<PAGE> 1
================================================================================
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, 1996
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 JULY 31, 1996
----- -----------------------------
Common Stock, $1.67 par value 44,260,024*
- ---------------------
* Consisting of 34,949,525 shares of Series A Common Stock and 9,310,499
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . 10
</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,
==================================================================================================================================
<S> <C> <C> <C> <C>
In thousands, except per share amounts
(unaudited) 1996 1995 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
- -NET OPERATING REVENUES
Broadcasting $ 90,385 $ 88,276 $ 160,992 $ 157,965
Newspaper publishing 121,682 101,166 237,553 194,466
Other 752 327 1,518 377
- ----------------------------------------------------------------------------------------------------------------------------------
Total net operating revenues 212,819 189,769 400,063 352,808
- ----------------------------------------------------------------------------------------------------------------------------------
- -OPERATING COSTS AND EXPENSES
Salaries, wages and employee benefits 57,136 52,238 113,071 102,468
Other production, distribution and operating costs 52,063 49,694 101,757 93,334
Newsprint, ink and other supplies 39,118 33,067 78,251 62,305
Depreciation 11,504 10,769 23,139 21,083
Amortization 4,945 4,357 9,881 8,463
- ----------------------------------------------------------------------------------------------------------------------------------
Total operating costs and expenses 164,766 150,125 326,099 287,653
- ----------------------------------------------------------------------------------------------------------------------------------
Earnings from operations 48,053 39,644 73,964 65,155
- ----------------------------------------------------------------------------------------------------------------------------------
- -OTHER INCOME AND EXPENSE
Interest expense (6,287) (7,607) (15,151) (14,223)
Other, net (Notes 4 and 5) 604 3,033 4,945 3,323
- ----------------------------------------------------------------------------------------------------------------------------------
Total other income and expense (5,683) (4,574) (10,206) (10,900)
- ----------------------------------------------------------------------------------------------------------------------------------
- -EARNINGS
Earnings before income taxes 42,370 35,070 63,758 54,255
Income taxes 16,874 13,872 25,538 21,614
- ----------------------------------------------------------------------------------------------------------------------------------
Net earnings $ 25,496 $ 21,198 $ 38,220 $ 32,641
- ----------------------------------------------------------------------------------------------------------------------------------
- -EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE $ .60 $ .53 $ .94 $ .81
- ----------------------------------------------------------------------------------------------------------------------------------
Average shares outstanding (Note 3) 42,556 40,044 40,753 40,148
- ----------------------------------------------------------------------------------------------------------------------------------
Cash dividends declared per share $ .11 $ .08 $ .19 $ .155
- ----------------------------------------------------------------------------------------------------------------------------------
</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) 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
- -ASSETS
Current assets:
Cash and temporary cash investments $ 15,169 $ 12,846
Accounts receivable, net 123,181 120,541
Other current assets 25,889 31,919
- ----------------------------------------------------------------------------------------------------------------------------------
Total current assets 164,239 165,306
- ----------------------------------------------------------------------------------------------------------------------------------
Property, plant and equipment, at cost:
Land 26,958 26,708
Buildings 157,401 155,877
Broadcast equipment 161,619 159,909
Newspaper publishing equipment 213,454 210,362
Other 53,619 51,156
Advance payments on plant and equipment expenditures 22,860 6,479
- ----------------------------------------------------------------------------------------------------------------------------------
Total property, plant and equipment 635,911 610,491
Less accumulated depreciation (271,444) (248,650)
- ----------------------------------------------------------------------------------------------------------------------------------
Net property, plant and equipment 364,467 361,841
- ----------------------------------------------------------------------------------------------------------------------------------
Intangible assets, net 591,751 571,060
Other assets, at cost 55,787 55,815
- ----------------------------------------------------------------------------------------------------------------------------------
Total assets $ 1,176,244 $ 1,154,022
==================================================================================================================================
</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) 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
- -LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 60,125 $ 65,039
Other current liabilities 23,220 16,629
- ----------------------------------------------------------------------------------------------------------------------------------
Total current liabilities 83,345 81,668
- ----------------------------------------------------------------------------------------------------------------------------------
Long-term debt 338,557 557,400
Deferred income taxes 118,144 114,729
Other liabilities 10,307 11,761
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 34,925,463 shares at June 30, 1996
and 28,961,753 shares at December 31, 1995 58,325 48,366
Series B: Issued 9,303,526 shares at June 30, 1996
and 9,280,179 shares at December 31, 1995 15,537 15,498
Additional paid-in capital 293,711 97,930
Retained earnings 261,137 230,203
- ----------------------------------------------------------------------------------------------------------------------------------
Total 628,710 391,997
Deferred compensation - restricted shares (2,819) (3,533)
- ----------------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 625,891 388,464
- ----------------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $1,176,244 $1,154,022
==================================================================================================================================
</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) 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
- -OPERATIONS
Net earnings $ 38,220 $ 32,641
Adjustments to reconcile net earnings
to net cash provided by operations:
Depreciation and amortization 33,020 29,546
Deferred income taxes 3,770 3,942
Non-cash adjustments and allowances (23) 876
Other, net (1,631) 75
Net change in current assets and liabilities:
Accounts receivable (3,926) (11,092)
Other current assets 5,031 (3,200)
Accounts payable and accrued expenses (3,643) (13,794)
Other current liabilities 7,277 (192)
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operations 78,095 38,802
- ----------------------------------------------------------------------------------------------------------------------------------
- -INVESTMENTS
Acquisitions (35,281) (163,303)
Capital expenditures (20,843) (18,438)
Sale of investment 3,750 4,327
Other, net 133 313
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash used for investments (52,241) (177,101)
- ----------------------------------------------------------------------------------------------------------------------------------
- -FINANCING
Net proceeds from sale of stock 198,513 -
Borrowings for acquisitions 36,415 163,313
Net proceeds from (payments on) debt (254,983) 5,687
Payments to repurchase stock - (28,795)
Payments of dividends on stock (7,286) (6,141)
Net proceeds from exercise of stock options 3,810 5,061
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash (used for) provided by financing (23,531) 139,125
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in cash and temporary cash investments 2,323 826
- ----------------------------------------------------------------------------------------------------------------------------------
Cash and temporary cash investments at beginning of period 12,846 9,294
- ----------------------------------------------------------------------------------------------------------------------------------
Cash and temporary cash investments at end of period $ 15,169 $ 10,120
==================================================================================================================================
- -SUPPLEMENTAL DISCLOSURES
Interest paid, net of amounts capitalized $ 15,756 $ 13,810
Income taxes paid, net of refunds $ 14,504 $ 18,298
- ----------------------------------------------------------------------------------------------------------------------------------
</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 accompanying unaudited consolidated condensed financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions
to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. The
balance sheet at December 31, 1995 has been derived from the audited
consolidated financial statements at that date but does not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and six-month periods
ended June 30, 1996 are not necessarily indicative of the results that
may be expected for the year ended December 31, 1996. For further
information, refer to the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form
10-K for the year ended December 31, 1995.
Certain amounts for the prior periods have been reclassified to
conform to the current year presentation.
(2) On February 1, 1995, Belo acquired television station KIRO-TV in
Seattle, Washington and on December 26, 1995, Belo completed the
acquisition of the Bryan-College Station Eagle, a daily newspaper
serving Bryan-College Station, Texas. On January 1, 1996, Belo
acquired the Owensboro Messenger-Inquirer, a daily newspaper serving
Owensboro, Kentucky.
The operations of these three entities are included in the
consolidated condensed financial statements as of each of the
respective acquisition dates. Pro forma financial results are not
included herein due to immateriality.
(3) In May 1996, the Company completed an equity offering of 5,750,000
shares of Series A Common Stock for net proceeds of approximately
$198,500,000, after deducting expenses associated with the offering.
The proceeds were used to pay down debt. If the offering and
subsequent debt reduction had occurred at January 1, 1996, net
earnings per share for the six months ended June 30, 1996, would have
been 91 cents per share.
(4) On February 2, 1996, the Company sold its interest in its programming
distribution partnership, Maxam Entertainment. A net gain of
$2,337,000 (6 cents per share) was recorded in connection with the
sale.
(5) In June 1995, Belo sold its investment in 15,267 shares of Stauffer
Communications, Inc. stock for $4,327,000. The carrying value of the
stock was $1,921,000, resulting in a net gain of $1,564,000 (4 cents
per share).
(6) On July 31, 1996, the Company entered into a new credit facility for
borrowings up to $1,000,000,000 with a syndicate of 18 banks led by
Texas Commerce Bank, Bank of America, Bank of Tokyo-Mitsubishi, and
NationsBank. The facility replaces a previously existing $800,000,000
revolving credit facility, under which borrowings at July 31, 1996
were $220,000,000. These borrowings were refinanced under the new
facility. The new agreement expires on July 31, 2001 with extensions
to July 31, 2003 at the request of the Company and with the consent of
the participating banks. The agreement also provides for a facility
fee ranging up to 18.75 basis points on the total commitment. Loans
under the new agreement bear interest at a rate based, at the option
of the Company, on the agent's alternate base rate, certificate of
deposit 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. The agreement requires the
5
<PAGE> 8
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
A. H. Belo Corporation and Subsidiaries
Company to maintain, as of the end of each quarter and measured over
the preceding four quarters, (i) a Funded Debt to Pro Forma Operating
Cash Flow ratio not exceeding 5.5 to 1.0, (ii) a Funded Debt to Pro
Forma Operating Cash Flow ratio (excluding subordinated debt) not
exceeding 5.0 to 1.0, and (iii) an Interest Coverage ratio of not less
than 2.5 to 1.0. At July 31, 1996, the Company was in compliance with
these requirements.
(7) Net operating revenues, earnings from operations, and depreciation and
amortization by industry segment are shown below (in thousands):
<TABLE>
<CAPTION>
==================================================================================================================================
Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET OPERATING REVENUES
Broadcasting $ 90,385 $ 88,276 $ 160,992 $ 157,965
Newspaper publishing 121,682 101,166 237,553 194,466
Other 752 327 1,518 377
- ----------------------------------------------------------------------------------------------------------------------------------
$ 212,819 $ 189,769 $ 400,063 $ 352,808
==================================================================================================================================
EARNINGS FROM OPERATIONS
Broadcasting $ 27,616 $ 26,526 $ 37,829 $ 41,760
Newspaper publishing 25,659 17,919 46,863 33,387
Other 7 (922) (994) (2,016)
Corporate expenses (5,229) (3,879) (9,734) (7,976)
- ----------------------------------------------------------------------------------------------------------------------------------
$ 48,053 $ 39,644 $ 73,964 $ 65,155
==================================================================================================================================
DEPRECIATION AND AMORTIZATION
Broadcasting $ 9,843 $ 9,622 $ 19,833 $ 18,480
Newspaper publishing 6,370 5,327 12,728 10,712
Other 45 1 76 7
Corporate 191 176 383 347
- ----------------------------------------------------------------------------------------------------------------------------------
$ 16,449 $ 15,126 $ 33,020 $ 29,546
==================================================================================================================================
</TABLE>
6
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net earnings for the second quarter of 1996 were $25,496,000 (60 cents per
share) compared to second quarter 1995 net earnings of $21,198,000 (53 cents
per share). Year-to-date earnings in 1996 were $38,220,000 (94 cents per share)
versus $32,641,000 (81 cents per share) for the same period in 1995. First
quarter 1996 included a net gain of $2,337,000 (6 cents per share) on the sale
of the Company's interest in its programming distribution partnership. The
1995 quarter and year-to-date periods included a net gain of $1,564,000 (4
cents per share) on the sale of the Company's investment in Stauffer
Communications, Inc. common stock. Excluding these items, comparable 1996 and
1995 earnings per share were 60 cents and 49 cents for the quarter and 88 cents
and 77 cents for the year-to-date period.
Total revenues for the three and six-month periods ended June 30, 1996 were
$212,819,000 and $400,063,000, respectively. Revenues in 1995 for the same
periods were $189,769,000 and $352,808,000. The increases of 12.1 percent and
13.4 percent over 1995 revenues were due in part to acquisitions (KIRO-TV in
February 1995, the Bryan-College Station Eagle in December 1995 and the
Owensboro Messenger-Inquirer in January 1996). Excluding the effect of these
acquisitions, total net operating revenues increased 8.6 percent and 8.9
percent for the three and six-month periods, respectively.
Broadcasting revenues for the second quarter and year-to-date 1996 were
$90,385,000 and $160,992,000, respectively, compared to $88,276,000 and
$157,965,000 in 1995. The 2.4 percent quarter-to-quarter increase is due
primarily to revenue gains at the Company's Seattle and New Orleans stations,
offset by declines at the Company's Dallas and Houston stations. The revenue
gains at KIRO-TV in Seattle were attributable to the broadcast of Mariners'
baseball and improved ratings. WWL-TV in New Orleans, which is consistently
rated number one in its market, had increased revenues in all advertising
categories. The declines at WFAA-TV in Dallas and KHOU-TV in Houston were due
mostly to softness in national spot advertising revenues. Revenues improved at
KIRO and WWL for the year-to-date period as well, and also at KXTV in
Sacramento. Gains at KXTV were due to strong political advertising and the
benefit of a March 1995 network affiliation change from CBS to ABC. These
stations' revenue increases, however, were offset by unfavorable six-month
revenue comparisons at each of the Company's other broadcast stations, most
notably at WFAA and KHOU. National revenue weakness at these two stations may
continue for the balance of 1996.
Newspaper publishing revenues for the three and six-month periods of 1996
were $121,682,000 and $237,553,000, respectively, compared to $101,166,000 and
$194,466,000 for the same periods in 1995. The gains of 20.3 percent for the
quarter and 22.2 percent for the year-to-date were partly attributable to
publishing acquisitions in December 1995 and January 1996. Excluding the
effect of these two acquisitions, revenues increased 13.6 percent for the
quarter and 15.5 percent year-to-date. For the quarter, revenues at The Dallas
Morning News increased due to higher advertising rates in retail, general and
classified that were offset only slightly by volume declines in retail and
classified linage. General linage volumes improved over 1995 due to new
advertising in several automotive categories. For the year-to-date period, The
Dallas Morning News had similar revenue gains from higher rates in all
categories, offset some by volume declines in classified advertising, primarily
automotive and real estate. Circulation revenues were higher for both the
quarter and year-to-date periods due to higher rates, offset somewhat by
declines in both daily and Sunday volume.
Operating expenses for the quarter and year-to-date periods in 1996 were
$164,766,000 and $326,099,000 compared to $150,125,000 and $287,653,000 in
1995. The acquisitions noted previously account for much of the 9.8 percent
and 13.4 percent increases for the three and six-month periods. Excluding the
effect of the acquisitions, expenses were up 6 percent and 8.3 percent,
respectively. For both the quarter and year-to-date, the majority of the
increase is attributable to higher newsprint, ink and other supplies expense,
which increased by 15.1 percent and 22.2 percent, respectively, excluding the
effect of acquisitions. Newsprint prices escalated throughout 1995, but
beginning in the second quarter of 1996, prices began to decline somewhat.
However, year-to-year comparisons continue to be unfavorable. Should price
decreases continue, comparisons for the last half of 1996 could be favorable.
Excluding the effect of acquisitions, all other cost categories had increases
of less than 5 percent over 1995 for the three and six-month periods.
7
<PAGE> 10
Interest expense for the three and six-month periods of 1996 was $6,287,000
and $15,151,000, respectively, compared to $7,607,000 and $14,223,000 in 1995.
The 17.4 percent decrease for the three-month period is due to both lower
average debt and lower rates. Lower debt levels for the quarter were the
result of the application of the net proceeds (after all offering expenses) of
approximately $198,500,000 from the Company's equity offering of 5,750,000
shares of Series A Common Stock on May 7, 1996. Interest expense for the first
six months of 1996 was higher than the same period in 1995 due to higher
average debt levels, offset somewhat by lower revolving rates. Higher debt
levels in 1996 reflect the acquisitions of KIRO-TV in February 1995, the
Bryan-College Station Eagle in December 1995 and the Owensboro
Messenger-Inquirer in January 1996.
Income tax expense for the three and six-month periods in 1996 was
$16,874,000 and $25,538,000, respectively, representing effective rates of 39.8
percent and 40.1 percent. In 1995, income taxes for the comparable periods
were $13,872,000 and $21,614,000 or 39.6 percent and 39.8 percent.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operations is the Company's primary source of liquidity.
During the six months ended June 30, 1996, net cash provided by operations was
$78,095,000, compared to $38,802,000 for the first six months of 1995. The
increase was due to an increase in net earnings and working capital changes.
Accounts receivable increased significantly during the first six months of 1995
following the acquisition of KIRO in February 1995, while 1996 accounts
receivable did not increase as much with the January acquisition of the
Owensboro Messenger-Inquirer. The change in other current assets was due to
lower newsprint inventory levels at the end of June 1996, both because of
recent price decreases and because of lower on-hand quantities. The change in
accounts payable and accrued expenses was due to higher 1995 payments for
capital expenditures, inventory purchases and performance-based bonuses. The
change in other current liabilities was due to lower payments for income taxes
in the first half of 1996 compared to 1995. Cash from operations was more than
sufficient to fund capital expenditures and the payment of dividends.
At June 30, 1996, the Company had borrowings under an $800,000,000 variable
rate revolving credit agreement of $230,000,000. 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 unsecured notes through its revolving
credit facility, short-term borrowings are classified as long-term. At June
30, 1996, $92,500,000 in short-term notes were outstanding. Total debt
outstanding, including the current portion of long term debt, decreased
$218,568,000 from December 31, 1995. The decrease was due to the application
of the net proceeds from the equity offering of approximately $198,500,000 plus
debt paydowns using cash from operations.
On July 31, 1996, the Company entered into a new credit facility for
borrowings up to $1,000,000,000 with a syndicate of 18 banks led by Texas
Commerce Bank, Bank of America, Bank of Tokyo-Mitsubishi, and NationsBank. The
facility replaces the previously existing $800,000,000 revolving credit
facility, under which borrowings at July 31, 1996 were $220,000,000. These
borrowings were refinanced under the new facility. For additional information
regarding this new credit facility, see Note 6 to the Consolidated Condensed
Financial Statements.
For the four quarters ended June 30, 1996, the Company's ratio of funded
debt to pro forma operating cash flow, as defined in the new credit facility,
was 1.59 compared to 2.77 for the four quarters ended December 31, 1995. The
decrease was due to the application of the net proceeds from the May 1996
equity offering to existing debt.
Because substantially all of the Company's outstanding debt is currently at
floating interest rates, the Company is subject to interest rate volatility.
The weighted average interest rate for the first half of 1996 was approximately
5.8 percent.
8
<PAGE> 11
Capital expenditures for the six months ended June 30, 1996 were
$20,843,000. Capital projects for the period included building renovations and
the purchase of property and equipment. The Company expects to finance future
capital expenditures using net cash generated from operations and, when
necessary, borrowings under the revolving credit agreement.
The Company paid dividends of $7,286,000 or 19 cents per share on Series A
and Series B Common Stock outstanding during the first half of 1996 compared to
$6,141,000 (15.5 cents per share) during the same period in 1995.
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 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
The Annual Meeting of Shareholders was held on May 8, 1996. Reference is
hereby made to the Proxy statement filed as Exhibit 22 of Item 6(a). All
nominees standing for election as directors were elected. (See "Election of
Directors" on page 7 of the Proxy Statement). The following chart indicates
the number of votes cast with respect to each nominee for director.
<TABLE>
<CAPTION>
Broker
Nominee For Withheld Non-Votes
-------- ---- --------- ---------
<S> <C> <C> <C>
John W. Basset, Jr. 99,824,872 4,132,375 n/a
Lester A. Levy 99,814,020 4,143,227 n/a
Burl Osborne 103,955,885 1,362 n/a
J. McDonald Williams 99,825,245 4,132,002 n/a
</TABLE>
As of May 31, 1996, after giving effect to the Company's equity offering in
May 1996, all directors and officers of the Company as a group (17 persons)
beneficially owned 3,271,520 shares of Series A Common Stock and 4,706,474
shares of Series B Common Stock, representing in the aggregate, approximately
19.4% of the total number (and approximately 40% of the total voting power) of
all outstanding shares of Common Stock.
9
<PAGE> 12
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 10.4(1) Credit Agreement dated as of July 31, 1996 among
the Company and Texas Commerce Bank, National
Association as administrative agent, The Chase
Manhattan Bank, as competitive advance facility
agent, Bank of America National Trust and Savings
Association and Bank of Tokyo- Mitsubishi, Ltd. as
co-syndication agents, NationsBank as documentation
agent and Societe Generale and The Fuji Bank, Limited
as co-agents
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K
During the quarter covered by this report, there were no reports on
Form 8-K filed.
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 9, 1996 By: /s/ Michael D. Perry
----------------------------
Michael D. Perry
Senior Vice President and
Chief Financial Officer
10
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQ.
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
- ------ ----------- ------
<S> <C>
10.4(1) Credit Agreement dated as of July 31, 1996
among the Company and Texas Commerce Bank, National
Association as administrative agent, The Chase Manhattan Bank,
as competitive advance facility agent, Bank of America National
Trust and Savings Association and Bank of Tokyo-Mitsubishi, Ltd.
as co-syndication agents, NationsBank as documentation agent
and Societe Generale and The Fuji Bank, Limited as co-agents
27 Financial Data Schedule ----------
</TABLE>
<PAGE> 1
EXHIBIT 10.4(1)
================================================================================
CREDIT AGREEMENT
dated as of
July 31, 1996
among
A. H. BELO CORPORATION
as Borrower,
The Lenders Party Hereto,
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
as Administrative Agent,
THE CHASE MANHATTAN BANK,
as Competitive Advance Facility Agent
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
BANK OF TOKYO-MITSUBISHI, LTD.
as Co-Syndication Agents
NATIONSBANK
as Documentation Agent
SOCIETE GENERALE
THE FUJI BANK, LIMITED
as Co-Agents
$1,000,000,000 REVOLVING CREDIT AND COMPETITIVE ADVANCE FACILITY
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
Definitions
SECTION 1.01. Defined Terms................................................. 1
SECTION 1.02. Classification of Loans and Borrowings........................14
SECTION 1.03. Terms Generally ..............................................14
ARTICLE II
The Credits
SECTION 2.01. Commitments...................................................15
SECTION 2.02. Loans and Borrowings..........................................15
SECTION 2.03. Requests for Revolving Borrowings.............................16
SECTION 2.04. Competitive Bid Procedure.....................................17
SECTION 2.05. Funding of Borrowings.........................................19
SECTION 2.06. Interest Elections............................................20
SECTION 2.07. Termination and Reduction of Commitments......................21
SECTION 2.08. Repayment of Loans; Evidence of Debt..........................21
SECTION 2.09. Prepayment of Loans...........................................22
SECTION 2.10. Fees..........................................................23
SECTION 2.11. Interest......................................................23
SECTION 2.12. Alternate Rate of Interest....................................24
SECTION 2.13. Increased Costs...............................................25
SECTION 2.14. Break Funding Payments........................................26
SECTION 2.15. Taxes.........................................................27
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of Set-offs...28
SECTION 2.17. Mitigation Obligations; Replacement of Lenders................29
SECTION 2.18 Extension of Maturity Date....................................30
</TABLE>
<PAGE> 3
2
<TABLE>
<S> <C> <C>
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers..........................................30
SECTION 3.02. Authorization; Enforceability.................................31
SECTION 3.03. Governmental Approvals; No Conflicts..........................31
SECTION 3.04. Financial Condition; No Material Adverse Change...............31
SECTION 3.05. Properties....................................................31
SECTION 3.06. Litigation and Environmental Matters..........................32
SECTION 3.07. Compliance with Laws and Agreements...........................32
SECTION 3.08. Certain Legal Matters.........................................32
SECTION 3.09. Taxes.........................................................33
SECTION 3.10. ERISA.........................................................33
SECTION 3.11. Disclosure....................................................33
ARTICLE IV
Conditions
SECTION 4.01. Effective Date................................................34
SECTION 4.02. Each Credit Event.............................................35
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other Information....................35
SECTION 5.02. Notices of Material Events....................................36
SECTION 5.03. Existence; Conduct of Business................................37
SECTION 5.04 Payment of Obligations........................................37
SECTION 5.05. Maintenance of Properties; Insurance..........................37
SECTION 5.06. Books and Records; Inspection Rights..........................38
SECTION 5.07. Compliance with Laws..........................................38
SECTION 5.08. Use of Proceeds...............................................38
</TABLE>
<PAGE> 4
3
<TABLE>
<S> <C> <C>
ARTICLE VI
Negative Covenants
SECTION 6.01. Liens.........................................................38
SECTION 6.02. Fundamental Changes...........................................38
SECTION 6.03. Transactions with Affiliates..................................39
SECTION 6.04. Restrictive Agreements........................................39
SECTION 6.05. Leverage......................................................39
SECTION 6.06. Interest Coverage.............................................39
ARTICLE VII
Events of Default.............................................40
ARTICLE VIII
The Agents....................................................42
ARTICLE IX
Miscellaneous
SECTION 9.01 Notices.......................................................44
SECTION 9.02 Waivers, Amendments...........................................45
SECTION 9.03 Expenses; Indemnity; Damage Waiver............................45
SECTION 9.04 Successors & Assigns..........................................46
SECTION 9.05 Survival......................................................49
SECTION 9.06 Counterparts; Integration; Effectiveness......................49
SECTION 9.07 Severability .................................................49
SECTION 9.08 Right of Setoff...............................................49
SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process....50
SECTION 9.10 Waiver of Jury Trial..........................................50
SECTION 9.11 Headings......................................................50
SECTION 9.12 Confidentiality...............................................51
SECTION 9.13 Interest Rate Limitations.....................................51
</TABLE>
Exhibits and Schedules
Exhibit A Form of Assignment and Acceptance
Exhibit B-1 Form of Opinion of Counsel --
General Counsel of A. H. Belo Corporation
Exhibit B-2 Form of Opinion of Counsel --
Locke Purnell Rain Harrell
Exhibit B-3 Form of Opinion of Counsel --
Wiley, Rein & Fielding
Schedule 2.01 Commitments
Schedule 3.06 Litigation, Labor and Environmental Matters
Schedule 6.01 Liens
Schedule 6.05 Subordinated Debt
<PAGE> 5
CREDIT AGREEMENT dated as of July 31, 1996, among
A.H. BELO CORPORATION, the LENDERS party hereto, THE
CHASE MANHATTAN BANK, a New York banking corporation
("Chase"), as Competitive Advance Facility Agent (in
such capacity, the "CAF Agent"), BANK OF AMERICA
NATIONAL TRUST AND SAVINGS ASSOCIATION and BANK OF
TOKYO-MITSUBISHI, LTD., as Co-Syndication Agents,
NATIONSBANK, as Documentation Agent, SOCIETE GENERALE
and THE FUJI BANK, LIMITED , as Co-Agents, and TEXAS
COMMERCE BANK NATIONAL ASSOCIATION, as Administrative
Agent (in such capacity, the "Administrative Agent";
and, together with the CAF Agent, the "Agents").
The Borrower (such term and each other capitalized term used but
not otherwise defined herein having the meaning assigned to it in Article I) has
requested the Lenders to extend credit in order to enable it to borrow on a
revolving credit basis on and after the date hereof and at any time and from
time to time prior to the Maturity Date a principal amount not to exceed
$1,000,000,000. The proceeds of such borrowings are to be used for general
corporate purposes, including working capital, acquisitions, stock repurchases
and commercial paper backup. The Borrower has also requested the Lenders to
provide a procedure pursuant to which the Lenders may be invited to bid on an
uncommitted basis on short-term borrowings by the Borrower. The Lenders are
willing to extend such credit to the Borrower on the terms and subject to the
conditions herein set forth.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Adjusted CD Rate" means, with respect to any CD Borrowing for
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/100 of 1%) equal to the sum of (a) the Fixed CD Rate for such
Interest Period multiplied by the Statutory Reserve Rate, plus (b) the
Assessment Rate.
"Adjusted LIBO Rate" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means Texas Commerce Bank National
Association, as administrative agent for the Lenders hereunder.
<PAGE> 6
2
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" means, when used with respect to a specified Person,
another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified.
"Alternate Base Rate" means, for any day, a rate per annum equal
to the greatest of (a) the Prime Rate in effect on such day, (b) the Base CD
Rate in effect on such day plus 1% and (c) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to
a change in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any Eurodollar
Loan (other than any Eurodollar Competitive Loan) or CD Loan, or with respect to
the facility fees referred to in Section 2.10(a), as the case may be, the
applicable percentage set forth in the table below under the caption "Eurodollar
Spread", "CD Spread" or "Facility Fee Percentage", as the case may be, based
upon the ratio of Funded Debt to Pro Forma Operating Cash Flow as of the end of
and for the most recent period of four consecutive fiscal quarters for which
financial statements of the Borrower are required to have been delivered under
Section 5.01(a) or (b), whether or not financial statements in respect of any
subsequent period shall have been delivered:
<TABLE>
<CAPTION>
============================================================================================================================
Ratio Facility Fee Euro-dollar CD
Percentage Spread Spread
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
Category 1 Below 3.0 to 1.0 .0700% .1550% .2800%
- ----------------------------------------------------------------------------------------------------------------------------
Category 2 At least 3.0 to 1.0 but below
4.0 to 1.0 .0800% .1700% .2950%
- ----------------------------------------------------------------------------------------------------------------------------
Category 3 At least 4.0 to 1.0 but below
4.5 to 1.0 .1000% .2250% .3500%
- ----------------------------------------------------------------------------------------------------------------------------
Category 4 At least 4.5 to 1.0 but below
5.0 to 1.0 .1500% .3500% .4750%
- ----------------------------------------------------------------------------------------------------------------------------
Category 5 Greater than or equal to 5.0
to 1.0 .1875% .4375% .5625%
============================================================================================================================
</TABLE>
At any time when financial statements required to have been delivered under
Section 5.01 (a) or (b) have not been delivered, the Applicable Percentage shall
be determined by reference to Category 5.
"Assessment Rate" means, for any day, the annual assessment rate
in effect on such day that is payable by a member of the Bank Insurance Fund
classified as "well-capitalized" and within supervisory
<PAGE> 7
3
subgroup "B" (or a comparable successor risk classification) within the meaning
of 12 C.F.R. Part 327 (or any successor provision) to the Federal Deposit
Insurance Corporation for insurance by such Corporation of time deposits made in
dollars at the offices of such member in the United States; provided that if, as
a result of any change in any law, rule or regulation, it is no longer possible
to determine the Assessment Rate as aforesaid, then the Assessment Rate shall be
such annual rate as shall be determined by the Administrative Agent to be
representative of the cost to the Lenders of such insurance.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative Agent,
in the form of Exhibit A or another form approved by the Administrative Agent.
"Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD
Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrower" means A.H. Belo Corporation, a Delaware corporation.
"Borrowing" means (a) a group of Revolving Loans of the same Type
and, in the case of CD Loans or Eurodollar Loans, as to which a single Interest
Period is in effect, (b) a Competitive Loan or group of Competitive Loans of the
same Type made on the same date and as to which a single Interest Period is in
effect.
"Borrowing Request" means a request by the Borrower for a
Revolving Borrowing in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"CAF Agent" means The Chase Manhattan Bank as competitive advance
facility agent for the Lenders hereunder.
"Capital Lease Obligations" of any Person means the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such
<PAGE> 8
4
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"CD", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted CD Rate.
A "Change in Control" shall be deemed to have occurred if (a) any
person or group (within the meaning of Rule 13d-5 of the Securities Exchange Act
of 1934 as in effect on the date hereof) other than officers of the Borrower and
Continuing Directors shall own, directly or indirectly, beneficially or of
record, shares representing more than 50% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Borrower; or (b)
a majority of the seats (other than vacant seats) on the board of directors of
the Borrower shall at any time be occupied by persons who are not Continuing
Directors.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender (or,
for purposes of Section 2.13, by any lending office of such Lender or by such
Lender's holding company, if any) with any law, rule or regulation, or any
guideline or directive (whether or not having the force of law) of any
Governmental Authority, or any request of any Governmental Authority with which
such Lender believes in good faith that it would be disadvantageous not to
comply, in each case made or issued after the date of this Agreement.
"Class", when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are Revolving
Loans or Competitive Loans.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment" means, with respect to each Lender, the commitment
of such Lender to make Revolving Loans hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender's Revolving Credit
Exposure hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.04. The initial amount
of each Lender's Commitment is set forth on Schedule 2.01, or in the Assignment
and Acceptance pursuant to which such Lender shall have assumed its Commitment,
as applicable.
"Competitive Bid" means an offer by a Lender to make a
Competitive Loan in accordance with Section 2.04.
"Competitive Bid Rate" means, with respect to any Competitive
Bid, the Margin or the Fixed Rate, as applicable, offered by the Lender making
such Competitive Bid.
<PAGE> 9
5
"Competitive Bid Request" means a request by the Borrower for
Competitive Bids in accordance with Section 2.04.
"Competitive Loan" means a Loan made pursuant to Section 2.04.
"Continuing Directors" means (i) the members of the Board of
Directors of the Borrower on the date hereof and (ii) future members of such
Board of Directors who were nominated or appointed by a majority of the
Continuing Directors at the date of their nomination or appointment.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Default" means any event or condition which constitutes an Event
of Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings,
labor controversies and the environmental matters disclosed in Schedule 3.06.
"dollars" or "$" refers to lawful money of the United States of
America.
"Effective Date" means the date on which the conditions specified
in Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
<PAGE> 10
6
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder, with respect to a
Plan; (b) the existence with respect to any Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan; (d) the incurrence of any liability under
Title IV of ERISA with respect to the termination of any Plan or the withdrawal
or partial withdrawal of the Borrower or any of its ERISA Affiliates from any
Plan or Multiemployer Plan; (e) the receipt by the Borrower or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to an
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; or (f) the receipt by the Borrower or any ERISA Affiliate of any
notice concerning the imposition of Withdrawal Liability or a determination that
a Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate (or, in the
case of a Competitive Loan, the LIBO Rate).
"Event of Default" has the meaning assigned to such term in
Article VII.
"Excluded Taxes" means, with respect to the Administrative Agent,
any Lender or any other recipient of any payment to be made by or on account of
any obligation of the Borrower hereunder, (a) income or franchise taxes imposed
on (or measured by) its net income by the jurisdiction under the laws of which
it is organized, or the jurisdiction in which its principal office is located
or, in the case of any Lender, in which its applicable lending office is
located, (b) any branch profits taxes imposed by the United States of America or
any similar tax imposed by any other jurisdiction in which the Borrower is
located and (c) in the case of a Foreign Lender (other than an assignee pursuant
to a request by the Borrower under Section 2.17(b)), any U.S. Federal
withholding tax imposed on amounts payable to such Foreign Lender under this
Agreement because of its failure or inability to comply with Section 2.15(e) or
for any other reason, unless (and to the extent that) (i) such withholding tax
liability arises or is increased by reason of a Change in Law occurring after
such Foreign Lender becomes a Lender under this Agreement or (ii) such Foreign
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such withholding tax
liability pursuant to Section 2.15(a).
"FCC" means the Federal Communications Commission and any
successors thereto.
<PAGE> 11
7
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for the day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Film Contracts" mean contracts or agreements with suppliers
which provide the right to broadcast certain specified film or video tape motion
pictures.
"Financial Officer" means the chief financial officer, vice
president of finance, principal accounting officer, treasurer or controller of
the Borrower.
"Fixed CD Rate" means, with respect to any CD Borrowing for any
Interest Period, the arithmetic average (rounded upwards, if necessary, to the
next 1/100 of 1%) of the prevailing rates per annum bid at or about 10:00 a.m.,
New York City time, to the Administrative Agent on the first Business Day of
such Interest Period by three negotiable certificate of deposit dealers of
recognized standing selected by the Administrative Agent for the purchase at
face value of negotiable certificates of deposit of major United States money
center banks in a principal amount of $5,000,000 and with a maturity comparable
to such Interest Period.
"Fixed Rate" means, with respect to any Competitive Loan bearing
interest at a fixed rate, the fixed rate of interest per annum specified by the
Lender making such Competitive Loan in its related Competitive Bid.
"Fixed Rate Loan" means a Competitive Loan bearing interest at a
Fixed Rate.
"Foreign Lender" means any Lender that is organized under the
laws of a jurisdiction other than that in which the Borrower is located. For
purposes hereof, the United States of America and each State thereof shall be
considered to constitute a single jurisdiction.
"Funded Debt" means without duplication, all Indebtedness, other
than short-term obligations under Film Contracts.
"GAAP" means generally accepted accounting principles in the
United States of America consistently applied.
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
<PAGE> 12
8
"Guarantee" means any agreement by which the 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 another 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, but shall not include typical and
customary indemnifications, representations and warranties made in connection
with purchases and sales of property or issuances of securities.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Hazardous Materials" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"Indebtedness" means, without duplication, the Borrower's and
each Subsidiary's (a) obligations for borrowed money, (b) 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,
(c) 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
the Borrower or any Subsidiary, (d) obligations created under any conditional
purchase or other title retention agreements, (e) Capital Lease Obligations,
letters of credit, bonds or similar instruments, bankers' acceptances, (f)
obligations under Guarantees; provided, however, that Indebtedness shall not
include obligations of the Borrower or any Subsidiary incurred in connection
with the self-insurance program or employee benefit plans and programs of the
Borrower or the Subsidiaries, and (g) obligations to make payments that would be
required to be made in the event of an early termination, on the date
Indebtedness of the Borrower or any Subsidiary is being determined, in respect
of outstanding Hedging Agreements.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Interest Coverage Ratio" means the ratio of Pro Forma Operating
Cash Flow to Interest Expense.
"Interest Election Request" means a request by the Borrower to
convert or continue a Revolving Borrowing in accordance with Section 2.06.
"Interest Expense" means, with respect to the Borrower and the
Subsidiaries for any period, the interest expense of the Borrower and the
Subsidiaries determined on a consolidated basis in accordance with GAAP,
including, without limitation, (a) the amortization of debt discounts, (b) the
amortization of all fees (including, without
<PAGE> 13
9
limitation, fees with respect to interest rate protection agreements) payable in
connection with the incurrence of Indebtedness and (c) the portion of any
Capital Lease Obligation allocable to interest expense.
"Interest Payment Date" means (a) with respect to any ABR Loan,
the last day of each March, June, September and December, (b) with respect to
any CD or Eurodollar Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration or a CD
Borrowing with an Interest Period of more than 90 days' duration, each day prior
to the last day of such Interest Period that occurs at intervals of three
months' duration or 90 days' duration, as the case may be, after the first day
of such Interest Period, (c) with respect to any Fixed Rate Loan, the last day
of the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a Fixed Rate Borrowing with an Interest Period of more than
90 days' duration (unless otherwise specified in the applicable Competitive Bid
Request), each day prior to the last day of such Interest Period that occurs at
intervals of 90 days' duration after the first day of such Interest Period, and
any other dates that are specified in the applicable Competitive Bid Request as
Interest Payment Dates with respect to such Borrowing.
"Interest Period" means (a) with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower may elect, (b) with respect to any CD
Borrowing, the period commencing on the date of such Borrowing and ending 30,
60, 90, 180, 270 or 360 days thereafter, as the Borrower may elect, and (c) with
respect to any Fixed Rate Borrowing, the period (which shall not be less than 1
day or more than 360 days) commencing on the date of such Borrowing and ending
on the date specified in the applicable Competitive Bid Request; provided, that
(i) if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless, in
the case of a Eurodollar Borrowing only, such next succeeding Business Day would
fall in the next calendar month, in which case such Interest Period shall end on
the next preceding Business Day and (ii) any Interest Period pertaining to a
Eurodollar Borrowing that commences on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and,
in the case of a Revolving Borrowing, thereafter shall be the effective date of
the most recent conversion or continuation of such Borrowing.
"Lenders" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for
any Interest Period, the rate appearing on Page 3750 of the
<PAGE> 14
10
Telerate Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the "LIBO Rate"
with respect to such Eurodollar Borrowing for such Interest Period shall be the
rate at which dollar deposits of $5,000,000 and for a maturity comparable to
such Interest Period are offered to the principal London office of the
Administrative Agent or any Affiliate designated by the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, hypothecation, encumbrance, charge or security interest
in, on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loans" means the loans made by the Lenders to the Borrower
pursuant to this Agreement.
"Margin" means, with respect to any Competitive Loan bearing
interest at a rate based on the LIBO Rate, the marginal rate of interest, if
any, to be added to or subtracted from the LIBO Rate to determine the rate of
interest applicable to such Loan, as specified by the Lender making such Loan in
its related Competitive Bid.
"Material Adverse Effect" means a material adverse effect on (a)
the business, assets, operations or condition, financial or otherwise, of the
Borrower and the Subsidiaries taken as a whole, (b) the ability of the Borrower
to perform any of its obligations under this Agreement or (c) the rights of or
benefits available to the Lenders under this Agreement.
"Material Indebtedness" means Indebtedness (other than the
Loans), of any one or more of the Borrower and the Subsidiaries in a principal
amount for any such Indebtedness in excess of $15,000,000 or in an aggregate
principal amount for all such Indebtedness in excess of $30,000,000.
"Maturity Date" means July 31, 2001.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
<PAGE> 15
11
"Operating Cash Flow" means, for the 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 or nonrecurring items), plus (ii) depreciation and amortization
expense during such period, plus (iii) 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.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution or delivery
of, or otherwise with respect to, this Agreement.
"Participation Percentage" means, with respect to any Lender,
the percentage of the total Commitments represented by such Lender's Commitment.
If the Commitments have terminated or expired, the Participation Percentages
shall be determined based upon the Commitments most recently in effect, giving
effect to any assignments.
"Permitted Liens" means (a) 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, (b) Liens securing any purchase money Indebtedness if such Liens do
not encumber any property other than the property for the purchase of which such
purchase money Indebtedness was incurred, (c) the currently existing Liens
described in Schedule 6.01 hereto, if any, and renewals thereof, (d) pledges or
deposits made to secure payment of worker's compensation, unemployment
insurance, pensions, or other social security programs, (e) good-faith pledges
or deposits made to secure performance of bids, tenders, contracts (other than
for the repayment of borrowed money), or leases, or to secure statutory
obligations, surety or appeal bonds, or indemnity, performance, or other similar
bonds in the ordinary course of business, (f) 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 the
Borrower and the Subsidiaries (taken as a whole) of their business, and none of
which is violated by existing or proposed structures or land use where such
violation would materially impair the operation by the Borrower and the
Subsidiaries (taken as a whole) of their business, (g) 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 operations of the Borrower
and the Subsidiaries 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; judgment Liens; and (h) any Lien existing
on any property or asset prior to the acquisition thereof by the Borrower or any
Subsidiary or existing on any property or asset of any Person that
<PAGE> 16
12
becomes a Subsidiary after the date hereof prior to the time the Person becomes
a Subsidiary; provided that (i) such Lien is not created in contemplation or
connection with such acquisition or such Person becoming a Subsidiary, as the
case may be, (ii) such Lien shall not apply to any other property or assets of
the Borrower or any Subsidiary and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date such
Person becomes a Subsidiary, as the case may be.
"PBGC" means the Pension Benefit Guarantee Corporation
referred to and Defined in ERISA.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by Texas Commerce Bank National Association as its
prime rate in effect at its principal office in Dallas; each change in the Prime
Rate shall be effective from and including the date such change is publicly
announced as being effective.
"Prior Agreement" means the Borrower's credit agreement dated
as of August 5, 1994 and amended as of July 28, 1995.
"Pro Forma Operating Cash Flow" means, for any relevant
period, Operating Cash Flow of the 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.
"Register" has the meaning set forth in Section 9.04.
"Required Lenders" means, at any time, Lenders having
Revolving Credit Exposures and unused Commitments representing more than 51% of
the sum of the total Revolving Credit Exposures and unused Commitments at such
time; provided that, for purposes of declaring the Loans to be due and payable
pursuant to Article VII, and for all purposes after the Loans become due and
payable pursuant to Article VII or the Commitments expire or terminate, the
outstanding Competitive Loans of the Lenders shall be included in their
respective Revolving Credit Exposures in determining the Required Lenders.
"Reportable Event" means any reportable event as defined by
Section 4043 of ERISA and the regulations issued under such Section with respect
to a Plan (other than a Multiemployer Plan), excluding, however, such events as
to which the PBGC by regulation or by technical update waived the requirement of
Section 4043(a) of ERISA
<PAGE> 17
13
that it be notified within 30 days of the occurrence of such event; provided
that a failure to meet the minimum funding standard of Section 412 of the Code
and Section 302 of ERISA shall be a reportable event regardless of the issuance
of any waiver in accordance with Section 412(d) of the Code.
"Revolving Credit Exposure" means, with respect to any Lender
at any time, the sum of the outstanding principal amounts of such Lender's
Revolving Loans at such time.
"Revolving Loan" means a Loan made pursuant to Section 2.03.
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is
subject (a) with respect to the Adjusted CD Rate or the Base CD Rate, for new
negotiable nonpersonal time deposits in dollars of over $100,000 with maturities
approximately equal to (i) the applicable Interest Period, in the case of the
Adjusted CD Rate, and (ii) three months, in the case of the Base CD Rate, and
(b) with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Board). Such
reserve percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Subordinated Debt" means Indebtedness of the Borrower for
borrowed money that satisfies the requirements set forth in Schedule 6.05
hereto.
"subsidiary" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that is, as of
such date, otherwise Controlled, by the parent or one or more subsidiaries of
the parent or by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
<PAGE> 18
14
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Three-Month Secondary CD Rate" means, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day is not a Business Day, the next preceding
Business Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current practices
of the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day), or, if such rate is not so reported on such
day or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center banks
in New York City received at approximately 10:00 a.m., New York City time, on
such day (or, if such day is not a Business Day, on the next preceding Business
Day) by the Administrative Agent from three negotiable certificate of deposit
dealers of recognized standing selected by it.
"Transactions" means the execution, delivery and performance
by the Borrower of this Agreement and the borrowing of the Loans hereunder.
"Type", when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate, the
Adjusted CD Rate, the Alternate Base Rate or, in the case of a Competitive Loan
or Borrowing, the LIBO Rate or a Fixed Rate.
"Withdrawal Liability" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For
purposes of this Agreement, Loans may be classified and referred to by Class
(e.g., a "Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class
and Type (e.g., a "Eurodollar Revolving Loan"). Borrowings also may be
classified and referred to by Class (e.g., a "Revolving Borrowing") or by Type
(e.g., a "Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar
Revolving Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any
<PAGE> 19
15
Person shall be construed to include such Person's successors and assigns, (c)
the words "herein", "hereof" and "hereunder", and words of similar import, shall
be construed to refer to this Agreement in its entirety and not to any
particular provision hereof, (d) all references herein to Articles, Sections,
Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Agreement and (e) the words "asset" and
"property" shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions
set forth herein, each Lender agrees to make Revolving Loans to the Borrower
from time to time during the Availability Period in an aggregate principal
amount that will not result in (a) such Lender's Revolving Credit Exposure
exceeding such Lender's Commitment or (b) the sum of the total Revolving Credit
Exposures plus the aggregate principal amount of outstanding Competitive Loans
exceeding the total Commitments. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Revolving Loans.
SECTION 2.02. Loans and Borrowings. (a) Each Revolving Loan
shall be made as part of a Borrowing consisting of Revolving Loans made by the
Lenders ratably in accordance with their respective Participation Percentages.
Each Competitive Loan shall be made in accordance with the procedures set forth
in Section 2.04. The failure of any Lender to make any Loan required to be made
by it shall not relieve any other Lender of its obligations hereunder; provided
that the Commitments and Competitive Bids of the Lenders are several and no
Lender shall be responsible for any other Lender's failure to make Loans as
required.
(b) Subject to Section 2.12, (i) each Revolving Borrowing
shall be comprised entirely of ABR Loans, CD Loans or Eurodollar Loans as the
Borrower may request in accordance herewith, and (ii) each Competitive Borrowing
shall be comprised entirely of Eurodollar Loans or Fixed Rate Loans as the
Borrower may request in accordance
<PAGE> 20
16
herewith. Each Lender at its option may make any Eurodollar Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accordance with the terms of this Agreement;
provided further, that if the designation of any such foreign branch or
Affiliate shall result in any costs, reductions or Taxes which would not
otherwise have been applicable and for which such Lender would, but for this
proviso, be entitled to request compensation under Section 2.13 or 2.15, such
Lender shall not be entitled to request such compensation unless it shall in
good faith have determined such designation to be necessary or advisable to
avoid any material disadvantage to it.
(c) At the commencement of each Interest Period for any CD
Revolving Borrowing or Eurodollar Revolving Borrowing, such Borrowing shall be
in an aggregate amount that is an integral multiple of $1,000,000 and not less
than $5,000,000. At the time that each ABR Revolving Borrowing is made, such
Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $5,000,000; provided that an ABR Revolving
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Commitments. Each Competitive Borrowing shall be in an
aggregate amount that is an integral multiple of $1,000,000 and not less than
$5,000,000. Borrowings of more than one Type and Class may be outstanding at the
same time; provided that there shall not at any time be more than a total of 15
CD and Eurodollar Revolving Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Maturity Date.
SECTION 2.03. Requests for Revolving Borrowings. In order to
request a Revolving Borrowing, the Borrower shall notify the Administrative
Agent of such request by telephone (a) in the case of a Eurodollar Borrowing,
not later than 11:00 a.m., Dallas time, three Business Days before the date of
the proposed Borrowing, (b) in the case of a CD Borrowing, not later than 11:00
a.m., Dallas time, two Business Days before the date of the proposed Borrowing
or (c) in the case of an ABR Borrowing, not later than 10:00 a.m., Dallas time,
on the date of the proposed Borrowing. Each such telephonic Borrowing Request
shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Borrowing Request in a form
approved by the Administrative Agent and signed by the Borrower. Each such
telephonic and written Borrowing Request shall specify the following information
in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business
Day;
(iii) whether such Borrowing is to be an ABR Borrowing, a CD
Borrowing or a Eurodollar Borrowing;
<PAGE> 21
17
(iv) in the case of a CD Borrowing or a Eurodollar Borrowing,
the initial Interest Period to be applicable thereto, which shall be a
period contemplated by the definition of the term "Interest Period";
and
(v) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the
requirements of Section 2.05.
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested CD or Eurodollar Revolving Borrowing,
then the Borrower shall be deemed to have selected an Interest Period of 30
days' duration, in the case of a CD Borrowing, or one month's duration, in the
case of a Eurodollar Borrowing. Promptly following receipt of a Borrowing
Request in accordance with this Section, the Administrative Agent shall advise
each Lender of the details thereof and of the amount of such Lender's Loan to be
made as part of the requested Borrowing.
SECTION 2.04. Competitive Bid Procedure. (a) Subject to the
terms and conditions set forth herein, from time to time during the Availability
Period the Borrower may request Competitive Bids and may (but shall not have any
obligation to) accept Competitive Bids and borrow Competitive Loans; provided
that the sum of the total Revolving Credit Exposures plus the aggregate
principal amount of outstanding Competitive Loans at any time shall not exceed
the total Commitments. In order to request Competitive Bids, the Borrower shall
notify the CAF Agent of such request by telephone, in the case of a Eurodollar
Borrowing, not later than 11:00 a.m., Dallas time, four Business Days before the
date of the proposed Borrowing and, in the case of a Fixed Rate Borrowing, not
later than 10:00 a.m., Dallas time, one Business Day before the date of the
proposed Borrowing; provided that a Competitive Bid Request shall not be made
within five Business Days after the date of any previous Competitive Bid
Request, unless any and all such previous Competitive Bid Requests shall have
been withdrawn or all Competitive Bids received in response thereto rejected.
Each such telephonic Competitive Bid Request shall be confirmed promptly by hand
delivery or telecopy to the CAF Agent of a written Competitive Bid Request in a
form approved by the CAF Agent and signed by the Borrower. Each such telephonic
and written Competitive Bid Request shall specify the following information in
compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business
Day;
(iii) whether such Borrowing is to be a Eurodollar Borrowing
or a Fixed Rate Borrowing;
(iv) the Interest Period to be applicable to such Borrowing,
which shall be a period contemplated by the definition of the term
"Interest Period"; and
<PAGE> 22
18
(v) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.05.
Promptly following receipt of a Competitive Bid Request in accordance with this
Section, the CAF Agent shall notify the Lenders of the details thereof by
telecopy, inviting the Lenders to submit Competitive Bids.
(b) Each Lender may (but shall not have any obligation to)
make one or more Competitive Bids to the Borrower in response to a Competitive
Bid Request. Each Competitive Bid by a Lender must be in a form approved by the
CAF Agent and must be received by the Administrative Agent by telecopy, in the
case of a Eurodollar Competitive Borrowing, not later than 9:30 a.m., Dallas
time, three Business Days before the proposed date of such Competitive
Borrowing, and in the case of a Fixed Rate Borrowing, not later than 9:30 a.m.,
Dallas time, on the proposed date of such Competitive Borrowing. Competitive
Bids that do not conform substantially to the form approved by the CAF Agent may
be rejected by the CAF Agent, and the CAF Agent shall notify the applicable
Lender as promptly as practicable. Each Competitive Bid shall specify (i) the
principal amount (which shall be a minimum of $5,000,000 and an integral
multiple of $1,000,000 and which may equal the entire principal amount of the
Competitive Borrowing requested by the Borrower) of the Competitive Loan or
Loans that the Lender is willing to make, (ii) the Competitive Bid Rate or Rates
at which the Lender is prepared to make such Loan or Loans (expressed as a
percentage rate per annum in the form of a decimal to no more than four decimal
places) and (iii) the Interest Period applicable to each such Loan and the last
day thereof.
(c) The CAF Agent shall promptly notify the Borrower by
telecopy of the Competitive Bid Rate and the principal amount specified in each
Competitive Bid and the identity of the Lender that shall have made such
Competitive Bid.
(d) Subject only to the provisions of this paragraph (d), the
Borrower may accept or reject any Competitive Bid. The Borrower shall notify the
CAF Agent by telephone, confirmed by telecopy in a form approved by the CAF
Agent, whether and to what extent it has decided to accept or reject each
Competitive Bid, in the case of a Eurodollar Competitive Borrowing, not later
than 10:30 a.m., Dallas time, three Business Days before the date of the
proposed Competitive Borrowing, and in the case of a Fixed Rate Borrowing, not
later than 10:30 a.m., Dallas time, on the proposed date of the Competitive
Borrowing; provided, that (i) the failure of the Borrower to give such notice
shall be deemed to be a rejection of each Competitive Bid, (ii) the Borrower
shall not accept a Competitive Bid made at a particular Competitive Bid Rate if
the Borrower rejects a Competitive Bid made at a lower Competitive Bid Rate,
(iii) the aggregate amount of the Competitive Bids accepted by the Borrower
shall not exceed the aggregate amount of the requested Competitive Borrowing
specified in the related Competitive Bid Request, (iv) to the extent necessary
to comply with clause (iii) above, the Borrower may accept Competitive Bids at
the same Competitive Bid Rate in part, which acceptance, in the case of multiple
Competitive Bids at such Competitive Bid Rate, shall be made pro rata in
accordance with the amount of each such
<PAGE> 23
19
Competitive Bid, and (v) except pursuant to clause (iv) above, no Competitive
Bid shall be accepted for a Competitive Loan unless such Competitive Loan is in
a minimum principal amount of $5,000,000 and an integral multiple of $1,000,000;
provided further that if a Competitive Loan must be in an amount less than
$5,000,000 because of the provisions of clause (iv) above, such Competitive Loan
may be for a minimum of $1,000,000 or any integral multiple thereof, and in
calculating the pro rata allocation of acceptances of portions of multiple
Competitive Bids at a particular Competitive Bid Rate pursuant to clause (iv)
the amounts shall be rounded to integral multiples of $1,000,000 in a manner
determined by the Borrower. A notice given by the Borrower pursuant to this
paragraph (d) shall be irrevocable.
(e) The CAF Agent shall promptly notify each bidding Lender by
telecopy whether or not its Competitive Bid has been accepted (and, if so, the
amount and Competitive Bid Rate so accepted), and each successful bidder will
thereupon become bound, subject to the terms and conditions hereof, to make the
Competitive Loan in respect of which its Competitive Bid has been accepted.
(f) If any Lender that is an Affiliate of the CAF Agent shall
elect to submit a Competitive Bid in its capacity as a Lender, it shall submit
such Competitive Bid directly to the Borrower at least one quarter of an hour
earlier than the time by which the other Lenders are required to submit their
Competitive Bids to the CAF Agent pursuant to paragraph (b) of this Section.
SECTION 2.05. Funding of Borrowings. (a) Each Lender shall
make each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 12:00 noon, Dallas time, to the
account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders. The Administrative Agent will make such Loans
available to the Borrower by promptly crediting the amounts so received, in like
funds, to an account of the Borrower maintained with the Administrative Agent in
Dallas and designated by the Borrower in the applicable Borrowing Request or
Competitive Bid Request.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the Federal Funds Effective Rate or (ii) in the
case of the Borrower, the interest rate borne by the applicable Borrowing. If
<PAGE> 24
20
such Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.
SECTION 2.06. Interest Elections. (a) Each Revolving Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a CD or Eurodollar Revolving Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter, the
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a CD or Eurodollar Revolving Borrowing, may
elect new Interest Periods therefor, all as provided in this Section. The
Borrower may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably
among the Lenders holding the Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing. This
Section shall not apply to Competitive Borrowings, which may not be converted or
continued.
(b) In order to make an election pursuant to this Section, the
Borrower shall notify the Administrative Agent of such election by telephone by
the time that a Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Revolving Borrowing of the Type resulting from such
election to be made on the effective date of such election. Each such telephonic
Interest Election Request shall be irrevocable and shall be confirmed promptly
by hand delivery or telecopy to the Administrative Agent of a written Interest
Election Request in a form approved by the Administrative Agent and signed by
the Borrower.
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing, a CD Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a CD Borrowing or a
Eurodollar Borrowing, the Interest Period to be applicable thereto
after giving effect to such election, which shall be a period
contemplated by the definition of the term "Interest Period".
If any such Interest Election Request requests a CD Borrowing or Eurodollar
Borrowing but does not specify an Interest Period, then the Borrower shall be
deemed to have selected an Interest Period of 30
<PAGE> 25
21
days' duration, in the case of a CD Borrowing, or one month's duration, in the
case of a Eurodollar Borrowing.
(d) Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the details
thereof and of such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest
Election Request with respect to a CD or Eurodollar Revolving Borrowing prior to
the end of the Interest Period applicable thereto, then, unless such Borrowing
is repaid as provided herein, at the end of such Interest Period such Borrowing
shall be converted to an ABR Borrowing. Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
Borrower, then, so long as an Event of Default is continuing (i) no outstanding
Revolving Borrowing may be converted to or continued as a CD or Eurodollar
Borrowing and (ii) unless repaid, each CD and Eurodollar Revolving Borrowing
shall be converted to an ABR Borrowing at the end of the Interest Period
applicable thereto.
SECTION 2.07. Termination and Reduction of Commitments. (a)
Unless previously terminated, the Commitments shall terminate on the Maturity
Date; provided that the Commitments shall terminate at 3:00 p.m., Dallas time,
on August 31, 1996, if the Effective Date has not occurred prior to such time.
(b) Subject to Section 2.09(d), the Borrower may at any time
terminate, or from time to time reduce, the Commitments; provided that (i) each
reduction of the Commitments shall be in an amount that is an integral multiple
of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not
terminate or reduce the Commitments if, after giving effect to any concurrent
prepayment of the Loans, the sum of the Revolving Credit Exposures plus the
aggregate principal amount of outstanding Competitive Loans would exceed the
total Commitments.
(c) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of this
Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; provided that a notice
of termination of the Commitments delivered by the Borrower may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments
shall be permanent. Each reduction of the Commitments shall be made ratably
among the Lenders in accordance with their respective Commitments.
SECTION 2.08. Repayment of Loans; Evidence of Debt. (a) The
Borrower hereby unconditionally promises to pay (i) to the Administrative Agent
for the account of each Lender the then unpaid
<PAGE> 26
22
principal amount of each Revolving Loan on the Maturity Date, (ii) to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Competitive Loan on the last day of the Interest Period
applicable to such Loan.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraphs (b) and (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced
by a promissory note. In such event, the Borrower shall prepare, execute and
deliver to such Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns) and
in a form approved by the Administrative Agent.
SECTION 2.09. Prepayment of Loans. (a) Subject to Section
2.09(d), the Borrower shall have the right at any time and from time to time to
prepay any Borrowing in whole or in part.
(b) In the event of any termination of the Commitments, the
Borrower shall prepay all outstanding Borrowings on the date of such
termination. In the event of any reduction of the Commitments, the Borrower
shall prepay outstanding Borrowings to the extent, if any, necessary so that, on
the date of and after giving effect to such reduction, the sum of the Revolving
Credit Exposures and the aggregate principal amount of the outstanding
Competitive Loans does not exceed the total Commitments.
(c) The Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case
of prepayment of a Eurodollar Revolving Borrowing, not later than 11:00 a.m.,
Dallas time, three Business Days before the date of prepayment, (ii) in the
case of prepayment of a CD Borrowing, not later than 11:00 a.m., Dallas time,
two Business Days before the date of prepayment, (iii) in the case of
prepayment of an ABR Revolving Borrowing, not later than 11:00 a.m., Dallas
time, on the date of prepayment. Each such notice shall be irrevocable and
shall specify
<PAGE> 27
23
the prepayment date and the principal amount of each Borrowing or portion
thereof to be prepaid; provided that, if a notice of prepayment is given in
connection with a conditional notice of termination of the Commitments as
contemplated by Section 2.07, then such notice of prepayment may be revoked if
such notice of termination is revoked in accordance with Section 2.07. Promptly
following receipt of any such notice relating to a Revolving Borrowing, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Revolving Borrowing shall be in an amount that would
be permitted in the case of an advance of a Revolving Borrowing of the same Type
as provided in Section 2.02. Each prepayment of a Revolving Borrowing shall be
applied ratably to the Loans included in the prepaid Borrowing. Prepayments
shall be accompanied by accrued interest to the extent required by Section 2.11.
(d) The Borrower shall not have the right to prepay any
Competitive Loan and shall not terminate or reduce the Commitments if such
termination or reduction would require prepayment of any Competitive Loan.
SECTION 2.10. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a facility fee, which shall
accrue at the Applicable Percentage per annum on the daily amount of the
Commitment of such Lender (whether used or unused) during the period from and
including the date hereof to but excluding the date on which such Commitment
terminates; provided that, if such Lender continues to have any Revolving Credit
Exposure after its Commitment terminates, then such facility fee shall continue
to accrue on the daily amount of such Lender's Revolving Credit Exposure from
and including the date on which its Commitment terminates to but excluding the
date on which such Lender ceases to have any Revolving Credit Exposure. Accrued
facility fees shall be payable in arrears on the last day of March, June,
September and December of each year and on the date on which the Commitments
terminate, commencing on the first such date to occur after the date hereof;
provided that any facility fees accruing after the date on which the Commitments
terminate shall be payable on demand. All facility fees shall be computed on the
basis of a year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).
(b) The Borrower agrees to pay to the Administrative Agent,
for its own account, fees payable in the amounts and at the times separately
agreed upon between the Borrower and the Administrative Agent.
(c) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent for distribution, in
the case of facility fees, to the Lenders. Fees paid shall not be refundable
under any circumstances.
SECTION 2.11. Interest. (a) The Loans comprising each ABR
Borrowing shall bear interest at a rate per annum equal to the Alternate Base
Rate.
<PAGE> 28
24
(b) The Loans comprising each CD Borrowing shall bear interest
at a rate per annum equal to the Adjusted CD Rate for the Interest Period in
effect for such Borrowing plus the Applicable Percentage from time to time in
effect.
(c) The Loans comprising each Eurodollar Borrowing shall bear
interest at a rate per annum equal to the Adjusted LIBO Rate for the Interest
Period in effect for such Borrowing plus the Applicable Percentage from time to
time in effect (or, in the case of a Competitive Loan, the LIBO Rate for the
Interest Period in effect for such Borrowing plus the Margin offered by the
Lender making such loan and accepted by the Borrower pursuant to Section 2.04).
(d) Each Fixed Rate Loan shall bear interest at a rate per
annum equal to the Fixed Rate applicable to such Loan.
(e) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of
any Loan, the rate otherwise applicable to such Loan as provided above plus 2%
or (ii) in the case of any other amount, the rate applicable to ABR Loans as
provided above plus 2%.
(f) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan; provided that (i) interest accrued
pursuant to paragraph (e) of this Section shall be payable on demand, (ii) in
the event of any repayment or prepayment of any Loan (other than a prepayment of
an ABR Revolving Loan prior to the end of the Availability Period), accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment, (iii) in the event of any conversion of any
Loan (other than an ABR Revolving Loan) prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective
date of such conversion and (d) in the event the Commitments are terminated, all
accrued and unpaid interest on the Loans shall be paid on the date of such
termination.
(g) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted CD Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.
SECTION 2.12 Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a CD Borrowing or Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that
<PAGE> 29
25
adequate and reasonable means do not exist for ascertaining the
Adjusted CD Rate, the Adjusted LIBO Rate or the LIBO Rate, as
applicable, for such Interest Period or, in the case of a Eurodollar
Borrowing, that a Change in Law makes it unlawful for any one or more
of the Lenders to make a Eurodollar Loan; or
(b) the Administrative Agent is advised by the Required
Lenders that, as a result of a Change in Law or other unusual events or
conditions affecting the markets in which such Lenders conduct their
funding operations, the Adjusted CD Rate, the Adjusted LIBO Rate or the
LIBO Rate, as applicable, for such Interest Period will be lower than
the actual cost to such Lenders of obtaining the funds necessary to
make or maintain their Loans comprising such Borrowing for such
Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a CD Borrowing or Eurodollar
Borrowing shall be ineffective, (ii) if any Borrowing Request requests a CD or
Eurodollar Revolving Borrowing, such Borrowing shall be made as an ABR Borrowing
and (iii) any request by the Borrower for a Eurodollar Competitive Borrowing
shall be ineffective; provided that (A) if the circumstances giving rise to such
notice do not affect all the Lenders, then requests by the Borrower for
Eurodollar Competitive Borrowings may be made to Lenders that are not affected
thereby and (B) if the circumstances giving rise to such notice affect only one
Type of Borrowings, then the other Type of Borrowings shall be permitted.
SECTION 2.13. Increased Costs. (a) If any Change in Law
shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted CD Rate or the Adjusted
LIBO Rate); or
(ii) impose on any Lender or the London interbank market any
other condition affecting this Agreement, CD Loans or Eurodollar Loans
or Fixed Rate Loans made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any CD Loan, Eurodollar Loan or Fixed Rate Loan
or to increase the cost to such Lender or to reduce the amount of any sum
received or receivable by such Lender hereunder (whether of principal, interest
or otherwise) by an amount deemed by such Lender to be material, then the
Borrower will pay to such Lender such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction suffered.
(b) If any Lender determines that any Change in Law regarding
capital requirements has or would have the effect of
<PAGE> 30
26
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 to a level below that which such Lender or such
Lender's holding company could have achieved but for such Change in Law (taking
into consideration such Lender's policies and the policies of such Lender's
holding company with respect to capital adequacy) by an amount deemed by such
Lender to be material, then from time to time the Borrower will pay to such
Lender, as the case may be, such additional amount or amounts as will compensate
such Lender or such Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or
amounts necessary to compensate such Lender or its holding company, as the case
may be, as specified in paragraph (a) or (b) of this Section, and setting forth
in reasonable detail the manner in which such amount or amounts shall have been
determined, shall be delivered to the Borrower and shall, if submitted in good
faith, be conclusive absent manifest error. The Borrower shall pay such Lender
the amount shown as due on any such certificate within 10 days after receipt
thereof.
(d) Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's right to demand such compensation; provided that the Borrower shall not
be required to compensate a Lender pursuant to this Section for any increased
costs or reductions incurred more than six months prior to the date that such
Lender notifies the Borrower of the Change in Law giving rise to such increased
costs or reductions and of such Lender's intention to claim compensation
therefor; provided further that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the six-month period referred
to above shall be extended to include the period of retroactive effect thereof.
(e) Notwithstanding the foregoing provisions of this Section,
a Lender shall not be entitled to compensation pursuant to this Section in
respect of any Competitive Loan if the Change in Law that would otherwise
entitle it to such compensation shall have been publicly announced prior to
submission of the Competitive Bid pursuant to which such Loan was made.
SECTION 2.14. Break Funding Payments. In the event of (a) the
payment of any principal of any CD Loan, Eurodollar Loan or Fixed Rate Loan
other than on the last day of an Interest Period applicable thereto, (b) the
conversion of any CD Loan or Eurodollar Loan other than on the last day of the
Interest Period applicable thereto, (c) the failure to borrow, convert, prepay
or continue any Revolving Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice is permitted to be revocable
and is revoked in accordance herewith), (d) the failure to borrow any
Competitive Loan after accepting the Competitive Bid to make such Loan, or (e)
the assignment of any CD Loan, Eurodollar Loan or Fixed Rate Loan other than on
the last day of the Interest Period applicable thereto as a result of a request
by the Borrower pursuant to Section 2.17, then, in any such event, the Borrower
shall compensate each Lender for the loss, cost and expense attributable to such
event by payment to such Lender of an amount determined by such Lender to be
<PAGE> 31
27
equal to the excess, if any, of (i) the amount of interest that such Lender
would pay for a deposit equal to the principal amount of the applicable Loan for
the period from the date of such payment, conversion, failure or assignment to
the last day of the then current Interest Period for such Loan (or, in the case
of a failure to borrow, convert, prepay or continue, the duration of the
Interest Period that would have resulted from such borrowing, conversion or
continuation) if the interest rate payable on such deposit were equal to the
Adjusted LIBO Rate, the Adjusted CD Rate or the Fixed Rate, as the case may be,
in effect (or that would have been in effect) for such Interest Period, over
(ii) the amount of interest that such Lender would earn on such principal amount
for such period if such Lender were to invest such principal amount for such
period at the interest rate that would be bid by such Lender (or an affiliate of
such Lender) for dollar deposits at other banks in the London interbank market
at the commencement of such period. A certificate of any Lender setting forth
any amount or amounts that such Lender is entitled to receive pursuant to this
Section, and setting forth in reasonable detail the manner in which such amount
or amounts shall have been determined, shall be delivered to the Borrower and
shall, if submitted in good faith, be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.
SECTION 2.15. Taxes. (a) Any and all payments by or on account
of any obligation of the Borrower hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes; provided that if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) each of the Agents or Lender (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Agents and each Lender
within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
paid by the Agents or such Lender, as the case may be, and any liability
(including penalties, interest and reasonable expenses) arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender, by the Administrative Agent on its own behalf or on behalf
of a Lender, or by the CAF Agent, and setting forth in reasonable detail the
manner in which such amount shall have been determined, shall, if submitted in
good faith, be conclusive absent manifest error.
<PAGE> 32
28
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, properly completed and executed forms prescribed by applicable law
(together with such other documentation or certification as the Borrower may
reasonably request) that will permit the Borrower to make such payments without
withholding or at a reduced rate.
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing
of Set-offs. (a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or otherwise) prior to 12:00
noon, Dallas time, on the date when due, in immediately available funds, to the
Administrative Agent at its offices at Dallas, Texas, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. The
Administrative Agent shall distribute any such payments received for the account
of any other Person to the appropriate recipient in the amount owed to it
promptly following receipt thereof. If any payment hereunder shall be due on a
day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to fully pay all amounts then due
hereunder, such funds shall be applied to the amounts then due hereunder in such
order and priority as the Administrative Agent may elect; provided that any
funds that the Administrative Agent elects to apply to principal, interest or
fees then due shall be applied ratably to all amounts of principal, interest or
fees (as the case may be) then due.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans resulting in such Lender receiving
payment of a greater proportion of the aggregate amount of its Revolving Loans
and accrued interest thereon than the proportion received by any other Lender,
then the Lender receiving such greater proportion shall purchase (for cash at
face value) participation in the Revolving Loans of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving Loans;
<PAGE> 33
29
provided that (i) if any such participations are purchased and all or any
portion of the payments giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this paragraph shall not
be construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans to any assignee or participant other than the Borrower or any
Subsidiary or Affiliate thereof. The Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.
SECTION 2.17. Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.13, or if the Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.15, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the good
faith judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.13 or 2.15, as the
case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender in such Lender's good faith judgment. The Borrower hereby agrees to pay
all reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.
(b) If any Lender requests compensation under Section 2.13, or
if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement
(other than any outstanding Competitive Loans held by it) to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower shall have received the
prior written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans (other than Competitive
Loans, as to which such Lender will continue to have all of its rights
hereunder), accrued interest thereon, accrued fees and all other amounts payable
to it hereunder, from the assignee (to the extent of such outstanding principal
and accrued interest and fees) or the Borrower (in the case of all other
amounts) and (iii) in the case of any such assignment resulting from a claim for
compensation under Section 2.13 or payments required to be made pursuant to
Section 2.15,
<PAGE> 34
30
such assignment will result in a reduction in such compensation or payments. A
Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.
SECTION 2.18 Extension of Maturity Date (a) The Borrower may,
by notice to the Administrative Agent (which shall promptly deliver a copy to
each of the Lenders) given not more than 60 days prior to any anniversary of the
Closing Date while the Commitments remain in effect, request that the Lenders
extend the Maturity Date for an additional one year period (but in no event
beyond the seventh anniversary of the Closing Date) from the Maturity Date then
in effect (the "Existing Maturity Date"). Each Lender shall, by notice to the
Borrower and the Administrative Agent given not later than the 10th Business Day
after the date of the Borrower's notice, advise the Borrower whether or not such
Lender agrees to such extension (and any Lender that does not so advise the
Borrower on or before such day shall be deemed to have advised the Borrower that
it will not agree to such extension).
(b) If (and only if) Lenders holding Commitments that
represent at least 51% of the total Commitments on the 60th day prior to the
applicable anniversary of the Closing Date shall have agreed to extend the
Existing Maturity Date (such Lenders being called the "Continuing Lenders"),
then (i) the Maturity Date shall be extended to the first anniversary of the
Existing Maturity Date (provided, that if such date is not a Business Day, then
the Maturity Date as so extended shall be the next following Business Day), and
(ii) the Commitment of each Lender that is not a Continuing Lender shall
terminate (with the result that the total Commitments will decrease by the
amount of such Commitment), and all Loans of each such Lender shall become due
and payable, together with all interest accrued thereon and all other amounts
owed to such Lender hereunder, on the Existing Maturity Date.
Notwithstanding the foregoing, no extension of the Maturity
Date shall be effective with respect to any Lender unless, on and as of the
Existing Maturity Date, the conditions set forth in paragraphs (b) and (c) of
Section 4.02 shall be satisfied (with all references to a Borrowing being deemed
to be references to such extension) and the Administrative Agent shall have
received a certificate to that effect dated the Existing Maturity Date and
executed by a Financial Officer of the Borrower.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Borrower and
its Subsidiaries is (i) duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, has all requisite power
and authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a
<PAGE> 35
31
Material Adverse Effect, is qualified to do business in, and is in good standing
in, every jurisdiction where such qualification is required and, (ii) 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 Subsidiary that operates a network affiliated television broadcasting
enterprise, to conduct its business as presently conducted.
SECTION 3.02. Authorization; Enforceability. The Transactions
are within the Borrower's corporate powers and have been duly authorized by all
necessary corporate and, if required, stockholder action. This Agreement has
been duly executed and delivered by the Borrower and constitutes a legal, valid
and binding obligation of the Borrower, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except (i) such
as have been obtained or made and are in full force and effect, and (ii) routine
filings after the Effective Date with Securities and Exchange Commission and the
FCC made pursuant to the requirements of 47 CFR 73.3613 (b)(3) and (5), (b) will
not violate any applicable law or regulation or the charter, by-laws or other
organizational documents of the Borrower or any Subsidiary or any order of any
Governmental Authority, (c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon the Borrower or any
Subsidiary or its assets, or give rise to a right thereunder to require any
payment to be made by the Borrower or any Subsidiary, and (d) will not result in
the creation or imposition of any Lien on any asset of the Borrower or any
Subsidiary.
SECTION 3.04. Financial Condition; No Material Adverse Change.
(a) The Borrower has heretofore furnished to the Lenders its consolidated
balance sheet and statements of earnings, shareholders equity and cash flows (i)
as of and for the fiscal year ended December 31, 1995, reported on by Ernst &
Young LLP, independent auditors, and (ii) as of and for the fiscal quarter ended
March 31, 1996, certified by its chief financial officer. Such financial
statements present fairly, in all material respects, the financial position and
results of operations and cash flows of the Borrower and its consolidated
Subsidiaries as of such dates and for such periods in accordance with GAAP,
subject to year-end audit adjustments and the absence of footnotes in the case
of the statements referred to in clause (ii) above.
(b) Since December 31, 1995, there has been no material
adverse change in the business, assets, operations or condition, financial or
otherwise, of the Borrower and its Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of the Borrower and its
Subsidiaries has good title to, or valid leasehold interests in,
<PAGE> 36
32
all its real and personal property material to its business, except for minor
defects in title that do not interfere with its ability to conduct its business
as currently conducted or to utilize such properties for their intended
purposes.
(b) Each of the Borrower and the Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Borrower and its Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.06. Litigation, Labor and Environmental Matters. (a)
There are not any actions, suits or proceedings by or before any arbitrator or
Governmental Authority now pending against or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any Subsidiary (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve this Agreement or the Transactions.
(b) There are no actual or, to the knowledge of the Borrower,
threatened labor controversies, including strikes, work stoppages, work slow
downs or National Labor Relations Board proceedings affecting the Borrower or
its Subsidiaries, that could, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.
(c) Except for the Disclosed Matters and except with respect
to any other matters that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect, neither the Borrower
nor any Subsidiary (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) has become subject to any Environmental
Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
(d) There has been no change in the status of the Disclosed
Matters that, individually or in the aggregate, has resulted in, or materially
increased the likelihood of, a Material Adverse Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of the
Borrower and its Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
SECTION 3.08. Certain Legal Matters. (a) Neither the
Borrower nor any Subsidiary is (i) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940
<PAGE> 37
33
or (ii) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
(b) Neither the Borrower nor any Subsidiary is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of buying or carrying margin stock, within the meaning of
Regulation U of the Board. Margin stock will at all times constitute less than
25% of the assets of the Borrower individually and the Borrower and the
Subsidiaries on a consolidated basis that are subject to the restrictions of
Section 6.01 and 6.02.
SECTION 3.09. Taxes. Each of the Borrower and its Subsidiaries
has filed or caused to be filed all tax returns and reports required to have
been filed and paid or caused to be paid all Taxes required to have been paid by
it, except (a) Taxes that are being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary, as applicable, shall
have set aside on its books adequate reserves or (b) to the extent that the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA
Events, could reasonably be expected to result in a Material Adverse Effect. As
of the date hereof, the present value of all accrued benefit liabilities under
each Plan (based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87), determined at the most recent annual valuation
date for such Plan, does not exceed by more than $10,000,000 the fair market
value of the assets of such Plan, and the present value of all accrued benefit
liabilities of all underfunded Plans (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87), determined at the most
recent annual valuation dates for such Plans, does not exceed by more than
$10,000,000 the fair market value of the assets of all such underfunded Plans.
SECTION 3.11. Disclosure. There are no agreements, instruments
or corporate restrictions to which the Borrower or any of its Subsidiaries is
subject, and no other matters known to the Borrower, that, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
None of the reports, financial statements, certificates or other information
furnished by or on behalf of the Borrower to the Administrative Agent or any
Lender in connection with the negotiation of this Agreement or delivered
hereunder (as modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that, with respect to
projected financial information, the Borrower represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.
ARTICLE IV
Conditions
<PAGE> 38
34
SECTION 4.01. Effective Date. The obligations of the Lenders
to make Loans hereunder shall not become effective until the date on which each
of the following conditions is satisfied (or waived in accordance with Section
9.02):
(a) The Administrative Agent (or its counsel) shall have
received from each party hereto either (i) a counterpart of this
Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received favorable
written opinions of Michael J. McCarthy, the General Counsel of the
Borrower, Locke Purnell Rain Harrell, counsel for the Borrower, and
Wiley, Rein & Fielding, special regulatory counsel to the Borrower,
substantially in the forms of Exhibits B-1, B-2 and B-3 hereto and
covering such other matters relating to this Agreement and the
Transactions as the Required Lenders shall reasonably request. Each of
such opinions shall be addressed to the Administrative Agent and the
Lenders and shall be dated the Effective Date. The Borrower hereby
requests such counsel to deliver such opinions.
(c) The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel
may reasonably request relating to the organization, existence and good
standing of the Borrower, the authorization of the Transactions and any
other legal matters relating to this Agreement or the Transactions, all
in form and substance satisfactory to the Administrative Agent and its
counsel.
(d) The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by the President, a
Vice President or a Financial Officer of the Borrower, confirming
compliance with the conditions set forth in paragraphs (b) and (c) of
Section 4.02.
(e) The Administrative Agent shall have received all fees and
other amounts due and payable on or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the
Borrower hereunder.
(f) The Prior Agreement shall have been terminated and the
obligations of the Borrower and the Subsidiaries thereunder paid in
full.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans
hereunder shall not become effective unless each of the foregoing conditions is
satisfied (or waived) on or prior to August 31, 1996. The Administrative Agent
shall notify the Borrower and the Lenders of the Effective Date, and such notice
shall be conclusive and binding.
<PAGE> 39
35
SECTION 4.02. Each Credit Event. The obligation of each Lender
to make a Loan on the occasion of any Borrowing (but not on the occasion of any
interest election pursuant to Section 2.06 that does not increase the
outstanding principal amount of the Loans of any Lender), is subject to the
satisfaction of the following conditions:
(a) In the case of a Borrowing of Revolving Loans, the
Administrative Agent shall have received a Borrowing Request for such
Borrowing in accordance with Section 2.03; or, in the case of a
Borrowing of Competitive Loans, Borrower shall have accepted the
Competitive Bid or Bids in respect of such Loans in accordance with
Section 2.04.
(b) The representations and warranties of the Borrower set
forth in this Agreement shall be true and correct on and as of the date
of such Borrowing.
(c) At the time of and immediately after giving effect to such
Borrowing, no Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to matters specified in paragraphs (b) and
(c) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full the Borrower covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information.
The Borrower will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the
Borrower, its audited consolidated balance sheet and related statements
of earnings, stockholders' equity and cash flows as of the end of and
for such year, all reported on by Ernst & Young LLP or other
independent public accountants of recognized national standing (without
a "going concern" or like emphasis paragraph and without any
qualification or exception as to the scope of such audit) to the effect
that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries on a consolidated basis
in accordance with GAAP;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Borrower, its condensed
consolidated balance sheet and related statements of earnings and cash
flows as of the end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, all certified by one of its Financial
Officers as presenting fairly
<PAGE> 40
36
in all material respects the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP for interim financial
information and with the instructions to Form 10Q and Article 10 of
Regulation S-X (and accordingly, such statements will not include all
of the information and footnotes required by GAAP for complete
financial statements);
(c) concurrently with each delivery of financial statements
under clause (a) or (b) above, a certificate of a Financial Officer of
the Borrower (i) certifying as to whether a Default has occurred and,
if a Default has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto, (ii) setting
forth reasonably detailed calculations demonstrating compliance with
Sections 6.05 and 6.06 and (iii) stating whether any change in GAAP or
in the application thereof has occurred since the date of the most
recent audited financial statements referred to in Section 3.04 or
delivered pursuant to this Section 5.01 and, if any such change has
occurred, specifying the effect of such change on the financial
statements accompanying such certificate;
(d) concurrently with any delivery of financial statements
under clause (a) above, a certificate of the accounting firm that
reported on such financial statements stating whether, in connection
with their audit, anything came to their attention that caused them to
believe that the Borrower had failed to comply with the terms,
covenants, provisions or conditions of Sections 6.05 and 6.06;
(e) promptly after the same become publicly available, copies
of all annual and quarterly reports to shareholders, reports to the
Securities and Exchange Commission on Form 10-K, Form 10-Q, Form 8-K or
any successor form, proxy statements and registration statements (other
than those relating only to employee benefit plans) filed or
distributed by the Borrower or any Subsidiary; and
(f) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Borrower or any Subsidiary, or compliance with the
terms of this Agreement, as the Administrative Agent or any Lender may
reasonably request.
SECTION 5.02. Notices of Material Events. The Borrower will
furnish to the Administrative Agent prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against or affecting the Borrower or any Affiliate thereof that, if
adversely determined, could reasonably be expected to result in a
Material Adverse Effect;
<PAGE> 41
37
(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Borrower and its Subsidiaries in
an aggregate amount exceeding $10,000,000;
(d) the receipt of any notice from the FCC or any other
Governmental Authority 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 the Borrower or any
Subsidiary which is required to operate any television broadcasting
station in compliance with all applicable laws; and,
(e) any other development that has resulted in, or could
reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Existence; Conduct of Business. The Borrower
will, and will cause each Subsidiary to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business; provided that the foregoing shall not prohibit
any merger, consolidation, liquidation or dissolution permitted under Section
6.02.
SECTION 5.04. Payment of Obligations. The Borrower will, and
will cause each Subsidiary to, pay its Indebtedness and other obligations,
including tax liabilities, before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has
set aside on its books adequate reserves with respect thereto in accordance with
GAAP and (c) the failure to make payment pending such contest could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.05. Maintenance of Properties; Insurance. The
Borrower will, and will cause each Subsidiary to, (a) keep and maintain all
property material to the conduct of the business of the Borrower and its
Subsidiaries taken as a whole in good working order and condition, ordinary wear
and tear and obsolescence excepted, (b) keep and maintain all licenses, permits,
franchises and major network affiliation agreements (including those with
American Broadcasting Companies, Inc. ("ABC"), National Broadcasting Companies
("NBC") or the Columbia Broadcasting System, Inc. ("CBS") necessary for their
business except as the loss of the same 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 such major network to another shall
not be considered to have such an effect; and (b) maintain, with financially
sound and reputable
<PAGE> 42
38
insurance companies, insurance in such amounts and against such risks as are
customarily maintained by companies engaged in the same or similar businesses
operating in the same or similar locations.
SECTION 5.06. Books and Records; Inspection Rights. The
Borrower will, and will cause each Subsidiary to, keep proper books of record
and account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrower will, and
will cause each Subsidiary to, permit any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, to visit and
inspect its properties, to examine and make extracts from its books and records,
and to discuss its affairs, finances and condition with its officers and
independent accountants, all at reasonable times and as often as shall be
reasonably requested.
SECTION 5.07. Compliance with Laws. The Borrower will, and
will cause each Subsidiary to, comply with all laws (including Environmental
Laws), regulations and orders of any Governmental Authority applicable to it or
its property, except to the extent that failures to do so, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.08. Use of Proceeds. The Borrower will cause the
proceeds of the Loans to be used only for the purposes referred to in the
preamble to this Agreement. No part of the proceeds of any Loan will be used,
whether directly or indirectly, for any purpose that entails a violation of any
of the Regulations of the Board, including Regulations G, U and X.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full, the Borrower covenants and agrees with the Lenders that:
SECTION 6.01. Liens. The Borrower will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including accounts receivable) or rights in respect of
any thereof, except that the Borrower and the Subsidiaries may assign or sell
delinquent receivables and rights in respect thereof and may create, incur,
assume or permit to exist (a) Permitted Liens and (b) other Liens securing
obligations in an aggregate amount at any time not greater than $20,000,000.
SECTION 6.02. Fundamental Changes. (a) The Borrower will not
merge into or consolidate with any other Person, or permit any other Person to
merge into or consolidate with it, or sell, transfer, lease or otherwise dispose
of (in one transaction or in a series of transactions) all or substantially all
of its assets (whether now
<PAGE> 43
39
owned or hereafter acquired), or liquidate or dissolve, except that any
Subsidiary or other Person may merge into the Borrower if the Borrower is the
surviving corporation and at the time thereof and immediately after giving
effect thereto no Default shall have occurred and be continuing and the Borrower
shall be in compliance with the financial covenants contained in this Article VI
on a pro forma basis with such merger being deemed to have occurred at the
beginning of each relevant period.
(b) The Borrower will not, and will not permit any Subsidiary
to, engage to an extent material to the Borrower and the Subsidiaries on a
consolidated basis in any business other than businesses of the type conducted
by the Borrower and its Subsidiaries on the date hereof and businesses
reasonably related thereto.
SECTION 6.03. Transactions with Affiliates. The 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 the
Borrower or any Subsidiary) except in the ordinary course of business and upon
terms no less favorable to the Borrower or such Subsidiary than the Borrower or
such Subsidiary could obtain in a comparable arms-length transaction.
SECTION 6.04. Restrictive Agreements. The Borrower will not,
and will not permit any Subsidiary to, directly or indirectly, enter into, incur
or permit to exist any agreement or other arrangement that prohibits, restricts
or imposes any condition upon the ability of any Subsidiary to pay dividends or
other distributions with respect to any shares of its capital stock or to make
or repay loans or advances to the Borrower or any other Subsidiary or to
Guarantee Indebtedness of the Borrower or any other Subsidiary.
SECTION 6.05. Leverage. The Borrower will not permit (a) the
ratio of Funded Debt to Pro Forma Operating Cash Flow as of the end of and for
any period of four consecutive fiscal quarters ending after the Effective Date
to be greater than 5.5 to 1.0, (b) the ratio of Funded Debt (excluding
Subordinated Debt) to Pro Forma Operating Cash Flow as of the end of and for any
period of four consecutive fiscal quarters ending after the Effective Date to be
greater than 5.0 to 1.0 or (c) Funded Debt of Subsidiaries (other than Funded
Debt owed to the Borrower or any other Subsidiary) to constitute more than 10%
of the Funded Debt that would at any time be permitted to exist under clause (a)
of this Section 6.05.
SECTION 6.06. Interest Coverage. The Borrower will not permit
the ratio of Pro Forma Operating Cash Flow to Interest Expense for any period of
four consecutive fiscal quarters ending after the Effective Date to be less than
2.5 to 1.0.
<PAGE> 44
40
ARTICLE VII
Events of Default
If any of the following events ("Events of Default") shall
occur:
(a) any representation or warranty made or deemed made by or
on behalf of the Borrower or any Subsidiary in or in connection with
this Agreement, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with this
Agreement, shall prove to have been incorrect in any material respect
when so made or deemed made;
(b) the Borrower shall fail to pay any principal of any Loan
when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or otherwise;
(c) the Borrower shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause
(b) above) payable under this Agreement, when and as the same shall
become due and payable, and such failure shall continue unremedied for
a period of three Business Days;
(d) the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.02, Section
5.03 (with respect to the Borrower's existence) or in Article VI;
(e) the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in this Agreement (other
than those specified in clause (b), (c) or (d) above) and such failure
shall continue unremedied for a period of 30 days after notice thereof
from the Administrative Agent or any Lender to the Borrower;
(f) the Borrower or any Subsidiary shall fail to make any
payment of principal, regardless of amount, in respect of any Material
Indebtedness, when and as the same shall become due and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower or any
Subsidiary or its debts, or of a substantial part of the property or
assets of the Borrower or a Subsidiary, under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other
Federal, state or foreign bankruptcy, insolvency, receivership or
similar law or (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any
<PAGE> 45
41
Subsidiary or for a substantial part of the property or assets of the
Borrower or any Subsidiary; and such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered;
(i) the Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under Title 11 of the United States
Code, as now constituted or hereafter amended, or any other Federal,
state or foreign bankruptcy, insolvency, receivership or similar law,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (h)
above, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for
the Borrower or any Subsidiary or for a substantial part of the
property or assets of the Borrower or any Subsidiary, (iv) file an
answer admitting the material allegations of a petition filed against
it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of
effecting any of the foregoing;
(j) one or more judgments for the payment of money in an
amount in excess of $15,000,000 individually or $30,000,000 in the
aggregate shall be rendered against the Borrower, any Subsidiary or any
combination thereof and the same shall (i) not be covered by insurance
and (ii) remain undischarged for a period of 30 consecutive days during
which execution shall not be effectively stayed, or any action shall be
legally taken by a judgment creditor to attach or levy upon any
property or assets of the Borrower or any Subsidiary to enforce any
such judgment;
(k) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to result in a
Material Adverse Effect;
(l) any main transmitter license, permit or authorization
issued to the Borrower or any Subsidiary by the FCC shall be forfeited,
revoked or not renewed, or any proceeding with respect to any such
forfeiture or revocation shall be instituted by the FCC, where such
forfeiture, revocation or non-renewal or such proceeding, as the case
may be, shall be reasonably likely to result in a Material Adverse
Effect;
(m) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) above), and at any time thereafter during the
continuance of such event, the Administrative Agent, at the request of the
Required Lenders shall, by notice to the Borrower, take either or both of the
following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which
<PAGE> 46
42
case any principal not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other liabilities of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower; and in any event with
respect to the Borrower described in clause (h) or (i) above, the Commitments
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other liabilities of the
Borrower accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
ARTICLE VIII
The Agents
Each of the Lenders hereby irrevocably appoints the Agents as
its agents and authorizes the Agents to take such actions on its behalf and to
exercise such powers as are delegated to the Agents by the terms hereof,
together with such actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agent, and
such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if it were not the Administrative Agent hereunder.
The Agents shall not have any duties or obligations except
those expressly set forth herein. Without limiting the generality of the
foregoing (a) the Agents shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing, and (b)
the Agents shall not have any duty to take any discretionary action or exercise
any discretionary powers permitted hereunder unless requested to do so in
writing by the Required Lenders. No Agent shall be liable for any action taken
or not taken by it with the consent or at the request of the Required Lenders or
in the absence of its own gross negligence or wilful misconduct. In addition,
the Agents shall not be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection with
this Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Agents.
<PAGE> 47
43
The Agents shall be entitled to rely upon, and shall not incur
any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Agents also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon. Each of the Agents may consult with legal counsel (who may be counsel
for the Borrower), independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.
Each of the Agents may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by such Agent. The Administrative Agent, the CAF Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through Affiliates or its or its Affiliates' employees. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent, to the
Affiliates of the Administrative Agent, the CAF Agent and any such sub-agent and
to the directors, officers, employees, agents and advisors of the Administrative
Agent, the CAF Agent, any such sub-agent and their respective Affiliates.
Subject to the appointment and acceptance of a successor Agent
as provided below, either Agent may resign at any time by notifying the Lenders
and the Borrower. Upon any such resignation, the Required Lenders, with the
consent of the Borrower (which shall not be unreasonably withheld) shall have
the right to appoint a successor Agent. If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Agent gives notice of its resignation, then
the retiring Agent may, with the consent of the Borrower (which shall not be
unreasonably withheld), on behalf of the Lenders, appoint a successor Agent
which shall be a bank with an office in Dallas or The City of New York, having a
combined capital and surplus of at least $500,000,000 or an Affiliate of any
such bank. Upon the acceptance of its appointment as Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After the
Agent's resignation hereunder, the provisions of this Article and Section 9.03
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.
Each Lender agrees (a) to reimburse the Agents, on demand, in
the amount of its pro rata share at the time reimbursement is sought (based on
its Commitment hereunder or, if the Commitments shall have expired or
terminated, based on its portion of the total Revolving Credit Exposures and
outstanding Competitive Loans) of any expenses incurred for the benefit of the
Lenders by the Agent, including counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Lenders, that shall not
have been reimbursed by the Borrower and (b) to indemnify and hold harmless each
of the Agents and any of its directors, officers, employees or
<PAGE> 48
44
agents, on demand, in the amount of such pro rata share, from and against any
and all liabilities, taxes, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by or asserted against it in its
capacity as Agent or any of them in any way relating to or arising out of this
Agreement or any action taken or omitted by it or any of them under this
Agreement, to the extent the same shall not have been reimbursed by the
Borrower, provided that no Lender shall be liable to any Agent or any such other
indemnified person for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
that are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of such Agent or any of its directors, officers, employees or agents.
Each Lender acknowledges that it has, independently and
without reliance upon the Agents or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agents or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any related agreement or any document
furnished hereunder or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at 400 South Record Street,
Dallas, TX 75202, Attention of the Chief Financial Officer (Telecopy
No. 214-977-8209) with a copy to the General Counsel;
(b) if to the Administrative Agent, to the attention of Loan
Syndication Services/Gale Manning (Telecopy No. 713-750-3810), with a
copy to Texas Commerce Bank National Association, at Dallas, TX,
Attention of Kevin Kelty (Telecopy No. 214-965-2997);
(c) if to the CAF Agent, to it at Loan and Agency Service
Group, at 140 East 45th Street, New York, New York 10017, Attention of
Chris Consomer (Telecopy No. 212-622-1308);
(d) if to a Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
<PAGE> 49
45
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt if
delivered by hand or overnight courier service or sent by telecopy or on the
date five Business Days after dispatch by certified or registered mail if
mailed, except that notices and communications to the Agents pursuant to Article
II shall be deemed to have been given only when received by the Agents.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by
the Administrative Agent, the CAF Agent or any Lender in exercising any right or
power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the CAF Agent and the Lenders
hereunder are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Required Lenders or by the Borrower
and the Administrative Agent with the consent of the Required Lenders; provided
that no such agreement shall (i) increase or decrease the Commitment of any
Lender (except for a ratable decrease in the Commitments of all the Lenders),
without the written consent of such Lender, (ii) reduce the principal amount of
any Loan or reduce the rate of interest thereon, or reduce any fees payable
hereunder, without the written consent of each Lender affected thereby, (iii)
postpone the scheduled date of payment of the principal amount of any Loan, or
any interest thereon, or any fees payable hereunder, or reduce the amount of,
waive or excuse any such payment, or postpone the scheduled date of expiration
of any Commitment, without the written consent of each Lender affected thereby,
or (iv) change any of the provisions of this Section or the definition of
"Required Lenders" or any other provision hereof specifying the number or
percentage of Lenders required in order to waive, amend or modify any rights
hereunder or grant any consent hereunder, without the written consent of each
Lender; provided further that no such agreement shall amend, modify or
otherwise affect the rights or duties of the Administrative Agent, hereunder
without the prior written consent of the Administrative Agent.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The
Borrower agrees to pay (i) all reasonable out-of-pocket expenses incurred by
any Agent and its Affiliates, including the reasonable fees, charges and
disbursements of Cravath, Swaine & Moore, counsel for the Agents, in connection
with the syndication of the credit facilities provided for herein, the
preparation and administration of this Agreement or any admendments,
modifications or
<PAGE> 50
46
waivers of the provisions hereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket
expenses incurred by the Agents or any Lender, including the reasonable fees,
charges and disbursements of any counsel for the Agents or any Lender, in
connection with the enforcement or protection of its rights in connection with
this Agreement.
(b) The Borrower agrees to indemnify each of the Agents and
each Lender, each Affiliate of any of them and each of the respective
directors, officers, employees, agents and advisors of the foregoing (each such
Person being called an "Indemnitee") against, and to hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance
by the parties hereto of their respective obligations hereunder or the
consummation of the Transactions or any other transactions contemplated hereby,
(ii) any Loan or the use of the proceeds thereof, (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property owned or
operated by the Borrower or any of its Subsidiaries, or any Environmental
Liability related in any way to the Borrower or any of its Subsidiaries, or
(iv) any claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee (BUT
SHALL BE AVAILABLE TO THE EXTENT THEY ARE DETERMINED TO HAVE RESULTED FROM, IN
WHOLE OR IN PART PART, THE SIMPLE NEGLIGENCE OF SUCH INDEMNITEE).
(c) To the extent permitted by applicable law, the Borrower
agrees not to assert, and hereby waives, any claim against any Indemnitee, on
any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, the Transactions, any Loan or the use of the proceeds
thereof.
(d) All amounts due under this Section shall be payable no
later than 10 days after written demand therefor.
SECTION 9.04. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except that
the Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrower without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto and their
respective successors and assigns permitted hereby) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
<PAGE> 51
47
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that
(i) except in the case of an assignment to a Lender or an Affiliate of a Lender,
each of the Borrower (and, except in the case of an assignment limited to rights
in respect of an outstanding Competitive Loan, the Administrative Agent) must
give their prior written consent to such assignment (which consent shall not be
unreasonably withheld), (ii) except in the case of an assignment to a Lender or
an Affiliate of a Lender or an assignment of the entire remaining amount of the
assigning Lender's Commitment, the amount of the Commitment of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $25,000,000 (or such lesser amount
as shall be approved by the Borrower, such approval not to be unreasonably
withheld), (iii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement, except that this clause shall not apply to rights in respect of
outstanding Competitive Loans, (iv) the Lenders party to each such assignment
shall execute and deliver to the Administrative Agent an Assignment and
Acceptance, together with a processing and recordation fee of $3,500, and (v)
the assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an Administrative Questionnaire. Upon acceptance and recording pursuant to
paragraph (d) of this Section, 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, the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.13, 2.14, 2.15 and 9.03).
(c) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices in The City of New
York a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, and the Borrower, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation
<PAGE> 52
48
fee referred to in paragraph (b) above and any written consent to such
assignment required by paragraph (b) above, the Administrative Agent shall (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Lenders. No
assignment shall be effective unless it has been recorded in the Register as
provided in this paragraph (d).
(e) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
("Participants") in all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans owing to
it); provided that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrower,
the 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. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right
to enforce this Agreement and to approve any amendment, modification or waiver
of any provision of this Agreement; provided that such agreement or instrument
may provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver described in the first proviso to
Section 9.02(b) that affects such Participant. Subject to paragraph (f) below,
the Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.13, 2.14 and 2.15 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
In connection with any sale of a participation pursuant to this paragraph, the
selling Lender shall obtain from the Participant an undertaking to be bound by
the provisions of Section 9.12. Any assignment or transfer by a Lender of rights
or obligations under this Agreement that does not comply with paragraph (b)
above shall be treated for purposes of this Agreement as a sale by such Lender
of a participation in such rights and obligations in accordance with this
paragraph.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.13 or 2.15 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.15 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
2.15(e) as though it were a Lender.
(g) Any Lender may at any time assign all or any portion of
its rights under this Agreement to a Federal Reserve Bank to secure extensions
of credit by such Federal Reserve Bank to such Lender; provided that no such
assignment shall release a Lender from any of its obligations hereunder or
substitute any such Federal Reserve Bank for such Lender as a party hereto.
<PAGE> 53
49
SECTION 9.05. Survival. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the Lenders and
shall survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by the Lenders or on their behalf
and notwithstanding that the Administrative Agent or any Lender may have had
notice or knowledge of any Default or incorrect representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
fee or any other amount payable under this Agreement is outstanding and unpaid
and so long as the Commitments have not expired or terminated. The provisions of
Sections 2.13, 2.14, 2.15 and 9.03 shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby,
the repayment of the Loans or the termination of the Commitments, this Agreement
or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
any separate letter agreements with respect to fees payable to the Agents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in Section
4.01, this Agreement shall become effective when it shall have been executed by
the Agents and when the Agents shall have received counterparts hereof which,
when taken together, bear the signatures of each of the other parties hereto,
and thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although
<PAGE> 54
50
such obligations may be unmatured. The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service
of Process. (a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
(b) The Borrower hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative Agent,
the CAF Agent or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement against the Borrower or its properties in the courts
of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement in any court
referred to in paragraph (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the
<PAGE> 55
51
construction of, or be taken into consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Agents and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (g) with the consent of the Borrower
or (h) to the extent such Information (i) becomes publicly available other than
as a result of a breach of this Section or (ii) becomes available to the
Administrative Agent, or any Lender on a nonconfidential basis from a source
other than the Borrower. For the purposes of this Section, "Information" means
all information received from the Borrower relating to the Borrower or its
business, other than any such information that is available to the Agents or any
Lender on a nonconfidential basis prior to disclosure by the Borrower; provided
that, in the case of information received from the Borrower after the date
hereof (other than information obtained by any Lender in the course of examining
the books or records of the Borrower or any Subsidiary as permitted by Section
5.06) such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information.
SECTION 9.13. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above
<PAGE> 56
the Maximum Rate therefor) until such cumulated amount, together with interest
thereon at the Federal Funds Effective Rate to the date of repayment, shall have
been received by such Lender.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
A. H. BELO CORPORATION,
by /s/ Dunia A. Shive
-------------------------------
Name: Dunia A. Shive
Title: Vice President/Finance
TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, individually and as
Administrative Agent,
by
/s/ Kevin Kelty
-------------------------------
Name: Kevin Kelty
Title: Senior Vice President
THE CHASE MANHATTAN BANK,
individually and as CAF Agent,
by
/s/ Janet M. Belden
-------------------------------
Name: Janet M. Belden
Title: Vice President
BANK OF AMERICA NT & SA,
by
/s/ Mathew J. Koenig
-------------------------------
Name: Mathew J. Koenig
Title: Vice President
BANK OF TOKYO-MITSUBISHI, LTD.
by
/s/ J. Beckwith
-------------------------------
Name: J. Beckwith
Title: Vice President
<PAGE> 57
NATIONSBANK OF TEXAS, N.A.
by
/s/ Todd Shipley
-------------------------------
Name: Todd Shipley
Title: Senior Vice President
SOCIETE GENERALE,
by
/s/ Christopher J. Speltz
-------------------------------
Name: Christopher J. Speltz
Title: Vice President
THE FUJI BANK, LIMITED,
by
/s/ David Kelley
-------------------------------
Name: David Kelley
Title: Senior Vice President
WELLS FARGO BANK (TEXAS), N.A.,
by
/s/ Ken Taylor
-------------------------------
Name: Ken Taylor
Title: Assistant Vice
President
WACHOVIA BANK OF GEORGIA, N.A.,
by
/s/ Joel K. Wood
-------------------------------
Name: Joel K. Wood
Title: Vice President
THE TOYO TRUST & BANKING CO., LTD.,
by
/s/ Hiroyuki Fukuro
-------------------------------
Name: Hiroyuki Fukuro
Title: Vice President
THE SAKURA BANK, LIMITED, HOUSTON
AGENCY
by
/s/ Toshihiko Shimizu
-------------------------------
Name: Toshihiko Shimizu
Title: Joint General Manager
<PAGE> 58
MELLON BANK, N.A.,
by
/s/ Stephen R. Viehe
-------------------------------
Name: Stephen R. Viehe
Title: Vice President
BANQUE NATIONALE DE PARIS,
by
/s/ Henry F. Setina
-------------------------------
Name: Henry F. Setina
Title: Vice President
THE TOKAI BANK, LIMITED,
by
/s/ Stuart M. Schulman
-------------------------------
Name: Stuart m. Schulman
Title: Senior Vice President
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA,
by
/s/ Jim F. Redman
-------------------------------
Name: Jim F. Redman
Title: Senior Vice President
THE SANWA BANK LIMITED, DALLAS AGENCY
by
/s/ Robert S. Smith
-------------------------------
Name: Robert S. Smith
Title: Vice President
THE NORTHERN TRUST COMPANY,
by
/s/ Martin G. Alston
-------------------------------
Name: Martin G. Alston
Title: Vice President
HIBERNIA NATIONAL BANK,
by
/s/ Troy J. Villafarra
-------------------------------
Name: Troy J. Villafarra
Title: Vice President
<PAGE> 59
CREDIT LYONNAIS NEW YORK BRANCH
by
/s/ Robert Ivosevich
-------------------------------
Name: Robert Ivosevich
Title: Senior Vice President
<PAGE> 60
EXHIBIT A
[Form of]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of July 31,
1996 (the "Credit Agreement"), among A.H. Belo Corporation, a Delaware
corporation (the "Borrower"), the lenders listed on Schedule 2.01 thereto (the
"Lenders"), Texas Commerce Bank National Association, as administrative agent
for the Lenders (in such capacity, the "Administrative Agent") and The Chase
Manhattan Bank, as Competitive Advance Facility Agent (the "CAF Agent"). Terms
defined in the Credit Agreement are used herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to
the Assignee, and the Assignee hereby purchases and assumes, without recourse,
from the Assignor, effective as of the Effective Date set forth below (but not
prior to the registration of the information contained herein in the Register
pursuant to Section 9.04(c) of the Credit Agreement), the interests set forth
below (the "Assigned Interest") in the Assignor's rights and obligations under
the Credit Agreement, including, without limitation, the amounts and percentages
set forth below of (i) the Commitment of the Assignor on the Effective Date and
(ii) the Loans owing to the Assignor which are outstanding on the Effective
Date. Each of the Assignor and the Assignee hereby makes and agrees to be bound
by all the representations, warranties and agreements set forth in Section
9.04(b) of the Credit Agreement, a copy of which has been received by each such
party. From and after the Effective Date (i) the Assignee shall be a party to
and be bound by the provisions of the Credit Agreement and, to the extent of the
interests assigned by this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and under the Loan Documents and (ii) the
Assignor shall, to the extent of the interests assigned by this Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Credit Agreement.
2. This Assignment and Acceptance is being delivered to the
Administrative Agent together with (i) if the Assignee is organized under the
laws of a jurisdiction outside the United States, the forms specified in Section
2.15(e) of the Credit Agreement, duly completed and executed by such Assignee,
(ii) if the Assignee is not already a Lender under the Credit Agreement, an
Administrative Questionnaire in the form supplied by the Administrative Agent
and (iii) a processing and recordation fee of $3,500.
3. This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
Date of Assignment:
<PAGE> 61
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective date of Assignment (may not be fewer than 5 Business Days after the
Date of Assignment):
<TABLE>
<CAPTION>
=================================================================================================
Percentage Assigned of
Applicable
Facility/Commitment
(set forth, to at
least 8 decimals, as a
percentage of the
Facility and the
(Principal Amount Assigned and aggregate Commitments
Identifying Information as to of all Lenders
Facility/Commitment individual Competitive Loans thereunder)
- ------------------- ------------------------------ -----------------------
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
Revolving Credit $ %
- -------------------------------------------------------------------------------------------------
Competitive Loans $ %
=================================================================================================
</TABLE>
The terms set forth above are
hereby agreed to: Accepted */
, as Assignor TEXAS COMMERCE BANK NATIONAL
- ------------------- ASSOCIATION,
as Administrative Agent
by: by:
---------------------------- -----------------------
Name: Name:
Title: Title:
, as Assignee
- -------------------
by:
------------------------------
Name:
Title:
<PAGE> 62
EXHIBIT B-1
[Letterhead of]
A. H. BELO CORPORATION
July 31, 1996
Texas Commerce Bank National Association
as Administrative Agent
2200 Ross Avenue
Dallas, Texas 75201
Chase Securities Inc.,
as Arranger
270 Park Avenue
New York, NY 10017
The Lenders from time to time party to the Credit Agreement referred to below
(all of the Addressees, collectively, the "Creditors")
Dear Ladies and Gentlemen:
I have acted as General Counsel to A.H. Belo Corporation, a
Delaware corporation (the "Borrower"), in connection with the execution and
delivery today of, and the consummation of the transactions contemplated by, the
Credit Agreement dated as of July 31, 1996, (the "Credit Agreement"), among the
Borrower, the financial institutions party thereto as lenders (the "Lenders"),
Texas Commerce Bank National Association, as administrative agent (in such
capacity, the "Administrative Agent") and The Chase Manhattan Bank, as
Competitive Advance Facility Agent (the "CAF Agent"), Bank of America National
Trust and Savings Association and Bank of Tokyo-Mitsubishi, Ltd., as
Co-Syndication Agents, NationsBank, as Documentation Agent and Societe Generale
and the Fuji Bank, Limited as Co-Agents and any promissory notes ("Notes")
delivered in connection with the Credit Agreement. This opinion is delivered
pursuant to Section 4.01(b)of the Credit Agreement. Capitalized terms used but
not defined herein shall have the meanings assigned to such terms in the Credit
Agreement.
In connection with this opinion, I have examined originals or
copies, certified or otherwise identified to our satisfaction, of the Credit
Agreement and such other records, agreements, instruments and other documents,
and have made such other investigations, as I have deemed necessary for the
purpose of this opinion.
Based upon the foregoing, it is my opinion that:
1. The Borrower and each Subsidiary (a) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has all requisite corporate power and
authority to own its property and assets and to carry on its business as now
conducted and as proposed to be conducted, (c) is qualified to do business and
is in good standing in each jurisdiction where such qualification is required,
except where the failure so to qualify could not reasonably be expected to
result in a Material Adverse Effect, and (d) in the case of the Borrower, has
the corporate power and
<PAGE> 63
authority to execute, deliver and perform its obligations under the Credit
Agreement and to borrow thereunder.
2. The execution, delivery and performance of the Credit
Agreement by the Borrower and the borrowings thereunder (a) have been duly
authorized by all requisite corporate and, if necessary, stockholder action of
the Borrower and each Subsidiary and (b) will not (i) violate (A) any provision
of the certificate of incorporation or by laws of the Borrower or any
Subsidiary, (B) to my knowledge after reasonable inquiry any law, statute, rule
or regulation or any order of any Governmental Authority applicable to the
Borrower or any Subsidiary or their properties or (C) any provision of any
indenture or other material agreement or other material instrument to which the
Borrower or any Subsidiary is a party or by which any of them or any of their
property is or may be bound, (ii) be in conflict with, result in a breach of or
constitute (along or with notice or lapse of time or both) a default under, or
give rise to any right to accelerate or to require the prepayment, repurchase or
redemption of any obligation under any such indenture, agreement or other
instrument or (iii) result in the creating or imposition of any Lien upon or
with respect to any property or assets now owned or hereafter acquired by the
Borrower or any Subsidiary.
3. If, contrary to the intent of the parties, the Credit
Agreement were held to be governed by the laws of the State of Texas, the Credit
Agreement would nevertheless constitute a valid and binding agreement of the
Borrower, enforceable in accordance with its terms, except (a) enforcement of
the indemnification and exculpatory provisions of the Credit Agreement may be
limited by applicable securities laws and other laws and public policies, (b)
enforcement of the Credit Agreement may be limited by Debtor Relief Laws and is
subject to equitable principles, and (c) certain provisions of the Credit
Agreement may be limited by, modified or unenforceable under applicable state
and federal laws, regulations, rulings and decisions in addition to those
referenced herein, if any; however, such limitation, modification or
unenforceability should not in our opinion materially diminish or substantially
interfere with the practical realization of benefits intended to be afforded by
the Credit Agreement except for the economic consequences of any procedural
delay which may result therefrom.
4. No action, consent or approval of, registration or filing
with or any other action by any Governmental Authority is or will be required in
connection with the execution, delivery and performance of the Loan Documents by
the Borrower party thereto or the consummation of the transactions contemplated
thereby, other than routine filings with the SEC and FCC or required of public
companies and FCC licensees and such authorizations and approvals as have
already been obtained and are in full force and effect.
5. There are not any actions, suits or proceedings at law or
in equity or by or before any Governmental Authority now pending or, to our
knowledge, threatened against or affecting the Borrower or any Subsidiary or any
business, property or rights of any such person (i) that involve the Credit
Agreement or the transactions contemplated thereby or (ii) as to which there is
a reasonable possibility of an adverse determination and that, if adversely
determined, could
<PAGE> 64
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect.
6. All shares of capital stock of each Subsidiary have been
duly and validly authorized and issued, are fully paid and non-assessable and,
except as set forth on Schedule 6.01 to the Credit Agreement, are owned by the
Borrower, directly or indirectly, free and clear of all Liens. No authorized but
unissued or treasury shares of capital stock of any Subsidiary are subject to
any option, warrant, right to call or commitment of any kind. Other than the
ongoing stock repurchase program of the Borrower, neither the Borrower nor any
Subsidiary is subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or retire any shares of its capital stock or any securities
convertible into or for shares of its capital stock. Neither the Borrower nor
any Subsidiary is a party to any agreement restricting the transfer or voting of
any shares of any capital stock of any Subsidiary.
7. Neither the Borrower nor any of the Subsidiaries is an
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940.
8. Neither the Borrower nor any of the Subsidiaries is a
"holding company" or a "subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935.
9. The making of the Loans to the Borrower and the application
of the proceeds thereof by the Borrower pursuant to the terms of the Credit
Agreement will not violate Regulation G, T, U or X of the Board of Governors of
the Federal Reserve System.
I am admitted to practice in the State of Texas. I express no
opinion as to matters under or involving the laws of any jurisdiction other than
the laws of the State of Texas, the General Corporation Law of the State of
Delaware and the Federal Laws of the United States.
This opinion may be relied upon by each of you, by any
successors and assigns of the Administrative Agent, and any participant,
assignee or successor to the interests of the Lenders under the Credit
Agreement.
Very truly yours,
/s/ Michael J. McCarthy
<PAGE> 65
EXHIBIT B-2
[Letterhead of]
LOCKE PURNELL RAIN HARRELL
July 31, 1996
Texas Commerce Bank National Association
as Administrative Agent
2200 Ross Avenue
Dallas, Texas 75201
Chase Securities Inc.,
as Arranger
270 Park Avenue
New York, NY 10017
The Lenders from time to time party to the Credit Agreement referred to below
(all of the Addressees, collectively, the "Creditors")
Dear Ladies and Gentlemen:
This opinion is being delivered to you pursuant to Section
4.01(b) of that certain $1,000,000,000 Credit Agreement dated as of July 31,
1996 (the "Credit Agreement") among A.H. Belo Corporation, a Delaware
corporation ("Borrower"), the financial institutions who are parties thereto as
Lenders, Texas Commerce Bank National Association ("TCB"), as Administrative
Agent and the Chase Manhattan Bank ("Chase"), as Competitive Advance Facility
Agent, Bank of America National Trust and Savings Association and Bank of
Tokyo-Mitsubishi, Ltd., as Co-Syndication Agents, NationsBank ("NationsBank"),
as Documentation Agent and Societe Generale and The Fuji Bank, Limited as
Co-Agents. Terms which are defined in the Credit Agreement and which are used
but not defined herein shall have the meanings given them in the Credit
Agreement. We have acted as counsel for Borrower in connection with the
transactions provided for in the Credit Agreement. Please be advised that we are
engaged by Borrower and/or its Subsidiaries from time to time to assist with
selected matters and do not serve as general counsel to any of such entities.
Also, please be advised that we are engaged by TCB, Chase, NationsBank and
certain other Lenders (or affiliates of TCB, Chase and such other Lenders) from
time to time to assist in selected matters unrelated to the Credit Agreement.
For purposes of this opinion, we have examined originals or
copies of the Credit Agreement and the promissory notes evidencing the Loans
(referred to herein individually as a "Principal Loan Document" and collectively
as the "Principal Loan Documents") and such corporate records of Borrower and
such other documents and matters of law which we have considered necessary for
such purposes. In connection with our examination, we have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents submitted
to us as copies, and the authenticity of the originals of such copies. As to
<PAGE> 66
matters of fact material to this opinion, we have relied, without any
independent investigation or verification upon the accuracy of the
representations, warranties and other statements of fact made in or pursuant to
the Principal Loan Documents.
In rendering the opinions expressed below, we have assumed the
accuracy and validity of the opinions of Borrower's General Counsel expressed to
you by letter of even date herewith, and to the extent relevant to our opinions,
have relied upon such opinions without independent investigation or
verification. Furthermore, we have assumed, with respect to the Credit
Agreement, that:
(i) such documents have been duly authorized by, have
been duly executed and delivered by, and constitute
legal, valid, binding and enforceable obligations of,
all of the parties to such documents (other than
Borrower);
(ii) all signatories to such documents (other than on
behalf of Borrower) have been duly authorized;
(iii) all of the parties to such documents (other than
Borrower) are duly organized and validly existing and
have the power and authority (corporate or other) to
execute, deliver and perform such documents;
(iv) no course of dealing, custom or practice between
Borrower and any Agent or Lender shall supersede any
provision thereof.
The opinions expressed herein are limited to the laws of the
State of Texas and federal laws of the United States except that we express no
opinion with respect to, and have not taken into account the effect of, (i) the
Communications Act of 1934, as amended, the Telecommunications Act of 1966, as
amended, the rules, regulations and policies of the FCC or (ii) applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
transfer or other similar laws relating to or affecting the rights of creditors
or the obligations of debtors generally ("Debtor Relief Laws"). We call your
attention to the fact that the Principal Loan Documents (to the extent provided
therein) provides that it is to be governed by and construed in accordance with
the laws of the State of New York, as to which we have made no independent
examination and express no opinion. With your permission we have assumed that
the laws of the State of New York relevant to the matters addressed in our
opinion are identical to the laws of the State of Texas.
Based upon the foregoing, having due regard for the legal
considerations we deem relevant and subject to the qualifications, assumptions
and exceptions herein set forth, we are of the opinion that the Principal Loan
Documents have been duly executed and delivered by the Borrower and constitute
legal, valid and binding obligations of the Borrower and are enforceable against
the Borrower in accordance with their terms, except (a) enforcement of the
indemnification and exculpatory provisions of the Principal Loan Documents may
be limited by applicable securities laws and other laws and public policies, (b)
enforcement of the Principal Loan Documents may be limited by Debtor Relief Laws
and is subject to equitable principles, and (c) certain
<PAGE> 67
provisions of the Principal Loan Documents may be limited by, modified or
unenforceable under applicable state and federal laws, regulations, rulings and
decisions in addition to those referenced herein, if any; however, such
limitation, modification or unenforceability should not in our opinion
materially diminish or substantially interfere with the practical realization of
benefits intended to be afforded by the Principal Loan Documents except for the
economic consequences of any procedural delay which may result therefrom.
In rendering the opinions expressed herein, we have assumed
that (a) every provision of the Principal Loan Documents limiting the rate and
amount of interest changed thereunder to the maximum amount permitted by
applicable law has been and will continue to be complied with and that each and
every usury savings clause contained in the Principal Loan Documents has been
and will continue to be complied with; (b) no other fees, sums, or benefits,
whether direct or indirect, have been charged, paid, or received or are, or may
be payable to or chargeable or receivable to any Agent or Lender except as
expressly mentioned in the Principal Loan Documents, the Commitment Letter and
the fee letter referred to therein; (c) any fees or charges which have been or
may be paid to any Agent or any Lender or to any other party are, or will be,
for services actually rendered, and that such fees and charges will not exceed
just and reasonable compensation for such services rendered; and (d) any fees
paid or to be paid by the Borrower to any Agent or any Lender and denominated
"commitment fees" or the like are in fact commitment fees and not sums paid for
the use, forbearance or detention of money.
The opinions herein expressed are solely for your benefit in
connection with the transactions contemplated by the Credit Agreement, and no
one else is entitled to rely hereon without our written consent. No person is
entitled to rely hereon to the extent such person or its counsel shall have any
knowledge why any opinion expressed herein is not accurate in any material
respect. We hereby disclaim any obligation to advise you of any changes in fact
or law which might affect the opinions expressed herein.
Sincerely,
LOCKE PURNELL RAIN HARRELL
(A Professional Corporation)
By: /s/ Guy Kerr
Guy Kerr
<PAGE> 68
EXHIBIT B-3
[Form of Opinion of Wiley, Rein & Fielding-
FCC Counsel for Borrower]
July 31, 1996
Texas Commerce Bank National Association
as Administrative Agent
2200 Ross Avenue
Dallas, TX 75201
Chase Securities, Inc.
as Arranger
270 Park Avenue
New York, NY 10017
The Lenders from time to time party to the Credit Agreement referred to below
(all of the Addressees, collectively, the "Creditors")
Dear Ladies and Gentlemen:
We have acted as special communications counsel to A.H. Belo
Corporation, a Delaware Corporation (the "Borrower"), in connection with the
execution and delivery today of, and the consummation of the transactions
contemplated by, the Credit Agreement dated as of July 31, 1996, (the "Credit
Agreement"), among the Borrower, the financial institutions party thereto as
lenders (the "Lenders") and Texas Commerce Bank National Association, as
administrative agent (in such capacity, the "Administrative Agent"). This
opinion is delivered pursuant to Section 4.01(b) of the Credit Agreement.
Capitalized terms used but not defined herein shall have the meanings assigned
to such terms in the Credit Agreement.
In rendering this opinion, we have examined the Credit Agreement and
such other documents and instruments and such questions of law as we have deemed
necessary for the purpose of rendering the opinion set forth herein.
Additionally, we have relied upon the representations made by the Borrower in
the Credit Agreement, upon the statements of officers and representatives of the
Borrower, and upon records relating to the Borrower and the television broadcast
stations owned and operated by the Borrower and its several Subsidiaries (the
"Stations") that are routinely available for public inspection at the Federal
Communications Commission ("FCC"). We have assumed the genuineness of all
signatures on all original documents, the conformity to original documents of
all copies submitted to us, and the full authorization, execution, and delivery
of all documents by parties responsible therefor. We also have assumed that the
documents and instruments described or referred to herein fully express the
agreements of any party thereto. Finally, we have assumed the completeness of
the public files relating to the
<PAGE> 69
Borrower, its Subsidiaries, and the Stations maintained by the FCC and the
accuracy and authenticity of all documents contained therein.
Whenever our opinion herein with respect to the existence (or absence)
of facts is qualified by the phrase "to the best of our knowledge," it is
intended to indicate that, during the course of our representation of the
Borrower, no information has come to our attention which would give us actual
knowledge of the existence (or absence) of such facts. We have undertaken no on
site inspection whatsoever of any of the Stations and, except as otherwise
specifically stated herein, we have not undertaken any independent investigation
to determine the existence or absence of such facts, and no inference as to our
knowledge of the existence (or absence) of such facts should be drawn from the
fact of our representation of the Borrower.
We are admitted to practice law in the District of Columbia. We address
herein only matters within the jurisdiction of the FCC under the Communications
Act of 1934, as amended, and the rules, regulations and published orders of the
FCC (Collectively, the "Communications Laws") applicable to the Stations. We
express no opinion as to matters arising under or involving any other laws.
Based upon the subject to the foregoing, it is our opinion that:
1. The Borrower or its Subsidiaries are the respective holders of the
licenses, permits, and authorizations issued by the FCC listed in Attachment A
hereto (the "FCC Licenses"). The FCC Licenses are in full force and effect for
the terms specified in Attachment A and, where applicable, timely renewal
applications have been filed with the FCC with respect to such FCC Licenses. The
FCC Licenses are not subject to any condition, restriction or limitation
materially adverse to the Borrower or the Stations except for conditions,
restrictions or limitations that appear on the faces of the FCC Licenses or that
are set forth in the rules, regulations or policies of the FCC that are
applicable generally to stations of the types, nature, classes, or locations of
the Stations.
2. To the best of our knowledge, no judgment, decree, order or notice
has been issued by the FCC which permits, or after notice or lapse of time or
both, would permit, revocation, nonrenewal, or termination of any of the FCC
Licenses prior to the respective expiration dates thereof, or which results or
would result in any other material impairment of any rights thereunder.
3. Neither the execution and delivery by the Borrower of the Credit
Agreement nor the fulfillment of or compliance with any of the provisions
thereof will (a) result in a violation of the Communications Laws, or (b)
require any authorization, consent, approval, exemption or other action by, or
any notice or filing with, the FCC pursuant to the Communications Laws (other
than routine filings after the date of this opinion with the FCC under Section
73.3613(b)(5) of the FCC's Rules and Regulations).
4. Other than as set forth in Attachment A and except as to any other
matters relating to the television broadcast industry in general, to the best of
our knowledge, no proceeding, claim, lawsuit, investigation or other action is
(a) currently pending before the FCC or
<PAGE> 70
(b) threatened in writing and received by any 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.
This opinion is being furnished to you subject to the qualifications
and limitations expressed herein, and has been prepared solely for your
information in connection with the transactions contemplated under the Credit
Agreement. This opinion may not be quoted in whole or in part or otherwise
referred to, or furnished to any governmental agency or other entity or person,
without our written consent. It may not be used or replied upon by any other
person or entity without our written consent, and may be relied upon by you only
with respect to the specific matters which are the subject hereof. The opinions
expressed herein are as of the date hereof, and we specifically disclaim any
obligation to advise you of any changes in the matters addressed in the
foregoing opinion occurring after such date.
Very truly yours,
/s/
WILEY, REIN & FIELDING
<PAGE> 71
Schedule 2.01
<TABLE>
<CAPTION>
==================================================================================================================
NAME ADDRESS COMMITMENT
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Texas Commerce Bank National 2200 Ross AV $130,000,000
Association 3rd Floor
Dallas, TX 75201
Attn: Kevin Kelty
- ------------------------------------------------------------------------------------------------------------------
Bank of America NT & SA 555 South Flower ST $100,000,000
Los Angeles, CA 90071
Attn: Robert Lagace
- ------------------------------------------------------------------------------------------------------------------
NationsBank 901 Main ST $100,000,000
Dallas, TX 75283
Attn: Todd Shipley
- ------------------------------------------------------------------------------------------------------------------
Bank of Tokyo-Mitsubishi, Ltd. 2001 Ross AV $100,000,000
Suite 3150
Dallas, TX 75201
Attn: Jeb Beckwith
- ------------------------------------------------------------------------------------------------------------------
2001 Ross AV $85,000,000
Societe Generale Suite 4800
Dallas, TX 75201
Attn: Chris Speltz
- ------------------------------------------------------------------------------------------------------------------
The Fuji Bank, Limited One Houston Center $75,000,000
1221 McKinney
Suite 4100
Houston, TX 77010
Attn: Phillip Lauinger
- ------------------------------------------------------------------------------------------------------------------
Wells Fargo Bank (Texas), N.A. 1445 Ross AV $55,000,000
3rd Floor
Dallas, TX 77202
Attn: Ken Taylor
- ------------------------------------------------------------------------------------------------------------------
Wachovia Bank of Georgia, N.A. 191 Peachtree ST, NE $40,000,000
Atlanta, GA 30303
Attn: Joel Wood
- ------------------------------------------------------------------------------------------------------------------
The Toyo Trust & Banking Co., 666 Fifth AV $40,000,000
Ltd. 33rd Floor
New York, NY 10103
Attn: Sharon Bonelli
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 72
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
The Sakura Bank, Limited, 3940 Interfirst Plaza $40,000,000
Houston Agency. 1100 Louisiana
Houston, TX 77002
Attn: Terrance Martin
Mellon Bank, N.A. One Mellon Bank Center $40,000,000
Pittsburgh, PA 15258
Attn: Lisa Pellow
- ------------------------------------------------------------------------------------------------------------------
Banque Nationale de Paris 717 North Harwood ST $40,000,000
Suite 2630
Dallas, TX 75201
Attn: Hank Setina
- ------------------------------------------------------------------------------------------------------------------
The Tokai Bank, Limited 55 East 52nd ST $30,000,000
12th Floor
New York, NY 10055
Attn: Stuart Schulman
- ------------------------------------------------------------------------------------------------------------------
First Union National Bank of One First Union Center $30,000,000
North Carolina Charlotte, NC 28288
Attn: Adrienne Musgnug
- ------------------------------------------------------------------------------------------------------------------
The Sanwa Bank Limited, Dallas 4100W $25,000,000
Agency Texas Commerce Tower
2200 Ross AV
Dallas, TX 75201
Attn: Rob Smith
- ------------------------------------------------------------------------------------------------------------------
The Northern Trust Company 50 S. LaSalle ST $25,000,000
Chicago, IL 60675
Attn: Martin Alston
- ------------------------------------------------------------------------------------------------------------------
Hibernia National Bank 313 Carondelet ST $25,000,000
New Orleans, LA 70130
Attn: Troy Villafarra
- ------------------------------------------------------------------------------------------------------------------
Credit Lyonnais New York 1301 Avenue of the Americas $20,000,000
Branch New York, NY 10019
Attn: Legal Dept.
w/copy to:
2200 Ross AV
Dallas, TX
Attn: Samuel Hill
==================================================================================================================
</TABLE>
<PAGE> 73
Schedule 3.06
Litigation, Labor and Environmental Matters
None.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 15,169
<SECURITIES> 0
<RECEIVABLES> 127,322
<ALLOWANCES> (4,141)
<INVENTORY> 14,609
<CURRENT-ASSETS> 164,239
<PP&E> 635,911
<DEPRECIATION> (271,444)
<TOTAL-ASSETS> 1,176,244
<CURRENT-LIABILITIES> 83,345
<BONDS> 338,557
<COMMON> 73,862
0
0
<OTHER-SE> 552,029
<TOTAL-LIABILITY-AND-EQUITY> 1,176,244
<SALES> 0
<TOTAL-REVENUES> 400,063
<CGS> 0
<TOTAL-COSTS> 293,079
<OTHER-EXPENSES> 33,020
<LOSS-PROVISION> 2,628
<INTEREST-EXPENSE> 15,151
<INCOME-PRETAX> 63,758
<INCOME-TAX> 25,538
<INCOME-CONTINUING> 38,220
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 38,220
<EPS-PRIMARY> 0.94
<EPS-DILUTED> 0.94
</TABLE>
