees.
Section 3. Compensation Committee; Other Committees.
(a) Subject to the provisions of Section 3(b), the
Board may, by resolution adopted by the affirmative vote of a
majority of the entire Board, designate members of the Board to
constitute a Compensation Committee and such other committees of
the Board as it may determine. Such committees shall in each
case consist of such number of directors as the Board may
provide, and shall have and may exercise, to the extent permitted
by law, such powers as the Board may delegate to them in the
respective resolutions appointing such committees. Each such
committee may determine its manner of acting and fix the time and
place of its meeting, unless the Board, by the affirmative vote
of a majority of the entire Board, shall otherwise provide. A
majority of the members of any such committee shall constitute a
quorum for the transaction of business by the committee, and the
act of a majority of the members of such committee present at a
meeting at which a quorum shall be present shall be the act of
the committee.
(b) Until the Third Anniversary, the Board shall
designate a Compensation Committee consisting of the Chairman of
the Board and at least two additional members, none of which
additional members shall be employees of the Company or designees
of such employees. The Compensation Committee so designated will
have authority to review and approve all arrangements relating to
the compensation of executive officers of the Company.
Section 4. Action by Consent; Participation by Telephone or
Similar Equipment. Unless the Board shall otherwise provide, by
the affirmative vote of a majority of the entire Board, any
action required or permitted to be taken by any committee may be
taken without a meeting if all members of the committee consent
in writing to the adoption of a resolution authorizing the
action. The resolution and the written consents thereto by the
members of the committee shall be filed with the minutes of the
proceedings of the committee. Unless the Board shall otherwise
so provide, by the affirmative vote of a majority of the entire
Board, any one or more members of any such committee may
participate in any meeting of the committee by means of con-
ference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear one
another. Participation by such means shall constitute presence
in person at a meeting of the committee.
Section 5. Changes in Committees; Resignations, Removals.
Subject to Section 1 of this Article IV, the Board shall have
power, by the affirmative vote of a majority of the entire Board,
at any time to change the members of, to fill vacancies in, and
to discharge any committee of the Board in accordance with the
provisions of this Article IV. Any member of any committee may
resign at any time by giving notice to the Corporation. Notice
to the Board, the Chairman of the Board, the President, the
chairman of such committee or the Secretary shall be deemed to
constitute notice to the Corporation. Such resignation shall
take effect upon receipt of such notice or at any later time
specified therein; and, unless otherwise specified therein,
acceptance of such resignation shall not be necessary to make it
effective. Any member of any committee may be removed at any
time, either with or without cause, by the affirmative vote of a
majority of the entire Board at any meeting of the Board called
for that purpose.
ARTICLE V
OFFICERS
Section 1. Number and Qualification. The Corporation shall
have such officers as may be necessary or desirable for the
business of the Corporation. There shall be elected by the Board
of Directors persons having the titles and exercising the duties
of the Chairman of the Board, President, Vice President,
Treasurer and Secretary, and such other persons having such other
titles and such other duties as the Board may prescribe. The
same person may hold more than one office. The Chairman of the
Board shall be elected from among the directors. Unless other-
wise determined by the Board, the officers of the Corporation
shall be elected by the Board at its annual meeting and shall be
elected to hold office until the next succeeding annual meeting
of the Board. In the event of the failure to elect officers at
such annual meeting, officers may be elected at any regular or
special meeting of the Board. Each officer shall hold office
until his successor has been elected and qualified, or until his
earlier death, resignation or removal.
Section 2. Resignations. Any officer may resign at any
time by giving written notice to the Corporation. Notice to the
Board, the Chairman of the Board, the President or the Secretary
shall be deemed to constitute notice to the Corporation. Such
resignation shall take effect upon receipt of such notice or at
any later time specified therein; and, unless otherwise specified
therein, the acceptance of such resignation shall not be
necessary to make it effective.
Section 3. Vacancies. Any vacancy among the officers,
whether caused by death, resignation, removal or any other cause,
shall be filled in the manner prescribed for election or
appointment to such office.
Section 4. Chairman of the Board. The Chairman of the
Board shall, if present, preside at all meetings of the Board and
of the shareholders. He shall perform the duties incident to the
office of the Chairman of the Board and all such other duties of
a senior executive nature as are specified in these By-laws or as
shall be assigned to him from time to time by the Board.
Section 5. President. In the absence of the Chairman of
the Board or if there shall be no such officer, the President
shall preside at all meetings of the shareholders and of the
Board of Directors at which he is present. He shall act as Chief
Executive Officer of the Corporation and shall have supervision
and control over, and complete responsibility for, the general
management and operation of the Corporation, and such other
powers and duties that may, from time to time, be prescribed by
the Board, provided that such duties are of the type usually
assigned to the President and Chief Executive Officer in charge
of similar companies.
Section 6. Vice President. The Vice President (or if there
shall be more than one Vice President, the Vice Presidents) shall
perform such duties and exercise such powers consistent with
these By-laws as may be assigned to such officer(s) from time to
time by a resolution of a majority of the Board of Directors. In
the absence of a President, the duties of a President shall be
performed and his powers may be exercised by such Vice President
as may be designated by the President or, failing such designa-
tion, such duties shall be performed and such power may be
exercised by each Vice President in the order of their earliest
election to that office; subject in any case to review and
superseding action by the President.
Section 7. Treasurer. The Treasurer shall have charge and
custody of, and be responsible for, all funds and securities of
the Corporation, shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation,
shall deposit all moneys and other valuables to the credit of the
Corporation in such depositaries as may be designated pursuant to
these By-laws, shall receive, and give receipts for, moneys due
and payable to the Corporation from any source whatsoever, shall
disburse the funds of the Corporation and shall render to all
regular meetings of the Board, or whenever the Board may require,
an account of all his transactions as Treasurer. He shall, in
general, perform all the duties incident to the office of
Treasurer and all such other duties as may be assigned to him
from time to time by the President.
Section 8. Secretary. The Secretary shall, if present, act
as secretary of, and keep the minutes of all meetings of the
Board, such committees of the Board, and the shareholders in one
or more books provided for that purpose, shall see that all
notices are duly given in accordance with these By-laws and as
required by law, shall be custodian of the seal of the
Corporation and shall affix and attest the seal to all documents
to be executed on behalf of the Corporation under its seal. He
shall, in general, perform all the duties incident to the office
of Secretary and all such other duties as may be assigned to him
from time to time by the President.
Section 9. Additional Officers. The Board of Directors may
by resolution appoint such other officers and agents as it may
deem appropriate, and such other officers and agents shall hold
their offices for such terms and shall exercise such powers and
perform such duties consistent with these By-laws as may be
determined from time to time by the Board of Directors.
Section 10. Salaries. No officer shall be prevented from
receiving any salary by reason of the fact that he is also a
director of the Corporation.
<PAGE>
ARTICLE VI
CAPITAL STOCK
Section 1. Stock Certificates. Each shareholder shall be
entitled to have, in such form as shall be approved by the Board,
a certificate or certificates signed by the Chairman of the Board
or the President, and by either the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary (except
that, when any such certificate is countersigned by a transfer
agent or registered by a registrar other than the Corporation or
an employee of the Corporation, the signatures of any such
officers may be facsimiles, engraved or printed), which may be
sealed with the seal of the Corporation (which seal may be a
facsimile, engraved or printed), certifying the number of shares
of capital stock of the Corporation owned by such shareholder.
In the event any officer who has signed or whose facsimile
signature has been placed upon any such certificate shall have
ceased to be such officer before such certificate is issued, such
certificate may be issued by the Corporation with the same effect
as if he were such officer at the date of its issue.
Section 2. List of Shareholders Entitled to Vote. The
officer of the Corporation who has charge of the stock ledger of
the Corporation shall prepare and make or cause to be prepared or
made, at least 10 days before every meeting of shareholders, a
complete list of the shareholders entitled to vote at the meeting
arranged in alphabetical order, and showing the address of each
shareholder and the number of shares of capital stock registered
in the name of each shareholder. Such list shall be open to the
examination of any shareholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least
10 days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified
in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting for the
duration thereof, and may be inspected by any shareholder of the
Corporation who is present.
Section 3. Stock Ledger. The stock ledger of the Corpora-
tion shall be the only evidence as to who are the shareholders
entitled to examine the stock ledger, the list required by
Section 2 of this Article VI or the books of the Corporation, or
to vote in person or by proxy at any meeting of shareholders.
Section 4. Transfers of Capital Stock. Transfers of shares
of capital stock of the Corporation shall be made only on the
stock ledger of the Corporation by the holder of record thereof,
by his attorney thereunto authorized by power of attorney duly
executed and filed with the Secretary of the Corporation, or by
the transfer agent of the Corporation, and only on surrender of
the certificate or certificates representing such shares,
properly endorsed or accompanied by a duly executed stock
transfer power. The Board may make such additional rules and
regulations as it may deem advisable concerning the issue and
transfer of certificates representing shares of the capital stock
of the Corporation.
Section 5. Restriction on Ownership, Voting and Transfer.
In accordance with the Federal Communications Act of 1934, as
amended (the "Communications Act"), and regulations of the
Federal Communications Commission (the "FCC"), the Board of
Directors shall prohibit: (i) the ownership or voting of the
Corporation's outstanding capital stock whenever necessary to
ensure that, in the aggregate, no more than 25% of the
Corporation's outstanding capital stock (or 20% of the
Corporation's outstanding capital stock if the Corporation holds
any FCC licenses directly rather than through subsidiaries) is
held or voted by or for the account of aliens or their
representatives or by foreign government(s) or representative(s)
thereof or by any corporation(s) organized under the laws of a
foreign country, or by or for corporations of which any officer
is an alien, more than one-fourth of its directors are aliens, or
by or for corporations or partnerships deemed alien pursuant to
Section 310(b) of the Communications Act (collectively "Aliens");
and (ii) any transfer or voting of the Corporation's outstanding
capital stock which would cause the Corporation to violate the
above or any other provision of the Communications Act or FCC
regulation.
Section 6. Lost Certificates. The Board of Directors may
direct a new certificate to be issued in place of any certificate
theretofore issued by the Corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact
by the person claiming the certificate of stock to be lost,
stolen or destroyed. When authorizing such issue of a new
certificate, the Board of Directors may, in its discretion and as
a condition precedent to the issuance thereof, require the owner
of such lost, stolen or destroyed certificate, or his legal
representative, to give the Corporation a bond in such sum as it
may direct as indemnity against any claim that may be made
against the Corporation with respect to the certificate alleged
to have been lost, stolen or destroyed.
Section 7. Fixing of Record Date. In order that the
Corporation may determine the shareholders entitled to notice of
or to vote at any meeting of shareholders or any adjournment
thereof, or entitled to receive payment of any dividends or other
distributions or allotments of any rights, or entitled to exer-
cise any rights in respect to any change, conversion or exchange
of stock, or for the purpose of any other lawful action, the
Board may fix, in advance, a record date, which shall not be more
than 50 days nor less than 10 days before the date of such
meeting, nor more than 50 days prior to any other action. A
determination of shareholders of record entitled to notice of or
to vote at a meeting of shareholders shall apply to any adjourn-
ment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
Section 8. Beneficial Owners. The Corporation shall be
entitled to recognize the exclusive right of a person registered
on its books as the owner of shares to receive dividends and to
vote as such owner, and to hold liable for calls and assessments
a person registered on its books as the owner of shares, and
shall not be bound to recognize any equitable or other claim to
or interest in such shares on the part of any other person,
whether or not the Corporation shall have express or other notice
thereof, except as otherwise provided by law.
ARTICLE VII
FISCAL YEAR
The Corporation's fiscal year shall coincide with the
calendar year.
ARTICLE VIII
SEAL
The Corporation's seal shall be circular in form and shall
include the words, "PRICE COMMUNICATIONS CORPORATION, New York,
1979, Seal".
ARTICLE IX
WAIVER OF NOTICE
Whenever any notice is required by law, the certificate of
incorporation or these By-laws to be given to any director,
member of a committee or shareholder, a waiver thereof in
writing, signed by the person or persons entitled to such notice,
whether signed before or after the time stated in such written
waiver, shall be deemed equivalent to such notice. Attendance of
a person at a meeting shall constitute a waiver of notice of such
meeting, except when such person attends a meeting for the
express purpose of objecting, at the beginning of the meeting, to
the transaction of any business on the grounds that the meeting
is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any meeting of the share-
holders, directors, or members of a committee of directors need
be specified in any written waiver of notice.
<PAGE>
ARTICLE X
AMENDMENTS
These By-laws may be adopted, amended, supplemented or
repealed by vote of the holders of a majority of the outstanding
shares of Common Stock, except that during the Restricted Period
(as defined in the Amended and Restated Certificate of
Incorporation) the affirmative vote of 80% or more of the
outstanding shares of Common Stock is required to amend,
supplement or repeal Section 13 of Article III, Section 1 of
Article IV or the supermajority shareholder vote requirements of
this Article X. Except as hereinafter provided, the By-laws may
be adopted, amended or repealed by majority vote of the Board of
Directors, but any such By-law may be amended or repealed by the
shareholders entitled to vote thereon as herein provided, and no
amendment or supplement adopted by the Board shall vary or
conflict with any amendment or supplement to these By-laws
adopted by the shareholders. During the Restricted Period (i)
the Board may not amend, supplement or repeal Section 13 of
Article IV or this Article X, (ii) the affirmative vote of at
least seven (7) directors is required to amend, supplement or
repeal Section 1 of Article IV, and (iii) whenever these By-laws
require the affirmative vote of a majority of the entire Board
for the taking of any action, the repeal of such requirement
requires the affirmative vote of a majority of the entire Board.
Accountants' Consent
The Board of Directors
Price Communications Corporation
We consent to incorporation by reference in Registration Statement
(No. 33-59592) on Form S-3 and Registration Statement (No. 33-
62568) on Form S-8 of Price Communications Corporation of our
report dated February 18, 1993, relating to the consolidated
balance sheet of Price Communications Corporation and subsidiaries
as of December 31, 1992 and the related consolidated statements of
operations, shareholders' equity (deficit) and cash flows and
related schedules for each of the years in the two-year period
ended December 31, 1992, which report appears in the December 31,
1993 Annual Report on Form 10-K of Price Communications
Corporation. Our report refers to the reorganization of Price
Communications Corporation, effective December 30, 1992, under a
plan confirmed by the Federal Bankruptcy Court and the adoption of
a new basis of accounting whereby all remaining assets and
liabilities were revalued at their estimated fair values. Our
report also refers to a change in the method of accounting for
income taxes in 1992 for the adoption of the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes."
KPMG Peat Marwick
New York, New York
March 28, 1994<PAGE>
CONSENT OF ERNST & YOUNG
We consent to the inclusion in this Annual Report (Form 10-K) of
Price Communications Corporation of our report dated March 8, 1994,
included in the 1993 Annual Report to Shareholders of Price
Communications Corporation.
Our audit also included the financial statement schedules of Price
Communications Corporation listed in Item 14(a). These schedules
are the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audit. In our
opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as
a whole, present fairly in all material respects the information
set forth therein.
We also consent to the incorporation by reference in the
Registration Statement Form S-8 No. 33-62568 for the registration
of 1,000,000 shares of the Company's Common Stock and in the
Registration Statement Form S-3 No. 33-59592 for the registration
of 5,650,609 shares of the Company's Common Stock and $16,915,000
in principal amount of the Company's 5% Senior Secured Notes due
1999.
Ernst & Young
New York, New York
March 8, 1994
