<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: June 30, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No. 1-8598
A. H. BELO CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 75-0135890
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
P. O. BOX 655237
DALLAS, TEXAS 75265-5237
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (214) 977-6606
Former name, former address and former fiscal year,
if changed since last report.
NONE
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
------- -------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
CLASS OUTSTANDING AT 7/29/94
----- -----------------------
Common Stock, $1.67 par value 19,827,882*
- - ----------------
* Consisting of 14,182,741 shares of Series A Common Stock and 5,645,141
shares of Series B Common Stock.
================================================================================
<PAGE> 2
A. H. BELO CORPORATION
FORM 10-Q
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . . . . . . 1
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations . . . . . . 7
PART II OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . 9
Item 2. Changes in Securities . . . . . . . . . . . . . . . . . . . . 9
Item 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . . 9
Item 4. Submission of Matters to a Vote of Security Holders . . . . . 9
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . 9
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 9
</TABLE>
(i)
<PAGE> 3
PART I.
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF EARNINGS
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
Three months Six months
ended June 30, ended June 30,
==========================================================================================================
In thousands, except per share amounts
(unaudited) 1994 1993 1994 1993
- - ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- - -NET OPERATING REVENUES
Newspaper publishing $ 91,107 $ 84,745 $ 174,028 $ 163,521
Broadcasting 63,830 59,059 112,956 103,123
- - ----------------------------------------------------------------------------------------------------------
Total net operating revenues 154,937 143,804 286,984 266,644
- - ----------------------------------------------------------------------------------------------------------
- - -OPERATING COSTS AND EXPENSES
Salaries, wages and employee benefits 43,099 40,587 84,348 78,856
Newsprint, ink and other supplies 25,077 26,965 50,254 52,084
Other production, distribution and operating costs 40,259 36,922 76,277 71,798
Depreciation 7,836 6,017 15,163 11,941
Amortization 3,262 3,096 6,354 6,192
- - ----------------------------------------------------------------------------------------------------------
Total operating costs and expenses 119,533 113,587 232,396 220,871
- - ----------------------------------------------------------------------------------------------------------
Earnings from operations 35,404 30,217 54,588 45,773
- - ----------------------------------------------------------------------------------------------------------
- - -OTHER INCOME AND EXPENSE
Interest expense (3,483) (3,410) (6,303) (7,549)
Other, net 509 (419) 985 331
- - ----------------------------------------------------------------------------------------------------------
- - -EARNINGS
Earnings before income taxes and cumulative effect
of change in accounting 32,430 26,388 49,270 38,555
Income taxes 12,919 10,245 19,721 15,141
- - ----------------------------------------------------------------------------------------------------------
Net earnings before cumulative effect
of change in accounting 19,511 16,143 29,549 23,414
Cumulative effect of change in accounting for
income taxes (Note 3) - - - 6,599
- - ----------------------------------------------------------------------------------------------------------
Net earnings $ 19,511 $ 16,143 $ 29,549 $ 30,013
==========================================================================================================
- - -EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE
Before cumulative effect of change in accounting $ .96 $ .80 $ 1.45 $ 1.17
Cumulative effect of change in accounting $ - $ - $ - $ .33
Net earnings $ .96 $ .80 $ 1.45 $ 1.50
- - ----------------------------------------------------------------------------------------------------------
Average shares outstanding 20,243 20,071 20,384 19,975
- - ----------------------------------------------------------------------------------------------------------
Cash dividends declared per share $ .15 $ .14 $ .30 $ .28
- - ----------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
1
<PAGE> 4
CONSOLIDATED CONDENSED BALANCE SHEETS
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
==============================================================================================
In thousands JUNE 30, December 31,
(Current year unaudited) 1994 1993
- - ----------------------------------------------------------------------------------------------
<S> <C> <C>
- - -ASSETS
Current assets:
Cash and temporary cash investments $ 7,092 $ 8,943
Accounts receivable, net 88,629 80,023
Other current assets 22,890 28,419
- - ----------------------------------------------------------------------------------------------
Total current assets 118,611 117,385
- - ----------------------------------------------------------------------------------------------
Property, plant and equipment, at cost:
Land 19,516 15,065
Buildings 120,927 116,466
Newspaper publishing equipment 184,320 183,211
Broadcast equipment 112,629 93,276
Other 39,157 35,610
Advance payments on plant and equipment expenditures 19,823 8,679
- - ----------------------------------------------------------------------------------------------
Total property, plant and equipment 496,372 452,307
Less accumulated depreciation (196,635) (182,295)
- - ----------------------------------------------------------------------------------------------
Net property, plant and equipment 299,737 270,012
- - ----------------------------------------------------------------------------------------------
Excess cost over values assigned to
tangible assets of purchased subsidiaries 409,140 333,880
Other intangibles, net 19,586 20,221
Other assets, at cost 55,955 54,658
- - ----------------------------------------------------------------------------------------------
Total assets $ 903,029 $ 796,156
==============================================================================================
</TABLE>
2
<PAGE> 5
CONSOLIDATED CONDENSED BALANCE SHEETS (CONTINUED)
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
=============================================================================================
In thousands, except share data JUNE 30, December 31,
(Current year unaudited) 1994 1993
- - ---------------------------------------------------------------------------------------------
<S> <C> <C>
- - -LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 46,913 $ 49,542
Other current liabilities 15,933 10,189
- - ---------------------------------------------------------------------------------------------
Total current liabilities 62,846 59,731
- - ---------------------------------------------------------------------------------------------
Long-term debt 381,400 277,400
Deferred income taxes 109,472 107,308
Other liabilities 5,786 5,618
Shareholders' equity:
Preferred stock, $1.00 par value. Authorized
5,000,000 shares; none issued
Common stock, $1.67 par value. Authorized
150,000,000 shares:
Series A: Issued 14,033,830 shares at June 30, 1994
and 14,467,182 shares at December 31, 1993 23,436 24,161
Series B: Issued 5,665,652 shares at June 30, 1994
and 5,743,099 shares at December 31, 1993 9,462 9,591
Additional paid-in capital 117,060 116,451
Retained earnings 197,564 201,246
- - ---------------------------------------------------------------------------------------------
Total 347,522 351,449
Deferred compensation - restricted shares (3,997) (5,350)
- - ---------------------------------------------------------------------------------------------
Total shareholders' equity 343,525 346,099
- - ---------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $903,029 $796,156
=============================================================================================
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
3
<PAGE> 6
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
A. H. Belo Corporation and Subsidiaries
<TABLE>
<CAPTION>
Six months
ended June 30,
===================================================================================================
In thousands
(unaudited) 1994 1993
- - ---------------------------------------------------------------------------------------------------
<S> <C> <C>
- - -OPERATIONS
Net earnings $ 29,549 $ 30,013
Adjustments to reconcile net earnings
to net cash provided by operations:
Depreciation and amortization 21,517 18,133
Deferred income taxes 3,976 3,357
Non-cash adjustments and allowances 65 145
Cumulative effect of change in accounting - (6,599)
Other, net (279) 3,330
Net change in current assets and liabilities:
Accounts receivable (8,661) (3,984)
Other current assets 3,162 (9,561)
Accounts payable and accrued expenses (3,443) 1,324
Other current liabilities 6,699 3,202
- - ---------------------------------------------------------------------------------------------------
Net cash provided by operations 52,585 39,360
- - ---------------------------------------------------------------------------------------------------
- - -INVESTMENTS
Acquisition of WWL-TV assets (110,038) -
Capital expenditures (15,235) (28,007)
Asset dispositions 711 2,130
- - ---------------------------------------------------------------------------------------------------
Net cash used for investments (124,562) (25,877)
- - ---------------------------------------------------------------------------------------------------
- - -FINANCING
Repayment of long-term debt - (100,000)
Net proceeds from (payments on) revolving debt 104,000 80,000
Purchases of treasury stock (32,073) -
Payments of dividends on stock (6,061) (5,504)
Net proceeds from exercise of stock options 4,260 11,878
- - ---------------------------------------------------------------------------------------------------
Net cash provided by (used for) financing 70,126 (13,626)
- - ---------------------------------------------------------------------------------------------------
Net decrease in cash and temporary cash investments (1,851) (143)
Cash and temporary cash investments at beginning of period 8,943 2,683
- - ---------------------------------------------------------------------------------------------------
Cash and temporary cash investments at end of period $ 7,092 $ 2,540
===================================================================================================
- - -SUPPLEMENTAL DISCLOSURES
Interest paid, net of amounts capitalized $ 6,351 $ 10,724
Income taxes paid $ 9,044 $ 5,579
- - ---------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
4
<PAGE> 7
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
(1) The unaudited consolidated condensed financial statements as of
June 30, 1994 and for the three and six-month periods ended June 30,
1994 and 1993 and related notes should be read in conjunction with the
audited consolidated financial statements and related notes as of
December 31, 1993.
(2) In the opinion of A. H. Belo Corporation (the "Company" or "Belo")
management, the accompanying unaudited consolidated condensed
financial statements contain all adjustments necessary to present
fairly the Company's financial position as of June 30, 1994, and its
results of operations and cash flows for the indicated periods. All
such adjustments are of a normal recurring nature.
Certain amounts for the prior periods have been reclassified to
conform to the current year presentation.
(3) Effective January 1, 1993, the Company adopted the provisions of
Statement of Financial Accounting Standard ("SFAS") No. 109,
"Accounting for Income Taxes" changing the method of accounting for
income taxes. As permitted under the new rules, prior years'
financial statements have not been restated to reflect the change.
The cumulative effect of adopting SFAS No. 109 as of January 1, 1993
was an increase to net earnings of $6,599,000 or 33 cents per share.
(4) On June 1, 1994, Belo acquired the assets of television station
WWL-TV, the CBS affiliate in New Orleans, Louisiana from Rampart
Operating Partnership ("Rampart") for approximately $110,000,000 in
cash.
The cost of the acquisition has been allocated on the basis of the
estimated fair market value of the assets acquired. This preliminary
allocation resulted in excess cost over values assigned to tangible
assets of purchased subsidiaries of approximately $80 million which is
being amortized over 40 years.
The pro forma financial results of operations below, which reflect
purchase price adjustments including an estimated fixed long-term
borrowing rate of 7 percent, assume the transaction was completed at
the beginning of each period presented (in thousands):
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Six months ended June 30, 1994 1993
-------------------------------------------------------------------------------------
<S> <C> <C>
Net operating revenues $ 300,266 $ 280,745
Net earnings before cumulative effect
of change in accounting $ 29,257 $ 22,171
Net earnings $ 29,257 $ 28,770
Net earnings per share before cumulative
effect of change in accounting $ 1.44 $ 1.11
Net earnings per share $ 1.44 $ 1.44
-------------------------------------------------------------------------------------
</TABLE>
The pro forma financial information is provided for informational
purposes only and is not necessarily representative of the operating
results that would have occurred had the acquisition been completed as
of the indicated dates, nor are they indicative of future operating
results.
(5) On August 5, 1994, the Company entered into a new credit facility for
borrowings up to $600,000,000. The commitment expires on August 5,
1999 with an extension to August 5, 2000 at the request of the Company
and consent of the participating banks. The agreement also provides
for a facility fee ranging from 1/8 to 1/4 percent on the total
commitment. Loans under the new agreement bear interest at a rate
based, at the option of the Company, on the bank's alternate base
rate, LIBOR or competitive bid. The rate obtained through competitive
bid is either a Eurodollar rate or a rate agreed to by the Company and
the bank.
5
<PAGE> 8
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
The revolving credit agreement contains certain covenants, including
the maintenance of cash flow in relation to both the Company's
leverage and its fixed charges, and a limitation on repurchases of the
Company's stock.
As of June 30, 1994, the Company had $381,400,000 of outstanding debt,
of which $25,000,000 would have been classified as short-term under
the terms of the existing revolving credit agreement at that date.
Based on the terms of the new credit facility, all of the Company's
borrowings at June 30, 1994, including $35,000,000 of various
short-term notes which the Company has the intent and ability to
refinance under the revolving credit facility, are classified as
long-term.
(6) During the three months ended June 30, 1994, Belo repurchased 644,000
shares of treasury stock for an aggregate purchase price of
$32,073,000. All of these shares were subsequently retired, resulting
in a $32,073,000 reduction in total shareholders' equity.
(7) Net operating revenues, earnings from operations, and depreciation and
amortization by industry segment are shown below (in thousands):
<TABLE>
<CAPTION>
==================================================================================================================
Three months ended June 30, Six months ended June 30,
1994 1993 1994 1993
- - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET OPERATING REVENUES
Newspaper publishing $ 91,107 $ 84,747 $ 174,028 $ 163,527
Broadcasting 63,831 59,154 112,957 103,276
Intersegment revenues (1) (97) (1) (159)
- - ------------------------------------------------------------------------------------------------------------------
$ 154,937 $ 143,804 $ 286,984 $ 266,644
============================================================
EARNINGS FROM OPERATIONS
Newspaper publishing $ 17,716 $ 13,160 $ 28,624 $ 24,170
Broadcasting 21,049 22,042 32,547 30,325
Corporate expenses (3,361) (4,985) (6,583) (8,722)
- - ------------------------------------------------------------------------------------------------------------------
$ 35,404 $ 30,217 $ 54,588 $ 45,773
============================================================
DEPRECIATION AND AMORTIZATION
Newspaper publishing $ 5,167 $ 4,039 $ 10,298 $ 8,062
Broadcasting 5,781 5,001 10,919 9,936
Other 150 73 300 135
- - ------------------------------------------------------------------------------------------------------------------
$ 11,098 $ 9,113 $ 21,517 $ 18,133
============================================================
</TABLE>
6
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Company's primary source of liquidity is cash provided by
operations, which was $52,585,000 for the six months ended June 30, 1994. This
compares with $39,360,000 generated during the corresponding period in 1993.
This improvement is mostly due to increased earnings before the cumulative
effect of an accounting change and improved working capital. Cash from
operations for the first six months of 1994 was sufficient to fund both capital
expenditures and dividends on common stock. In addition, excess cash from
operations, supplemented by proceeds from the exercise of stock options, were
also used to finance the repurchase of 644,000 treasury shares for $32,073,000
during the second quarter, which were subsequently retired.
On June 1, 1994, Belo borrowed $110,000,000 under its revolving credit
agreement to finance the purchase of certain of the assets of WWL-TV, the CBS
television affiliate in New Orleans, Louisiana.
As of June 30, 1994, the Company had access to $418,750,000 in
revolving credit on which the borrowings at that date were $340,000,000. On
June 27, 1994, the board of directors authorized the Company to enter into a
new credit facility for borrowings up to $600,000,000. The new
agreement, effective August 5, 1994, expires on August 5, 1999 with an
extension to August 5, 2000 at the request of the Company and consent of the
participating banks.
From time to time, short-term unsecured notes are also used as a
source of financing. Based on the Company's intent and ability to renew
short-term notes through the revolving credit facility, short-term borrowings
are also classified as long-term. At June 30, 1994, there were $35,000,000 in
short-term notes outstanding.
Belo's ratio of long-term debt to total capitalization at June 30, 1994
was 52.6 compared to a ratio of 44.5 at December 31, 1993. The change during
1994 is due to additional borrowings to finance the acquisition of WWL-TV as
noted previously and the reduction in shareholders' equity due to the repurchase
and subsequent retirement of treasury shares, partially offset by current year
earnings.
Although the Company believes its current financial condition and
credit relationships will enable it to adequately meet its current obligations
and near-term growth strategy, the Company's board of directors has authorized
the Company to file a shelf registration statement that would allow the
Company, from time to time, to offer up to $200,000,000 of fixed rate debt
securities. Proceeds from these financings would be used to refinance existing
indebtedness, to repurchase common stock under the Company's stock repurchase
program and for general corporate purposes.
Capital expenditures for the first six months of 1994 were
$15,235,000. Current year capital expenditures include additional production
equipment for The Dallas Morning News and significant building projects at two
of Belo's broadcast stations. Capital expenditures are generally financed with
cash from operations, supplemented when necessary with bank borrowings.
Belo paid dividends of $6,061,000 or 30 cents per share on Series A
and Series B common stock outstanding during the first half of 1994 compared to
$5,504,000 or 28 cents per share in the first half of 1993.
RESULTS OF OPERATIONS
Belo had net earnings of $19,511,000 (96 cents per share) and
$29,549,000 ($1.45 per share) for the three and six month periods ended June
30, 1994, respectively. These results represent improvements of 20.9 percent
and 26.2 percent over same period 1993 earnings of $16,143,000 (80 cents per
share) and $23,414,000 ($1.17 per share), respectively. The year-to-date 1993
results do not reflect the cumulative effect of a change in accounting. The
adoption of Statement of Financial Accounting Standards ("SFAS") No. 109,
"Accounting for Income Taxes," effective January 1, 1993, increased year-to-date
1993 net earnings $6,599,000 or 33 cents per share. Net earnings for the six
months ended June 30, 1993 including the cumulative effect of the accounting
change were $30,013,000 ($1.50 per share).
7
<PAGE> 10
Earnings for the six month period in 1994 include the first quarter
reversal of certain music license fee accruals of $631,000 (2 cents per share).
Results for both the three and six month periods in 1994 include one month's
operations of WWL-TV, which was consolidated beginning June 1, 1994. Net
earnings for the three and six month periods were slightly higher due to the
inclusion of WWL-TV's results of operations.
Revenues for the quarter and six month periods ended June 30, 1994
were $154,937,000 and $286,984,000. Revenues for the same periods in 1993 were
$143,804,000 and $266,644,000, resulting in year-to-year improvement of 7.7
percent and 7.6 percent, respectively. Publishing revenues for the quarter of
$91,107,000 improved 7.5 percent over 1993 second quarter revenues of
$84,745,000 while year-to-date revenues of $174,028,000 were 6.4 percent better
than the $163,521,000 recognized during the first half of 1993. Although
retail advertising linage has declined, retail revenues have remained
relatively unchanged year to year due to rate increases. General and
classified advertising revenues have improved during the three and six month
periods of 1994, primarily in the employment and automotive categories. These
increases are a result of a combination of higher rates and increased linage,
due to a gradual job market recovery in the North Texas area throughout 1994.
Double digit volume increases in the preprint category also contributed to the
revenue growth. Circulation revenues were down slightly in the three and six
month periods ended June 30, 1994, despite a modest increase in average
circulation, due to contractor rate adjustments. Effective April 1, The Dallas
Morning News increased the daily/Sunday home delivery subscription rate from
$9.50 to $10.50 per month. This increase has not had a significant effect on
total circulation revenues.
Excluding WWL-TV revenues for the month of June 1994, broadcast
revenues improved by 3.4 percent and 6.9 percent for the three and six month
periods, respectively. Total broadcast revenues of $63,830,000 for the quarter
and $112,956,000 for six months were 8.1 percent and 9.5 percent better than
revenues of $59,059,000 and $103,123,000 earned in the corresponding 1993
periods. Contributing to the 1994 improvement were revenue gains in excess of
5 percent at all but Belo's Dallas television station. Locally generated
revenues continue to improve in Belo's Houston and Tulsa broadcast areas, due to
strong ratings and market growth. Broadcast revenues were negatively affected
by unfavorable quarter to quarter comparisons in the political advertising
category in both Dallas and Houston, as well as weak national advertising sales
in Dallas. In the second quarter of 1993, both Dallas and Houston stations
benefited from political advertising in Texas during the special election for
the U. S. Senate. Overall, national revenues for the six months ended June 30,
1994 were boosted by broadcast of the Winter Olympics on Belo's three CBS
affiliates.
Operating expenses for the three and six months of $119,533,000 and
$232,396,000 increased 5.2 percent in both periods from 1993 to 1994.
Salaries, wages and employee benefits increased 6.2 percent and 7 percent,
respectively, due to additional employees, salary increases, and higher benefit
costs, particularly pension and 401(k) matching contributions. Increased
programming expenses for locally produced series and syndicated programs
contributed a significant portion of the overall increase in other production,
distribution and operating costs, which was higher by 9 percent and 6.2 percent
for the three and six month periods, respectively. Higher distribution costs
in the publishing segment also contributed to the increase. These increases
were offset somewhat by the first quarter reversal of certain music license fee
accruals of $631,000. Depreciation expense increased in 1994 due to the
completion of the North Plant production facility expansion in the third
quarter of 1993. Newsprint, ink and other supplies expense was favorably
affected in 1994 by lower prices, particularly in the second quarter, where
savings over last year were 7 percent.
Interest expense for the second quarter of 1994 was slightly higher
than the same period in 1993, due to higher weighted average debt outstanding
during the period. The increase in debt outstanding at the end of the second
quarter of 1994 is due to borrowings of $110,000,000 on June 1, 1994 for the
purchase of WWL-TV. Interest expense for the six months ended June 30, 1994
was lower than interest expense for the same period of 1993 due to the
replacement of $100,000,000 of 8 5/8% debt with proceeds from the revolving
credit agreement.
OTHER MATTERS
The Company is in the process of renegotiating certain of its network
affiliation agreements. Revenues from network compensation are expected to
increase in 1995 as a result of these negotiations.
8
<PAGE> 11
PART II.
ITEM 1. LEGAL PROCEEDINGS
There are a number of legal proceedings pending against the Company,
including several actions for alleged libel. In the opinion of management,
liabilities, if any, arising from these actions are either covered by insurance
or would not have a material adverse effect on the operations or financial
position of the Company.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The following exhibits are filed as part of this report:
Exhibit
Number Description
------- -----------
10.3(1) Sixth Amendment to the A. H. Belo
Corporation Employee Savings and
Investment Plan
10.3(2) Sixth Amendment to the G. B. Dealey
Retirement Pension Plan
10.4(1) Credit Agreement dated as of August 5, 1994
among the Company and Citicorp Securities,
Inc., as Syndication Agent, The First
National Bank of Chicago, as Administrative
Agent, Texas Commerce Bank National
Association, as Documentation Agent and
The Banks Listed Therein, as Lenders
(b) Reports on Form 8-K
During the quarter covered by this report there was a report
on Form 8-K filed on June 8, 1994, containing information under Item 2
concerning the acquisition of the assets of WWL-TV in New Orleans, Louisiana.
Subsequently, an amendment to the Form 8-K was filed on Form 8-K/A on August 2,
1994, containing information under Item 7 concerning the financial statements
and pro-forma disclosure requirements related to the above noted acquisition.
9
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
A. H. BELO CORPORATION
August 12, 1994 By: /s/ MICHAEL D. PERRY
Michael D. Perry
Senior Vice President and
Chief Financial Officer
10
<PAGE> 13
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Seq.
Exhibit Page
Number Description Num.
- - ------- ----------- ----
<S> <C> <C>
10.3(1) Sixth Amendment to the A. H. Belo Corporation Employee
Savings and Investment Plan ____
10.3(2) Sixth Amendment to the G. B. Dealey Retirement Pension Plan ____
10.4(1) Credit Agreement dated as of August 5, 1994 between the Company
and Citicorp Securities, Inc., as Syndication Agent, The First
National Bank of Chicago, as Administrative Agent, Texas
Commerce Bank National Assocation, as Documentation Agent, and
The Banks Listed Therein, as Lenders ____
</TABLE>
<PAGE> 1
EXHIBIT 10.3 (1)
SIXTH AMENDMENT
TO THE
A. H. BELO CORPORATION EMPLOYEE
SAVINGS AND INVESTMENT PLAN
A. H. Belo Corporation, a Delaware corporation, pursuant to
authorization of its Board of Directors, adopts the following amendments to the
A. H. Belo Corporation Employee Savings and Investment Plan (the "Plan").
1. Section 1.30 of the Plan ("Year of Service") is amended by the
addition of the following paragraph:
Notwithstanding the foregoing, in determining whether an
Employee of WWL-TV, Inc., a Delaware corporation ("WWL- TV"), has
completed a Year of Service for purposes of eligibility to participate
under Section 2.1, each such Employee who became an employee of WWL-TV
on June 1, 1994, and who immediately prior to that date was an
employee of Rampart Operating Partnership, a partnership organized
under the laws of the State of Louisiana ("Rampart"), will receive
credit for an Hour of Service for each hour for which the Employee was
paid or entitled to payment by Rampart or any affiliate of Rampart
determined in accordance with Section 1.17 and will receive credit for
his period of employment with Rampart or any affiliate of Rampart
calculated in the same manner as if it had been employment with a
Controlled Group Member.
2. Section 2.1 of the Plan ("Eligibility to Participate") is
amended by the addition of the following sentence:
Notwithstanding the foregoing, each Employee of WWL-TV, Inc.
who completed a Year of Service on or before May 31, 1994, will become
a Participant on June 1, 1994, if he is classified as a full-time
Employee in accordance with standard personnel practices of WWL-TV,
Inc., and will become a Participant on July 1, 1994, if he is
classified as a part-time Employee in accordance with such standard
personnel practices.
<PAGE> 2
3. Section 3.2(d) of the Plan, which was added to the Plan by the
Fifth Amendment thereto, is amended in its entirety to read as follows:
(d) Participants Ineligible for Matching Contributions.
Notwithstanding the foregoing provisions of this Section, no matching
contributions will be made with respect to any Employee who is
employed by DFW Suburban Newspapers, Inc. or by WWL-TV, Inc.
4. The first sentence of Section 6.1(a) of the Plan ("Timing of
Distributions") is amended in its entirety to read as follows:
Except as set forth in Sections 6.2 and 6.3, distribution of a
Participant's vested Account Balances will be made as soon as
practicable after the Valuation Date coinciding with or immediately
following the Participant's termination of employment, or if earlier,
the date on which the Participant becomes eligible to receive benefits
under the Social Security Act on account of total and permanent
disability.
5. Section 6.3(e) of the Plan is amended in its entirety to read
as follows:
(e) Source of Hardship Distributions. The cumulative
amount distributed to a Participant on account of hardship will not
exceed the amount of his Deferral Contributions that have not been
previously withdrawn (but not the income allocable to his Deferral
Contributions) and the balance, if any, of his Transfer Account.
The amendment set forth in paragraph 4 will be effective as of October
1, 1989. The remaining amendments will be effective as of June 1, 1994.
-2-
<PAGE> 3
Executed at Dallas, Texas, this 27th day of July, 1994.
A. H. BELO CORPORATION
By /s/ MICHAEL J. MCCARTHY
-3-
<PAGE> 1
EXHIBIT 10.3(2)
SIXTH AMENDMENT
TO
THE G. B. DEALEY RETIREMENT PENSION PLAN
(As Amended and Restated Effective January 1, 1988)
A. H. Belo Corporation, a Delaware corporation, pursuant to
authorization of its Board of Directors, adopts the following amendments to the
G. B. Dealey Retirement Pension Plan (the "Plan").
1. Section 1.14 of the Plan ("Credited Service") is amended by
the addition of the following sentence:
In determining the Credited Service of an Employee who became
an employee of WWL-TV, Inc., a Delaware corporation, on June 1, 1994,
and who immediately prior to that date was an employee of Rampart
Operating Partnership, a partnership organized under the laws of the
State of Louisiana ("Rampart"), such Employee will receive credit for
his period of employment with Rampart or any affiliate of Rampart,
calculated in the same manner as if it had been employment with a
Controlled Group Member, for purposes of eligibility to participate in
the Plan under Section 2.1 but not for purposes of determining the
amount of his retirement benefit or his vested interest in his
retirement benefit or for any other purpose of the Plan.
2. Section 2.1 of the Plan ("Eligibility to Participate") is
amended by the addition of the following sentence:
Notwithstanding the foregoing, each Employee of WWL-TV, Inc.
who completed a year of Credited Service on or before May 31, 1994,
will become a Participant on June 1, 1994.
3. Section 4.1(c) of the Plan is amended in its entirety to read
as follows:
<PAGE> 2
(c) Full Vesting for Certain Participants. A
Participant's interest in his Accrued Benefit as of March 31, 1994
will become 100% vested and nonforfeitable without regard to his years
of Credited Service if he is employed by DFW Suburban Newspapers, Inc.
on such date. In addition, any Participant who terminated employment
with DFW Suburban Newspapers, Inc., or who was classified as a
newspaper employee and terminated employment with Dallas-Ft. Worth
Suburban Newspapers, Inc., on or after January 1, 1994 and before
March 31, 1994 will have a 100% vested and nonforfeitable interest in
his Accrued Benefit as of the date of his termination without regard
to years of Credited Service.
4. Section 5.1(a) of the Plan is amended by in its entirety to read as
follows:
(a) General Rule. A Participant who terminates
employment at age 65 will receive a monthly retirement benefit
beginning on his Normal Retirement Date in an amount equal to the sum
of (i) 1.1% of his Final Monthly Compensation multiplied by his years
of Credited Service and (ii) 0.35% of his Final Monthly Compensation
in excess of his Covered Compensation multiplied by his years of
Credited Service up to 35 such years, plus, if he is a Participant to
whom the provisions of Section 6.4 apply, a monthly benefit equal to
the benefit described Section 6.4(a)(v).
The amendment set forth in paragraph 5 is effective as of April 30,
1991. The amendment set forth in paragraph 3 is effective on and after April
1, 1994. The remaining amendments are effective as of June 1, 1994.
Executed at Dallas, Texas, this 27th day of July, 1994.
A. H. BELO CORPORATION
By /s/ MICHAEL J. MCCARTHY
-2-
<PAGE> 1
EXHIBIT 10.4 (1)
================================================================================
$600,000,000
CREDIT AGREEMENT
Dated as of August 5, 1994
among
A. H. BELO CORPORATION,
as Borrower,
and
CITICORP SECURITIES, INC.,
as Syndication Agent,
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Administrative Agent,
and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
as Documentation Agent,
and
THE BANKS LISTED HEREIN,
as Lenders
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1 - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Terms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 2 - THE CREDITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.1 Commitment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.2 Ratable Advances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.3 Competitive Bid Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.4 Mandatory Reductions of the Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.5 Optional Principal Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.6 Optional Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.7 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.8 Method of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.9 Method of Selecting Types and Interest Periods for New Ratable Advances . . . . . . . . . . . . . . 25
2.10 Conversion and Continuation of Outstanding Ratable Advances . . . . . . . . . . . . . . . . . . . . 25
2.11 Changes in Interest Rate, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.12 Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.13 Notes; Telephonic Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.14 Interest Payment Dates; Interest Basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.15 Notification of Loans; Interest Rates, Prepayments and Commitment Reductions . . . . . . . . . . . . 27
2.16 Applicable Lending Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.17 Optional Termination and Replacement of Lenders in Certain Circumstances . . . . . . . . . . . . . . 28
2.18 Successor Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.19 Non-Receipt of Funds by the Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.20 Extension of Facility Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 3 - CHANGE IN CIRCUMSTANCES; ILLEGALITY;
INDEMNIFICATION; TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.1 Yield Protection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.2 Change in Legality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.3 Availability of Interest Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.4 Failure to Pay or Borrow on Certain Dates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.5 Lender Certificates; Survival of Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.6 Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.7 Withholding Tax Exemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE 4 - CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.1 Initial Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.2 Each Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
4.3 Each Advance Resulting in an Increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.1 Corporate Existence and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.2 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.3 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.4 Compliance with Laws and Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.5 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.6 Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.7 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.8 Government Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.9 Properties; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.10 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.11 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.12 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.13 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.14 Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.15 Regulation U . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.16 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 6 - COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.1 Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.2 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.3 Notice of Default, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.4 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.5 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.6 Maintenance of Corporate Existence, Assets, Business and Insurance . . . . . . . . . . . . . . . . . 41
6.7 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.8 Compliance with Laws and Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.9 Lines of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.10 Inspection; Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.11 Stock Redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.12 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.13 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.14 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.15 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.16 Leverage Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.17 Fixed Charge Coverage Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.18 Subordinated Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE 7 - DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE 8 - ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.1 Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
8.3 Preservation of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE 9 - GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.1 Benefit of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.2 Survival of Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.3 Governmental Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.4 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.5 Applicable Law; Venue; Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.6 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.7 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
9.8 Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.9 Several Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.10 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.11 Numbers of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.13 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
9.14 Maximum Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.15 Non-Application of Chapter 15 of Texas Credit Code . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.16 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.17 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.18 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.19 LIMITATION OF LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.20 Lenders Not Fiduciaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.21 Termination of and Waiver Under Prior Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE 10 - THE CO-AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
10.1 Appointment of Co-Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
10.2 Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.3 General Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.4 No Responsibility for Loans, Recitals, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.5 Action on Instructions of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.6 Employment of Agents and Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.7 Reliance on Documents; Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.8 Co-Agents' Reimbursement and Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.9 Rights as a Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.10 Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
10.11 Co-Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE 11 - SETOFF; RATABLE PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
11.1 Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
11.2 Sharing of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
</TABLE>
iii
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<TABLE>
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ARTICLE 12 - NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
12.1 Giving Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
12.2 Change of Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE 13 - COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
</TABLE>
INDEX TO SCHEDULES
<TABLE>
<CAPTION>
Section
Schedule Description of Schedule Reference
- - -------- ----------------------- ---------
<S> <C> <C>
1 List of Lenders and Commitments 1.1
2 List of Subsidiaries 5.11
3 Existing Permitted Liens 1.1, 6.7
4 Existing Litigation 5.3
5 Environmental Matters 5.16
</TABLE>
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description of Exhibit
- - ------- ----------------------
<S> <C>
"A" Form of Note (Ratable Loans)
"B" Form of Note (Competitive Bid Loans)
"C" Form of Declaration of Bidding Status
"D" Form of Competitive Bid Quote Request
"E" Form of Invitation for Competition Bid Quotes
"F" Form of Competitive Bid Quote
"G" Form of Assignment and Acceptance Agreement
"H" Form of Opinion of Counsel for Borrower
</TABLE>
iv
<PAGE> 6
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (as amended, modified, supplemented, renewed or
restated from time to time, the "Agreement") dated as of August 5, 1994 is made
by and among A. H. BELO CORPORATION, a Delaware corporation ("Borrower"), the
financial institutions listed on the signature pages hereof and each other
financial institution that may hereafter become a party hereto in accordance
with the provisions hereof (collectively, the "Lenders" and individually, a
"Lender"), CITICORP SECURITIES, INC., in its capacity as syndication agent for
the Lenders (the "Syndication Agent"), THE FIRST NATIONAL BANK OF CHICAGO, in
its capacity as administrative agent for the Lenders (the "Administrative
Agent"), and TEXAS COMMERCE BANK NATIONAL ASSOCIATION, in its capacity as
documentation agent for the Lenders (the "Documentation Agent") (the
Syndication Agent, the Administrative Agent and the Documentation Agent are
collectively called the "Co-Agents" and, individually, a "Co-Agent").
RECITALS:
WHEREAS, Borrower has requested the Lenders and the Co-Agents to make
a revolving credit facility in the principal amount of $600,000,000 available
to Borrower for general corporate purposes, including, without limitation, to
refinance existing indebtedness, repurchase outstanding common stock of the
Borrower, make non-hostile acquisitions, back-up its current or future
commercial paper program, and provide working capital; and
WHEREAS, the Lenders and the Co-Agents are willing to make such a
revolving credit facility available to Borrower on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrower, the Lenders and the
Co-Agents hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the meanings specified below:
"Absolute Rate" shall mean, with respect to an Absolute Rate
Loan made by a given Lender for the relevant Absolute Rate Interest
Period, the rate of interest per annum (rounded to the nearest 1/100th
of 1%) offered by such Lender and accepted by Borrower.
CREDIT AGREEMENT - Page 1
<PAGE> 7
"Absolute Rate Advance" shall mean a borrowing hereunder
consisting of the aggregate amount of the several Absolute Rate Loans
made by some or all of the Lenders to Borrower at the same time and
for the same Absolute Rate Interest Period.
"Absolute Rate Auction" shall mean a solicitation of
Competitive Bid Quotes setting forth Absolute Rates pursuant to
Section 2.3.
"Absolute Rate Interest Period" shall mean, with respect to an
Absolute Rate Advance, a period of not less than 14 and not more than
280 days commencing on a Business Day selected by Borrower pursuant to
this Agreement. If such Absolute Rate Interest Period would end on a
day which is not a Business Day, such Absolute Rate Interest Period
shall end on the next succeeding Business Day.
"Absolute Rate Loan" shall mean a Loan which bears interest at
the Absolute Rate.
"Administrative Agent" shall have the meaning assigned to such
term in the preamble hereto.
"Advance" shall mean a borrowing hereunder consisting of the
aggregate amount of the several Loans made by some or all of the
Lenders to Borrower on the same Borrowing Date, at the same Rate
Option (or on the same interest basis in the case of Competitive Bid
Advances) and for the same Interest Period and includes a Competitive
Bid Advance, a Eurodollar Advance and a Floating Rate Advance.
"Affiliate" shall mean, as to any Person, any other Person (i)
that directly or indirectly, through one or more intermediaries,
controls or is controlled by, or is under common control with, such
Person; (ii) that directly or indirectly beneficially owns or holds
ten percent (10%) or more of any class of voting stock of such Person;
or (iii) ten percent (10%) or more of the voting stock of which is
directly or indirectly beneficially owned or held by the Person in
question. The term "control" shall mean the possession, directly or
indirectly, of the power to direct or cause direction of the
management and policies of a Person, whether through the ownership of
voting securities, by contract, or otherwise; provided, however, in no
event shall any Co-Agent or Lender be deemed an Affiliate of Borrower
or any of its Subsidiaries.
"Agreement" shall have the meaning assigned to such term in
the preamble hereto.
"Alternate Base Rate" shall mean, for any date, a rate per
annum equal to the higher as of such day of (i) the Federal Funds
Effective Rate plus one-half of one percent (1/2%) per annum and (ii)
the Corporate Base Rate. Any change in the Alternate Base Rate due to
a change in the Federal Funds Effective Rate or the Corporate Base
Rate shall be effective on the effective date of such change in the
Federal Funds Effective Rate or the Corporate Base Rate, as the case
may be.
CREDIT AGREEMENT - Page 2
<PAGE> 8
"Applicable Eurodollar Margin" shall mean for each Eurodollar
Advance, the percentage rate of interest set forth in the table below
to be added to the Eurodollar Rate based on Borrower's ratio of Funded
Debt as of the date of the most recent fiscal quarter to Pro Forma
Operating Cash Flow for the preceding four fiscal quarters most
recently then ended expressed as a percentage (rounded to the nearest
1/100 of 1%) as follows:
<TABLE>
<CAPTION>
Ratio of Funded Debt/ Applicable Eurodollar Margin
Pro Forma Operating Cash Flow (percentage rate of interest)
----------------------------- -----------------------------
<S> <C>
Greater than 5.00: 0.500% per annum
Equal to or greater than 4.51,
but equal to or less than 5.00:
0.425% per annum
Equal to or greater than 4.01,
but equal to or less than 4.50:
0.350% per annum
Equal to or less than 4.00: 0.250% per annum
</TABLE>
Any change in the Applicable Eurodollar Margin required hereunder
shall be deemed to occur on the date that the Administrative Agent
receives the financial statements required by Section 6.1(i) and
6.1(ii), as the case may be, and the certificate required by Section
6.1(iii); provided, that if Borrower fails to deliver to the
Administrative Agent such financial statements and certificate on or
before the date such financial statements or certificate are required
to be delivered pursuant to Section 6.1(i) or 6.1(ii), as the case may
be, or Section 6.1(iii), the Applicable Eurodollar Margin for all
Eurodollar Advances shall be one-half of one percent (0.500%) per
annum for the period from such required date until the date such
statements and certificate are actually delivered to the
Administrative Agent, after which the Applicable Eurodollar Margin
shall be as otherwise provided herein. The Administrative Agent will
promptly notify Borrower and the Lenders in writing of any changes in
the Applicable Eurodollar Margin.
"Applicable Lending Office" shall mean for each Lender and
each Type of Loan, the lending office of such Lender (or of an
Affiliate of such Lender) designated for such Type of Loan below its
name on the signature pages hereof or such other office of such Lender
(or of an Affiliate of such Lender) as such Lender may from time to
time specify in writing to Borrower and the Administrative Agent as
the office by which its Loans of such Type are to be made and
maintained.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an Eligible Assignee, and
accepted by the Administrative Agent, in the form of Exhibit "G"
hereto.
CREDIT AGREEMENT - Page 3
<PAGE> 9
"Authorized Officer" shall mean any of the President, any
Executive Vice President, any Senior Vice President, the Treasurer or
any Vice President of Borrower, acting singly.
"Bidding Lender" shall mean a Lender who has notified the
Administrative Agent of its desire to be invited to submit Competitive
Bid Quotes by delivering an executed Declaration of Bidding Status in
the form of Exhibit "C" hereto to the Administrative Agent (with a
copy to Borrower).
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"Borrowing Date" shall mean a date on which an Advance is
made, Continued or Converted hereunder.
"Borrowing Notice" shall have the meaning assigned to such
term in Section 2.9.
"Broadcast Subsidiary" shall mean, at any time, Borrower and
each Subsidiary which owns, operates or is otherwise engaged in any
business which engages in the radio or television broadcasting
business through the ownership or operation of AM or FM radio stations
or UHF or VHF television stations, or is otherwise engaged in the
broadcast industry through cable television, subscription television,
multipoint distribution, data transmission or production or similar
activities.
"Business Day" shall mean any day, other than a Saturday,
Sunday or legal holiday in the States of Texas, New York or Illinois,
on which banks are open for substantially all their banking business
in Chicago, Illinois, Dallas, Texas and New York, New York; provided,
however, if such date relates to a borrowing of, a payment or
prepayment of principal of or interest on, a conversion of or into, or
an Interest Period for, a Eurodollar Loan or a Eurodollar Bid Rate
Loan or a notice by Borrower with respect to any such borrowing,
payment, prepayment or Interest Period, the term "Business Day" shall
also exclude any day on which banks are not open for dealings in
Dollar deposits in the London interbank market.
"Capital Stock" shall mean any and all shares, interests,
participations, rights or other equivalents (however designated) of
corporate stock.
"Capitalized Lease Obligations" shall mean the amount of the
obligations of Borrower and its Subsidiaries under Financing Leases
which would be shown as a liability on a balance sheet of Borrower or
a Subsidiary, determined in accordance with GAAP.
"CERCLA" shall have the meaning assigned to such term in the
definition of "Environmental Law" in this Section 1.1.
CREDIT AGREEMENT - Page 4
<PAGE> 10
"Citicorp" shall mean Citicorp U.S.A., Inc. in its individual
capacity.
"Closing Date" shall mean August 5, 1994.
"Code" shall mean the Internal Revenue Code of 1986, as the
same may be amended from time to time.
"Commitment" shall mean, as to any Lender, such Lender's Pro
Rata Percentage of $600,000,000, as set forth opposite such Lender's
name under the heading "Commitment" on Schedule 1 hereto, or in the
Assignment and Acceptance executed by a Lender and an Eligible
Assignee pursuant to Section 9.13, as such amount may be reduced or
terminated from time to time pursuant to Sections 2.4 or 2.6 or
Article 8 hereof, and "Commitments" shall mean, collectively, the
Commitments for all of the Lenders.
"Commitment Letter" shall mean the commitment letter
(including without limitation, Exhibits A and B thereto) dated July 5,
1994 by and among Borrower, the Co-Agents, Citicorp, First Chicago and
TCB with respect to the Transactions, together with the Fee Letter
referred to therein.
"Competitive Bid Advance" shall mean a borrowing hereunder
consisting of the aggregate amount of the several Competitive Bid
Loans made by some or all of the Lenders to Borrower at the same time
and for the same applicable Interest Period.
"Competitive Bid Borrowing Notice" shall have the meaning
assigned to such term in Section 2.3.6.
"Competitive Bid Loan" shall mean a Eurodollar Bid Rate Loan
or an Absolute Rate Loan, or both, as the case may be.
"Competitive Bid Margin" shall mean the margin above or below
the applicable Eurodollar Base Rate offered for a Eurodollar Bid Rate
Loan, expressed as a percentage (rounded to the nearest 1/100th of 1%)
to be added to or subtracted from such Eurodollar Base Rate.
"Competitive Bid Note" shall mean a promissory note in
substantially the form of Exhibit "B" hereto, with appropriate
insertions, duly executed and delivered to the Administrative Agent by
Borrower for the account of a Lender and payable to the order of such
Lender, including any amendment, modification, renewal or replacement
of such promissory note.
"Competitive Bid Quote" shall mean a Competitive Bid Quote
substantially in the form of Exhibit "F" hereto completed and
delivered by a Lender to the Administrative Agent in accordance with
Section 2.3.4.
CREDIT AGREEMENT - Page 5
<PAGE> 11
"Competitive Bid Quote Request" shall mean a Competitive Bid
Quote Request substantially in the form of Exhibit "D" hereto
completed and delivered by Borrower to the Administrative Agent in
accordance with Section 2.3.2.
"Continue", "Continuation", and "Continued" shall mean a
continuation pursuant to Section 2.10 of a Eurodollar Advance as a
Eurodollar Advance from one Interest Period to the next Interest
Period.
"Controlled Group" shall mean all members of a controlled
group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with Borrower, are
treated as a single employer under Section 414(b) or 414(c) of the
Code.
"Convert", "Conversion", and "Converted" shall mean a
conversion pursuant to Section 2.10 of one Type of Advance into
another Type of Advance.
"Conversion/Continuation Notice" shall have the meaning
assigned to such term in Section 2.10.
"Corporate Base Rate" shall mean a rate of interest announced
by the Administrative Agent from time to time as its corporate base
rate, changing when and as said corporate base rate changes. For
purposes of this Agreement, any change in the Alternate Base Rate due
to a change in the Corporate Base Rate shall be effective on the date
such change in the Corporate Base Rate is announced. The Corporate
Base Rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer. The
Administrative Agent may make commercial loans or other loans at rates
of interest at, above or below the Corporate Base Rate.
"Debtor Relief Laws" shall mean the Bankruptcy Code of the
United States of America, as amended from time to time, and all other
applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws from time to time in effect affecting the Rights of
creditors generally.
"Default" shall mean the occurrence of an event described in
Article 7.
"Default Rate" shall mean the lesser of (i) the Maximum Rate
or (ii) the sum of the Alternate Base Rate in effect from day to
day plus two percent (2%).
"Documentation Agent" shall have the meaning assigned to such
term in the preamble hereto.
"Dollars" or "$" shall mean lawful money of the United States
of America.
CREDIT AGREEMENT - Page 6
<PAGE> 12
"Eligible Assignee" shall mean a savings and loan association,
a federal savings bank, a commercial bank organized under the laws of
the United States, or any State thereof, or a foreign bank which
maintains a branch or agency under the laws of the United States, and
having been approved by Borrower as an acceptable assignee of a Lender
pursuant to Section 9.13 hereof, or any Affiliate of a Lender or a
Lender.
"Environmental Law" shall mean any federal, state, local or
foreign Law issued, promulgated, approved or entered thereunder,
relating to pollution or the protection, cleanup or restoration of the
environment or natural resources, industrial hygiene, land use, waste
management, or to safety or health, including, but not limited to, the
federal Clean Air Act, the federal Clean Water Act, the federal
Resource Conservation and Recovery Act ("RCRA"), the federal
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA") and the federal Occupational Safety and Health Act, in each
case as amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or
not incorporated) that is a member of a group consisting of Borrower
or its Subsidiaries or any member of the Controlled Group.
"Eurocurrency Reserve Requirements" shall mean for any day as
applied to a Eurodollar Advance, 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 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 the Board) by a member bank of the
Federal Reserve System.
"Eurodollar Advance" shall mean a borrowing hereunder
consisting of the aggregate amount of the several Eurodollar Loans
made on the same day by the Lenders bearing interest at the same
Eurodollar Rate for the same applicable Eurodollar Interest Period.
"Eurodollar Auction" shall mean a solicitation of Competitive
Bid Quotes setting forth Eurodollar Bid Rates pursuant to Section 2.3.
"Eurodollar Base Rate" shall mean, for any Eurodollar Advance
or Eurodollar Bid Rate Advance for any Interest Period therefor, the
rate per annum (rounded upwards, if necessary, to the nearest 1/16 of
1%) quoted by the First Chicago at approximately 11:00 A.M. London
time (or as soon thereafter as practicable) two Business Days prior to
the first day of such Interest Period for the offering by First
Chicago to prime banks in the London interbank market of Dollar
deposits in immediately available funds having a term
CREDIT AGREEMENT - Page 7
<PAGE> 13
comparable to such Interest Period and, in the case of Eurodollar
Advances, in an amount comparable to the principal amount of the
Eurodollar Advance to be made by First Chicago to which such Interest
Period relates and, in the case of Eurodollar Bid Rate Advances, in an
amount comparable to the principal amount of the Eurodollar Bid Rate
Loan that would be made by First Chicago if it were to participate in
the Eurodollar Bid Rate Advance ratably in accordance with its
Commitment (or in the event that First Chicago does not quote any or
all of the foregoing rates, as quoted by the Lender having the largest
single Commitment; if more than one Lender has the largest Commitment,
Borrower shall designate the Lender responsible for providing such
quotations from among those Lenders having the largest Commitments).
"Eurodollar Bid Rate" shall mean, with respect to a Eurodollar
Bid Rate Loan made by a given Lender for the relevant Eurodollar
Interest Period, the sum of (i) the Eurodollar Base Rate and (ii) the
Competitive Bid Margin offered by such Lender and accepted by
Borrower.
"Eurodollar Bid Rate Advance" shall mean a Competitive Bid
Advance which bears interest at a Eurodollar Bid Rate.
"Eurodollar Bid Rate Loan" shall mean a Loan which bears
interest at the Eurodollar Bid Rate.
"Eurodollar Interest Period" shall mean, with respect to a
Eurodollar Advance or a Eurodollar Bid Rate Advance, a period of one,
two, three, six or nine months (if available) commencing on a Business
Day and selected by Borrower pursuant to Section 2.9 in the case of a
Eurodollar Advance or pursuant to Section 2.3.2 in the case of a
Eurodollar Bid Rate Advance. A month means a period starting on one
day in a calendar month and ending on the numerically corresponding
day in the next calendar month. If there is no such numerically
corresponding day in the month in which a Eurodollar Interest Period
ends, such Eurodollar Interest Period shall end on the last Business
Day of such month. If a Eurodollar Interest Period would otherwise
end on a day which is not a Business Day, such Eurodollar Interest
Period shall end on the next succeeding Business Day, provided,
however, that if said next succeeding Business Day falls in a new
month, such Eurodollar Interest Period shall end on the immediately
preceding Business Day.
"Eurodollar Rate" shall mean, with respect to a Eurodollar
Advance for the relevant Eurodollar Interest Period, a rate per annum
equal to the sum of (i) the quotient of (a) the Eurodollar Base Rate
applicable to that Eurodollar Interest Period, divided by (b) one
minus the Eurocurrency Reserve Requirement (expressed as a decimal)
applicable to that Eurodollar Interest Period, plus (ii) the
Applicable Eurodollar Margin in effect from time to time. The
Eurodollar Rate shall be rounded, if necessary, to the next higher
1/16 of 1%.
CREDIT AGREEMENT - Page 8
<PAGE> 14
"Eurodollar Loan" shall mean a Loan with respect to which
Borrower shall have selected an interest rate based on the Eurodollar
Rate plus the Applicable Eurodollar Margin in accordance with Article
2.
"Facility Fees" shall mean the facility fees that shall be
payable by Borrower quarterly in arrears, on the basis of a 360-day
year (calculated on the basis of actual days elapsed), on the full
amount of the Commitments irrespective of usage, such facility fees to
be the percentage rate of interest set forth in the table below
(rounded to the nearest 1/100 of 1%) based on Borrower's ratio of
Funded Debt as of the date of the most recent fiscal quarter to Pro
Forma Operating Cash Flow for the preceding four fiscal quarters then
ended as follows:
<TABLE>
<CAPTION>
Ratio of Funded Debt/ Facility Fee
Pro Forma Operating Cash Flow (percentage rate of interest)
----------------------------- -----------------------------
<S> <C>
Greater than 5.00: 0.250% per annum
Equal to or greater than 4.51,
but equal to or less than 5.00:
0.200% per annum
Equal to or greater than 4.01,
but equal to or less than 4.50:
0.150% per annum
Equal to or less than 4.00: 0.125% per annum
</TABLE>
Any change in the Facility Fees required hereunder shall be deemed to
occur on the date that the Administrative Agent receives the financial
statements required by Section 6.1(i) and 6.1(ii), as the case may be,
and the certificate required by Section 6.1(iii); provided, that if
Borrower fails to deliver to the Administrative Agent such financial
statements and certificate on or before the date such financial
statements or certificate are required to be delivered pursuant to
Section 6.1(i) or 6.1(ii), as the case may be, or Section 6.1(iii),
the Facility Fees shall be one-quarter of one percent (0.250%) per
annum for the period from such required date until the date such
statements and certificate are actually delivered to the
Administrative Agent, after which the Facility Fees shall be as
otherwise provided herein. The Administrative Agent will promptly
notify Borrower and the Lenders in writing of any changes in the
Facility Fees.
"Facility Termination Date" shall mean August 5, 1999, or such
later date as may be extended pursuant to the provisions of Section
2.20 hereof, or the earlier date on which the Commitments are canceled
by Borrower or otherwise terminated pursuant to this Agreement.
"FCC" shall mean the Federal Communications Commission and any
successor thereto.
CREDIT AGREEMENT - Page 9
<PAGE> 15
"Federal Funds Effective Rate" shall mean, for any day, the
weighted average of the rates (rounded to the nearest 1/100 of 1%) on
overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for
such Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the
average of the quotations for the day of such transactions received by
the Administrative Agent from three Federal funds brokers of
recognized standing selected by it. For purposes of this Agreement,
any change in the Alternate Base Rate due to a change in the Federal
Funds Effective Rate shall be effective on the effective date of such
change in the Federal Funds Effective Rate. If for any reason the
Administrative Agent shall have determined (which determination shall
be conclusive absent manifest error) that it is unable to ascertain
the Federal Funds Effective Rate for any reason, including, without
limitation, the inability or failure of the Administrative Agent to
obtain sufficient quotations in accordance with the terms thereof, the
Alternate Base Rate shall be the Corporate Base Rate until the
circumstances giving rise to such inability no longer exist.
"Film Contracts" shall mean contracts or agreements with
suppliers which provide the right to broadcast certain specified film
or video tape motion pictures.
"Financing Lease" shall mean any lease of property which would
be capitalized on a balance sheet of Borrower or a Subsidiary,
determined in accordance with GAAP.
"First Chicago" shall mean The First National Bank of Chicago
in its individual capacity.
"Fixed Charge Coverage Ratio" shall mean, for any period based
on the four preceding fiscal quarters then ended, the quotient
obtained by dividing (a) Net Cash Flow by (b) Fixed Charges.
"Fixed Charges" shall mean, for Borrower and its Subsidiaries
on a consolidated basis for any relevant period, the sum of (i) all
interest on and scheduled principal repayments of Funded Debt (except
for principal refinanced by new debt, Loans hereunder or equity) which
is or will be due and payable by its terms during such period,
excluding repayment of any borrowed money from commercial banks which
was due by its terms within one year of its date of creation and not
extendible beyond one year at the sole option of Borrower, plus (ii)
all dividends, redemption amounts or other amounts or distributions
with respect to the securities of Borrower or any Subsidiary which are
or will be due and payable during such period.
"Floating Rate Advance" shall mean a borrowing hereunder
consisting of the aggregate amount of the Floating Rate Loans made on
the same day by the Lenders bearing interest at the Alternate Base
Rate for the same applicable Floating Rate Interest Period and
"Floating Rate" shall mean the Alternate Base Rate.
CREDIT AGREEMENT - Page 10
<PAGE> 16
"Floating Rate Interest Period" shall mean, with respect to a
Floating Rate Advance, a period of 30 days (or, if less, the period
from the date of such Advance until the Facility Termination Date)
commencing on a Business Day selected by Borrower pursuant to Section
2.9. If such Floating Rate Interest Period would end on a day which
is not a Business Day, such Floating Rate Interest Period shall end on
the next succeeding Business Day.
"Floating Rate Loan" shall mean a Loan with respect to which
Borrower shall have selected an interest rate based on the Alternate
Base Rate in accordance with Article 2.
"Funded Debt" shall mean, without duplication, all
Indebtedness, exclusive of all short-term obligations under Film
Contracts.
"GAAP" shall mean generally accepted accounting principles,
applied on a consistent basis, as set forth in opinions of the
Accounting Principles Board of the American Institute of Certified
Public Accountants and/or in statements of the Financial Accounting
Standards Board and/or their respective successors and which are
applicable in the circumstances as of the date in question.
Accounting principles are applied on a "consistent basis" when the
accounting principles observed in a current period are comparable in
all material respects to those accounting principles applied in a
preceding period.
"Governmental Authority" shall mean any nation or government,
any federal, state, county, municipal, parish, provincial or other
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government, including, without limitation, any
arbitration panel, any court or any commission.
"Guaranty" shall mean any agreement by which Borrower or any
Subsidiary assumes, guarantees, endorses, contingently agrees to
purchase or provide funds for the payment of, or otherwise becomes
liable upon, the obligation of any other Person, or agrees to maintain
the net worth or working capital or other financial condition of any
other Person or otherwise assure any creditor of such other Person
against loss, and shall include, without limitation, the contingent
liability of Borrower or any Subsidiary under any Letter of Credit,
but shall not include typical and customary indemnifications,
representations and warranties made in connection with nonrecourse
purchases and sales of property or issuances of securities.
"Hazardous Materials" shall mean any toxic substance or waste,
pollutant, hazardous substance or waste, contaminant, insecticide,
pesticide, special waste, industrial substance or waste, petroleum or
petroleum-derived substance or waste, radioactive substance or waste,
or any constituent of any such substance or waste, including, without
limitation, any such substance or waste regulated as such under or
defined by or pursuant to any Environmental Law.
CREDIT AGREEMENT - Page 11
<PAGE> 17
"Indebtedness" shall mean, without duplication, Borrower's and
each Subsidiary's (i) obligations for borrowed money, (ii) obligations
representing the deferred purchase price of property (including,
without limitation, under Film Contracts) other than accounts payable
arising in connection with the purchase of inventory in the ordinary
course of business and in accordance with past practice, (iii)
obligations, whether or not assumed, secured by Liens on or payable
out of the proceeds or production from Property now or hereafter owned
or acquired by Borrower or any Subsidiary, (iv) obligations created
under any conditional purchase or other title retention agreements,
(v) Capitalized Lease Obligations, (vi) Letters of Credit, bonds or
similar instruments, and (vii) obligations under Guaranties; provided,
however, that Indebtedness shall not include obligations of Borrower
or any Subsidiary, not exceeding $8,000,000 in the aggregate, incurred
in connection with the self-insurance program or employee benefit
plans and programs of Borrower or its Subsidiaries.
"Interest Period" shall mean an Absolute Rate Interest Period,
a Eurodollar Interest Period or a Floating Rate Interest Period.
"Interest Rate Protection Agreement" shall mean, with respect
to any person, an interest rate swap, cap, corridor or collar
agreement or similar arrangement between such person and one or more
banks or financial institutions providing for the transfer or
mitigation of interest rate risks by such person either generally or
under specified contingencies.
"Investment" shall mean any loan, advance, extension of credit
(excluding accounts receivable arising in the ordinary course of
business), or contribution of capital by Borrower or any Subsidiary to
any other Person or any investment in, or purchase or other
acquisition of, the stock, notes, debentures or other securities of
any other Person made by Borrower or any Subsidiary.
"Law" or Laws" mean all applicable treaties, statutes, laws,
ordinances, codes, regulations, rules, principles of common law,
orders, writs, judgments, injunctions or decrees of any state,
commonwealth, nation, country, territory, possession, county, parish,
municipality or Tribunal.
"Lender Termination Date" shall have the meaning assigned to
such term in Section 2.17.
"Lender" or "Lenders" shall have the meanings assigned to such
terms in the preamble hereto, and includes, without limitation, any
Successor Lender.
"Letter of Credit" shall mean a letter of credit or similar
instrument which is issued upon the application of Borrower or any
Subsidiary or upon which Borrower or any Subsidiary is the account
party or for which Borrower or any Subsidiary is in any way liable.
CREDIT AGREEMENT - Page 12
<PAGE> 18
"Lien" shall mean any security interest, mortgage, pledge,
lien, charge, encumbrance, title retention agreement, lessor's
interest under a Financing Lease or analogous instrument, in, of or on
any of Borrower's or any Subsidiary's Property.
"Litigation" shall mean any proceeding, claim, lawsuit, and/or
investigation conducted or threatened in writing (and known to the
principal executive officer and/or principal financial officer of any
Subsidiary or any Authorized Officer) by or before any Tribunal.
"Loan" shall mean a loan made from a Lender to Borrower under
this Agreement.
"Loan Documents" shall mean this Agreement, the Notes, the
Commitment Letter and all other instruments, documents, certificates
and agreements now or hereafter executed by Borrower and delivered
pursuant to or in connection with this Agreement, as such instruments,
documents, certificates and agreements may be amended, modified,
renewed, extended, or supplemented from time to time.
"Margin Stock" shall have the meaning assigned such term in
Regulation U.
"Material Adverse Effect" shall mean any set of circumstances
or event which (i) would have any material adverse effect whatsoever
upon the validity or enforceability of any of the Loan Documents, (ii)
is or would reasonably be expected to have a material and adverse
effect on the business, condition (financial or otherwise),
operations, or Properties of Borrower and its Subsidiaries taken as a
whole, (iii) would materially impair Borrower's ability to fulfill its
obligations under the terms and conditions of the Loan Documents, or
(iv) causes a Default or an Unmatured Default (this clause (iv) being
inapplicable in connection with the application of the definition of
Material Adverse Effect under Sections 7.11, 7.12 and 7.13).
"Material Indebtedness" shall mean any Indebtedness
outstanding in an amount equal to or exceeding $2,500,000.
"Maximum Rate" shall mean the maximum rate of nonusurious
interest permitted from day to day by applicable law, including as to
Article 5069-1.04, Vernon's Texas Civil Statutes (and as the same may
be incorporated by reference in other Texas statutes), but otherwise
without limitation, that rate based upon the "indicated rate ceiling"
and calculated after taking into account any and all relevant fees,
payments, and other charges in respect of the Loan Documents which are
deemed to be interest under applicable law.
"Net Cash Flow" shall mean, for Borrower and its Subsidiaries
for any relevant period, on a consolidated basis, Operating Cash Flow
of Borrower and its Subsidiaries, less income taxes paid during such
period.
"Note" or "Notes" shall mean Notes (Ratable Loans) and/or
Notes (Competitive Bid Loans) of Borrower, executed and delivered
pursuant to this Agreement.
CREDIT AGREEMENT - Page 13
<PAGE> 19
"Note (Competitive Bid Loans)" shall mean a competitive bid
note, in substantially the form of Exhibit "B" hereto, duly executed
and delivered to the Documentation Agent by Borrower or as otherwise
provided in this Agreement for the account of a Lender and payable to
the order of a Lender in the amount of its Competitive Bid Loan, and
all extensions, renewals and other modifications thereof and all
replacements and substitutions therefor, and "Notes (Competitive Bid
Loans)" shall mean, collectively, all of the Notes (Competitive Bid
Loans).
"Note (Ratable Loans)" shall mean a revolving credit note, in
substantially the form of Exhibit "A" hereto, duly executed and
delivered to the Documentation Agent by Borrower or as otherwise
provided in this Agreement for the account of each Lender and payable
to the order of each Lender in the amount of its Commitment, and all
extensions, renewals and other modifications thereof and all
replacements and substitutions therefor, and "Notes (Ratable Loans)"
shall mean, collectively, all of the Notes (Ratable Loans).
"Obligations" shall mean all obligations, indebtedness, and
liabilities of Borrower to the Co-Agents and the Lenders, or any of
them, arising pursuant to any of the Loan Documents, now existing or
hereafter arising, whether direct, indirect, related, unrelated,
fixed, contingent, liquidated, unliquidated, joint, several, or joint
and several, including, without limitation, the obligation of Borrower
to repay the Loans, interest on the Loans, and all fees, costs,
indemnities and expenses (including reasonable attorneys' fees)
provided for in the Loan Documents.
"Operating Cash Flow" shall mean, for Borrower and its
Subsidiaries for any relevant period, on a consolidated basis, the sum
of (i) earnings before income taxes for such period (without taking
into account extraordinary, nonrecurring items), plus (ii)
depreciation and amortization expense during such period, plus (iii)
interest charges or interest expense actually incurred or accrued
during such period determined in accordance with GAAP; provided,
however, that Operating Cash Flow shall not include any income or loss
attributable to any investment accounted for on the "equity" method of
accounting.
"Payment Date" shall mean the first day of each January,
April, July and October.
"Permits" shall mean all permits, certificates, approvals,
orders, licenses and other governmental authorizations.
"Permitted Liens" shall mean (i) Liens for Taxes not yet due
and payable, mechanic's Liens and materialman's, shipper's or
warehouseman's Liens for services or materials and landlord's Liens
for rental amounts for which payment is not yet due or which are being
contested in good faith by appropriate proceedings, (ii) Liens
securing any purchase money Indebtedness if such Liens do not encumber
any property other than the property for which such purchase money
Indebtedness was incurred, (iii) the currently existing Liens
described in Schedule 3 hereto, if any, and renewals thereof,
CREDIT AGREEMENT - Page 14
<PAGE> 20
(iv) pledges or deposits made to secure payment of worker's
compensation, or to participate in any fund in connection with
worker's compensation, unemployment insurance, pensions, or other
social security programs, (v) good-faith pledges or deposits made to
secure performance of bids, tenders, contracts (other than for the
repayment of borrowed money), or leases, not in excess of 20% of the
aggregate amount due thereunder, or to secure statutory obligations,
surety or appeal bonds, or indemnity, performance, or other similar
bonds in the ordinary course of business, (vi) encumbrances consisting
of zoning restrictions, easements, utility district assessments or
other restrictions on the use of Property, none of which materially
impairs the operation by Borrower and its Subsidiaries (taken as a
whole) of their business, and none of which is violated by existing or
proposed structures or land use which materially impairs the operation
by Borrower and its Subsidiaries (taken as a whole), and (vii) the
following, if the validity or amount thereof is being contested in
good faith and by appropriate and lawful proceedings and so long as
levy and execution thereon have been stayed and continue to be stayed,
or they do not in the aggregate materially detract from the value of
any material assets or the operation by Borrower or any of its
Subsidiaries of their respective businesses taken as a whole: claims
and Liens for Taxes due and payable; claims and Liens upon, and
defects of title to, Property, including any attachment of Property or
other legal process prior to adjudication of a dispute on the merits;
and claims and Liens of mechanics, materialmen, warehousemen,
carriers, landlords, or other Liens; and judgment Liens.
"Person" or "person" shall mean any corporation, natural
person, firm, joint venture, partnership, trust, unincorporated
organization, government or any department or agency of any
government.
"Plan" shall mean an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Internal Revenue Code of 1986, as
amended and is either (i) maintained by Borrower or any member of the
Controlled Group for employees of Borrower or any member of the
Controlled Group (a "Single Employer Plan") or (ii) maintained
pursuant to a collective bargaining agreement or any other arrangement
to which Borrower or any member of the Controlled Group is a party
under which more than one employer makes contributions (a
Multiemployer Plan").
"Prior Agreement" shall have the meaning assigned to such term
in Section 9.21.
"Pro Forma Operating Cash Flow" shall mean, for any relevant
period, Operating Cash Flow of Borrower and its Subsidiaries on a
consolidated basis adjusted to include the Operating Cash Flow of any
operating units or entities acquired during such relevant period and
to exclude the Operating Cash Flow of any operating units or entities
divested or sold during such relevant period.
"Pro Rata Percentage" shall mean with respect to any Lender, a
fraction (expressed as a percentage), the numerator of which shall be
the amount of such Lender's
CREDIT AGREEMENT - Page 15
<PAGE> 21
Commitment and the denominator of which shall be the aggregate amount
of all the Commitments of the Lenders, as adjusted from time to time
in accordance with Sections 2.4 and 9.13 hereof.
"Property" shall mean any interest or right in any kind of
property or asset, whether real, personal or mixed, whether owned or
leased and whether tangible or intangible and whether now held or
hereafter acquired.
"Ratable Advance" shall mean a borrowing hereunder consisting
of the aggregate amount of the several Ratable Loans made by the
Lenders to Borrower at the same time, at the same Rate Option and for
the same Interest Period.
"Ratable Loan" shall mean a Loan made by a Lender pursuant to
Section 2.2 hereof and shall include Floating Rate Loans and
Eurodollar Loans, but shall exclude Competitive Bid Loans.
"Rate Option" shall mean the Eurodollar Rate or the Alternate
Base Rate in respect of Ratable Loans and the Absolute Rate or
Eurodollar Bid Rate in respect of Competitive Bid Loans.
"RCRA" shall have the meaning assigned to such term in the
definition of "Environmental Law" in this Section 1.1.
"Register" shall have the meaning assigned to such term in
Section 9.13(iv).
"Regulation D" shall mean Regulation D of the Board, from time
to time in effect and shall include any successor or other regulation
or official interpretation of said Board relating to reserve
requirements applicable to member banks of the Federal Reserve System.
"Regulation U" shall mean Regulation U of the Board, from time
to time in effect and shall include any successor or other regulation
or official interpretation of said Board relating to the extension of
credit by banks for the purpose of purchasing or carrying margin
stocks (as defined therein) applicable to member banks of the Federal
Reserve System.
"Regulation X" shall mean Regulation X of the Board, from time
to time in effect and shall include any successor or other similar
regulation or official interpretation of said Board applicable to
member banks of the Federal Reserve System.
"Release" shall mean a "release", as such term is defined in
CERCLA.
"Remedial Action" shall mean all actions required to (i)
cleanup, remove, treat, or otherwise address Hazardous Materials in
the indoor or outdoor environment, (ii) prevent the Release or threat
of Release or minimize the further Release of Hazardous Materials
CREDIT AGREEMENT - Page 16
<PAGE> 22
so that they do not migrate or endanger or threaten to endanger public
health or welfare or the indoor or outdoor environment, or (iii)
perform pre-remedial studies and investigations and post-remedial
monitoring and care.
"Reportable Event" shall mean a reportable event as defined
in Section 4043 of ERISA.
"Required Lenders" shall mean Lenders in the aggregate holding
at least 66-2/3% of the aggregate unpaid principal amount of the
outstanding Ratable Loans, or, if no Ratable Loans are outstanding,
Lenders in the aggregate having at least 66-2/3% of the Commitments.
"Rights" shall mean rights, remedies, powers and privileges.
"Senior Leverage Ratio" shall mean, for any relevant period
based on the four preceding fiscal quarters then ended, the quotient
obtained by dividing (i) Funded Debt (exclusive of Subordinated Debt,
if any)by (ii) Pro Forma Operating Cash Flow.
"Subordinated Debt" shall mean any debt for borrowed money of
Borrower or its Subsidiaries expressly subordinate to the Obligations
of Borrower which satisfies the following criteria or such other
criteria as may be acceptable to the Required Lenders: (i) such
subordinated debt will not amortize until at least six (6) months
after the Facility Termination Date; (ii) the financial covenants
taken as a whole under any such subordinated debt will not be more
restrictive to the Borrower than those contained in this Agreement;
(iii) the terms of such subordinated debt will not permit payments to
subordinated debt holders when a Default or Unmatured Default exists
under this Agreement; and (iv) the subordinated debt holders' rights
will be subordinate to those of the Co-Agents and the Lenders under
this Agreement in the event of bankruptcy and/or liquidation of
Borrower.
"Subsidiary" shall mean any corporation, or any similar
entity, more than 50% of the outstanding voting securities or
ownership interests of which shall at the time be owned or controlled,
directly or indirectly, by Borrower or by one or more Subsidiaries or
by Borrower and one or more Subsidiaries, or any similar foreign
business organization which is so owned or controlled.
"Successor Lender" shall have the meaning assigned to such
term in Section 2.18.
"Syndication Agent" shall have the meaning assigned to such
term in the preamble hereto.
"Taxes" shall mean all taxes, assessments, filing or other
fees, levies, imposts, duties, deductions, withholdings, stamp taxes,
interest equalization taxes, capital transaction taxes, foreign
exchange taxes or charges, or other similar charges from time to time
or at any time imposed by any Law or Tribunal.
CREDIT AGREEMENT - Page 17
<PAGE> 23
"TCB" shall mean Texas Commerce Bank National Association in
its individual capacity.
"Term" shall mean the period from the Closing Date to the
Facility Termination Date.
"Terminated Lender" shall have the meaning assigned to such
term in Section 2.17.
"Total Leverage Ratio" shall mean, for any relevant period
based on the four preceding fiscal quarters then ended, the quotient
obtained by dividing (i) Funded Debt (including all Subordinated Debt,
if any)by (ii) Pro Forma Operating Cash Flow.
"Transactions" shall mean the execution, delivery and
performance by Borrower of each of the Loan Documents and the Advances
and Loans hereunder.
"Tribunal" shall mean any relevant court or governmental
department, commission, board, bureau, agency, or instrumentality of
any state, commonwealth, nation, territory, possession, county,
parish, or municipality, whether now or hereafter constituted or
existing.
"Type" when used in respect of any Loan or Advance, shall
refer to the Rate by reference to which interest on such Loan or on
the Loans comprising such Advance is determined. For purposes hereof,
"Rate" shall include the Eurodollar Rate, the Alternate Base Rate, the
Absolute Rate and the Eurodollar Bid Rate.
"Unfunded Liabilities" shall mean, determined in accordance
with FASB 87, (i) in the case of Single Employer Plans, the amount (if
any) by which the present value of all vested nonforfeitable benefits
under such Plan exceeds the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent
valuation date for such Plan, and (ii) in the case of Multiemployer
Plans, the withdrawal liability of Borrower and its Subsidiaries.
"Unmatured Default" means an event which but for the lapse of
time or the giving of notice, or both, would constitute a Default.
1.2 Terms Generally. The definitions in Section 1.1 shall apply
equally to both the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including"
shall be deemed to be followed by the phrase "without limitation". All
references herein to Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules to, this
Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided,
however, that, for purposes of determining compliance with any
CREDIT AGREEMENT - Page 18
<PAGE> 24
covenant set forth in Article 6, such terms shall be construed in accordance
with GAAP as in effect on the date of this Agreement applied on a basis
consistent with the application used in Borrower's and the Subsidiaries'
audited financial statements referred to in Section 5.5.
ARTICLE 2
THE CREDITS
2.1 Commitment. From and including the date of this Agreement and
prior to the Facility Termination Date, (i) each Lender severally agrees, on
the terms and conditions set forth in this Agreement, to make Ratable Loans to
Borrower from time to time in amounts not to exceed in the aggregate at any one
time outstanding the amount of its Commitment in accordance with Section 2.2;
and (ii) each Lender may, in its sole discretion, make bids to make Competitive
Bid Loans to Borrower in accordance with Section 2.3. Subject to the terms of
this Agreement, Borrower may borrow, repay and reborrow at any time prior to
the Facility Termination Date. In no event may the aggregate principal amount
of all outstanding Advances (including both the Ratable Advances and the
Competitive Bid Advances) exceed the aggregate Commitments. The Commitments to
lend hereunder shall expire on the Facility Termination Date.
2.2 Ratable Advances.
2.2.1 Ratable Loans. Each Ratable Advance hereunder shall
consist of Ratable Loans made from each of the several Lenders ratably in
accordance with their respective Pro Rata Percentages. For purposes of
calculating availability under this Section 2.2., the aggregate outstanding
amount of Competitive Bid Advances shall reduce each Lender's Commitment
ratably in the proportion such Lender's Commitment bears to the aggregate
Commitments regardless of which Lender or Lenders make such Competitive Bid
Advances. Ratable Advances shall be evidenced by the Notes (Ratable Loans).
2.2.2 Types of Ratable Advances. Ratable Advances may be
Floating Rate Advances, or Eurodollar Rate Advances, or a combination thereof,
selected by Borrower in accordance with Sections 2.9 and 2.10. No Ratable
Advance may mature after the Facility Termination Date.
2.2.3 Method of Selecting Types of Interest Periods for New
Ratable Advances. Borrower shall select the Rate Option and, in the case of
each Eurodollar Rate Advance, the Interest Period applicable to each Ratable
Advance from time to time. Borrower shall give the Administrative Agent
irrevocable notice in accordance with Sections 2.9 and 2.10.
2.3 Competitive Bid Advances.
2.3.1 Competitive Bid Option. In addition to Ratable
Advances pursuant to Section 2.2, and subject to the terms and conditions of
this Agreement (including, without limitation, the limitation set forth in
Section 2.1 as to the maximum aggregate principal amount
CREDIT AGREEMENT - Page 19
<PAGE> 25
of all outstanding Advances hereunder), Borrower may, as set forth in this
Section 2.3, request the Lenders, prior to the Facility Termination Date, to
make offers to make Competitive Bid Advances to Borrower. Each Lender who
wants to be a Bidding Lender that will be invited to submit Competitive Bid
Quotes shall deliver an executed Declaration of Bidding Status in the form of
Exhibit "C" hereto to the Administrative Agent (with a copy to Borrower). Any
Lender who becomes a Bidding Lender hereunder, but does not participate in
either an Absolute Rate Auction or a Eurodollar Auction for a period of six (6)
months, shall be deemed to have revoked its status as a Bidding Lender and
shall be required to execute a new Declaration of Bidding Status and deliver it
to the Administrative Agent (with a copy to Borrower) to reinstate itself as a
Bidding Lender hereunder. Each Bidding Lender may, but shall have no
obligation to, make such offers and Borrower may, but shall have no obligation
to, accept any such offers in the manner set forth in this Section 2.3.
Competitive Bid Advances shall be evidenced by the Notes (Competitive Bid
Loans).
2.3.2 Competitive Bid Quote Request. When Borrower wishes
to request offers to make Competitive Bid Loans under this Section 2.3, it
shall transmit to the Administrative Agent by telex or telecopy a Competitive
Bid Quote Request substantially in the form of Exhibit "D" hereto so as to be
received no later than (i) 10:00 a.m. (Chicago time) at least four Business
Days prior to the Borrowing Date proposed therein, in the case of a Eurodollar
Auction or (ii) 9:00 a.m. (Chicago time) at least one Business Day prior to the
Borrowing Date proposed therein, in the case of an Absolute Rate Auction
specifying:
(a) the proposed Borrowing Date, which
shall be a Business Day, for the proposed Competitive
Bid Advance,
(b) the aggregate principal amount of
such Competitive Bid Advance,
(c) whether the Competitive Bid Quotes
requested are to set forth a Eurodollar Bid Rate or
an Absolute Rate, or both, and
(d) the Interest Period applicable
thereto (which may not end after the Facility
Termination Date).
Borrower may request offers to make Competitive Bid Loans for more than one
Interest Period in a single Competitive Bid Quote Request. No Competitive Bid
Quote Request shall be given within five (5) Business Days (or such other
number of days as Borrower and the Administrative Agent may agree) of any other
Competitive Bid Quote Request. A Competitive Bid Quote Request that does not
conform substantially to the format of Exhibit "D" hereto shall be rejected,
and the Administrative Agent shall promptly and in any event before the close
of business on the same Business Day of receipt of a Competitive Bid Request
notify Borrower of such rejection by telex or telecopy. Any Competitive Bid
Quote Request received by the Administrative Agent after 3:30 p.m. (Chicago
time) shall be deemed to have been received the next Business Day.
CREDIT AGREEMENT - Page 20
<PAGE> 26
2.3.3 Invitation for Competitive Bid Quotes. Promptly and
in any event before the close of business on the same Business Day of receipt
of a Competitive Bid Quote Request that is not rejected pursuant to Section
2.3.2, the Administrative Agent shall send to each of the Bidding Lenders by
telex or telecopy an Invitation for Competitive Bid Quotes substantially in the
form of Exhibit "E" hereto, which shall constitute an invitation by Borrower to
each Bidding Lender to submit Competitive Bid Quotes offering to make the
Competitive Bid Loans to which such Competitive Bid Quote Request relates in
accordance with this Section 2.3.
2.3.4 Submission and Contents of Competitive Bid Quotes.
(i) Each Bidding Lender may, in its sole
discretion, submit a Competitive Bid Quote containing an offer
or offers to make Competitive Bid Loans in response to any
Invitation for Competitive Bid Quotes. Each Competitive Bid
Quote must comply with the requirements of this Section 2.3.4
and must be submitted to the Administrative Agent by telex or
telecopy at its offices specified in or pursuant to Article 12
not later than (a) 9:00 a.m. (Chicago time) at least three (3)
Business Days prior to the proposed Borrowing Date, in the
case of a Eurodollar Auction or (b) 9:00 a.m. (Chicago time)
on the proposed Borrowing Date, in the case of an Absolute
Rate Auction (or, in either case upon reasonable prior notice
to the Bidding Lenders, such other time and date as Borrower
and the Administrative Agent may agree); provided that
Competitive Bid Quotes submitted by First Chicago may only be
submitted if the Administrative Agent or First Chicago
notifies Borrower of the terms of the offer or offers
contained therein not later than 15 minutes prior to the
latest time at which the relevant Competitive Bid Quotes must
be submitted by the other Lenders. Subject to Articles 4 and
8, any Competitive Bid Quote so made shall be irrevocable
except with the written consent of the Administrative Agent
given on the instructions of Borrower.
(ii) Each Competitive Bid Quote shall be in
substantially the form of Exhibit "F" hereto and shall in any
case specify:
(a) the proposed Borrowing Date, which
shall be the same as that set forth in the applicable
Invitation for Competitive Bid Quotes,
(b) the principal amount of the
Competitive Bid Loan for which each such offer is
being made, which principal amount (1) may be greater
than, less than or equal to the Commitment of the
quoting Bidding Lender, (2) must be at least
$5,000,000 and an integral multiple of $1,000,000,
and (3) may not exceed the principal amount of
Competitive Bid Loans for which offers were
requested,
(c) in the case of a Eurodollar Auction,
the Competitive Bid Margin offered for each such
Competitive Bid Loan,
CREDIT AGREEMENT - Page 21
<PAGE> 27
(d) the minimum amount, if any, of the
Competitive Bid Loan which may be accepted by
Borrower,
(e) in the case of an Absolute Rate
Auction, the Absolute Rate offered for each such
Competitive Bid Loan, and
(f) the identity of the quoting Bidding
Lender.
(iii) The Administrative Agent shall reject any
Competitive Bid Quote that:
(a) is not substantially in the form of
Exhibit "F" hereto or does not specify all of the
information required by Section 2.3.4(ii);
(b) contains qualifying, conditional or
similar language, other than any such language
contained in Exhibit "F" hereto;
(c) proposes terms other than or in
addition to those set forth in the applicable
Invitation for Competitive Bid Quotes; or
(d) arrives after the time set forth in
Section 2.3.4(i).
If any Competitive Bid Quote shall be rejected pursuant to
this Section 2.3.4(iii), then the Administrative Agent shall
notify the relevant Bidding Lender of such rejection as soon
as practical.
2.3.5 Notice to Borrower. The Administrative Agent shall
promptly notify Borrower of the terms (i) of any Competitive Bid Quote
submitted by a Bidding Lender that is in accordance with Section 2.3.4 and (ii)
of any Competitive Bid Quote that amends, modifies or is otherwise inconsistent
with a previous Competitive Bid Quote submitted by such Bidding Lender with
respect to the same Competitive Bid Quote Request. Any such subsequent
Competitive Bid Quote shall be disregarded by the Administrative Agent unless
such subsequent Competitive Bid Quote specifically states that it is submitted
solely to correct a manifest error in such former Competitive Bid Quote. The
Administrative Agent's notice to Borrower shall specify the aggregate principal
amount of Competitive Bid Loans for which offers have been received for each
Interest Period specified in the related Competitive Bid Quote Request and the
respective principal amounts and Eurodollar Bid Rates or Absolute Rates, as the
case may be, so offered.
2.3.6 Acceptance and Notice by Borrower. Not later than
(i) 10:15 a.m. (Chicago time) at least three Business Days prior to the
proposed Borrowing Date, in the case of a Eurodollar Auction or (ii) 10:00 a.m.
(Chicago time) on the proposed Borrowing Date, in the case of an Absolute Rate
Auction (or in either case upon reasonable prior notice to the Bidding Lenders,
such other time and date as Borrower and the Administrative Agent may agree),
Borrower shall notify the Administrative Agent of its acceptance or rejection
of the offers
CREDIT AGREEMENT - Page 22
<PAGE> 28
so notified to it pursuant to Section 2.3.5; provided, however, that the
failure by Borrower to give such notice to the Administrative Agent shall be
deemed to be a rejection of all such offers. In the case of acceptance, such
notice (a "Competitive Bid Borrowing Notice") shall specify the aggregate
principal amount of offers for each Interest Period that are accepted.
Borrower may accept any Competitive Bid Quote in whole or in part (subject to
the terms of Section 2.3.4(ii)(d)); provided that:
(i) the aggregate principal amount of
each Competitive Bid Advance may not exceed the
applicable amount set forth in the related
Competitive Bid Quote Request,
(ii) acceptance of offers may only be
made on the basis of ascending Eurodollar Bid Rates
or Absolute Rates, as the case may be, and
(iii) Borrower may not accept any offer
that is described in Section 2.3.4(iii) or that
otherwise fails to comply with the requirements of
this Agreement.
2.3.7 Allocation by Administrative Agent. If offers are
made by two or more Bidding Lenders with the same Eurodollar Bid Rates or
Absolute Rates, as the case may be, for a greater aggregate principal amount
than the amount in respect of which offers are accepted for the related
Interest Period, the principal amount of Competitive Bid Loans in respect of
which such offers are accepted shall be allocated by the Administrative Agent
among such Bidding Lenders as nearly as possible (in such multiples, not
greater than $1,000,000, as the Administrative Agent may deem appropriate) in
proportion to the aggregate principal amount of such offers; provided, however,
that no Bidding Lender shall be allocated a portion of any Competitive Bid
Advance which is less than the minimum amount which such Bidding Lender has
indicated that it is willing to accept. Allocations by the Administrative
Agent of the amounts of Competitive Bid Loans shall be conclusive in the
absence of manifest error. The Administrative Agent shall promptly, but in any
event on the same Business Day sufficiently prior to each Bidding Lender's
close of business, notify each Bidding Lender of its receipt of a Competitive
Bid Borrowing Notice and the aggregate principal amount of such Competitive Bid
Advance allocated to each participating Lender.
2.3.8 Competition Bid Administration Fee. Borrower hereby
agrees to pay to the Administrative Agent an administration fee of $200 per
Bidding Lender per each Competitive Bid Quote Request transmitted by Borrower
to the Administrative Agent pursuant to Section 2.3.2 per auction; provided,
however, in no event shall such administrative fees exceed $1,500 per auction
in the aggregate. Such administration fee shall be payable in arrears on each
Payment Date hereafter and on the Facility Termination Date (or such earlier
date on which the aggregate Commitments shall terminate or be canceled) for any
period then ending for which such fee, if any, shall not have been theretofore
paid.
CREDIT AGREEMENT - Page 23
<PAGE> 29
2.3.9 Borrower as Agent for Competitive Bid Advances.
Commencing one (1) year after the Closing Date, Borrower may at its option
assume the duties of the Administrative Agent with respect to the Competitive
Bid Advances under this Section 2.3; provided, however, Borrower shall comply
with timing and reporting requirements of the Administrative Agent to the
satisfaction of the Administrative Agent and no Default or Unmatured Default
shall have occurred and be continuing.
2.4 Mandatory Reductions of the Commitments. In the event that at
any time any Lender's Commitment is terminated pursuant to Section 2.17 and not
fully replaced and substituted by the Commitment of a Successor Lender pursuant
to Section 2.18, the aggregate amount of the Commitments shall be reduced by
the amount of the Commitment not fully replaced or substituted and each
Lender's Pro Rata Percentage shall be adjusted accordingly. Borrower shall
repay the outstanding Loans in full on the Facility Termination Date.
2.5 Optional Principal Payments. The Borrower may from time to
time pay all outstanding Advances, or, in a minimum aggregate amount of
$1,000,000, or any integral multiple thereof, any portion of the outstanding
Advances upon one (1) Business Day's notice to the Administrative Agent;
provided, however, that, except as provided by the terms of Section 2.17, each
Eurodollar Advance, Eurodollar Bid Rate Advance and Absolute Rate Advance may
be paid only on the last day of its applicable Interest Period. If any
Eurodollar Advance, Eurodollar Bid Rate Advance or Absolute Rate Advance is not
paid on the last day of its applicable Interest Period, then Borrower shall
reimburse fully each Lender on demand for any funding losses, breakage costs
and redeployment costs related to such prepayment and the calculations of such
Lender in respect thereof shall be final, conclusive and binding save for
manifest error. Advances outstanding to which the Alternate Base Rate applies
may be prepaid without penalty or premium at any time.
2.6 Optional Reduction of Commitments. Borrower may permanently
reduce the Commitments in whole, or in part ratably among the Lenders in a
minimum amount of $20,000,000, upon at least ten Business Days' written notice
to the Administrative Agent, which shall specify the amount of any such
reduction, provided, however, that the Commitments may not be reduced below the
outstanding principal amount of the Advances. If the Commitments are
terminated in their entirety, all accrued and unpaid Facility Fees and all
other amounts payable hereunder shall be payable on the effective date of such
termination.
2.7 Fees. Borrower agrees to pay the following fees:
2.7.1 Facility Fees. Borrower agrees to pay to the
Administrative Agent for the ratable account of the Lenders the Facility Fee,
from the date hereof to and including the Facility Termination Date, payable in
arrears on each Payment Date hereafter and on the Facility Termination Date.
2.7.2 Fees for Syndication Agent. Borrower agrees to pay
such fees and expenses of the Syndication Agent as is set forth in the
Commitment Letter and the Fee Letter referred to therein.
CREDIT AGREEMENT - Page 24
<PAGE> 30
2.7.3 Fees for Documentation Agent. Borrower agrees to pay
such fees and expenses of the Documentation Agent as is set forth in the
Commitment Letter.
2.7.4 Fees for Administrative Agent. Borrower agrees to
pay such fees and expenses of the Administrative Agent as is set forth in the
Commitment Letter.
2.8 Method of Borrowing. Not later than noon Chicago time on each
Borrowing Date, each Lender shall make available its ratable share of the
Advance or Advances (or with respect to a Competitive Bid Advances, its
Competitive Bid Loan) to be made on such date in funds immediately available in
Chicago, to the Administrative Agent at its address specified pursuant to
Article 12. The Administrative Agent will make the funds so received from the
Lenders available to Borrower at the Administrative Agent's aforesaid address.
2.9 Method of Selecting Types and Interest Periods for New Ratable
Advances. Borrower shall select the Type of Advance and, in the case of each
Eurodollar Advance, the Interest Period applicable to such Advance. Borrower
shall give the Administrative Agent irrevocable notice (a "Borrowing Notice")
not later than 10:15 a.m. (Chicago time) on the same Business Day as the
Borrowing Date for each Floating Rate Advance, and three Business Days before
the Borrowing Date for each Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business
Day, of such Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the
Interest Period applicable thereto.
The unpaid principal amount of each Eurodollar Advance shall bear interest from
and including the first day of the Eurodollar Interest Period applicable
thereto to (but not including) the last day of such Eurodollar Interest Period
at the Eurodollar Rate applicable to such Eurodollar Advance. Floating Rate
Advances shall bear interest at the Floating Rate and the interest rate on any
Floating Rate Advances shall change when and as the Floating Rate changes.
Each Floating Rate Advance and Eurodollar Advance shall be in the minimum
amount of $5,000,000 (and in multiples of $1,000,000 if in excess thereof).
Borrower shall select an Interest Period and Rate Option to apply to each
Ratable Advance, subject to the notice and minimum Advance amount provisions
applicable to the Type of Ratable Advance selected. Any Advance not paid at
maturity, whether by acceleration or otherwise, shall bear interest until paid
in full at a rate per annum equal to the Default Rate.
2.10 Conversion and Continuation of Outstanding Ratable Advances.
Floating Rate Advances shall continue as Floating Rate Advances unless and
until such Floating Rate Advances are converted into Eurodollar Advances. Each
Eurodollar Advance shall continue as a
CREDIT AGREEMENT - Page 25
<PAGE> 31
Eurodollar Advance until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Advance shall be automatically
converted into a Floating Rate Advance unless Borrower shall have given the
Administrative Agent a Conversion/Continuation Notice requesting that, at the
end of such Interest Period, such Eurodollar Advance either continue as a
Eurodollar Advance for the same or another Interest Period or be converted into
a Floating Rate Advance. Subject to the terms of Section 2.8, Borrower may
elect from time to time to convert all or any part of a Ratable Advance of any
Type into any other Type of Ratable Advances; provided that any conversion of
any Eurodollar Advance shall be made on, and only on, the last day of the
Interest Period applicable thereto. Competitive Bid Advances may not be
Converted or Continued. Borrower shall give the Administrative Agent
irrevocable notice (a "Conversion/Continuation Notice") of each conversion of
an Advance or continuation of a Eurodollar Advance not later than 10:00 a.m.
(Chicago time) on the same Business Day, in the case of a conversion into a
Floating Rate Advance, or three Business Days, in the case of a conversion into
or continuation of a Eurodollar Advance, prior to the date of the requested
conversion or continuation, specifying:
(i) the requested date which shall be a Business
Day, of such conversion or continuation;
(ii) the aggregate amount and Type of the Advance
which is to be converted or continued; and
(iii) the amount and Type(s) of Advance(s) into
which such Advance is to be converted or continued and, in the
case of a conversion into or continuation of a Eurodollar
Advance, the duration of the Interest Period applicable
thereto.
2.11 Changes in Interest Rate, etc. Each Floating Rate Advance
shall bear interest on the outstanding principal amount thereof, for each day
from and including the date such Advance is made or is converted from a
Eurodollar Advance into a Floating Rate Advance pursuant to Section 2.10 to but
excluding the date it becomes due or is converted into a Eurodollar Advance
pursuant to Section 2.10 hereof, at a rate per annum equal to the Floating Rate
for such day. Changes in the rate of interest on that portion of any Advance
maintained as a Floating Rate Advance will take effect simultaneously with each
change in the Alternate Base Rate. Each Eurodollar Advance shall bear interest
from and including the first day of the Interest Period applicable thereto to
(but not including) the last day of such Interest Period at the Eurodollar Rate
applicable to such Eurodollar Advance. No Interest Period may end after the
Facility Termination Date. Borrower shall select Interest Periods so that it
is not necessary to repay any portion of a Eurodollar Advance prior to the last
day of the applicable Interest Period in order to make a mandatory reduction of
Commitments pursuant to Section 2.4.
2.12 Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, subject to Section
11.1 hereof, in immediately available funds to the Administrative Agent at the
Administrative Agent's address specified pursuant to Article 12, or at any
other Applicable Lending Office of the Administrative Agent
CREDIT AGREEMENT - Page 26
<PAGE> 32
specified in writing by the Administrative Agent to Borrower, by noon (Chicago
time) on the date when due and shall be applied ratably by the Administrative
Agent among the Lenders to whom it is due. Each payment delivered to the
Administrative Agent for the account of any Lender shall be delivered promptly
by the Administrative Agent to such Lender in the same type of funds that the
Administrative Agent received at its address specified pursuant to Article 12
or at any Applicable Lending Office specified in a notice received by the
Administrative Agent from such Lender.
2.13 Notes; Telephonic Notices. Each Lender is hereby authorized
to record the principal amount of each of its Loans and each repayment on the
schedule attached to its Note(s), provided, however, that the failure to so
record shall not affect Borrower's obligations under such Note(s). Borrower
hereby authorizes the Lenders and the Administrative Agent to extend, convert
or continue Advances, effect selections of Types of Advances and to transfer
funds based on telephonic notices made by any person or persons the
Administrative Agent or any Lender in good faith believes to be acting on
behalf of Borrower. Borrower agrees to deliver promptly to the Administrative
Agent a written confirmation, if such confirmation is requested by the
Administrative Agent or any Lender, of each telephonic notice signed by an
Authorized Officer. If the written confirmation differs in any material
respect from the action taken by the Administrative Agent and the Lenders, the
records of the Administrative Agent and the Lender shall govern absent manifest
error.
2.14 Interest Payment Dates; Interest Basis. Interest accrued on
each Floating Rate Advance shall be payable on the last day of its applicable
Interest Period, on any date on which it is prepaid by Borrower and at
maturity. Interest for Floating Rate Loans shall be calculated on the basis of
a 365/366 -day year for Advances to which the Corporate Base Rate is applicable
and on the basis of a 360-day year for Advances to which the Federal Funds
Effective Rate is applicable (in each case calculated on the basis of actual
days elapsed). Interest accrued on each Eurodollar Advance, each Eurodollar
Bid Rate Advance and each Absolute Rate Advance shall be payable on the last
day of its applicable Interest Period and, in the case of an Interest Period
longer than three months, interest shall also be payable on the last day of
each three-month interval during such Interest Period, on the basis of a
360-day year (calculated on the basis of actual days elapsed). Interest and
Facility Fees hereunder shall be calculated for actual days elapsed on the
basis of a 360-day year. Interest shall be payable for the day a Loan is made
but not for the day of any payment on the amount paid if payment is received
prior to noon (local time) at the place of payment. If any payment of
principal of or interest on a Loan or any other amount due hereunder shall
become due on a day which is not a Business Day, such payment shall be made on
the next succeeding Business Day (except to the extent otherwise specified in
the definition of Eurodollar Interest Period) and, in the case of a principal
payment, such extension of time shall be included in computing interest in
connection with such payment.
2.15 Notification of Loans; Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Administrative
Agent will notify each Lender of the contents of each commitment reduction
notice, Borrowing Notice, and repayment notice received hereunder. The
Administrative Agent will notify each Lender of the interest rate applicable to
each Eurodollar Advance (and the portion thereof which is the Applicable
Eurodollar Margin)
CREDIT AGREEMENT - Page 27
<PAGE> 33
promptly upon determination of such interest rate and will give each Lender
prompt notice of each change in the Corporate Base Rate. The notifications by
the Administrative Agent provided for herein may be telephonic, but shall be
confirmed in writing (which may be by facsimile).
2.16 Applicable Lending Offices. Each Lender may book its Loans at
any Applicable Lending Office selected by such Lender and may change such
Applicable Lending Office from time to time. All terms of this Agreement shall
apply to any such Applicable Lending Office and each Lender shall be deemed to
hold its Notes for the benefit of such Applicable Lending Office. Each Lender
may, by written or telex notice to the Administrative Agent and Borrower,
designate an Applicable Lending Office through which Loans are made by it and
for whose account Loan payments are to be made.
2.17 Optional Termination and Replacement of Lenders in Certain
Circumstances. If Borrower receives a notice from a Lender that such Lender
claims reimbursement for increased costs pursuant to clause (ii) of Section
3.1, then Borrower shall have the right, at Borrower's option, under the terms
of this Section 2.17, to terminate the Commitment of such Lender (each a
"Terminated Lender") and pay or prepay all outstanding Loans made by the
Terminated Lender. Borrower shall, by giving written notice thereof to the
Terminated Lender and to the Administrative Agent, specify the proposed
effective date of termination of the Terminated Lender's Commitment (the
"Lender Termination Date"), which date shall not in any event be less than five
nor more than thirty days following the date of such notice of termination.
Borrower may not elect to terminate the Commitment and prepay the Loans of any
Lender under this Section 2.17 if a Default or Unmatured Default exists. On
the Lender Termination Date (i) Borrower shall pay or prepay all outstanding
Loans of such Terminated Lender, together with accrued interest thereon and all
fees due such Terminated Lender under Section 2.7.1, in each case accrued
through the Lender Termination Date, together with all amounts payable under
Sections 3.1 and 3.4, if any, in connection with prepayment of such Loans, and
(ii) the Terminated Lender shall have no further Commitment under this
Agreement and shall no longer be a "Lender" under this Agreement for any
purpose except insofar as it shall be entitled to any payment or
indemnification, or be obligated to make any indemnification, on account of any
event which shall have occurred, or any right or liability which shall have
arisen, on or prior to the date of repayment in full of such Loans. The
termination of any Terminated Lender's Commitment and the prepayment of a
Terminated Lender's Loans pursuant to this Section 2.17 shall not relieve or
satisfy the obligations of Borrower to reimburse such Terminated Lender for all
increased costs incurred prior to such termination pursuant to Sections 3.1,
3.2 and 3.6, or to comply with all other terms and conditions of this
Agreement.
2.18 Successor Lenders. If, from time to time, any Lender's
Commitment is terminated pursuant to Section 2.17, Borrower may, at its option,
specify one or more commercial banks (including any Lender), reasonably
acceptable to the Administrative Agent (each, a "Successor Lender"), which
Successor Lender or Successor Lenders shall have agreed, in the aggregate, to
succeed to the entire Commitment of such Terminated Lender on the applicable
Lender Termination Date. Effective as of such Lender Termination Date,
Borrower, the Administrative Agent and such Successor Lender shall enter into
an appropriate amendment to this Agreement so that each such Successor Lender
shall become a party to this Agreement
CREDIT AGREEMENT - Page 28
<PAGE> 34
as if such Successor Lender shall have been named on the signature pages
hereof, and such Successor Lender shall have all the rights and obligations of
a "Lender" hereunder. Each such amendment shall be in form and substance
satisfactory to Borrower, the Administrative Agent and the applicable Successor
Lender.
2.19 Non-Receipt of Funds by the Administrative Agent. Unless
Borrower or a Lender, as the case may be, notifies the Administrative Agent
prior to the date on which it is scheduled to make payment to the
Administrative Agent of (i) in the case of a Lender, the proceeds of a Loan or
(ii) in the case of Borrower, a payment of principal, interest or fees to the
Administrative Agent for the account of the Lenders, that it does not intend to
make such payment, the Administrative Agent may assume that such payment has
been made. The Administrative Agent may, but shall not be obligated to, make
the amount of such payment available to the intended recipient in reliance upon
such assumption. If such Lender or Borrower, as the case may be, has not in
fact made such payment to the Administrative Agent, the recipient of such
payment shall, on demand by the Administrative Agent, repay to the
Administrative Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Administrative Agent until the date the
Administrative Agent recovers such amount at a rate per annum equal to (i) in
the case of payment by a Lender, the Federal Funds Effective Rate for such day
or (ii) in the case of payment by Borrower, the interest rate applicable to the
relevant Loan.
2.20 Extension of Facility Termination Date. Provided an Unmatured
Default or Default has not occurred and is continuing hereunder or under any
other Loan Document, Borrower may at any time during the period from one (1)
year after the Closing Date to one (1) year before the Facility Termination
Date, request the Co-Agents and the Lenders in writing to extend the Facility
Termination Date by one (1) year to August 5, 2000. Upon the timely receipt of
any such written request for a one (1) year extension of the Facility
Termination Date from Borrower, the Co-Agents and the Lenders shall in their
sole discretion determine (which determination must be unanimous) whether the
Facility Termination Date shall be extended by an additional one (1) year
period and the Administrative Agent, on behalf of itself, the other Co-Agents
and the Lenders, shall advise Borrower in writing of their determination no
later than thirty (30) days after receipt of such written request for the
extension from Borrower.
ARTICLE 3
CHANGE IN CIRCUMSTANCES; ILLEGALITY; INDEMNIFICATION; TAXES
3.1 Yield Protection.
(i) If any existing or future law, rule,
regulation or directive, whether or not having the force of
law, or compliance of any Lender with such, after the date
hereof,
CREDIT AGREEMENT - Page 29
<PAGE> 35
(a) subjects any Lender or any
Applicable Lending Office to any tax, duty, charge or
withholding on or from payments due from Borrower, or
changes the basis of taxation of payments to any
Lender in respect of its Loans or other amounts due
it hereunder (excluding federal, state, local or
foreign taxation of the overall net income of any
Lender or any Applicable Lending Office and excluding
any Taxes subject to Section 3.6 but not payable as a
result of the proviso in the penultimate sentence
thereof), or
(b) imposes or increases or deems
applicable any reserve (other than reserves included
in the Eurodollar Reserve Requirement with respect to
Eurodollar Advances and Eurodollar Bid Rate
Advances), special deposit or similar requirement
against assets of, deposits with or for the account
of, or credit extended by, any Lender or any
Applicable Lending Office, or
(c) imposes any other condition the
result of which is to increase the cost to any Lender
or any Applicable Lending Office of making, funding
or maintaining U.S. Dollar loans or reduces any
amount receivable by any Lender or any Applicable
Lending Office in connection with U.S. Dollar loans,
or requires any Lender or any Applicable Lending
Office to make any payment calculated by reference to
the amount of loans held or interest received by it,
by an amount reasonably deemed material by such
Lender, or
(ii) If any Lender shall reasonably have
determined that the applicability of any law, rule,
regulation, agreement or guideline adopted pursuant to or
arising out of the July 1988 report of the Basle Committee on
Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital
Standards" as amended, modified and supplemented and in effect
from time to time, or the adoption after the date hereof of
any other law, rule, regulation, agreement or guideline
regarding capital adequacy, or any change in any of the
foregoing or in the interpretation or administration of any of
the foregoing by any Governmental Authority, central bank or
comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or any
Applicable Lending Office of such Lender) or any Lender's
holding company with any request or directive regarding
capital adequacy (whether or not having the force of law) of
any such Governmental Authority, central bank or comparable
agency, has or would have the effect or reducing the rate of
return on such Lender's capital or on the capital of such
Lender's holding company, if any, as a consequence of this
Agreement or the Loans made by such Lender pursuant hereto to
a level below that which such Lender or such Lender's holding
company could have achieved but for such applicability,
adoption, change or compliance (taking into consideration such
Lender's policies and the policies of such Lender's holding
company with respect
CREDIT AGREEMENT - Page 30
<PAGE> 36
to capital adequacy) by an amount reasonably deemed by such
Lender to be material,
and such Lender has determined that designating a different Applicable Lending
Office for the Loans of such Lender affected by the matters described in this
Section 3.1 will not eliminate or significantly reduce the reduction in the
benefits to such Lender as hereinabove described (provided, however, such
Lender shall not be required to designate a different Applicable Lending Office
if such designation would be contrary or inconsistent with Lender's internal
policies, illegal, or contrary to regulatory policy or otherwise in such
Lender's reasonable judgment be disadvantageous to such Lender), then, within
15 days of demand and the submission of reasonable evidence in support thereof
by such Lender, Borrower shall pay such Lender that portion of such increased
expense incurred (including, in the case of Section 3.1(ii), any reduction in
the rate of return on capital to an amount below that which it would have
achieved but for such change in regulation after taking into account such
Lender's policies as to capital adequacy) or the amount of reduction in an
amount received which such Lender determines is attributable to making, funding
and maintaining its Loans or its Commitment. In determining such additional
amounts, each Lender shall act reasonably and in good faith and will use
reasonable averaging and attribution methods.
3.2 Change in Legality.
(i) Notwithstanding any other provisions herein, if
any change in any law or regulation or in the interpretation
thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it
unlawful for any Lender to make or maintain any Eurodollar
Loan or Eurodollar Bid Rate Loan or to give effect to its
obligations as contemplated hereby with respect to any
Eurodollar Loan or Eurodollar Bid Rate Loan, then, by written
notice to the Borrower and to the Co-Agents, such Lender shall
give prompt notice to Borrower and may:
(a) declare that Eurodollar Loans and
Eurodollar Bid Rate Loans will not thereafter be made
by such Lender hereunder, whereupon any request by a
Borrower for a Eurodollar Advance shall, as to such
Lender only, be deemed a request for a Floating Rate
Advance unless such declaration shall be subsequently
withdrawn; and
(b) require that all outstanding
Eurodollar Loans and Eurodollar Bid Rate Loans made
by it be converted to Floating Rate Loans, in which
event all such Eurodollar Loans and Eurodollar Bid
Rate Loans shall be automatically converted to
Floating Rate Loans as of the effective date of such
notice as provided in paragraph (ii) below
(notwithstanding the provisions of Section 2.5).
In the event any Lender shall exercise its rights under (a) or
(b) above, all payments and prepayments of principal which
would otherwise have been applied
CREDIT AGREEMENT - Page 31
<PAGE> 37
to repay the Eurodollar Loans or Eurodollar Bid Rate Loans
that would have been made by such Lender or the Converted
Eurodollar Loans of such Lender shall instead be applied to
repay the Floating Rate Loans made by such Lender in lieu of,
or resulting from the Conversion of, such Eurodollar Loans and
the Floating Rate Loans resulting from the Conversion of such
Eurodollar Loans shall be prepayable only at the times the
Converted Eurodollar Loans would have been prepayable,
notwithstanding the provisions of Section 2.5.
(ii) For purposes of this Section 3.2, a notice to
Borrower by any Lender shall be effective as to each
Eurodollar Loan and Eurodollar Bid Rate Loan, if lawful, on
the last day of the Interest Period currently applicable to
such Eurodollar Loan and Eurodollar Bid Rate Loan; in all
other cases such notice shall be effective on the date of
receipt by such Borrower.
3.3 Availability of Interest Rate. Subject to the terms of
Section 3.5, if any Lender reasonably determines that the making or the
maintenance of its portion of the Eurodollar Advances and/or Eurodollar Bid
Rate Advances at its Applicable Lending Office would violate any applicable
law, rule, regulation, or directive, whether or not having the force of law, or
if the Required Lenders reasonably determine that (i) deposits of a type and
maturity appropriate to match fund Eurodollar Advances and/or Eurodollar Bid
Rate Advances are not available or (ii) a Eurodollar Rate does not accurately
reflect the cost of making or maintaining a Eurodollar Advance or (iii) a
Eurodollar Bid Rate does not accurately reflect the cost of making or
maintaining a Eurodollar Bid Rate Advance, then the Administrative Agent shall
suspend the availability of the affected Rate Option and require any Eurodollar
Advance and/or Eurodollar Bid Rate Advance outstanding under an affected Rate
Option to be converted to an unaffected Rate Option. Subject to the provisions
of Section 2, Borrower may select any unaffected Rate Option to apply to such
affected Advances. If Borrower fails to select a new Rate Option, the affected
Advances shall be Floating Rate Advances.
3.4 Failure to Pay or Borrow on Certain Dates. If any payment of
a Eurodollar Advance and/or Eurodollar Bid Rate Advance occurs on a date which
is not the last day of the applicable Interest Period, or a Eurodollar Advance
or Eurodollar Bid Rate Advance is not made on the date specified by Borrower
for any reason other than default by the Lenders, Borrower will indemnify each
Lender for any loss or cost incurred by it resulting therefrom, including,
without limitation, any loss or cost (exclusive of any loss of profit) in
liquidating or employing deposits acquired to fund or maintain such Eurodollar
Advance and/or Eurodollar Bid Rate Advance.
3.5 Lender Certificates; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Applicable
Lending Office with respect to its Eurodollar Advances and Eurodollar Bid Rate
Advances and take other actions consistent with its internal policies and legal
requirements to avoid or reduce any liability of Borrower to such Lender under
Sections 3.1, 3.2 and 3.6 or to avoid the unavailability of a Rate Option under
Section 3.3, so long as such designation or actions are not disadvantageous to
such Lender. A certificate of a Lender as to the amount due under Sections
3.1, 3.2, 3.4 or 3.6 shall be final, conclusive
CREDIT AGREEMENT - Page 32
<PAGE> 38
and binding on Borrower in the absence of manifest error and provided that the
calculations, allocations and determinations underlying the amount stated to be
due have a reasonable basis. Determination of amounts payable under such
Sections in connection with a Eurodollar Advance or Eurodollar Bid Rate Advance
shall be calculated as though each Lender funded its portion of the Eurodollar
Advance or Eurodollar Bid Rate Advance through the purchase of a deposit of the
type and maturity corresponding to the deposit used as a reference in
determining the Eurodollar Rate or Eurodollar Bid Rate applicable to such
Advance, as the case may be. Unless otherwise provided herein or therein, the
amount specified in any such certificate shall be payable on demand after
receipt by Borrower of such certificate. The obligations of Borrower under
Sections 3.1, 3.2, 3.4 and 3.6 shall survive payment of the Loans and
termination of this Agreement for a period of two (2) years therefrom.
3.6 Withholding Taxes. All payments by Borrower of principal of
and interest on the Loans and of all fees and other amounts payable under any
Loan Document shall be payable without deduction for or on account of any
present or future taxes, duties or other charges levied or imposed by the
United States of America or by the government of any jurisdiction outside the
United States of America or by any political subdivision or taxing authority of
or in any of the foregoing through withholding or deduction with respect to any
such payments. If any such taxes, duties or other charges are so levied or
imposed, Borrower will make additional payments in such amounts so that every
net payment of principal of and interest on the Loans and of all other amounts
payable by it under any Loan Document, after withholding or deduction for or on
account of any such present or future taxes, duties or other charges, will not
be less than the amount provided for herein or therein, provided that the
Borrower shall have no obligation to pay such additional amounts to any Lender
to the extent that such taxes, duties, or other charges are levied or imposed
by reason of the failure of such Lender to comply with the provisions of
Section 3.7. The Borrower shall furnish promptly to the Administrative Agent
for distribution to each affected Lender, as the case may be, official receipts
evidencing any such withholding or reduction.
3.7 Withholding Tax Exemption. Each Lender that is not
incorporated under the laws of the United States of America or a state thereof
agrees that it will deliver to the Borrower and the Administrative Agent two
duly completed copies of United States Internal Revenue Service Form 1001 or
4224 (or any successor form(s) thereto), certifying in either case that such
Lender is entitled to receive payments from Borrower under any Loan Document
without deduction or withholding of any United States federal income taxes.
Each Lender which so delivers a Form 1001 or 4224 (or any successor form(s)
thereto) further undertakes to deliver to Borrower and the Administrative Agent
two additional copies of such form (or a successor form) on or before the date
such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by Borrower or the Administrative Agent, in each case certifying that
such Lender is entitled to receive payments from Borrower under any Loan
Document without deduction or withholding of any United States federal income
taxes, unless 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
CREDIT AGREEMENT - Page 33
<PAGE> 39
and delivering any such form with respect to it and such Lender advises
Borrower and the Administrative Agent that it is not capable of receiving such
payments without any deduction or withholding of United States federal income
tax.
ARTICLE 4
CONDITIONS PRECEDENT
4.1 Initial Advance. No Lender shall be required to make the
initial Advance hereunder unless Borrower has furnished to the Documentation
Agent in form and substance satisfactory to the Lenders (or otherwise has
satisfied the Lenders in the case of subclause (ix) of this Section 4.1):
(i) Copies of the Certificate of Incorporation of
Borrower, together with all amendments, certified by, and a
certificate of good standing, from the Secretary of State of
Delaware.
(ii) A certificate of good standing of Borrower, from
the Comptroller of Public Accounts of the State of Texas.
(iii) Copies, certified by the Secretary or Assistant
Secretary of the Borrower, of its Bylaws and of its Board of
Directors' resolutions authorizing the execution, delivery and
performance of the Loan Documents and borrowing hereunder.
(iv) An incumbency certificate, executed by the
Secretary or Assistant Secretary of Borrower, which shall
identify by name and title and bear the signature of the
officers of Borrower authorized to sign the Loan Documents and
to make borrowings hereunder, upon which certificate the
Lenders shall be entitled to rely until informed of any change
in writing by Borrower.
(v) A written opinion of Borrower's General Counsel,
addressed to the Lenders in substantially the form of Exhibit
"H" hereto and a written opinion of Locke Purnell Rain
Harrell, addressed to the Lenders, opining on the
enforceability of this Agreement and the Notes under Texas
law.
(vi) A certificate, signed by the Vice President and
Treasurer of Borrower or the Senior Vice President and Chief
Financial Officer of Borrower, stating that on the initial
Borrowing Date no Default or Unmatured Default has occurred
and is continuing and the representations and warranties
contained in Article 5 are true and correct.
(vii) A Note (Ratable Loans) payable to the order of
each Lender in the amount of its Commitment and a Note
(Competitive Bid Loans) payable to the
CREDIT AGREEMENT - Page 34
<PAGE> 40
order of each Lender up to the maximum amount of the Total
Commitments for all Lenders.
(viii) The fees payable to the Co-Agents on the Closing
Date set forth in the Commitment Letter and Fee Letter
referred to therein.
(ix) The Prior Agreement shall have been terminated in
accordance with Section 9.21 hereof and the obligations of
Borrower thereunder fully satisfied and paid in full.
(x) Such other documents as any Lender or its
counsel may have reasonably requested.
4.2 Each Advance. No Lender shall be required to make any Advance
unless on the relevant Borrowing Date:
(i) There exists no Default.
(ii) The representations and warranties contained in
Article 5, except the representations and warranties contained
in Sections 5.3, 5.6 and 5.13, are true and correct in all
material respects as of such Borrowing Date except for changes
in the Schedules hereto reflecting transactions or events
permitted by this Agreement.
(iii) After giving effect to the use of proceeds of
such Advance, margin stock (as defined in Regulation U) shall
constitute less than 25% of the assets of Borrower alone or
the Borrower and its Subsidiaries on a consolidated basis.
(iv) All legal matters incident to the making of such
Advance shall be reasonably satisfactory to the Lenders and
their respective counsel.
Each Borrowing Notice and Conversion/Continuation Notice relating to any such
Advance shall constitute a representation and warranty by Borrower that the
conditions contained in Sections 4.2(i), (ii) and (iii) have been satisfied.
4.3 Each Advance Resulting in an Increase. No Lender shall be
required to make any Advance resulting in any increase in the principal amount
of Advances outstanding unless on the relevant Borrowing Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in
Article 5 are true and correct as of such Borrowing Date
except for changes in the Schedules hereto reflecting
transactions permitted by this Agreement.
CREDIT AGREEMENT - Page 35
<PAGE> 41
(iii) After giving effect to the use of proceeds of
such Advance, margin stock (as defined in Regulation U) shall
constitute less than 25% of the consolidated assets of
Borrower and its Subsidiaries.
(iv) All legal matters incident to the making of such
Advance shall be reasonably satisfactory to the Lenders and
their respective counsel.
Each Borrowing Notice relating to any such Advance shall constitute a
representation and warranty by Borrower that the conditions contained in
Sections 4.3(i), (ii) and (iii) have been satisfied.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to the Lenders that:
5.1 Corporate Existence and Authority. Borrower and each of the
Subsidiaries (i) is a corporation duly organized, validly existing, and in good
standing under the Laws of its jurisdiction of incorporation, (ii) is duly
qualified to transact business as a foreign corporation in, and is in good
standing under the laws of, each jurisdiction where the nature or extent of its
business and properties require the same, except in such jurisdictions where
the failure so to qualify or be in good standing would not reasonably be
expected to cause a Material Adverse Effect, and (iii) possesses all requisite
authority and power and material licenses, permits, franchises (including,
without limitation, licenses, permits, and franchises issued by the FCC), and
valid and subsisting network affiliation agreements in the case of each
Broadcast Subsidiary which operates a network affiliated television
broadcasting enterprise to conduct its business as presently conducted and, in
the case of Borrower, to execute, deliver, and comply with the terms of the
Loan Documents, which have been duly authorized and approved by all necessary
corporate action, for which no material approval or consent of any Person or
Tribunal (including, without limitation, the FCC) is required which has not or
will not have been obtained prior to the date of this Agreement, and each of
the Loan Documents constitutes the legal, valid and binding obligation of
Borrower enforceable against Borrower in accordance with its terms except as
enforcement may be limited by applicable Debtor Relief Laws.
5.2 Compliance with Laws. Borrower and its Subsidiaries are not
in violation of (i) any Laws, other than such violations which, individually or
collectively, could not reasonably be expected to cause a Material Adverse
Effect, (ii) the terms of any material agreement (including, without
limitation, network affiliation agreements to which Borrower or any Subsidiary
is a party), contract, document, or instrument to which Borrower or any
Subsidiary is a party or by which it or any of its assets is bound, other than
such violations which, individually or collectively, could not reasonably be
expected to cause a Material Adverse Effect, or (iii) Borrower's or any
Subsidiaries' Articles or Certificate of Incorporation or By-laws in any
material respect.
CREDIT AGREEMENT - Page 36
<PAGE> 42
5.3 Litigation. There is no Litigation pending or, to the
knowledge of Borrower, threatened in writing against or affecting Borrower or
any Subsidiary, which, collectively or individually, has a substantial
likelihood of resulting in a Material Adverse Effect, except as set forth on
Schedule 4, or that purports to affect the legality, validity or enforceability
of any Loan Documents.
5.4 Compliance with Laws and Contracts. Neither the execution and
delivery by Borrower of the Loan Documents, the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will violate any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on or affecting Borrower or any Subsidiary or
Borrower's or any Subsidiary's Articles or Certificate of Incorporation or
By-laws or the provisions of any indenture, instrument or agreement to which
Borrower or any Subsidiary is a party or is subject, or by which it, or its
property, is bound, or conflict with or constitute a default thereunder, or
result in the creation or imposition of any Lien pursuant to the terms of any
such indenture, instrument or agreement. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with the
execution, delivery and performance of, or the legality, validity, binding
effect or enforceability of, any of the Loan Documents.
5.5 Financial Statements. The June 30, 1994 unaudited
consolidated financial statements of Borrower and the Subsidiaries and the
December 31, 1993 consolidated financial statements of Borrower and the
Subsidiaries audited by Ernst & Young heretofore delivered to the Lenders were
prepared in accordance with GAAP in effect on the respective dates such
statements were prepared and fairly present the consolidated financial
condition and operations of Borrower and the Subsidiaries at such dates and the
consolidated results of their operations for the respective periods then ended.
5.6 Material Adverse Change. No Material Adverse Effect has
occurred with respect to the Borrower and its Subsidiaries since the dates of
the financial statements referred to in Section 5.5.
5.7 Taxes. All federal, state, foreign and other tax returns of
Borrower and each Subsidiary required to be filed (unless such filing dates
have been validly extended) have been or will be filed prior to the date such
returns were or are due, and all federal, state, foreign and other Taxes
imposed upon Borrower and the Subsidiaries which are due and owing, unless
subject to a good faith contest by appropriate legal proceedings for which
adequate reserves have been established in accordance with GAAP, have been or
will be paid by Borrower or such Subsidiary.
5.8 Government Regulation. Neither Borrower nor any Subsidiary or
Affiliate is subject to regulation under the Public Utility Holding Company Act
of 1935, the Federal Power Act, the Investment Company Act of 1940, the
Interstate Commerce Act (as any of the preceding acts have been amended), or
any other Law (other than Regulation X of the Board) which regulates the
incurring by Borrower of Indebtedness, including, without limitation, Laws
CREDIT AGREEMENT - Page 37
<PAGE> 43
relating to common or contract carriers or the sale of electricity, gas, steam,
water, or other public utility services; provided, however, that Borrower and
certain of the Subsidiaries are regulated by the FCC and are subject to
requirements of the Communications Act of 1934, as amended, and the current
rules and regulations of the FCC, relating to remedies with respect to security
granted in respect of Indebtedness incurred by a licensee.
5.9 Properties; Liens. Borrower and each Subsidiary has good and
indefeasible title to all of its Properties (other than Properties which are
the subject of Financing Leases), subject to no defects in title thereto which
could reasonably be expected, individually or collectively, to cause a Material
Adverse Effect, and there are no Liens on any Property of Borrower or any
Subsidiary other than Permitted Liens.
5.10 Leases. All material leases under which Borrower or any
Subsidiary is lessee or tenant are in full force and effect, and there does not
exist any default thereunder on the part of Borrower or any Subsidiary or, to
the best of Borrower's knowledge, on the part of any other party thereto which
in either case could reasonably be expected to cause a Material Adverse Effect.
5.11 Subsidiaries. Schedule 2 hereto contains an accurate list of
all of the presently existing Subsidiaries, setting forth their respective
jurisdictions of incorporation and the percentage of their respective capital
stock owned by Borrower or other Subsidiaries; all of the issued and
outstanding shares of capital stock of the Subsidiaries have been duly
authorized and issued and are fully paid and non-assessable.
5.12 ERISA. Each Plan complies in all material respects with all
applicable requirements of ERISA and the Code and regulations thereunder. No
Reportable Event has occurred with respect to any Plan, neither Borrower nor
any of its Subsidiaries has withdrawn from any Plan or initiated steps to do
so, and no steps have been taken to terminate any Plan. On the date of this
Agreement, no Unfunded Liabilities exist with respect to any Plan.
5.13 Defaults. No Default or Unmatured Default has occurred and is
continuing.
5.14 Accuracy of Information. No information, exhibit or report
furnished by Borrower with respect to Borrower or any Subsidiary to the
Co-Agents in connection with the negotiation of the Loan Documents contains any
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statements contained therein not misleading, in light of
the circumstances under which furnished.
5.15 Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of the assets of Borrower alone or Borrower and its
Subsidiaries on a consolidated basis.
5.16 Environmental Matters. Except as disclosed in Schedule 5:
(i) to the best knowledge of Borrower without investigation by any third party,
all Properties owned, leased, occupied, or otherwise operated as of the Closing
Date by Borrower and its Subsidiaries are owned, leased, occupied, or otherwise
operated in compliance in all material respects with all
CREDIT AGREEMENT - Page 38
<PAGE> 44
Environmental Laws in effect as of the Closing Date, unless the violation of
which, singly or in the aggregate, would not be reasonably expected to have a
Material Adverse Effect; (ii) to the best knowledge of Borrower without
investigation by any third party, during its operation by Borrower or its
Subsidiary there has not been any Release of Hazardous Materials at, on, in or
under Properties now or previously owned, leased, occupied, or otherwise
operated by Borrower or its Subsidiaries that, singly or in the aggregate,
have, or would be reasonably expected to have, a Material Adverse Effect; (iii)
all Permits under any Environmental Law that are necessary for Borrower and its
Subsidiaries to carry on their respective businesses have been obtained, except
for those for which the failure to obtain would not be reasonably expected to
have a Material Adverse Effect, and are in full force and effect and Borrower
and its Subsidiaries are not in breach of any such Permits or any requirement
to have such Permits in any material respect; (iv) there are no lawsuits or
administrative enforcement or environmental cleanup proceedings pending or, to
Borrower's or its Subsidiaries' best knowledge without investigation by any
third party, threatened, with respect to (a) the condition or operation of any
of the Properties owned, leased, occupied, or otherwise operated by Borrower or
its Subsidiaries, or (b) potential responsibility for Remedial Action in
connection with such Properties, either on-site or off-site, in either case
which would be reasonably expected to, singly or in the aggregate, have a
Material Adverse Effect; (v) to the best knowledge of Borrower without
investigation by any third party, none of the Properties owned, leased,
occupied, or otherwise operated by Borrower or its Subsidiaries are listed as a
site on the National Priorities List or its state equivalent pursuant to CERCLA
or analogous state law; and (vi) to the best knowledge of Borrower without
investigation by any third party, none of the Properties owned, leased,
occupied, or otherwise operated by Borrower or its Subsidiaries includes
underground storage tanks subject to regulation under RCRA from which there has
been a Release of Hazardous Materials that, singly or in the aggregate, would
be reasonably expected to have a Material Adverse Effect.
ARTICLE 6
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1 Financial Reporting. Borrower will maintain, for itself and
its Subsidiaries, a system of accounting established and determined in
accordance with GAAP, and furnish to the Lenders:
(i) Within 90 days after the close of each of its
fiscal years, an unqualified (except for qualifications
required by changes in accounting methods with which
Borrower's auditors concur) audit report certified by Ernst &
Young or other independent certified public accountants of
nationally recognized standing, prepared in accordance with
GAAP on a consolidated basis for itself and its Subsidiaries,
including a balance sheet as of the end of its fiscal year and
related statements of earnings, shareholders' equity and cash
flows for the year
CREDIT AGREEMENT - Page 39
<PAGE> 45
then ended, accompanied by a certificate of said accountants
that, in connection with their audit, nothing came to their
attention that caused them to believe that the Borrower failed
to comply with the terms, covenants, provisons, or conditions
of Sections 6.12, 6.16 and 6.17 of this Agreement insofar as
they relate to accounting matters, or if, in the opinion of
such accountants, any such Default or Unmatured Default shall
exist as a result of a violation of the provisions of such
Sections, stating the nature and status thereof.
(ii) Within 45 days after the close of each quarterly
period of each of its fiscal years, for itself and the
Subsidiaries, consolidated unaudited balance sheets as at the
close of each such period and consolidated profit and loss and
a statement of cash flow for the period from the beginning of
such fiscal year to the end of such quarter, together with a
compliance certificate, in form and detail reasonably
satisfactory to the Required Lenders, setting forth the
calculations with respect to the Senior Leverage Ratio, the
Total Leverage Ratio and the Fixed Charge Coverage Ratio as at
the end of such quarterly period and demonstrating Borrower's
compliance with the provisions of Sections 6.12, 6.16 and
6.17, all certified by its chief financial officer or
treasurer.
(iii) Together with the financial statements required
hereunder, a certificate signed by its chief financial officer
or treasurer stating that no Default or Unmatured Default
exists, or if any Default or Unmatured Default exists, stating
the nature and status thereof and the action Borrower proposes
to take with respect thereto.
(iv) Within 240 days after the close of each fiscal
year, a statement of the Unfunded Liabilities of each Plan,
certified as correct by an actuary enrolled under ERISA.
(v) As soon as possible and in any event within 10
Business Days after Borrower knows that any Reportable Event
has occurred with respect to any Plan, a statement, signed by
the chief financial officer or treasurer of Borrower,
describing said Reportable Event and the action which Borrower
proposes to take with respect thereto.
(vi) Promptly upon the furnishing thereof to the
stockholders of Borrower, copies of all financial statements,
reports and proxy statements so furnished.
(vii) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or
other regular reports (other than Form S-8 Registration
Statements, Forms 144 and Forms 3, 4 and 5 and the like) which
Borrower files with the Securities and Exchange Commission
and, if requested by the Administrative Agent, with the FCC.
CREDIT AGREEMENT - Page 40
<PAGE> 46
(viii) Such other material information (including
non-financial information) as the Co-Agents or any Lender may
from time to time reasonably request.
6.2 Use of Proceeds. Borrower will use the proceeds of the
Advances for general corporate purposes, including, without limitation, to
refinance existing Indebtedness, repurchase outstanding Capital Stock, make
non-hostile acquisitions, back-up its current or future commercial paper
program and provide working capital.
6.3 Notice of Default, etc. Borrower will, and will cause each
Subsidiary to, give notice in writing within five Business Days to the Lenders
of (i) the occurrence of any Default or Unmatured Default and of any other
development, financial or otherwise, which has a substantial likelihood of
materially adversely affecting the business or Properties of Borrower and its
Subsidiaries taken as a whole, or the ability of Borrower to repay the
Obligations, and stating the nature and status thereof and the action Borrower
proposes to take with respect thereto, or (ii) the receipt of any notice from
the FCC or any other Tribunal of the expiration without renewal, termination or
suspension of, or the institution of any proceedings to terminate or suspend,
any main transmitter license granted by the FCC or any other material license
now or hereafter held by any Broadcasting Subsidiary which is required to
operate any television broadcasting station in compliance with all applicable
Laws, and stating the action Borrower proposes to take with respect thereto.
6.4 Taxes. Borrower and each Subsidiary shall promptly pay when
due any and all Taxes due and owing by them, except Taxes which (i) are being
contested in good faith by appropriate legal proceedings and for which a
reserve has been established in an amount determined in accordance with GAAP
and (ii) do not in the aggregate materially detract from the value of the
properties of Borrower and its Subsidiaries (taken as a whole), materially
impair the operation of their businesses taken as a whole or the ability of
Borrower to perform its Obligations under the Loan Documents, or give rise to
any Lien other than a Permitted Lien.
6.5 Payment of Obligations. Borrower and each Subsidiary shall
promptly pay or renew and extend all of their Material Indebtedness for the
payment of money as the same become due, except any such Material Indebtedness
being contested in good faith by appropriate legal proceedings, for which a
reserve for the payment thereof has been established in an amount determined in
accordance with GAAP, and with respect to which failure to promptly pay or
renew and extend does not result in the violation of any provision of any
material agreement, contract, document or instrument to which Borrower or any
Subsidiary is a party or by which Borrower or any Subsidiary or any of their
respective properties is bound that could reasonably be expected to cause a
Material Adverse Effect.
6.6 Maintenance of Corporate Existence, Assets, Business and
Insurance. Except as otherwise permitted by Section 6.13, or as a result of
any transfer to another Subsidiary, the Borrower and each Subsidiary shall at
all times maintain (i) their respective corporate existence and authority to
transact business and good standing in their respective jurisdiction of
incorporation and in all other jurisdictions where the failure so to maintain
could reasonably be expected to cause a Material Adverse Effect, (ii) all
material licenses, permits, franchises and
CREDIT AGREEMENT - Page 41
<PAGE> 47
major network affiliation agreements (i.e., those with American Broadcasting
Companies, Inc. ("ABC"), National Broadcasting Company ("NBC"), or the Columbia
Broadcasting System, Inc. ("CBS")) necessary for their businesses except such
as could not individually or in the aggregate reasonably be expected to cause a
Material Adverse Effect, it being understood and agreed that a change from one
major network (i.e., ABC, NBC or CBS or other major networks) to another shall
not be considered to have such an effect, (iii) to the extent consistent with
prudent business practices, all of their assets which are useful and necessary
in their businesses in good working order and condition and make all necessary
repairs and replacements thereto or thereof, and (iv) insurance with such
reputable insurers, in such amounts, and covering such risks, as is customary
in their respective industries including, without limitation, adequate business
interruption insurance.
6.7 Liens. Borrower will not, nor will it permit any Subsidiary
to, directly or indirectly, create, incur or suffer or permit to be created or
incurred or to exist any Lien upon any of its assets except Permitted Liens.
6.8 Compliance with Laws and Documents. Borrower will not, nor
will it permit any Subsidiary to, directly or indirectly, violate the
provisions of any Laws, including without limitation any Environmental Law, its
Articles or Certificate of Incorporation or By-laws, or any material agreement,
contract, document or instrument to which it is a party or by which it or any
of its assets may be bound if such violation alone, or when aggregated with all
other such violations, could reasonably be expected to cause a Material Adverse
Effect.
6.9 Lines of Business. Borrower and its Subsidiaries, taken as a
whole, will not, directly or indirectly, engage in any lines of business other
than those in which it is presently engaged or reasonable expansions or
extensions thereof.
6.10 Inspection; Confidentiality. Borrower will, and will cause
each Subsidiary to, permit the Lenders, by their respective representatives and
agents, to inspect such of the properties, corporate books and financial
records of Borrower and each Subsidiary, to examine and make copies of such of
the books of accounts and other financial records of Borrower and each
Subsidiary, and to discuss such of the affairs, finances and accounts of
Borrower and each Subsidiary with, and to be advised as to the same by, their
respective officers as shall be reasonably requested at such reasonable times
and intervals as the Lenders may designate upon reasonable notice to Borrower.
Each Lender agrees to treat all such information received by it (except such
information which is generally available or has been made available to the
public from sources other than the Lenders or their respective officers,
employees or representatives) as confidential, provided, however, that nothing
in this Section shall prohibit any Lenders or the Co- Agents from, or subject
any Lender or the Co-Agents to liability for, disclosing any such information
(i) to any court, tribunal or to any regulatory or administrative body or
commission, or any representative thereof, to whose jurisdiction any Lender or
the Co- Agents may be subject or (ii) to any prospective purchaser or assignee
of a participation or assignment of its Loans or its Commitment, provided that
such disclosure is made subject to an appropriate confidentiality agreement on
terms substantially similar to those contained in this Section 6.10.
CREDIT AGREEMENT - Page 42
<PAGE> 48
6.11 Stock Redemptions. Borrower will not, nor will it permit any
Subsidiary to, redeem, repurchase or otherwise acquire or retire any of
Borrower's Capital Stock at any time outstanding, in an aggregate cumulative
amount exceeding $100,000,000 during the Term of this Agreement.
6.12 Indebtedness. Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness for borrowed
money (other than intercompany debts and that evidenced by the Notes) unless
(i) such Indebtedness is incurred solely by Borrower (and not any Subsidiary)
on an unsecured, unguaranteed basis, except for such Indebtedness of
Subsidiaries in an aggregate amount not exceeding $25,000,000 at any one time
outstanding which Indebtedness may be secured or guaranteed, and (ii) after
giving effect to the incurrence of such Indebtedness, Borrower will be in
compliance with (a) its covenants relating to the Senior Leverage Ratio and the
Total Leverage Ratio pursuant to Section 6.16 hereof, and (b) its covenant
related to the Fixed Charge Coverage Ratio pursuant to Section 6.17 hereof.
6.13 Merger. Borrower will not merge or consolidate with or into
any other Person, except that any Subsidiary may merge or consolidate with or
into Borrower, provided Borrower is the legally surviving entity.
6.14 Investments. Borrower will not, nor will it permit any
Subsidiary to, make or suffer to exist any Investments, or commitments therefor
except:
(i) Obligations of, or fully guaranteed by, the
United States of America and its territories or any agency or
instrumentality thereof, having a maturity of one year or less
from the date of acquisition;
(ii) Commercial paper maturing in 270 days or less
from the date of issuance which is rated A-1 or better by
Standard and Poor's Corporation or P-1 or better by Moody's
Investors Service, Inc. or otherwise rated in the highest
rating category by a nationally recognized securities rating
agency;
(iii) Demand deposit accounts maintained in the
ordinary course of business;
(iv) Interest bearing deposit accounts (which may be
represented by certificates of deposit including Eurodollar
certificates of deposit) in domestic commercial banks having
capital, surplus and undivided profits in excess of
$500,000,000 and repurchase agreements with, and bankers
acceptances drawn on and accepted by, any such commercial
banks, maturing within one year from the date of origin;
(v) Investment grade securities (as specified by
Standard & Poor's Corporation and/or Moody's Investor Service
or by any nationally recognized securities rating agency), the
interest on which is exempt from federal income taxation to
the holders thereof;
CREDIT AGREEMENT - Page 43
<PAGE> 49
(vi) Investments in and to Subsidiaries, Borrower and
other entities principally engaged in lines of business
engaged in by Borrower and its Subsidiaries as of the date of
this Agreement or reasonable expansions or extensions thereof;
(vii) Money market mutual funds having assets in excess
of $2 billion limited to holdings specified in (i), (ii), and
(iv) of this Section 6.14;
(viii) Borrower's or its Subsidiaries' receivables
arising from the sale of goods and services in the ordinary
course of business;
(ix) Interest Rate Protection Agreements; and
(x) Other Investments not to exceed $25,000,000 in
the aggregate at any one time outstanding.
6.15 Affiliates. Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any property or service) with, or make any payment or
transfer to, any of its Affiliates (other than Borrower or any Subsidiary)
except in the ordinary course of business and pursuant to the reasonable
requirements of Borrower's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to Borrower or such Subsidiary than Borrower
or such Subsidiary could obtain in a comparable arms-length transaction.
6.16 Leverage Requirement. Borrower shall maintain as of the end
of each of its fiscal quarterly accounting periods (i) a Senior Leverage Ratio
for the four fiscal quarters then ended not exceeding 5.0 to 1.0 and (ii) a
Total Leverage Ratio for the four fiscal quarters then ended not exceeding 5.5
to 1.0.
6.17 Fixed Charge Coverage Requirements. Borrower shall maintain
as of the end of each of its fiscal quarterly accounting periods a Fixed Charge
Coverage Ratio for the four preceding fiscal quarters then ended of not less
1.2 to 1.0.
6.18 Subordinated Debt. Borrower will not amend or modify any
agreement governing any Subordinated Debt to the extent any of the conditions
contained in the definition of Subordinated Debt set forth herein are no longer
satisfied.
ARTICLE 7
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
CREDIT AGREEMENT - Page 44
<PAGE> 50
7.1 Any representation or warranty made by or on behalf of
Borrower or any Subsidiary to the Lenders under or in connection with any Loan
Document shall be materially false or incorrect as of the date on which made.
7.2 Nonpayment of principal of the Notes when due, or nonpayment
of interest upon the Notes or of any Facility Fee or other fees or obligations
under any of the Loan Documents within five Business Days after the same
becomes due.
7.3 The breach by Borrower of any of the terms or provisions of
Sections 6.2, 6.3, 6.5, 6.6, 6.7, 6.9, 6.10, 6.11, 6.12, 6.13, 6.15, 6.16,
6.17, or 6.18.
7.4 The breach by Borrower (other than a breach which constitutes
a Default under Section 7.1, 7.2 or 7.3) of any of the terms or provisions of
this Agreement which is not remedied within thirty days after any Authorized
Officer of Borrower has become aware of such breach or any Lender has given
written notice specifying such breach.
7.5 Failure of Borrower or any Subsidiary to pay any Material
Indebtedness when due (subject to any applicable grace period), or the default
by Borrower or any Subsidiary in the performance of any other term, provision
or condition contained in any agreement which has not been cured or waived
under which any such Material Indebtedness was created or is governed, the
effect of which is to cause, or to permit the holder or holders of such
Material Indebtedness to cause, such Material Indebtedness to become due prior
to its stated maturity; or any such Material Indebtedness shall be declared to
be due and payable or required to be prepaid (other than by a regularly
scheduled payment), prior to the stated maturity thereof.
7.6 Borrower or any Subsidiary shall (i) have an order for relief
entered with respect to it under the Federal Bankruptcy Code, (ii) not pay, or
admit in writing its inability to pay, its debts generally as they become due,
(iii) make an assignment for the benefit of creditors, (iv) apply for, seek,
consent to, or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial part of its
property, (v) institute any proceeding seeking an order for relief under the
Federal Bankruptcy Code or seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file
an answer or other pleading denying the material allegations of any such
proceeding filed against it, (vi) take any corporate action to authorize or
effect any of the foregoing actions set forth in this Section 7.6 or (vii) fail
to contest in good faith any appointment or proceeding described in Section
7.7.
7.7 Without the application, approval or consent of Borrower or
any Subsidiary, a receiver, trustee, examiner, liquidator or similar official
shall be appointed for Borrower or any Subsidiary or any substantial part of
its property, or a proceeding described in Section 7.6(v) shall be instituted
against Borrower or any Subsidiary and such appointment continues undischarged
or such proceeding continues undismissed or unstayed for a period of 60
consecutive days.
CREDIT AGREEMENT - Page 45
<PAGE> 51
7.8 Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of all or any
substantial portion of the Property of Borrower and its Subsidiaries taken as a
whole.
7.9 Borrower or any Subsidiary shall fail within 90 days to pay,
bond or otherwise discharge any judgment or order for the payment of money in
excess of $2,500,000, which is not stayed on appeal or otherwise being
appropriately contested in good faith.
7.10 Borrower shall fail to meet the minimum funding requirements
under the provisions of Section 412 of the Code and Section 302 of ERISA with
respect to any Plan, or any Reportable Event shall occur in connection with any
Plan, each in such a manner that would be reasonably likely to have a Material
Adverse Effect hereunder.
7.11 Any main transmitter license, permit or authorization issued
to Borrower or any Subsidiary by the FCC is forfeited, revoked or not renewed;
or any proceeding with respect to such forfeiture or revocation is instituted
by the FCC and is not resolved or dismissed within eighteen months of the date
of the publication of the order instituting such proceeding and with respect to
which an adverse determination would constitute a Material Adverse Effect.
7.12 Borrower or any Subsidiary shall fail to comply with any Law,
including, without limitation, any Law, rule or regulation promulgated by the
FCC, or any Environmental Law, the effect of which would have a Material
Adverse Effect, which failure is not remedied with respect to Laws (other than
Environmental Laws) within thirty days after the principal executive officer
and/or principal financial officer of any Subsidiary or any Authorized Officer
has become aware of such breach or any Lender has given written notice
specifying such breach, and unless, with respect to Environmental Laws,
Borrower or its Subsidiary fails to commence corrective action within thirty
days after the principal executive officer and/or principal financial officer
of any Subsidiary or any Authorized Officer has become aware of such breach or
any Lender has given written notice specifying such breach and fails to
diligently prosecute such corrective action to its completion.
7.13 The occurrence of a default under any other material
agreement, document or instrument (including, without limitation, any network
affiliation agreement) to which Borrower or any Subsidiary is a party or by
which any of its assets is bound the effect of which would constitute a
Material Adverse Effect.
ARTICLE 8
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1 Acceleration. If any Default described in Section 7.6 or 7.7
occurs, the Commitments of the Lenders to make Advances hereunder shall
automatically terminate and the Obligations shall immediately become due and
payable without any election or action on the part of the Co-Agents or any
Lender, and without presentment, demand, protest or notice of any kind, all of
which Borrower hereby expressly waives. If any other Default occurs and is
CREDIT AGREEMENT - Page 46
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continuing, the Required Lenders may terminate the Commitments of the Lenders
to make Advances hereunder, or declare the Obligations to be due and payable,
whereupon the Obligations shall become immediately due and payable, or both,
without presentment, demand, notice of intent to accelerate, notice of
acceleration, protest or notice of any kind, all of which Borrower hereby
expressly waives.
8.2 Amendments. Subject to the provisions of this Section 8.2,
the Required Lenders (or the Co-Agents with the consent in writing of the
Required Lenders) and Borrower may enter into agreements supplemental hereto
for the purpose of adding any provisions to this Agreement or changing in any
manner the rights of the Lenders or Borrower hereunder or waiving any Default
hereunder; provided, however, that no such supplemental agreement shall,
without the consent of all of the Lenders:
(i) Change the maturity of any Note or the principal
amount thereof, or change the rate or the time of payment of
interest thereon or of any fees due hereunder, or waive any
non-payment of any of the foregoing;
(ii) Reduce the percentage specified in the definition
of Required Lenders, change the number or percentage of
Lenders required to make decisions or grant consents or
approvals with respect to with respect to any provision
hereunder or impair any indemnification provided to any Lender
hereunder;
(iii) Except as permitted or required under Sections
2.4, and 2.18, change the amount of the Commitment of any
Lender hereunder, or permit Borrower to assign its rights
under this Agreement; or
(iv) Amend Section 2.4 or this Section 8.2.
No amendment of any provision of this Agreement relating to the Co-Agents shall
be effective without the written consent of the Co- Agents.
8.3 Preservation of Rights. No delay or omission of the Lenders
or the Co-Agents to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Default or an acquiescence
therein, and any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lenders required pursuant to Section 8.2, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be
available to the Co- Agents and the Lenders until the Obligations have been
paid in full and the Commitments have been terminated.
CREDIT AGREEMENT - Page 47
<PAGE> 53
ARTICLE 9
GENERAL PROVISIONS
9.1 Benefit of Agreement. The Lenders will accept the Notes as
evidence of loans made in the ordinary course of their respective commercial
banking businesses.
9.2 Survival of Representations. All representations and
warranties of Borrower contained in this Agreement shall survive delivery of
the Notes and the making of the Loans herein contemplated.
9.3 Governmental Regulation. Anything contained in this Agreement
to the contrary notwithstanding, no Lender shall be obligated to extend credit
to Borrower in violation of any limitation or prohibition provided by any
applicable Laws.
9.4 Taxes. Any taxes (excluding income or other taxes payable
with respect to the assets or income of a bank generally) payable or ruled
payable by Federal or State authority in respect of the Loan Documents shall be
paid by Borrower, together with interest and penalties, if any.
9.5 Applicable Law; Venue; Service of Process. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Texas and the applicable laws of the United States of America. This Agreement
has been entered into in Dallas County, Texas, and it shall be performable for
all purposes in Dallas County, Texas. Any action or proceeding against
Borrower under or in connection with any of the Loan Documents may be brought
in any state or federal court in Dallas County, Texas. Borrower hereby
irrevocably (i) submits to the nonexclusive jurisdiction of such courts, and
(ii) waives any objection it may now or hereafter have as to the venue of any
such action or proceeding brought in any such court or that any such court is
an inconvenient forum. Borrower agrees that service of process upon it may be
made by certified or registered mail, return receipt requested, at its address
specified or determined in accordance with the provisions of Article 12.
Nothing herein or in any of the other Loan Documents shall affect the rights of
the Co-Agents or the Lenders to serve process in any other manner permitted by
law or shall limit the right of the Co-Agents or the Lenders to bring any
action or proceeding against Borrower or with respect to any of its Property in
courts in other jurisdictions. Any action or proceeding by Borrower against
the Co-Agents or the Lenders shall be brought only in a court located in Dallas
County, Texas unless Borrower is unable to join the necessary Co-Agent(s)
and/or Lender(s).
9.6 Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any
of the provisions of the Loan Documents.
9.7 ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES, AND THE OTHER
LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL
CREDIT AGREEMENT - Page 48
<PAGE> 54
PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL
AGREEMENTS AMONG THE PARTIES HERETO. If there is a conflict between the terms
of this Agreement and the terms of the Commitment Letter, the terms of this
Agreement shall prevail.
9.8 Accounting. Except as otherwise provided herein, all
accounting terms shall be construed and compliance with Sections 6.12, 6.16 and
6.17 shall be determined on a consolidated basis for Borrower and the
Subsidiaries, in accordance with GAAP.
9.9 Several Obligations. The respective obligations of the
Lenders hereunder are several and not joint and no Lender shall be the partner
or agent of any other (except to the extent to which any Co-Agent is authorized
to act as such). The failure of any Lender to perform any of its obligations
hereunder shall not relieve any other Lender from any of its obligations
hereunder.
9.10 Expenses. Subject only to the limitations provided by the
terms of the Commitment Letter and the Fee Letter referred to therein, Borrower
shall reimburse the Co-Agents for any and all costs, internal charges and
out-of-pocket expenses (including reasonable attorneys' fees and expenses for
the Co-Agents), paid or incurred by the Co-Agents in connection with the
preparation, review, execution, delivery, amendment, modification, collection
and enforcement of the Loan Documents, and any extension of the Facility
Termination Date pursuant to Section 2.20. Borrower shall reimburse the
Co-Agents and Lenders for any and all costs, internal charges and out-of-pocket
expenses (including reasonable attorneys' fees and expenses) paid or incurred
by the Lenders in connection with collection and enforcement of the Loan
Documents. The obligations of Borrower under this Section 9.10 shall survive
the termination of this Agreement.
9.11 Numbers of Documents. All statements, notices and requests
hereunder shall be furnished to the Administrative Agent with sufficient
counterparts so that the Administrative Agent may furnish one to each of the
Lenders and the Administrative Agent shall so furnish such statements, notices
and requests to the Lenders.
9.12 Severability. In the event that any one or more of the
provisions contained in this Agreement or in the Notes should be held invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein or therein shall
not in any way be affected or impaired thereby.
9.13 Successors and Assigns.
(i) Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of Borrower
CREDIT AGREEMENT - Page 49
<PAGE> 55
or the Lenders that are contained in this Agreement shall bind
and inure to the benefit of their respective successors and
assigns. Borrower may not assign or transfer any of its
obligations hereunder without the prior written consent of all
the Lenders.
(ii) Each Lender may assign to one or more
Eligible Assignees all or a portion of its interests, rights
and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment and the same
portion of the Loans at the time owing to it and the Note or
Notes held by it). An assignment shall be permitted if such
assignment involves the assignment of the principal amount of
at least $20,000,000 in Commitments if the assignment is to an
Eligible Assignee who is not a Lender or an Affiliate of a
Lender; provided, however, if the assignment is for a
principal amount that is less than all of Lender's Commitment
and Loans outstanding, such Lender shall retain a Commitment
and Loans outstanding in a principal amount at least equal to
$20,000,000. Assignments in a principal amount of less than
$20,000,000 may be made to a Lender or an Affiliate of a
Lender. Notwithstanding the foregoing, each assignment shall
be subject to the following criteria: (a) Borrower shall
consent in writing to an assignment to any Eligible Assignee,
which consent shall not be unreasonably withheld or delayed;
(b) the assigning Lender, Eligible Assignee and Borrower shall
execute and deliver an Assignment and Acceptance, together
with any new Note or Notes subject to such assignment, and the
assigning Lender shall return its old Note or Notes to
Borrower; (c) assignments to banks organized under the laws of
a country other than the United States may occur only upon
receipt of a properly completed Internal Revenue Service Form
1001 (or, if applicable, Form 4224) or any successor form(s)
indicating that withholding taxes will not be imposed, and
such foreign assignee banks must inform Borrower promptly if
such Internal Revenue Service forms cease to apply; (d) the
assigning Lender, upon the return of the old Note or Notes to
Borrower, execution of the Assignment and Acceptance and the
issuance of new Note or Notes by Borrower, shall promptly
advise the Administrative Agent in writing of such assignment
for recording in the Register and provide a copy of such
Assignment and Acceptance to the Administrative Agent for its
records; and (e) the Lender assigning an interest hereunder
will be subject to a service fee, payable to the
Administrative Agent for its own account, in the amount of
$2,500. Upon such execution, delivery, acceptance and
recording by the Administrative Agent, from and after the
effective date specified in each Assignment and Acceptance,
which effective date shall be at least five Business Days
after the execution thereof, (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 hereby and (y) the Lender thereunder shall, to the
extent provided in such assignment, be released from its
obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto).
CREDIT AGREEMENT - Page 50
<PAGE> 56
(iii) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee
thereunder confirm to and agree with each other and the other
parties hereto as follows: (a) other than the representation
and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse
claim, such Lender assignor makes no representation or
warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in
connection with the Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of
this Agreement or any other instrument or document furnished
pursuant hereto; (b) such Lender assignor makes no
representation or warranty and assumes no responsibility with
respect to the financial condition of Borrower or the
performance or observance by Borrower of any of its
obligations under this Agreement or any other instrument or
document furnished pursuant hereto; (c) such assignee confirms
that it has received a copy of this Agreement, together with
copies of the financial statements referred to in Section 5.5
and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (d) such assignee
will, independently and without reliance upon the
Administrative Agent or any of the other Co-Agents, such
Lender assignor 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 this Agreement; (e) such assignee
confirms that it is an Eligible Assignee; (f) such assignee
appoints and authorizes the Co-Agents to take such action as
agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Co- Agents by the terms
hereof, together with such powers as are reasonably incidental
thereto; and (g) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by
the terms of this Agreement are required to be performed by it
as a Lender.
(iv) The Administrative Agent shall maintain at
its address referred to in Article 12 a copy of each
Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders and
the Commitment of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive, in the absence of
manifest error, and Borrower, the Co-Agents and the Lenders
may treat each person whose name is recorded in the Register
as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by Borrower, the
Co-Agents or any Lender at any reasonable time and from time
to time upon reasonable prior notice.
(v) The Administrative Agent shall not be
responsible for the documentation relating to any assignment;
such documentation shall be the responsibility of the
assigning Lender, the Eligible Assignee and the Borrower to
complete all documentation relating to any such assignment.
Within five Business Days after receipt of an executed
Assignment and Acceptance from the assigning
CREDIT AGREEMENT - Page 51
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Lender, Borrower, at its own expense, shall execute and
deliver to the assigning Lender in exchange for the
surrendered Note or Notes a new Note or Notes payable to the
order of the Eligible Assignee in an amount equal to the
Commitment assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a
Commitment hereunder, a new Note or Notes payable to the order
of the assigning Lender in an amount equal to the Commitment
retained by it hereunder. Such new Note or Notes shall be in
an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the
effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of Exhibit "A" and
Exhibit "B" hereto. Canceled Notes shall be returned to
Borrower and the new Note or Notes shall be delivered to each
such Note's respective payee by the Borrower. Any costs,
internal charges and out-of-pocket expenses (including
attorneys' fees and expenses) incurred by the assigning
Lender, Eligible Assignee or Borrower shall be for their own
accounts, respectively. Upon its receipt from the assigning
Lender of a copy of the Assignment and Acceptance executed by
an assigning Lender and an Eligible Assignee and Borrower, the
Administrative Agent shall, if such Assignment and Acceptance
has been completed and is in the form of Exhibit "G" hereto,
(a) record the information contained therein in the Register,
and (b) give prompt notice within one Business Day thereof to
Borrower, the other Co- Agents and the assigning Lenders and
Eligible Assignee.
(vi) Each Lender may without the consent of
Borrower sell participations to one or more banks or other
entities in all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a
portion of its Commitment and the Loans owing to it and the
Note or Notes held by it) provided, however, that (a) such
Lender's obligations under this Agreement shall remain
unchanged, (b) such Lender shall remain solely responsible to
the other parties hereto for the performance of such
obligations, (c) the participating banks or other entities
shall be entitled to the cost protection provisions contained
in Article 3, (d) Borrower, the Co- Agents and the other
Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations
under this Agreement, and (e) the voting rights of any person
purchasing a participation shall be limited to matters
concerning the increase or decrease of the Commitments and the
interest rates charged hereunder, the reduction of any amount
payable to the Lenders hereunder, and the delay of any date on
which the Lenders are to receive payment hereunder.
(vii) Any Lender may, in connection with any
assignment or participation or proposed assignment or
participation pursuant to this Section 9.13, disclose to the
assignee or participant or proposed assignee or participant,
any information relating to Borrower furnished to such Lender
by or on behalf of Borrower; provided that prior to any such
disclosure, each such assignee or participant or proposed
assignee or participant shall agree in writing to preserve
CREDIT AGREEMENT - Page 52
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the confidentiality of any confidential information relating
to Borrower received from such Lender.
(viii) Nothing herein shall prohibit any Lender from
pledging or assigning its Note or Notes to any Federal Reserve
Bank in accordance with applicable Law.
9.14 Maximum Interest Rate. No provision of this Agreement or of
any other Loan Document shall require the payment or the collection of interest
in excess of the maximum permitted by applicable law. If any excess of
interest in such respect is hereby provided for, or shall be adjudicated to be
so provided, in any Loan Document or otherwise in connection with this loan
transaction, the provisions of this Section 9.14 shall govern and prevail and
neither Borrower nor the sureties, guarantors, successors, or assigns of
Borrower shall be obligated to pay the excess amount of such interest or any
other excess sum paid for the use, forbearance, or detention of sums loaned
pursuant hereto. In the event any Lender ever receives, collects, or applies
as interest any such sum, such amount which would be in excess of the maximum
amount permitted by applicable law shall be applied as a payment and reduction
of the principal of the indebtedness evidenced by the Note or Notes of such
Lender; and, if the principal of such Note or Notes has been paid in full, any
remaining excess shall forthwith be paid to Borrower. In determining whether
or not the interest paid or payable exceeds the Maximum Rate, Borrower and each
such Lender shall, to the extent permitted by applicable law, (i) characterize
any nonprincipal payment as an expense, fee, or premium rather than as
interest, (ii) exclude voluntary prepayments and the effects thereof, and (iii)
amortize, prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the entire contemplated term of the indebtedness
evidenced by the Note or Notes so that interest for the entire term does not
exceed the Maximum Rate.
9.15 Non-Application of Chapter 15 of Texas Credit Code. The
provisions of Chapter 15 of the Texas Credit Code (Vernon's Texas Civil
Statutes, Article 5069-15) are specifically declared by the parties hereto not
to be applicable to this Agreement or any of the other Loan Documents or to the
Transactions contemplated hereby.
9.16 Construction. Borrower, Co-Agents and Lenders acknowledge
that each of them has had the benefit of legal counsel of its own choice and
has been afforded an opportunity to review this Agreement and the other Loan
Documents with its legal counsel and that this Agreement and the other Loan
Documents shall be construed as if jointly drafted by Borrower and the Lenders.
9.17 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF BORROWER, CO-AGENTS AND LENDERS HEREBY IRREVOCABLY AND
EXPRESSLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF
OR RELATING TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS.
CREDIT AGREEMENT - Page 53
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9.18 INDEMNIFICATION. BORROWER HEREBY INDEMNIFIES EACH CO-AGENT,
EACH LENDER AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES, ATTORNEYS, AND AGENTS FROM, AND HOLDS EACH OF THEM
HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES,
JUDGMENTS, COSTS, AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) (THE
"LOSSES") TO WHICH ANY OF THEM MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY
ARISE FROM OR RELATE TO (I) THE NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE,
ADMINISTRATION, OR ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS, (II) ANY OF THE
TRANSACTIONS, (III) ANY BREACH BY BORROWER OF ANY REPRESENTATION, WARRANTY,
COVENANT, OR OTHER AGREEMENT CONTAINED IN ANY OF THE LOAN DOCUMENTS, (IV) THE
PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL, REMOVAL, OR CLEANUP OF ANY
HAZARDOUS SUBSTANCE LOCATED ON, ABOUT, WITHIN, OR AFFECTING ANY OF THE
PROPERTIES OR ASSETS OF BORROWER OR ANY OF ITS SUBSIDIARIES, OR (V) ANY
INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION,
ANY THREATENED INVESTIGATION, LITIGATION, OR OTHER PROCEEDING RELATING TO ANY
OF THE FOREGOING. WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT OR OF ANY
OTHER LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT
EACH PERSON TO BE INDEMNIFIED UNDER THIS SECTION SHALL BE INDEMNIFIED FROM AND
HELD HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES,
PENALTIES, JUDGMENTS, COSTS, AND EXPENSES (INCLUDING REASONABLE ATTORNEYS'
FEES) ARISING OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE
(OTHER THAN GROSS NEGLIGENCE) OF THE PERSON TO BE INDEMNIFIED. NO PERSON TO BE
INDEMNIFIED UNDER THIS SECTION 9.18 SHALL BE INDEMNIFIED FOR ANY LOSSES ARISING
FROM ITS GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS DETERMINED BY A COURT OF
COMPETENT JURISDICTION IN A FINAL NON-APPEALABLE JUDGMENT.
9.19 LIMITATION OF LIABILITY. NEITHER ANY CO-AGENT OR LENDER NOR
ANY AFFILIATE, OFFICER, DIRECTOR, EMPLOYEE, ATTORNEY, OR AGENT OF ANY CO-AGENT
OR LENDER SHALL HAVE ANY LIABILITY WITH RESPECT TO, AND EACH OBLIGATED PARTY
HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE ANY CO-AGENT, ANY LENDER UPON,
ANY CLAIM FOR ANY SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES
SUFFERED OR INCURRED BY ANY OBLIGATED PARTY IN CONNECTION WITH, ARISING OUT OF,
OR IN ANY WAY RELATED TO, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR
ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT EXCEPT TO THE EXTENT
THAT THE SAME OCCURS AS THE RESULT OF THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF SUCH PARTY AS DETERMINED BY A COURT OF COMPETENT JURISDICTION IN
A FINAL NON- APPEALABLE JUDGMENT. BORROWER HEREBY WAIVES, RELEASES, AND AGREES
NOT TO SUE ANY CO-AGENT, ANY LENDER OR ANY
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OF CO-AGENTS' OR LENDERS' AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES,
ATTORNEYS, OR AGENTS FOR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM IN CONNECTION
WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS, OR ANY OF THE TRANSACTIONS EXCEPT TO THE EXTENT THAT THE
SAME OCCURS AS THE RESULT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH
PARTY AS DETERMINED BY A COURT OF COMPETENT JURISDICTION IN A FINAL
NON-APPEALABLE JUDGMENT.
9.20 Lenders Not Fiduciaries. The relationship between Borrower
and the Lenders is solely that of debtor and creditor, and the Lenders have no
fiduciary or other special relationship with Borrower, and no term or condition
of any of the Loan Documents shall be construed so as to deem the relationship
between Borrower and the Lenders to be other than that of debtor and creditor.
9.21 Termination of and Waiver Under Prior Agreement. By its
execution of this Agreement, Borrower hereby gives notice of the termination of
that certain Credit Agreement dated as of October 27, 1988, as amended, by and
among Borrower, First Chicago as Managing Agent, and the banks party thereto
(the "Prior Agreement"), effective as of the date the conditions precedent set
forth in Section 4.1 of this Agreement have been satisfied or waived. By its
execution of this Agreement, each Lender that is a "Bank" party to the Prior
Agreement hereby agrees to waive the requirement of ten Business Days' written
notice to the Managing Agent prior to termination thereof set forth in Section
2.4 thereof. Such waiver shall become effective upon execution of counterparts
of this Agreement by sufficient Lenders to constitute the "Required Banks" as
that term is defined in the Prior Agreement.
ARTICLE 10
THE CO-AGENTS
10.1 Appointment of Co-Agents. First Chicago is hereby appointed
Administrative Agent hereunder and under the other Loan Documents and shall
have general responsibilities for all administrative matters with respect to
the Loan Documents, including without limitation Advances made or to be made
hereunder by the Lenders, communications, notices and correspondence between
Borrower, on the one hand, and a Lender or Lenders, on the other hand,
monitoring compliance by Borrower and the Lenders with requirements hereunder,
maintaining the Register for names and addresses of Lenders and their
Commitments hereunder, and acting as agent for the Lenders with respect to
consents, waivers and the exercise of rights and remedies under the Loan
Documents. The Administrative Agent shall not be responsible for any
documentation unless specifically authorized by Borrower and Lenders. Citicorp
Securities is hereby appointed Syndication Agent hereunder and under the other
Loan Documents and shall manage all aspects of the loan syndication in
consultation with Borrower, including the timing of all offers to potential
Lenders, the acceptance of Commitments, and the determination of the amounts
offered and the compensation provided. TCB is hereby appointed Documentation
Agent hereunder and under the other Loan Documents and shall have primary
responsibility for
CREDIT AGREEMENT - Page 55
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all documentation of (but not administrative matters associated with) the
revolving credit facility, the Loan Documents and any loan documentation
related to any amendments, waivers, modifications or restatements thereof, any
extension of the Facility Termination Date, any increase in the Commitments and
any assignments permitted hereunder. Each of the Lenders irrevocably
authorizes First Chicago to act as Administrative Agent, Citicorp Securities to
act as Syndication Agent and TCB to act as Documentation Agent, of such Lender.
Each Co-Agent agrees to act as such upon the express conditions contained in
this Article 10. No Co-Agent shall have a fiduciary relationship in respect of
Borrower or any Lender by reason of this Agreement.
10.2 Powers. Each Co-Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to such Co-Agents by the
terms of each thereof, together with such powers as are reasonably incidental
thereto. The Co- Agents shall have no implied duties to the Lenders, or any
obligation to the Lenders to take any action thereunder except any action
specifically provided by the Loan Documents to be taken by any such Co-Agent.
10.3 General Immunity. Neither the Co-Agents nor any of its
directors, officers, agents or employees shall be liable to Borrower or any
Lender for any action taken or omitted to be taken by it or them hereunder or
under any other Loan Document or in connection herewith or therewith except for
its or their own gross negligence or willful misconduct.
10.4 No Responsibility for Loans, Recitals, etc. Neither Co-Agents
nor any of their respective directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify (i) any
statement, warranty or representation made in connection with any Loan Document
or any borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information directly
to each Lender; (iii) the satisfaction of any condition specified in Article 4,
except receipt of items required to be delivered to the Administrative Agent;
(iv) the validity, effectiveness or genuineness of any Loan Document or any
other instrument or writing furnished in connection therewith; or (v) the
value, sufficiency, creation, perfection or priority of any interest in any
collateral security. The Co-Agents shall have no duty to disclose to the
Lenders information that is not required to be furnished by Borrower to the
Co-Agents or any of them at such time, but is voluntarily furnished by Borrower
to the Co-Agents or any of them (either in their respective capacities as
Co-Agents or in their individual capacities).
10.5 Action on Instructions of Lenders. Each of the Co-Agents
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder and under any other Loan Document in accordance with written
instructions signed by the Required Lenders, and such instructions and any
action taken or failure to act pursuant thereto shall be binding on all of the
Lenders and on all holders of Notes. Each of the Co-Agents shall be fully
justified in failing or refusing to take any action not otherwise required
hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action.
CREDIT AGREEMENT - Page 56
<PAGE> 62
10.6 Employment of Agents and Counsel. Each of the Co-Agents may
execute any of its duties as Co-Agent hereunder and under any other Loan
Document by or through employees, agents, and attorneys-in-fact and shall not
be answerable to the Lenders, except as to money or securities received by it
or its authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Each of the Co-Agents
shall be entitled to advice of counsel concerning all matters pertaining to the
agency hereby created and its duties hereunder and under any other Loan
Document.
10.7 Reliance on Documents; Counsel. Each of the Co-Agents shall
be entitled to rely upon any Note, notice, consent, certificate, affidavit,
letter, telegram, telecopy statement, paper or document believed by it to be
genuine and correct and to have been signed or sent by the proper person or
persons, and, in respect to legal matters, upon the opinion of counsel selected
by Co- Agent, which counsel may be employees of such Co-Agent.
10.8 Co-Agents' Reimbursement and Indemnification. The Lenders
agree to reimburse and indemnify the Co-Agents ratably in proportion to their
respective Commitments (i) for any amounts not to be reimbursed by Borrower for
which any Co-Agent is entitled to reimbursement by Borrower under the Loan
Documents, (ii) for any other expenses incurred by any Co-Agent on behalf of
the Lenders, in connection with the administration and enforcement of the Loan
Documents and (iii) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against any Co-Agent in any way relating to or arising out of the Loan
Documents or any other document delivered in connection therewith or the
transactions contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of any Co-Agent. The obligations of the Lenders under this
Section 10.8 shall survive payment of the Obligations and termination of this
Agreement.
10.9 Rights as a Lender. In the event any Co-Agent is a Lender,
such Co-Agent shall have the same rights and powers hereunder and under any
other Loan Document as any Lender and may exercise the same as though it were
not a Co-Agent, and the term "Lender" or "Lenders" shall, at any time when a
Co-Agent is a Lender, unless the context otherwise indicates, include such
Co-Agent in its individual capacity. Each Co-Agent may accept deposits from,
lend money to, and generally engage in any kind of trust, debt, equity or other
transaction, in addition to those contemplated by this Agreement or any other
Loan Document, with Borrower or any of its Subsidiaries in which Borrower or
such Subsidiary is not restricted hereby from engaging with any other Person.
Each Co-Agent, in its individual capacity, is obligated to be a Lender, except
for the Syndication Agent.
10.10 Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon any Co-Agents or any other Lender and
based on the financial statements prepared by Borrower and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each
Lender also acknowledges that it will, independently and without reliance
CREDIT AGREEMENT - Page 57
<PAGE> 63
upon any Co-Agents 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 or not taking action under this Agreement and the other Loan
Documents.
10.11 Co-Agents. Any Co-Agent may resign at any time by giving
written notice thereof to the other Co-Agents, the Lenders and Borrower, such
resignation to be effective upon the appointment of a successor Co-Agent or, if
no successor Co-Agent has been appointed, forty-five days after the retiring
Co-Agent gives notice of its intention to resign. Upon any such resignation,
the Required Lenders shall have the right to appoint, on behalf of Borrower and
the Lenders, a successor Co-Agent, which shall be a Lender. If no successor
Co-Agent shall have been so appointed by the Required Lenders within thirty
days after the resigning Co- Agent's giving notice of its intention to resign,
then the resigning Co-Agent may appoint, on behalf of Borrower and the Lenders,
a successor Co-Agent. Any such appointment of a successor Co-Agent shall be
subject to the consent of Borrower, which consent shall not be unreasonably
withheld. Borrower shall provide its written consent to or disapproval of any
such successor Co-Agent within fifteen days after receipt of notice of the
appointment of such successor Co-Agent; if Borrower does not respond in writing
within such fifteen day period, Borrower shall be deemed to have consented to
the appointment of such successor Co-Agent. If the Co-Agent has resigned and
no successor Co-Agent has been appointed, the Lenders may perform all duties of
the resigning Co-Agent hereunder and, in the event the resigning Co-Agent is
the Administrative Agent, Borrower shall make all payments in respect of the
Obligations to the applicable Lender and for all other purposes shall deal
directly with the Lenders. No successor Co-Agent shall be deemed to be
appointed hereunder until such successor Co-Agent has accepted the appointment.
Any such successor Co-Agent shall be a commercial bank having capital, retained
earnings and undivided profits of at least $500,000,000. Upon the acceptance
of any appointment as Co-Agent hereunder by a successor Co-Agent, such
successor Co-Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning Co-Agent. Upon the
effectiveness of the resignation of the Co-Agent, the resigning Co-Agent shall
be discharged from its duties and obligations hereunder and under the Loan
Documents. After the effectiveness of the resignation of a Co-Agent, the
provisions of this Article 10 shall continue in effect for the benefit of such
Co-Agent in respect of any actions taken or omitted to be taken by it while it
was acting as the Co-Agent hereunder and under the other Loan Documents.
ARTICLE 11
SETOFF; RATABLE PAYMENTS
11.1 Setoff. In addition to, and without limitation of, any rights
of the Lenders under applicable law, if Borrower becomes insolvent, however
evidenced, or any Default occurs, any indebtedness from any Lender to Borrower
may, subject to Section 11.2, be offset and applied toward the payment of the
Obligations owing to such Lender, whether or not the Obligations, or any part
hereof, shall then be due. If any Lender becomes insolvent, any indebtedness
from Borrower to such Lender (including, without limitation, liabilities of
such Lender for deposits from Borrower) may be offset and applied toward the
payment of the Obligations owing to such Lender, whether or not the Obligations
or any part hereof, shall then be due.
CREDIT AGREEMENT - Page 58
<PAGE> 64
11.2 Sharing of Payments. In case at any time any Lender, whether
by setoff or otherwise, has payment made to it upon its Note or Notes in a
greater proportion than received by any other Lender upon its Note (Ratable
Loans) in accordance with its Commitment, such Lender so receiving such greater
proportionate payment agrees to purchase a portion of the Ratable Loans held by
the other Lenders so that after such purchase each Lender will hold its Pro
Rata Percentage of the Ratable Loans in accordance with its Commitment. There
shall be no sharing of payments under this Section 11.2 among Lenders with
Competitive Bid Loans outstanding. In case any such payment is disturbed by
legal process, or otherwise, appropriate further adjustments shall be made.
Borrower agrees that any Lender executing this Agreement purchasing a
participation hereunder may, to the fullest extent permitted by law, exercise
all its rights of payment with respect to such participation as if such Lender
were the direct creditor of Borrower in the amount of the participation.
ARTICLE 12
NOTICES
12.1 Giving Notice. Any notice or information required or
permitted to be given under this Agreement may be, and shall be deemed, given
when deposited in the United States mail, postage prepaid, or by telecopy when
received by the appropriate office after transmission, charges prepaid,
addressed to Borrower, the Lenders or the Co-Agents at the addresses indicated
below their signatures to the Agreement.
12.2 Change of Address. Borrower, the Lenders and the Co-Agents
may each change the address for service of notice upon it by a notice in
writing to the other parties hereto.
ARTICLE 13
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by Borrower, the
Co-Agents and the Lenders and each party has notified the Documentation Agent
by telecopy or telephone, confirmed in writing, that it has taken such action.
CREDIT AGREEMENT - Page 59
<PAGE> 65
IN WITNESS WHEREOF, Borrower, the Lenders and the Co-Agents have
executed this Agreement as of the date first above written.
BORROWER:
A. H. BELO CORPORATION
By: /s/ MICHAEL D. PERRY
Michael D. Perry
Senior Vice President
Address:
Communications Center
400 South Record Street
Dallas, Texas 75202
Telecopy: (214) 977-6603
Attention: Ms. Vicky C. Teherani
Vice President and Treasurer
CREDIT AGREEMENT - Page 60
<PAGE> 66
CO-AGENTS AND LENDERS:
CITICORP SECURITIES, INC.,
as Syndication Agent
By: /s/ FREDERICK B. PICKERING, JR.
Frederick B. Pickering, Jr.
Managing Director
Address:
399 Park Avenue, 9th Floor
New York, New York 10043
Telecopy: 212-832-9137
Attention: Margaret Ullrich
CREDIT AGREEMENT - Page 61
<PAGE> 67
Commitment: THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Administrative Agent
$75,000,000.00
By: /s/ JOHN M. SPEER
John M. Speer
Vice President
Address:
Mail Suite 0629; 1FNP-14
One First National Plaza
Chicago, Illinois 60670
Telecopy: 213-732-8587
Attention: John M. Speer
Communications Division
CREDIT AGREEMENT - Page 62
<PAGE> 68
Commitment: TEXAS COMMERCE BANK NATIONAL ASSOCIATION
Individually and as Documentation Agent
$75,000,000.00
By: /s/ JOHN P. DEAN
John P. Dean
Senior Vice President
Address:
P. O. Box 660197
Dallas, Texas 75266-0197
Telecopy: 214-922-2044
Attention: John P. Dean
Senior Vice President
CREDIT AGREEMENT - Page 63
<PAGE> 69
Commitment: CITICORP U.S.A., INC.,
Individually
$75,000,000.00
/s/ THOMAS D. STOTT
Thomas D. Stott
Vice President
By: /s/ FREDERICK B. PICKERING, JR.
Name: Frederick B. Pickering, Jr.
Title: Vice President
Address:
399 Park Avenue, 4th Floor
New York, New York 10043
Telecopy: 212-793-6873
Attention: Robert Keller
Media Group
CREDIT AGREEMENT - Page 64
<PAGE> 70
Commitment: FIRST INTERSTATE BANK OF TEXAS, N.A.
$55,000,000.00
By: /s/ CONNOR J. DUFFEY
Connor J. Duffey
Vice President
Address:
1445 Ross Avenue, 3rd Floor
Dallas, Texas 75202
Telecopy: 214-740-1543
Attention: Connor J. Duffey
CREDIT AGREEMENT - Page 65
<PAGE> 71
Commitment: NATIONSBANK OF TEXAS, N.A.
$55,000,000.00
By: /s/ DONALD L. HARRISON, JR.
Donald L. Harrison, Jr.
Senior Vice President
Address:
901 Main Street, 67th Floor
Dallas, Texas 75202
Telecopy: 214-508-0980
Attention: Donald L. Harrison, Jr.
CREDIT AGREEMENT - Page 66
<PAGE> 72
Commitment: SOCIETE GENERALE, SOUTHWEST AGENCY
$55,000,000.00
By: /s/ CHRISTOPHER J. SPELTZ
Name: Christopher J. Speltz
Title: Vice President
Address:
2001 Ross Avenue, #4800
Dallas, Texas 75201
Telecopy: 214-979-1104
Attention: Chris Speltz
CREDIT AGREEMENT - Page 67
<PAGE> 73
Commitment: BANK OF AMERICA NT & SA
$40,000,000.00
By: /s/ JAMES C. COLEGATE
Name: James C. Colegate
Title: Senior Vice President
Address:
555 South Flower Street
Los Angeles, California 90071
Telecopy: 213-228-3145
Attention: Robert Lagace
CREDIT AGREEMENT - Page 68
<PAGE> 74
Commitment: THE BANK OF CALIFORNIA, N.A.
$40,000,000.00
By: /s/ RICK HOLMAN
Name:
Title: Vice President
Address:
400 California Street, 14th Floor
San Francisco, California 94104
Telecopy: 415-765-3146
Attention: Rick Holman
CREDIT AGREEMENT - Page 69
<PAGE> 75
Commitment: THE BANK OF TOKYO, LTD.
$40,000,000.00
By: /s/ J. BECKWITH
Name: J. Beckwith
Title: Vice President
Address:
2001 Ross Avenue, Suite 3150
Dallas, Texas 75201
Telecopy: 214-954-1007
Attention: John E. Beckwith
CREDIT AGREEMENT - Page 70
<PAGE> 76
Commitment: CREDIT LYONNAIS CAYMAN ISLAND BRANCH
$40,000,000.00
By: /s/ ALAIN PAPIASSE
Name: Alain Papiasse
Title: Authorized Signature
Address:
c/o Credit Lyonnais Dallas Representative Office
500 North Akard, Suite 3210
Dallas, Texas 75201
Telecopy: (214) 954-3312
Attention: Karen Watson
CREDIT AGREEMENT - Page 71
<PAGE> 77
Commitment: THE FUJI BANK, LIMITED
$25,000,000.00
By: /s/ DAVID KELLEY
Name: David Kelley
Title: Vice President & Senior Manager
Address:
Two Houston Center, Suite 2800
Houston, Texas 77010
Telecopy: 713-759-0048
Attention: Philip C. Lauinger, III
CREDIT AGREEMENT - Page 72
<PAGE> 78
Commitment: TOYO TRUST AND BANKING COMPANY, LTD.
$25,000,000.00
By: /s/ HIROYUKI FUKURO
Hiroyuki Fukuro
Vice President
Address:
437 Madison Avenue, 37th Floor
New York, New York 10022
Telecopy: 212-371-4963
Attention: Sharon Bonelli
CREDIT AGREEMENT - Page 73
<PAGE> 79
EXHIBIT "A"
NOTE
(Ratable Loans)
$ ____________ _____________, 19__
A. H. BELO CORPORATION, a Delaware corporation ("Borrower"), promises to
pay, on or before the Facility Termination Date (as defined in the Agreement
referred to below), to the order of __________________ (the "Lender") the lesser
of the principal sum of _________________________________ Dollars or the
aggregate unpaid principal amount of all Loans made by the Lender to Borrower
pursuant to Sections 2.1 and 2.2 of the Credit Agreement (as the same may be
amended or modified, the "Agreement") hereinafter referred to, in immediately
available funds at the main office of The First National Bank of Chicago in
Chicago, Illinois, as Administrative Agent, together with interest on the
unpaid principal amount hereof at the rates and on the dates set forth in the
Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Ratable Loan and the date and amount of each
principal payment hereunder.
This Note (Ratable Loans) is one of the Notes issued pursuant to, and is
entitled to the benefits of, the Credit Agreement, dated as of August 5, 1994,
among Borrower, Citicorp Securities, Inc., as Syndication Agent, The First
National Bank of Chicago, individually and as Administrative Agent, Texas
Commerce Bank National Association, individually and as Documentation Agent,
and the banks named therein, including the Lender, to which Agreement, as it
may be amended from time to time, reference is hereby made for a statement of
the terms and conditions under which this Note may be prepaid or its maturity
date accelerated. Capitalized terms used herein and not otherwise defined
herein are used with the meanings attributed to them in the Agreement.
Notwithstanding anything to the contrary contained herein, no provision of
this Note shall require the payment or permit the collection of interest in
excess of the Maximum Rate. If any excess of interest in such respect is
herein provided for, or shall be adjudicated to be so provided, in this Note or
otherwise in connection with this loan transaction, the provisions of this
paragraph shall govern and prevail, and neither Borrower nor the successors or
assigns of Borrower shall be obligated to pay the excess amount of such
interest, or any other excess sum paid for the use, forbearance or detention of
sums loaned pursuant hereto. If for any reason interest in excess of the
Maximum Rate shall be deemed charged, required or permitted by any court of
competent jurisdiction, any such excess shall be applied as a payment and
reduction of the principal of indebtedness evidenced by this Note; and, if the
principal amount hereof has been paid in full, any remaining excess shall
forthwith be paid to Borrower. In determining whether or not the interest paid
or payable exceeds the Maximum Rate, Borrower and the
<PAGE> 80
Lenders shall, to the extent permitted by an applicable law, (a) characterize
any non-principal payment as an expense, fee, or premium rather than as
interest, (b) exclude voluntary prepayments and the effects thereof, and (c)
amortize, prorate, allocate, and spread in equal or unequal parts of the total
amount of interest throughout the entire contemplated term of the indebtedness
evidenced by this Note so that the interest for the entire term does not exceed
the Maximum Rate.
Borrower and each endorser and other party ever liable for payment of any
sums of money payable on this Note jointly and severally waive notice (except
for notice specifically required by the terms of the Credit Agreement),
presentment, demand for payment, protest, notice of protest and non-payment or
dishonor, notice of acceleration, notice of intent to accelerate, notice of
intent to demand, diligence in collecting, grace, and all other formalities of
any kind, and consent to all extensions without notice for any period or
periods of time and partial payments, before or after maturity, and any
impairment of any collateral securing this Note, all without prejudice to the
holder. The holder shall similarly have the right to deal in any way, at any
time, with one or more of the foregoing parties without notice to any other
party, and to grant any such party any extensions of time for payment of any of
said indebtedness, or to release or substitute any such party, or to grant any
other indulgences or forbearances whatsoever, without notice to any other party
and without in any way affecting the personal liability of any party hereunder.
THIS NOTE AND THE OTHER LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT
AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
A. H. BELO CORPORATION
By: ______________________
Name: ____________________
Title: ___________________
<PAGE> 81
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE (RATABLE LOANS) OF _________________
DATED ____________, 19__
<TABLE>
<CAPTION>
Principal Maturity of Principal
Date Amount of Loan Interest Period Amount Paid Unpaid Balance
---- -------------- --------------- ----------- --------------
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 82
EXHIBIT "B"
NOTE
(Competitive Bid Loans)
$600,000,000.00 ______________, 19__
A. H. BELO CORPORATION, a Delaware corporation ("Borrower"), promises to
pay, on or before the Facility Termination Date, to the order of __________ (the
"Lender") the aggregate unpaid principal amount of all Competitive Bid Loans
made by the Lender to Borrower pursuant to Sections 2.1 and 2.3 of the Credit
Agreement hereinafter referred to (as the same may be amended, modified, the
"Agreement"), in lawful money of the United States in immediately available
funds at the main office of The First National Bank of Chicago, as
Administrative Agent, in Chicago, Illinois, together with interest, in like
money and funds, on the unpaid principal amount hereof at the rates and on the
dates determined in accordance with the Agreement. Borrower shall pay each
Competitive Bid Loan in full on the last day of such Competitive Bid Loan's
applicable Interest Period.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or otherwise record in accordance with its usual practice, the
date and amount of each Competitive Bid Loan and the date and amount of each
principal payment hereunder.
This Note (Competitive Bid Loans) is one of the Notes issued pursuant to,
and is entitled to the benefits of, the Credit Agreement dated as of August 5,
1994, among Borrower, Citicorp Securities, Inc., as Syndication Agent, The
First National Bank of Chicago, individually and as Administrative Agent, Texas
Commerce Bank National Association, individually and as Documentation Agent,
and the banks named therein, including the Lender, to which Agreement, as it
may be amended from time to time, reference is hereby made for a statement of
the terms and conditions under which this Note may be prepaid or its maturity
date accelerated. Capitalized terms used herein and not otherwise defined
herein are used with the meanings attributed to them in the Agreement.
Each Note (Competitive Bid Loans) issued pursuant to the Agreement is in
the amount of $600,000,000.00, provided, however, that the aggregate principal
amount of Loans under this Note may not exceed the aggregate of Commitments
from all Lenders under the Agreement.
Notwithstanding anything to the contrary contained herein, no provision of
this Note shall require the payment or permit the collection of interest in
excess of the Maximum Rate. If any excess of interest in such respect is
herein provided for, or shall be adjudicated to be so provided, in this Note or
otherwise in connection with this loan transaction, the provisions of this
paragraph shall govern and prevail, and neither Borrower nor the successors or
assigns of Borrower shall be obligated to pay the excess amount of such
interest, or any other excess sum
<PAGE> 83
paid for the use, forbearance or detention of sums loaned pursuant hereto. If
for any reason interest in excess of the Maximum Rate shall be deemed charged,
required or permitted by any court of competent jurisdiction, any such excess
shall be applied as a payment and reduction of the principal of indebtedness
evidenced by this Note; and, if the principal amount hereof has been paid in
full, any remaining excess shall forthwith be paid to Borrower. In determining
whether or not the interest paid or payable exceeds the Maximum Rate, Borrower
and the Lenders shall, to the extent permitted by an applicable law, (a)
characterize any non-principal payment as an expense, fee, or premium rather
than as interest, (b) exclude voluntary prepayments and the effects thereof,
and (c) amortize, prorate, allocate, and spread in equal or unequal parts of
the total amount of interest throughout the entire contemplated term of the
indebtedness evidenced by this Note so that the interest for the entire term
does not exceed the Maximum Rate.
Borrower and each endorser and other party ever liable for payment of any
sums of money payable on this Note jointly and severally waive notice (except
for notice specifically required by the terms of the Credit Agreement),
presentment, demand for payment, protest, notice of protest and non-payment or
dishonor, notice of acceleration, notice of intent to accelerate, notice of
intent to demand, diligence in collecting, grace, and all other formalities of
any kind, and consent to all extensions without notice for any period or
periods of time and partial payments, before or after maturity, and any
impairment of any collateral securing this Note, all without prejudice to the
holder. The holder shall similarly have the right to deal in any way, at any
time, with one or more of the foregoing parties without notice to any other
party, and to grant any such party any extensions of time for payment of any of
said indebtedness, or to release or substitute any such party, or to grant any
other indulgences or forbearances whatsoever, without notice to any other party
and without in any way affecting the personal liability of any party hereunder.
THIS NOTE AND THE OTHER LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT
AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
A. H. BELO CORPORATION
By: _______________________
Name: _____________________
Title: ____________________
<PAGE> 84
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE (COMPETITIVE BID LOANS) OF _________________,
DATED __________, 19__
<TABLE>
<CAPTION>
Principal Maturity of Principal
Date Amount of Loan Interest Period Amount Paid Unpaid Balance
---- -------------- --------------- ----------- --------------
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 85
EXHIBIT "C"
DECLARATION OF BIDDING STATUS
_________________, 199___
The First National Bank of Chicago, as Administrative Agent
One First National Plaza
Mail Suite 0629; 1-14
Chicago, Illinois 60670
Attention: Communications Division
Re: A.H. BELO CORPORATION COMPETITIVE BID FACILITY
The undersigned, as a Lender party to that certain Credit Agreement
dated as of August 5, 1994 among A.H. Belo Corporation ("Borrower"), the
Co-Agents party thereto, and the Lenders party thereto (hereinafter the
"Agreement") hereby declares that it is a Bidding Lender. Capitalized terms
used herein and not otherwise defined shall have the meanings given to them in
the Agreement.
This declaration may be revoked and/or reinstated at any time in the
sole discretion of the undersigned Lender. The undersigned Lender acknowledges
that:
1. at such times as this declaration is not in effect, the
undersigned will not be invited to deliver Competitive Bid
Quotes under Section 2.3.3 of the Agreement; and
2. in the event the undersigned has not participated in either an
Absolute Rate Auction or a Eurodollar Auction for a period of
six months, it will be deemed to have revoked this
declaration. Any reinstatement of this declaration subsequent
to such deemed revocation may not itself be deemed revoked
hereunder for a period of six months commencing on the date of
such reinstatement.
(LENDER)
________________________________
By: ____________________________
Name: __________________________
Title: _________________________
cc: Ms. Vicky C. Teherani
A. H. Belo Corporation
400 South Record Street
Dallas, Texas 75202
<PAGE> 86
EXHIBIT "D"
COMPETITIVE BID QUOTE REQUEST
(Section 2.3.2)
___________, 19____
To: The First National Bank of Chicago,
as administrative agent (the "Administrative Agent")
From: A. H. Belo Corporation ("Company")
Re: Credit Agreement (the "Agreement") dated as of August 5, 1994,
among the Company, Citicorp Securities, Inc., as Syndication
Agent, The First National Bank of Chicago, individually and as
Administrative Agent, Texas Commerce Bank National
Association, individually and as Documentation Agent, and the
Lenders listed on the signature pages thereof
We hereby give notice pursuant to Section 2.3.2 of the Agreement that
we request Competitive Bid Quotes for the following proposed Competitive Bid
Advance(s):
Borrowing Date: ______________, 19___
Principal Amount(1) Interest Period(2)
- - ------------------- ------------------
$
Such Competitive Bid Quotes should offer a (Competitive Bid Margin)
(Absolute Rate).
Upon acceptance by the undersigned of any or all of the Competitive
Bid Advances offered by Lenders in response to this request, the undersigned
shall be deemed to affirm as of such date the representations and warranties
made in the Agreement to the extent specified in Article IV thereof.
Capitalized terms used herein have the meanings assigned to them in the
Agreement.
A. H. BELO CORPORATION
By:______________________________
Name:____________________________
Title:___________________________
____________________
(1) Amount must be at least $________ and an integral multiple of
$________.
(2) One, two, three, six or nine months (Eurodollar Auction) or at least
14 and up to 280 days (Absolute Rate Auction), subject to the
provisions of the definitions of Eurodollar Interest Period and
Absolute Rate Interest Period.
<PAGE> 87
EXHIBIT "E"
INVITATION FOR COMPETITIVE BID QUOTES
(Section 2.3.3.)
___________, 19___
To: (Name of Bank)
Re: Invitation for Competitive Bid Quotes to
A. H. Belo Corporation (the "Company")
Pursuant to Section 2.3.3 of the Credit Agreement dated as of August
5, 1994 (the "Agreement") among the Company, Citicorp Securities, Inc., as
Syndication Agent, Texas Commerce Bank National Association, individually and
as Documentation Agent, the Lenders parties thereto and the undersigned,
individually and as Administrative Agent, we are pleased on behalf of the
Company to invite you to submit Competitive Bid Quotes to the Company for the
following proposed Competitive Bid Advance(s):
Borrowing Date: _________________, 19___
Principal Amount Interest Period
- - ---------------- ---------------
$
Such Competitive Bid Quotes should offer a (Competitive Bid Margin)
(Absolute Rate). Your Competitive bid Quote must comply with Section 2.3.4 of
the Agreement and the foregoing terms in which the Competitive Bid Quote
Request was made. Capitalized terms used herein have the meanings assigned to
them in the Agreement.
Please respond to this invitation by no later than (1:00 p.m.) (9:00
a.m.) Chicago time on _______________, 19___.
THE FIRST NATIONAL BANK OF CHICAGO
as Administrative Agent
By:_____________________________________
Authorized Officer
<PAGE> 88
EXHIBIT "F"
COMPETITIVE BID QUOTE
(Section 2.3.4)
______________, 19___
To: The First National Bank of Chicago, as Administrative Agent
Attn: ____________________________
Re: Competitive Bid Quote to A. H. Belo Corporation (the "Company")
In response to your invitation on behalf of the Company dated _______________,
19___, we hereby make the following Competitive Bid Quote pursuant to Section
2.3.4 of the Credit Agreement hereinafter referred to and on the following
terms:
1. Quoting Bank:______________________________________________ 2.
Person to contact at Quoting Bank: ___________________ 3. Borrowing
Date:____________, 19__(1) 4. We hereby offer to make Competitive Bid Loan(s)
in the following principal amounts, for the following Interest Periods and at
the following rates:
<TABLE>
<CAPTION>
Principal Interest (Competitive (Absolute Minimum
Amount(2) Period(3) Bid Margin(4)) Rate(5)) Amount(6)
- - --------- --------- -------------- --------- ---------
<S> <C> <C> <C> <C>
$
</TABLE>
__________________________________
(1) As specified in the related Invitation.
(2) Principal amount bid for each Interest Period may not exceed principal
amount requested. Bids must be made for $5,000,000 and an integral
multiple of $1,000,000.
(3) One, two, three, six or nine months or at least 14 and up to 280 days,
as specified in the related Invitation.
(4) Competitive Bid Margin over or under the Eurodollar Base Rate
determined for the applicable Interest Period. Specify percentage
(rounded to the nearest 1/100 of 1%) and specify whether "PLUS" or
"MINUS".
(5) Specify rate of interest per annum (rounded to the nearest 1/100 of
1%).
(6) Specify minimum amount which the Company may accept (see Section
2.3.4(ii)(d).
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Credit Agreement
dated as of August 5, 1994 among the Company, Citicorp Securities, Inc., as
Syndication Agent, Texas Commerce Bank National Association, individually and
as Documentation Agent, the Lenders listed on the signature pages
<PAGE> 89
thereof and yourselves, individually and as Administrative Agent, irrevocably
obligates us to make the Competitive Bid Loan(s) for which any offer(s) are
accepted, in whole or in part.
Very truly yours,
(NAME OF BANK)
Dated: _____________, 19___ By:___________________________
Authorized Officer
<PAGE> 90
EXHIBIT "G"
ASSIGNMENT AND ACCEPTANCE AGREEMENT
Dated _______________, 19__
Reference is made to the Credit Agreement dated as of August 5, 1994
(such Credit Agreement, as the same may hereinafter be amended or otherwise
modified, herein the "Agreement"), among A. H. Belo Corporation (the "Company"),
Citicorp Securities, Inc., as Syndication Agent, Texas Commerce Bank National
Association, individually and as Documentation Agent, The First National Bank
of Chicago, individually and as Administrative Agent, and the lenders named
therein (the "Lenders"). Capitalized terms used herein and not otherwise
defined shall have the meanings assigned to such terms in the Agreement.
____________________________________________________________ (the
"Assignor") and ____________________________________________________________
(the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, a _____% interest in
and to all the Assignor's rights and obligations under the Agreement as of the
Effective Date (as defined below) (including, without limitation, such
percentage interest in the Commitments of the Assignor on the Effective Date
and such percentage interest in the Loans owing to the Assignor outstanding on
the Effective Date together with such percentage interest in all unpaid
interest accrued to the Effective Date and such percentage interest in the Note
(Ratable Loans) (and) (but excluding the Note (Competitive Bid Loans)) held by
the Assignor, as defined herein). In consideration for the assignment provided
for herein, Assignee agrees to pay Assignor in immediately available funds, on
or before the Effective Date, $_______________.
2. The Assignor (i) represents that as of the date hereof, its
Commitments (without giving effect to assignments thereof which have not yet
become effective) is $_______________ and the outstanding balance of its Loans
(unreduced by an assignments thereof which have not yet become effective) is
$_______________; (ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Agreement,
or any other instrument or document furnished pursuant thereto, other than that
it is the legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse claim; (iii)
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Company or the performance or observance by
the Company of any of its obligations under the Agreement or any other
instrument or document furnished pursuant thereto; and (iv) has returned to the
Company, in accordance with the provisions of Section 9.13 of the Agreement,
the Note (Ratable Loans) (and the Note (Competitive Bid Loans)) referred to in
paragraph 1 above and the Company has issued a new Note (Ratable Loans) (and
the Note (Competitive Bid Loans)) payable to the order of the Assignee in the
principal amounts of
ASSIGNMENT AND ACCEPTANCE AGREEMENT - Page 1
<PAGE> 91
$_______________ and $_______________, respectively, and if the Assignor has
retained any Commitments, the Company has also issued a new Note (Ratable
Loans) (and the Note (Competitive Bid Loans)) payable to the order of the
Assignor in the principal amounts of $_______________ and $_______________,
respectively, and copies of all such new Notes issued by the Company are
attached hereto.
3. The Assignee (i) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (ii) confirms that it
has received a copy of the Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 6.1 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; (iii)
agrees that it will, independently and without reliance upon the Co-Agents, the
assignor or any other Lenders party to the Agreement 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
Agreement; (iv) confirms that it is an Eligible Assignee; (v) appoints and
authorizes each of the Co-Agents to take such actions as agent on its behalf
and to exercise such powers as are delegated to the Co-Agents by the terms of
the Agreement, together with such powers as are reasonably incidental thereto;
(vi) agrees that it will perform in accordance with their terms all the
obligations which by the terms of the Agreement are required to be performed by
it as a party thereto; and (vii) agrees that it will keep confidential all
information with respect to the Company and its Subsidiaries furnished to it by
the Company and its Subsidiaries or the Assignor (other than information
generally available to the public or otherwise available to the Assignor on a
nonconfidential basis).
4. The effective date for this Assignment and Acceptance shall be
____________________ (the "Effective Date").(1) Following the execution of this
Assignment and Acceptance, a copy will be delivered to the Administrative Agent
for acceptance and recording by the Administrative Agent.
5. Upon such acceptance and recording, from and after the
Effective Date, (i) the Assignee shall be a party to the Agreement, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a party thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Agreement.
(LENDER ASSIGNOR)
By:_______________________________
Name:_____________________________
Title:____________________________
____________________
(1) See Section 9.13 of the Agreement. Such date shall be at least 2
Business Days after the execution of this Assignment and Acceptance and
delivery thereof to the Administrative Agent.
ASSIGNMENT AND ACCEPTANCE AGREEMENT - Page 2
<PAGE> 92
(ELIGIBLE ASSIGNEE)
By:______________________________
Name:____________________________
Title:___________________________
A. H. BELO CORPORATION
By:_____________________________
Name:___________________________
Title:__________________________
ASSIGNMENT AND ACCEPTANCE AGREEMENT - Page 3
<PAGE> 93
EXHIBIT "H"
(Letterhead of the General Counsel of the Borrower)
August 5, 1994
The Co-Agents and Lenders who are parties
to the Credit Agreement described below.
Gentlemen:
I am Senior Vice President, Secretary and General Counsel for A. H.
Belo Corporation, a Delaware corporation (the "Borrower"), and have
participated as an officer of the Borrower in the execution and delivery of a
Credit Agreement among the Borrower, Citicorp Securities, Inc., as Syndication
Agent, The First National Bank of Chicago, individually and as Administrative
Agent, Texas Commerce Bank National Association, individually and as
Documentation Agent, and the other Lenders named therein, providing for Loans
in an aggregate principal amount not exceeding $600,000,000 at any one time
outstanding and dated as of August 5, 1994 (the "Agreement"). All capitalized
terms used in this opinion shall have the meanings attributed to them in the
Agreement.
I am a member of the Bar of the State of Texas. My opinions expressed
below are limited to the law of the State of Texas, Federal law of the United
States and the General Corporation Law of the State of Delaware.
I have examined the Borrower's Certificate of Incorporation, By-laws,
resolutions, the Loan Documents and such other matters of fact and law which I
deem necessary in order to render this opinion. Based upon the foregoing, it
is my opinion that:
1. The Borrower and each Subsidiary are corporations duly
incorporated, validly existing and in good standing under the laws of their
states of incorporation and have all requisite corporate authority to conduct
their business in each jurisdiction in which their business is conducted.
2. The execution and delivery of the Loan Documents by the
Borrower and the performance by the Borrower of the Obligations and the
consummation of the transactions contemplated by the Loan Documents have been
duly authorized by all necessary corporate action and proceedings on the part
of the Borrower and will not:
(a) require any consent of the Borrower's stockholders;
(b) violate any law or the Borrower's or any Subsidiary's
Certificate or
<PAGE> 94
Articles of Incorporation or By-laws or, to my knowledge after
reasonable inquiry, any rule, regulation, order, writ, judgment,
injunction, decree or award binding on or affecting the Borrower or
any Subsidiary or any material indenture, instrument or agreement
binding upon the Borrower or any Subsidiary; or
(c) result in, or require, the creation or imposition of
any Lien pursuant to the provisions of any indenture, instrument or
agreement binding upon the Borrower or any Subsidiary except as set
forth in the Loan Documents.
3. The Loan Documents have been duly executed and delivered by
the Borrower and constitute legal, valid and binding obligations of the
Borrower enforceable in accordance with their terms except to the extent
enforcement (a) of the indemnification provisions of the Agreement may be
limited by applicable securities laws and public policies, and (b) may be
limited by Debtor Relief Laws and subject also to the availability of equitable
remedies if equitable remedies are sought.
4. There is no non-FCC litigation or proceeding pending or, to
the best of my knowledge, threatened against the Borrower or any Subsidiary
which, collectively or individually, has a substantial likelihood of resulting
in a Material Adverse Effect (except as set forth on Schedule 4 to the
Agreement).
5. No approval, authorization, consent, or order of any
governmental authority, which has not been obtained by the Borrower or any
Subsidiary, is required to be obtained by the Borrower or any Subsidiary in
connection with the execution and delivery of the Loan Documents, the
borrowings under the Agreement or in connection with the payment by the
Borrower of the Obligations.
6. The Borrower and each of its Subsidiaries have been duly
issued, and they validly hold, as of this date, all material licenses, permits,
certificates and other authorizations from the FCC which are necessary to
enable each of them to own and operate the television stations owned and
operated by each of them on the date hereof and to conduct their respective
businesses as now being conducted; and to the best of my knowledge, the
Borrower and each of the Subsidiaries are operating in accordance with the
terms of such licenses, permits, certificates or other authorizations and in
accordance with the Communications Act of 1934, as amended, and all applicable
material rules and regulations of the FCC promulgated pursuant thereto.
7. Neither the execution and delivery by the Borrower of the Loan
Documents nor the fulfillment of or compliance with any of the provisions
thereof will (a) result in a violation of any currently applicable law,
statute, rule or regulation administered or promulgated by the FCC, or (b)
require any authorization, consent, approval, exemption or other action by, or
any notice to or filing with, the FCC (other than routine filings after the
date of this opinion with the FCC under Section 73.3613(b) (3) and (5) of the
FCC's Rule and Regulations) pursuant to any currently applicable law, statute,
rule or regulation administered by the FCC to which the Borrower or any
Subsidiary is subject.
2
<PAGE> 95
8. To the best of my knowledge after reasonable inquiry, no
proceeding, claim, lawsuit, investigation or other action is (a) currently
pending before the FCC, or (b) to my knowledge after reasonable inquiry,
threatened in writing and received by any radio or television station operated
by the Borrower or any Subsidiary and not currently before the FCC, which has a
substantial likelihood of resulting in a Material Adverse Effect.
9. Neither the Borrower nor any Subsidiary is an "investment
company" as that term is defined in, or is otherwise subject to regulation
under, the Investment Company Act of 1940.
Very truly yours,
3
