SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1994
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from _____________ to _____________
Commission File No. 0-2481
_________________________________________________________________
LIN BROADCASTING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 62-0673800
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
5295 Carillon Point
Kirkland, Washington 98033
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(206) 828-1902
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.01 per share
(Title of Class)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The number of shares outstanding of the registrant's Common
Stock was 51,682,483 as of March 15, 1995, excluding 3,646,031
treasury shares. The aggregate market value of the voting stock
held by non-affiliates of the registrant was $2,992,347,544 as of
March 15, 1995. (The term "affiliates" is deemed, for this
purpose only, to refer only to the directors of the registrant,
to McCaw Cellular Communications, Inc. and to AT&T Corp.)
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Proxy Statement relating to its
1995 annual meeting of stockholders are incorporated by reference
into Part III hereof. Such information will be filed with the
Securities and Exchange Commission no later than 120 days after
the registrant's fiscal year ended December 31, 1994.
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TABLE OF CONTENTS
PART I
Page
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . 1
Business of the Company. . . . . . . . . . . . . . . . . 1
The Cellular Telephone Industry. . . . . . . . . . . . . 2
The Company's Cellular Operations. . . . . . . . . . . . 5
The Company's Media Operations . . . . . . . . . . . . .14
Mobile Satellite Service . . . . . . . . . . . . . . . .14
Private Market Value Guarantee . . . . . . . . . . . . .14
Governmental Regulation. . . . . . . . . . . . . . . . .20
Employees. . . . . . . . . . . . . . . . . . . . . . . .24
Executive Officers . . . . . . . . . . . . . . . . . . .24
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . .25
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . .25
Item 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . . . . . .28
PART II
Item 5. Market for the Registrant's Common Equity
and Related Stockholder Matters. . . . . . . . . . . . .29
Item 6. Selected Consolidated Financial Data . . . . . . . . . . .30
Item 7. Management's Discussion and Analysis of
Financial Condition and Results
of Operations. . . . . . . . . . . . . . . . . . . . . .34
Item 8. Financial Statements and Supplementary Data. . . . . . . .43
Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure. . . . . . . . . . .43
PART III
Item 10. Directors and Executive Officers of
the Registrant . . . . . . . . . . . . . . . . . . . . .44
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . .44
Item 12. Security Ownership of Certain Beneficial Owners
and Management . . . . . . . . . . . . . . . . . . . . .44
Item 13. Certain Relationships and Related Transactions . . . . . .44
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K. . . . . . . . . . . . . . . . . . .45
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PART I
Item 1. BUSINESS
Business of the Company
LIN Broadcasting Corporation (the "Company" or "LIN"),
through its subsidiaries, is engaged primarily in the business of
providing cellular voice telephone and data services. McCaw
Cellular Communications, Inc. ("McCaw") owns an approximate 52%
interest in the Company through a wholly-owned subsidiary, MMM
Holdings, Inc. ("MMM"). On September 19, 1994, McCaw became a
wholly-owned subsidiary of AT&T Corp. ("AT&T").
The Company owns cellular interests (i.e., direct or
indirect interests in licensees) primarily in the New York, Los
Angeles, Dallas-Fort Worth and Houston markets. The Company's
cellular interests represent approximately 26 million 1994 pops.
"Pops" refers to the population of a market multiplied by a
percentage ownership interest in an entity licensed or designated
to receive a license (a "licensee") by the Federal Communications
Commission (the "FCC") to construct or operate a cellular
telephone system in such market. Pops do not represent actual
subscribers in a cellular system. All of the Company's cellular
interests are located in markets where the Company owns a 50% or
more equity or voting interest. These markets represent four of
the top 10 Metropolitan Statistical Areas ("MSAs") nationwide,
including the two largest markets - New York and Los Angeles - in
the United States.
As of December 31, 1994, the cellular systems in which the
Company owned interests had an aggregate of approximately
1,644,000 subscribers and average penetration was 4.26%. The
Company's proportionate share of such subscribers (based on its
actual ownership interest) was 1,083,000. During 1994, the
cellular operations in which LIN had ownership interests produced
aggregate net revenues of $1.4 billion. The Company's
proportionate share of such cellular operations' net revenues was
$959 million. LIN's media operations, substantially all of which
were divested in 1994, recorded net revenues of $184 million
during 1994.
On December 28, 1994, the Company divested itself of
substantially all of its television broadcasting operations
through the distribution (the "Television Spin-off") to the
holders of its common stock of all of the outstanding common
stock of the Company's wholly-owned subsidiary, LIN Television
Corporation ("LIN TV"). The number of network-affiliated stations
owned by the Company was reduced from seven to one due to the
Television Spin-off, with the remaining station also providing
programming and marketing services to another network affiliated
station pursuant to a local marketing agreement. On June 24, <PAGE>
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1994, the Company disposed of its interest in the Philadelphia
cellular licensee and its interest in the GuestInformant
speciality publishing business pursuant to the redemption of the
preferred stock of LCH Communications, Inc.("LCH"), a wholly-owned
subsidiary of the Company.
The Company and McCaw are parties to a Private Market Value
Guarantee ("PMVG") pursuant to which McCaw has the right to offer
to purchase the shares of the Company's Common Stock that it does
not already own. For further information and recent developments,
see "-Private Market Value Guarantee."
The Company, a Delaware corporation, was incorporated in
October 1961. The Company's principal executive office is located
at 5295 Carillon Point, Kirkland, Washington 98033. Its telephone
number is (206) 828-1902. References to "the Company" in this
Form 10-K include LIN Broadcasting Corporation and/or its
subsidiaries and its predecessors, unless the context otherwise
requires.
The Cellular Telephone Industry
Cellular telephone technology provides high quality service
to and from hand-held and vehicle-mounted portable and stationary
wireless telephones. Cellular telephone systems ("cellular
systems") divide a region into many "cells," each covered by its
own low-power transmitter, receiver and signaling equipment (the
"cell site"). Each cell site is connected by landline, microwave
or other technology to the system's computers in a mobile
telephone switching office (the "switch"). The switches control
the operation of the cellular system for the entire service area.
Each conversation in a cellular system involves a radio
transmission between a cellular telephone and a cell site and the
transmission of the call between the cell site and a switch.
Currently, the radio transmission between the cellular
telephone and the cell site is primarily an "analog"
transmission. With the current analog technology and the amount
of licensed radio frequencies available to the Company, there are
capacity limitations in certain areas, especially in large
markets like New York and Los Angeles. To relieve potential
capacity constraints as well as to provide a platform for future
service enhancements, the Company has participated in the
development of and is in the process of introducing "digital"
service in addition to traditional analog service in all of its
cellular operations. The Company has launched commercial digital
service in Los Angeles and in New York, and as of December 31,
1994, had approximately 50,000 digital subscribers in those
markets. The Company has also installed digital transmitting
equipment in Dallas-Fort Worth and Houston and is currently
conducting subscriber tests of the service. Introduction of <PAGE>
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commercial digital service in Dallas and Houston is planned for
the first half of 1995. The Company is using a digital format
referred to as Time Division Multiple Access ("TDMA"), which has
been adopted by several major cellular carriers. Other major
cellular carriers have adopted an alternative digital format,
Code Division Multiple Access ("CDMA"). Digital technology offers
many advantages over analog technology, including an initial
three-fold increase in capacity, lower costs and the opportunity
to provide enhanced services, such as improved data
transmissions, short messaging, Caller ID, longer phone battery
life and improved anti-fraud features. Because existing analog
cellular telephones will not be capable of receiving digital
transmissions from the cell site, the Company expects that the
conversion from analog to digital will be phased in over a number
of years, during which a system will maintain both analog and
digital transmitting equipment and will thus be able to serve
customers with either analog, dual-mode (analog and digital) or
digital cellular telephones. The Company expects that after a
meaningful percentage of call volume is handled by the digital
network, the capital costs of adding system capacity to support
subscriber growth will drop significantly.
The Company, along with McCaw and other carriers,
increasingly is employing a range of techniques to increase
capacity, improve coverage in difficult areas and increase in-building
penetration. For example, in New York, the Company has
introduced cell sites into Grand Central Station and the Lincoln
Tunnel. The Company expects this development to provide it with a
competitive advantage by permitting coverage in areas that
otherwise are hard to reach and by permitting systems to
determine within a few yards where a caller is located.
Cellular systems can offer a variety of features, including
call forwarding, call waiting, conference calling, voice message
storage and retrieval and voice recognition where subscribers can
make calls by speaking the number to be dialed. Because cellular
systems are fully interconnected with the landline telephone
network, subscribers can receive and originate both local and
long distance calls from their cellular telephones. The cellular
system operator pays an interconnection charge to the local
landline telephone company to carry calls placed from a mobile
unit to a wired telephone. The amounts paid are subject to
negotiation or tariff and FCC regulation and vary from system to
system.
The FCC granted only two licenses for cellular service with
spectrum bandwidth of 25 megahertz ("MHZ") in each market. During
its initial licensing of cellular MSAs and rural service areas
("RSAs"), the FCC reserved one license for applicants (such as
the Company) that were not affiliated with any landline telephone
carrier (the "A Block license") and the other license for
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wireline applicants (the "B Block license"). Now, subject to FCC
rules, an A Block or B Block license may be granted to either a
wireline or nonwireline entity, but no entity may control more
than one cellular system in any service area. All of the
interests held by the Company are in A Block licenses.
All cellular phones are designed for compatibility with
cellular systems in all market areas within the United States,
Canada and Mexico and with all channels allocated for cellular
use, so that a mobile unit may be used wherever a subscriber is
located. Changes of cellular telephone numbers or other technical
adjustments to mobile units by the manufacturer or the cellular
service operator may be required, however, to enable the
subscriber to change from one cellular system to another.
Cellular system operators may provide service to subscribers from
another cellular system temporarily located in or traveling
through the operator's service area. Such subscribers are called
"roamers."
The Company, together with McCaw and Vodaphone Group PLC, is
creating a worldwide roaming arrangement. A Company customer
traveling in the U.K., 19 other European countries, Hong Kong or
Australia can, using a cellular phone obtained locally and an
easily inserted adapter card provided by the Company, place and
receive calls using the customer's own phone number. The Company
plans to participate in the continued worldwide expansion of this
service.
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<TABLE>
The Company's Cellular Operations
Set forth below is information with respect to the seven cellular systems in which
the Company owns an interest:
<CAPTION>
Market Information
Total
LIN's Interests Population Market B Block
Name and Location Equity Voting (000,000s)(1) Rank(1) Competition
<S> <C> <C> <C> <C> <C> <S> <C>
Cellular One 98.3% (2) 100.0% 15.0 1 NYNEX/Bell
New York Atlantic
Los Angeles
Cellular Telephone
Company 40.0% 50.0% 14.7 2 AirTouch
Los Angeles Communications
Metrocel 60.4% 60.4% 4.3 6 Southwestern
Dallas-Fort Worth Bell
Houston Cellular 56.3% 50.0% 3.9 8 GTE
Telephone Company
Houston
Galveston Cellular 34.6% 50.0% 0.2 169 GTE
Telephone Company
Galveston
Cellular One 100.0% 100.0% 0.2 N/A GTE
(Texas RSA-17)
Newton, TX
Cellular One 100.0% 100.0% 0.2 N/A Southern New
(Connecticut RSA-1) England Tele-
Litchfield County, CT(3) communications
(1) Source: Donnelley Marketing Information Services estimate for 1994.
(2) Includes 5.2% interest acquired in 1994 for approximately $145 million in cash.
(3) The Company acquired its interest in the Litchfield County, Connecticut RSA in 1994.
</TABLE>
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The Company believes that its presence in the major markets
listed above provides it with a unique position within the
industry. In addition to being by far the two largest markets in
the United States, New York City and Los Angeles are major
national and international commercial centers.
The operations in the New York, Los Angeles, Dallas-Fort
Worth, Houston and Galveston markets are conducted by
partnerships in which the Company holds an interest. The
partnership agreements are generally similar and the Company has
or shares effective operating control of each partnership. The
Company's wholly or partially owned subsidiaries are general
partners in these partnerships, and each of the partnerships is
governed by a Partners' or Executive Committee consisting of
designated representatives from the partners in the particular
partnership. In each case, the applicable partnership agreement
generally provides that all rights and obligations (other than
voting), such as obligations for capital investment, sharing of
profits and losses, and distributions, are based on percentage
ownership. The participants in each of these partnership or
corporate entities are generally responsible for their pro rata
share of all capital contributions called for by the governing
bodies of such entities, and failure to make such contributions
could result in the ownership interest being either forfeited or
diluted. Such ownership interests are also subject to
restrictions on the owners' ability to sell, transfer, pledge or
otherwise encumber or dispose of such interests under certain
circumstances.
Marketing. In marketing its services, the Company stresses
that cellular telephones are affordable and easy to use and
produce immediate and direct benefits to subscribers, including
increased productivity for the business user and convenience for
all subscribers. The Company also emphasizes that it is a locally
managed, customer-oriented cellular system operator which is
responsive and accommodating to the needs of subscribers.
The Company follows a strategy of controlled
decentralization which allows each regional manager to adapt the
Company's general marketing and incentive plans to the particular
needs of the market, to develop innovative uses for cellular
telephones and products which are responsive to local needs, and
to set goals for its sales force and dealers. The key elements of
all such marketing plans are appealing to potential subscribers,
creating public awareness and understanding of the cellular
telephone services offered by the Company, developing a sales
force and dealer network, reducing the initial investment
required by subscribers to obtain cellular service and certifying
installation centers.
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The Company is developing additional or alternative means of
attracting new customers. For example, the Company has
participated with McCaw in developing and test marketing
GoPhone , an attractively priced cellular phone that would be
distributed through popular consumer retail outlets, such as
Walmart, and service activated through a phone call.
Marketing costs constitute a significant portion of the
Company's operating costs. Total marketing expense per gross
additional subscriber is expected to increase for at least the
next several years.
Subscribers. While subscribers are engaged in a wide range
of occupations, they have traditionally been individuals who work
in the construction, contracting, real estate, wholesale and
retail industries, service industries and professionals. Since
these individuals use their cellular telephones during their
normal working hours to meet their business communications needs,
the Company's systems are used primarily between the hours of 7
a.m. and 6 p.m. Increasingly, the Company's subscribers
represent major accounts, such as federal and local governmental
agencies, national and regional shipping, delivery and
transportation companies and other businesses. Although
historically a majority of the Company's subscribers are business
users, a growing share of new customers use the phone principally
for personal convenience and safety. The Company expects this
trend to continue as market penetration increases. Over half of
the Company's new subscribers purchase a portable unit that is
not restricted to car use. The Company believes that hand-held
portable cellular telephones will become an increasingly large
portion of its subscriber base as the price for such telephones
continues to decline.
Because of the fixed costs involved in the development of a
cellular system, as the number of subscribers has increased the
Company has benefited from economies of scale, which have allowed
the Company to pass lower rates along to its customers. These
rate reductions, in turn, make cellular service attractive to an
even larger portion of the population. Service rates have fallen
most dramatically for roaming, thereby permitting the Company to
expand a customer's "home" area.
The Company's proportionate share of subscribers in its
markets was approximately 1,083,000 at year end, reflecting an
increase of 25% during 1994, including the changes in ownership
interests in New York and Philadelphia as discussed earlier.
Growth was particularly strong in New York, where the number of
subscribers increased over 50%, including those added through the
purchase of minority interests in the New York partnership.
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The Company is subject to significant levels of turnover, or
"churn," among its customers. The Company has instituted programs
to reduce churn rates and expects the reduction of customer churn
to be a major area of focus in the future.
Another challenge is posed by fraudulent use of cellular
service. The Company and McCaw are continuing to develop an
extensive antifraud program to combat this problem, including
authentication features to verify the validity of each call,
real-time comparisons of actual and normal phone usage and radio
fingerprinting. The Company expects to continue to devote
resources to protect the integrity of its system.
Sales Force, Dealers and Retailers. The Company enlists
subscribers primarily through an internal sales force and through
a network of independent dealers and retailers. Dealers and
retailers are independent contractors who solicit customers on a
commission basis for the Company's cellular systems.
The Company's dealers either are in the business of selling
or servicing cellular telephones exclusively or are engaged in
businesses with customers that are likely to become cellular
subscribers. The Company has established and is continuing to
pursue multi-state dealer arrangements. The Company has several
dealer compensation contracts. Most involve a commission which is
paid immediately to the dealer, but with the dealer's retention
of all or part of the commission contingent upon the customer
keeping the service for a specified period of time (generally
between three and six months). Such contracts may also involve
the payment of a portion of the commission over time, as service
is provided to the subscriber. The Company has also been
successful in attracting premier national mass market retailers
to distribute its products.
National Marketing. Increasingly, large customers with
nationwide needs for cellular services are purchasing these
services centrally. Larger corporations generally require a
national sales force, special volume purchase discounts, trial
programs, central billing, simple rate plans, and national 24-hour
customer service. McCaw's National Account Services Group
coordinates these activities with local markets, and certain of
the Company's markets contract with this group in order to meet
the needs of their large customers. To improve these programs,
McCaw is now operating a central clearing house for all new
national account orders and shipping of the cellular telephones
to national accounts. The National Account Services Group also
accredits local installers and establishes McCaw's national
corporate price plans.
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Telephones and Installation. The Company purchases
telephones under national sales contracts and, as a means of
stimulating demand for cellular service, generally sells phones
to its dealers and the major accounts it services directly at
prices reflecting its costs. The Company cooperates with several
cellular equipment manufacturers in local advertising and
promotion of cellular equipment.
There are a number of different types of cellular telephones
available, all of which are compatible with cellular systems
nationwide. Models vary by type: car-mounted, transportable, and
fully portable; by type of transmission: analog and digital; by
feature, such as: speed dialing, speakerphone, voice recognition
and horn alert; and by price. Prices at which telephones are sold
to subscribers may also vary by market, resulting in part from
local competitive forces. To ensure quality installation and
customer satisfaction, the Company certifies installation centers
which meet certain quality control standards.
Products and Services. The Company generally offers its
customers several pricing options in each market. Some options
consist of a fixed monthly charge plus additional variable
charges per minute of telephone use. A high volume caller might
find an option with a high monthly access charge and low per-minute
charges to be most economical. Low volume users might
choose a different package featuring a lower access fee and
higher per-minute charge. The Company also offers plans with
access fees which include a specified number of minutes, with
established per-minute charges for usage in excess of the
included minutes.
The Company makes available to subscribers custom calling
services such as call-forwarding, call-waiting, three-way
calling, no-answer and busy transfer. The Company has also
instituted a voice retrieval message system and has or will be
installing voice recognition technology in all its cellular
systems. The Company also provides news, weather, sports and
financial news recordings.
The Company has also implemented automatic roaming in its
cellular systems. With automatic roaming, the Company's
subscribers are pre-registered in cellular systems outside the
Company's regions. Such subscribers receive service automatically
while they are roaming, without having to communicate with the
local office in any fashion.
The following were among the products and services that were
introduced or under development during 1994:
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Digital-Based Services. The Company is able to offer or is
developing enhanced services to customers who use digital,
rather than analog, service, including Caller ID and Message
Waiting Indicator. The Company will continue to develop
other enhanced services that will be available only to
digital customers, which the Company expects will encourage
the migration of all customers to digital service over time.
Cellular Office Service. Cellular Office Service combines
cellular technology with the internal communications system
of an individual business or organization. Users typically
would be employees of a business who share a workplace, such
as an office or a campus. Outside the workplace boundaries,
a user's cellular phone will operate as any cellular phone.
Within those boundaries, the cellular phone will function as
part of the organization's existing telecommunications
system (such as PBX). In either location, all users will be
linked by the same system, thereby enabling them to reach
one another by dialing only internal extensions, to be
available through direct dial, and to use the system's voice
mail and other functions. The system has been successfully
tested and will be available in certain of the Company's
markets in 1995.
Data-Over-Cellular. The Company has participated actively in
the development of recently adopted industry specifications
for a packet data technology to be used for transmission of
data over cellular communications systems (Cellular Digital
Packet Data or "CDPD"). This technology will allow data to
be transmitted across existing cellular networks without
disrupting or degrading voice traffic and without requiring
additional system capacity or spectrum. CDPD is in addition
to circuit switched systems, which also permit data
communication. Circuit switched data transmission requires
the maintenance of a dedicated connection throughout the
transmission. CDPD, with its connectionless system, operates
at greater speed and higher quality but generally at lesser
cost for short transmissions such as e-mail messages. The
Company has successfully installed its first CDPD system in
a commercial site and expects to begin offering CDPD service
in selected markets in 1995.
Home Base Station. The Company and other cellular providers
are developing and implementing a service for the
residential market enabling a cellular phone to operate with
both the wireless cellular system and as part of the wired
telephone system. In and near the home, the cellular phone
will operate as a cordless phone linked through the home
base station to the home's wired system. When the customer
leaves the home area, the phone will operate as a regular
cellular phone connecting to the Company's wireless system.
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Customer Service. The Company recognizes that being
responsive to the problems and concerns of its subscribers is
critical in a service business. The Company trains and certifies
various agents to provide repair services for the Company's
subscribers. The Company continually monitors and provides
ongoing training for service centers. In addition, the Company
operates its markets through an on-site staff, including a branch
manager or managers, technicians and customer service
representatives. Customer service is available toll-free 24
hours a day, 7 days a week by simply dialing 611.
McCaw National Network. McCaw is continuing the process of
linking various regional cellular systems, including the
Company's, into the North American Cellular Network ("NACN"), a
"national seamless network" permitting cellular subscribers,
without making special arrangements, to both place and receive
calls anywhere they travel in areas served by the NACN, even if
the local cellular service is not provided by McCaw or the
Company. All of McCaw's and the Company's markets within the
continental United States as well as the A Block systems in most
other major metropolitan areas and Cantel, which holds Canada's A
Block cellular license, are served by the NACN. Most of the major
B Block licensees have formed a national network similar to the
NACN, which competes with the NACN. As of February 28, 1995, the
NACN served over 8 million subscribers and covered a population
base of over 200 million. Ultimately, the Company's goal is to
extend this network to permit its customers to place and receive
calls effortlessly throughout North America.
Cellular Competition. The FCC awarded only two cellular
licenses in each market - an A Block and a B Block license.
During its initial licensing of MSAs and RSAs, the FCC reserved
the A Block license for a nonwireline company (which in each of
the Company's markets is the partnership or other entity in which
the Company owns an interest) and the B Block license for an
affiliate of a local wireline telephone company. Now, subject to
FCC rules, an A Block or a B Block license may be held by either
a wireline or a nonwireline entity, but no entity may control
more than one license per market. Each licensee in a market has
the exclusive grant of a defined frequency band within that
market. The Company also faces competition for wireless
communications services in each market from other wireless
technologies which provide many of the characteristics of
cellular service. See "-Competition From Other Technologies".
Competition is principally on the basis of service and
equipment pricing, services and enhancements offered, the
technical quality of the system and quality and responsiveness of
customer service. Competition may be intense. Under applicable
law, the Company is required to permit the "reselling" of its <PAGE>
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services. In certain larger markets and in certain market
segments such as national customers, competition from resellers
may be significant. There is also competition for dealers.
FCC rules require Regional Bell Operating Companies (the
"RBOCs") that become cellular operators to create a separate
subsidiary to own and operate cellular systems. This requirement
is intended to make it more difficult for these companies to
engage in anticompetitive activities, such as subsidizing their
cellular operations from monopoly landline revenues in order to
force cellular competitors out of the market.
There are currently pending several legislative and
regulatory initiatives which may affect the Company, including
proposals regarding the obligations of common carriers such as
the Company to provide interconnection to resellers and other
wireless competitors and to offer equal access to interexchange
carriers and the right of the RBOCs (which are the Company's
primary B Block competitors) to offer or resell interexchange
services. The RBOCs have also filed petitions in federal court
seeking to exempt their wireless systems from the proscription
against offering interexchange service that is contained in the
Modification of Final Judgment pursuant to which certain
activities of the RBOCs are governed. In light of the uncertainty
surrounding these legislative and regulatory initiatives and
judicial proceedings, it is impossible to quantify their impact
on the Company and the competitive conditions it may face at this
time.
Competition From Other Technologies. The development of the
cellular industry has attracted numerous other companies that
desire to provide services intended to compete with the service
provided, or to be provided, by the Company. Some of these
competitive services are currently available and others have been
announced. For example, specialized mobile radio ("SMR")
systems, generally used by taxicabs and tow truck services, and
other communication services which have the technical capability
to handle mobile telephone calls may provide competition in
certain markets. One-way or two-way messaging or beeper services
that feature voice message and data display as well as tones may
be adequate for potential subscribers who do not need to transmit
back to the caller. Other two-way mobile services may also be
competitive with the Company's services.
In addition to B Block cellular competition, the Company and
its unconsolidated affiliates expect to face competition from
enhanced specialized mobile radio services ("ESMR") operations,
such as Nextel, which is providing cellular-like services in the
Company's Los Angeles market. Several other ESMR networks have
begun operating in other cities; still others are scheduled to
begin either operation or construction in 1995 in cities served
by the Company's cellular systems.
<PAGE>
<PAGE> 13
Recently, the FCC allocated a significant amount of spectrum
to new Personal Communications Services ("PCS") that are expected
to compete with cellular service. On March 14, 1995, the FCC
announced the completion of the first phase of its auction of
spectrum for broadband PCS. The first phase involved two licenses
for 30 MHZ of spectrum in each of the 51 Major Trading Areas
("MTAs"), except that only one license was available for bidding
in each of New York, Los Angeles and Washington, D.C., with the
other having been awarded under the FCC's pioneer's preference
program. In LIN's markets, the pioneer's preference awards were
to OmniPoint Corp. in New York and Cox Cable in Los Angeles. An
MTA is considerably larger in geographic size and population than
a cellular MSA and may include two or more MSAs or RSAs. The New
York MTA, for example, covers Connecticut, Eastern New York
state, Long Island and Vermont. The Company chose not to
participate in the first phase of the auction. The successful
bidders for 30 MHZ licenses in LIN's markets were as follows: New
York - a coalition of Sprint and major cable companies
("WirelessCo"); Los Angeles - PacTel; Dallas-Fort Worth - a
coalition of Bell Atlantic, NYNEX, US West and AirTouch
("Primeco") and WirelessCo; and Houston - Telephone and Data
Systems and Primeco.
In the future, the FCC will auction an additional 30 MHZ
license and three 10 MHZ licenses for each of 492 Basic Trading
Areas ("BTAs"). BTAs are smaller than MTAs but generally larger
than cellular MSAs or RSAs and may include two or more MSAs or
RSAs. The additional 30 MHZ license and one of the 10 MHZ
licenses in each BTA have been set aside for auction on special
terms to small business or minority- or women-owned enterprises
("Designated Entities"). The auction for the 30 MHZ license to
Designated Entities was scheduled to begin shortly after the
conclusion of the MTA license auction, but the FCC has been
ordered to stay auctions to Designated Entities pending
resolution of an appeal regarding the special rules concerning
bidding on licenses for Designated Entities. The Company will
analyze whether to seek additional licenses in these future
auctions, but has not yet made any decisions in that regard.
Some of the PCS spectrum is already used by utilities,
public safety agencies and other entities for fixed microwave
transmissions, and the FCC has determined that the existing
microwave users must be phased out or relocated to new
frequencies once PCS is deployed. However, the FCC's rules enable
displaced microwave users to obtain compensation from PCS
licensees for vacating PCS spectrum and provide for a transition
period before incumbent microwave users are forced to relocate.
<PAGE>
<PAGE> 14
The Company's Media Operations
As discussed earlier, the Company spun-off substantially all
its television broadcasting operations effective December 28,
1994 and divested itself of its specialty publishing operations
effective June 24, 1994. The Company's results of operations for
the year ended December 31, 1994 include the results of these
businesses through the dates of their divestiture. Thus, the
results for 1994 are not directly comparable to prior years nor
will future results be directly comparable to those of 1994.
Following the Television Spin-off, the Company continues to own
station WOOD-TV, an NBC-affiliated station serving the Grand
Rapids-Kalamazoo-Battle Creek, Michigan market. Station WOOD-TV
was acquired by the Company in April 1983 and is affiliated with
the NBC network. WOOD-TV's current FCC license expires in
October 1997. The Grand Rapids-Kalamazoo-Battle Creek market,
with a population of approximately 1,666,000, is served by two
other commercial VHF television stations which are affiliated
with CBS and ABC, by two commercial UHF television stations (one
of which is affiliated with ABC and one of which is affiliated
with the Fox network) and by three non-commercial UHF television
stations. WOOD-TV also provides programming and marketing
services pursuant to a local marketing agreement to station WOTV-41,
Battle Creek, Michigan, an ABC affiliate operating on UHF
Channel 41. WOTV-41's current FCC license expires in October
1997. In addition to network programming, WOOD-TV devotes
segments of its broadcasting day to news, local live programming,
talk shows, and syndicated and off-network programs. News and
community-oriented programs are emphasized and play an important
role in the station's services to its viewers.
Mobile Satellite Service
The Company, through subsidiaries, beneficially owned, as of
March 15, 1995, approximately 6.7% of the outstanding stock of
American Mobile Satellite Corporation, which has been licensed by
the FCC to provide national mobile satellite service. This
service is expected to be available by the end of 1995 and will
provide full-duplex, digital mobile telephony to vehicle mounted
and fixed terminals throughout North America. The Company does
not expect mobile satellite service to be competitive with
cellular service, but should be a complementary service in rural
areas not otherwise served by cellular systems.
Private Market Value Guarantee
The Company entered into the Private Market Value Guarantee
("PMVG") with McCaw in 1989 for the benefit of the Company's
stockholders (other than McCaw and its affiliates). The PMVG
applies for as long as McCaw and its affiliates beneficially own <PAGE>
<PAGE> 15
in the aggregate at least 25% of the outstanding shares of the
Company's Common Stock ("Shares") on a fully diluted basis or
McCaw's designees constitute a majority of the Board of Directors
of the Company, and any Shares are held by other persons.
Status of PMVG Sale Process. Pursuant to the terms of the
PMVG, in January 1995 the Independent Directors (as defined
below) retained the investment banking firms of Lehman Brothers,
Inc. and Bear Stearns & Co., Inc. (together, the "Independent
Directors' Appraiser") to act jointly as their appraiser for the
purpose of determining the private market value per Share of the
Company. AT&T and McCaw retained the investment banking firm of
Morgan Stanley & Co., Incorporated (the "Offeror's Appraiser") to
act as McCaw's appraiser. On February 15, 1995, the Independent
Directors' Appraiser reported that they had determined the
private market value per Share to be $155, and the Offeror's
Appraiser reported that it had determined the private market
value per Share to be $105. In accordance with the PMVG,
Wasserstein Perella & Co., Inc. was jointly designated by the
Independent Directors' Appraiser and the Offeror's Appraiser as
the third appraiser (the "Mutually Designated Appraiser") to
determine the private market value. On March 7, 1995, the
Mutually Designated Appraiser reported that, based upon its
review and subject to the limitations noted in its report dated
March 7, 1995, it had determined the private market value per
Share to be $127.50. In accordance with the PMVG, the "Private
Market Price" per Share therefore was established as $127.50.
McCaw must decide by April 21, 1995 whether it desires to proceed
with an Acquisition (as defined below).
Litigation involving the PMVG process is pending in several
jurisdictions. In re LIN Broadcasting Corporation Shareholders
Litigation, filed February 17, 1995 in Delaware Chancery Court,
New Castle County, Consolidated C.A. No. 14039, is a consolidated
action alleging that AT&T, McCaw and MMM have, by their conduct
in the PMVG described above, breached the PMVG and certain
fiduciary duties. The relief sought includes an injunction
prohibiting AT&T, McCaw and MMM from acquiring LIN stock owned by
the class members, an order directing AT&T, McCaw and MMM to
fulfill their contractual and fiduciary obligations, rescission
if a PMVG sale to AT&T, McCaw or MMM is consummated and monetary
damages. In Newman v. McCaw Cellular Communications and AT&T
Corp., filed March 7, 1995 in the United States District Court
for the Southern District of New York, C.A. No. 95 Civ. 1583, the
plaintiff alleges that defendants failed to disclose that private
market value would be determined in violation of the method set
forth in the PMVG by improperly disregarding certain potential
purchasers, including AT&T and other unidentified companies, and
this action, together with public statements and other actions
taken by the defendants, constituted a violation of federal <PAGE>
<PAGE> 16
securities law. Plaintiff seeks injunctive relief similar to that
described above and monetary damages. In Luke v. Wasserstein
Perella & Co., AT&T Corp., McCaw Cellular Communications, Inc.,
LIN Broadcasting Corporation, William G. Herbster, Wilma H.
Jordan and Richard W. Kislik, filed March 9, 1995, in New York
Supreme Court, New York County, Index No. 95-105973, plaintiffs
allege that the Mutually Designated Appraiser was negligent and
breached its duty of care, that AT&T, McCaw and MMM were unjustly
enriched by such negligence and that the individual defendants
may breach their fiduciary duties as Independent Directors. In
addition to seeking injunctive relief and monetary damages
similar to those described above, the plaintiffs have requested
an injunction prohibiting the Independent Directors from
approving any sale of LIN for a price less than a properly
computed Private Market Price and an order directing the
Independent Directors to take all action necessary to determine
the Private Market Price and to maximize shareholder value. In
all of these cases, none of the defendants have yet filed an
answer or otherwise responded to the complaints. All of these
cases have been brought as class actions, but no action has yet
been taken with respect to the consideration of certifying a
class. The Company cannot predict their possible outcome or
effect on the Company or the PMVG process at this time. However,
the Company does not expect that the ultimate results of any of
the foregoing legal proceedings will have a material adverse
effect on its financial position, results of operations or cash
flows.
The following is a summary of the terms of the PMVG:
Independent Directors. Three members of the Company's board
of directors (the "Independent Directors") will be independent
directors as determined under the New York Stock Exchange Rules
(i.e., independent of management of the Company and its
affiliates and free of any relationship that, in the opinion of
the Company's board of directors, would interfere with the
exercise of independent judgment). The initial Independent
Directors are persons who served on the Company's Board prior to
the completion by McCaw of its tender offer for the Company. At
each annual meeting of the Company's stockholders, Independent
Directors will be nominated by the then current Independent
Directors and elected by a Majority Vote of the Public
Stockholders, as defined below. Independent Directors will be
subject to removal only (a) for cause, (b) if a majority of the
Independent Directors approve such removal or (c) if such removal
is approved by a Majority Vote of the Public Stockholders.
"Majority Vote of the Public Stockholders" means (a) the
affirmative vote of the holders of at least a majority of the
Public Shares (as defined below) present and entitled to vote at
any meeting at which the holders of a majority of the Public
Shares are present or (b) the action by written consent (in
accordance with applicable provisions of Delaware law and the <PAGE>
<PAGE> 17
Company's certificate of incorporation and by-laws) of the
holders of a majority of the Public Shares. "Public Shares" means
Shares not owned by McCaw or any of its affiliates.
Sale of the Company after Five Years. On or about January 1,
1995 (the "Initiation Date"), the Independent Directors were
required to designate an investment banking firm of recognized
national standing and McCaw was required to designate an
investment banking firm of recognized national standing, in each
case to determine the private market value per Share. As set
forth in the PMVG, "private market value per Share is the private
market price per Share (including control premium) that an
unrelated third party would pay if it were to acquire all
outstanding Shares (including the Shares held by [McCaw] and its
affiliates) in an arm's-length transaction, assuming that the
Company was being sold in a manner designed to attract all
possible participants (including the Regional Bell Operating
Companies) and to maximize stockholder value, including if
necessary through the sale or other disposition (including tax-free
spin-offs, if possible) of businesses prohibited by legal
restrictions to be owned by any particular buyer or class of
buyers (e.g., the Regional Bell Operating Companies)."
If the higher of the respective final views of the
Independent Directors' Appraiser and the Offeror's Appraiser as
to private market value per Share (the "Higher Appraised Amount")
was more than 110% of the lower of such views (the "Lower
Appraised Amount"), then the Independent Directors' Appraiser and
the Offeror's Appraiser were to agree upon and jointly designate
a third investment banking firm of recognized national standing
to determine the private market value per Share (the "Mutually
Appraised Amount"). The Mutually Designated Appraiser was
required, no later than the 65th day after the Initiation Date,
to determine the Mutually Appraised Amount, and the private
market price per Share (the "Private Market Price") is (x) the
Mutually Appraised Amount, if such amount falls (as it did)
within the range of values that is greater than one-third and
less than two-thirds of the way between the Lower Appraised
Amount and the Higher Appraised Amount, and (y) the average of
the Mutually Appraised Amount and the other Appraised Amount
(Lower or Higher) that is closest to the Mutually Appraised
Amount, if the Mutually Appraised Amount does not fall within
that range; provided, however, that the Private Market Price may
not be less than the Lower Appraised Amount nor more than the
Higher Appraised Amount.
Once the Private Market Price was determined pursuant to the
procedures provided for in the PMVG, McCaw has 45 days to decide
whether it desires to proceed with an acquisition of all of the
Public Shares (an "Acquisition") at that price. If McCaw decides
to proceed with an Acquisition, it may pay the Private Market
Price in cash or any combination of cash, common equity
securities and/or nonconvertible senior or subordinated "current <PAGE>
<PAGE> 18
cash pay" debt securities that the Independent Directors, after
consultation with their investment banking firm, believe in good
faith will have an aggregate market value, on a fully distributed
basis, of not less than the Private Market Price. If McCaw
determines to proceed with an Acquisition as set forth above, it
will enter into an agreement with the Company (containing
customary terms and conditions applicable in a situation in which
the acquiror has an ownership position comparable to McCaw's
ownership interest in the Company) and will cause a meeting of
stockholders of the Company to be held as soon as practicable to
consider and vote thereon. The Acquisition may only be completed
if it is approved by a Majority Vote of the Public Stockholders.
If McCaw determines not to proceed with an Acquisition, or
if despite McCaw's good faith efforts an Acquisition has not been
completed within 12 months following the Initiation Date (or, if
an Acquisition has been approved by a Majority Vote of the Public
Stockholders and is being pursued in good faith by McCaw but has
not been completed due to regulatory delays or litigation, 20
months following the Initiation Date), McCaw will put the Company
in its entirety up for sale under direction of the Independent
Directors in a manner intended by the Independent Directors to
maximize value for all Shares. The sale procedures will be set by
the Independent Directors and may include, if necessary in order
to maximize stockholder value, provision for the sale or other
disposition (including tax-free spin-offs, if possible) of
businesses prohibited by legal restrictions to be owned by any
particular buyer or class of buyers (e.g., the Regional Bell
Operating Companies). The Independent Directors will select from
among the proposed transactions the one or more transactions
determined by them as being most likely to maximize value for all
Shares and will cause a meeting of the Company's stockholders to
be held as soon as practicable to consider and vote thereon.
McCaw will not bid unless requested to do so by the Independent
Directors. McCaw will fully cooperate in this process and, if one
or more of the transactions so selected by the Independent
Directors are approved by a Majority Vote of the Public
Stockholders, will cause all Shares owned by it or its affiliates
to be voted in favor thereof. Any sale of the Company would be
subject to receipt of FCC and other necessary regulatory
approvals.
If a transaction is presented for approval at a meeting of
stockholders as contemplated above and fails to receive the
requisite Majority Vote of the Public Stockholders, McCaw will
have no further rights or obligations to purchase the remaining
interest in the Company, but the remainder of the Private Market
Value Guarantee shall continue to apply to the extent described
therein.
<PAGE>
<PAGE> 19
Continuing Stockholder Protections. Except as described
above, neither McCaw nor any of its non-Company affiliates may
engage in any material transaction (including, without
limitation, agreements, such as roaming agreements, which are
standard in the industry) with the Company or any of its
subsidiaries (other than proportionate as a stockholder of the
Company) unless such transaction has been approved by a majority
of the Independent Directors.
Except as described above, neither McCaw nor any of its non-Company
affiliates may engage in a merger or consolidation with
the Company, or purchase all or substantially all of the
Company's assets, unless the transaction is approved not only by
a majority of the Independent Directors but also by a Majority
Vote of the Public Stockholders. In deciding whether to approve
such a transaction, the Independent Directors will be instructed
to consider as a fair price per Share the Private Market Price
per Share (including control premium) that an unrelated third
party would pay if it were to acquire all outstanding Shares
(including the Shares held by McCaw and its affiliates) in an
arm's length transaction, assuming that the Company was being
sold in the manner contemplated above. The Independent Directors
will retain independent financial advisors and counsel to advise
them with respect to any such transaction.
No transaction will be undertaken, and the Company will not
take any action, whether or not approved by a majority of the
board of directors of the Company, if the Independent Directors
determine in their good faith judgment by unanimous vote that
such transaction or action would likely depress the value of the
Company on the Initiation Date. In addition, the Company will not
acquire or dispose of any business (other than acquisitions of
additional cellular interests in markets in which the Company has
an interest), whether or not approved by a majority of the board
of directors of the Company, if the Independent Directors
determine in their good faith judgment by unanimous vote that
such acquisition or disposition is not in the best interests of
the Company.
Additional Share Purchases. Except as permitted above,
neither McCaw nor any of its non-Company affiliates may purchase
additional Shares if, after giving effect thereto, they would
beneficially own in the aggregate more than 75% of the
outstanding Shares on a fully diluted basis.
Corporate Opportunities. McCaw will direct to the Company,
and the Company will have a priority right to pursue, all
corporate opportunities to acquire interests in U.S. cellular
telephone systems other than those in markets in which McCaw has
an interest or contiguous to markets in which McCaw has such an
interest (in the latter instance, however, only if such market is <PAGE>
<PAGE> 20
not a market in which the Company has such an interest or
contiguous to such a market). For purposes of the foregoing, a
party will not be deemed to have an interest in a cellular
telephone system solely by reason of such party's ownership of
less than a majority equity interest in a public company having
such an interest. The Independent Directors will be afforded an
amount of time reasonably necessary to consider any such
transaction, consistent with any time constraints imposed by the
other party to such transaction, and if and for as long as a
majority of the Independent Directors desire to pursue such
transaction, McCaw will not separately pursue that transaction.
Certain Transferees Bound. Except pursuant to a sale of the
Company as described above, neither McCaw nor any of its non-Company
affiliates may sell more than 25% of the outstanding
Shares on a fully diluted basis to a third party or group unless
that third party or group agrees in writing to be bound by the
provisions set forth in the PMVG to the same extent as McCaw is
so bound.
Amendments. The provisions of the PMVG may be amended in any
respect not materially adverse to the holders of Public Shares,
but only if the amendment is approved by a majority of the
Independent Directors. Any such amendment will promptly be
disclosed in a filing with the Securities and Exchange
Commission. The determination of the Independent Directors as to
whether an amendment is materially adverse to the holders of
Public Shares shall be final and shall bind all holders of Public
Shares. The provisions of the PMVG may also be amended in any
other respect if the amendment is approved by a Majority Vote of
the Public Stockholders. The PMVG was amended in 1994 in
connection with the Television Spin-off.
The foregoing description is only a summary of, and is
qualified by reference to, the PMVG, which has been filed with
the Securities and Exchange Commission as an exhibit to this Form
10-K.
Governmental Regulation
The construction, operation and transfer of cellular systems
in the United States are regulated to varying degrees by the FCC
pursuant to the Communications Act of 1934, as amended (the
"Communications Act"). The FCC has promulgated regulations
governing the construction and operation of cellular systems,
licensing and technical standards for the provision of cellular
telephone service.
<PAGE>
<PAGE> 21
For licensing purposes the FCC divided the United States
into 734 separate geographic markets (306 MSAs and 428 RSAs). In
each market, the allocated cellular frequencies are divided into
two equal blocks. During the initial application process for MSAs
and RSAs, the FCC reserved the A Block frequencies for
nonwireline applicants (such as the Company) and the B Block for
wireline applicants. Now, subject to FCC rules, an A Block or a B
Block license may be held by either a wireline or nonwireline
entity, but no entity may control more than one cellular system
in any MSA or RSA.
The completion of acquisitions involving the transfer of
control of a cellular system requires prior FCC approval and, in
certain cases, compliance with the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 and state regulatory approval.
Acquisitions of minority interests generally do not require FCC
approval. Whenever FCC approval is required, any interested party
may file a petition to dismiss or deny the Company's application
for approval of the proposed transfer.
When a cellular system has been constructed, the licensee is
required to notify the FCC that construction has been completed.
Immediately upon this notification, but not before, FCC rules
authorize the licensee to offer commercial service to the public.
The licensee is then said to have "operating authority." The
Company has obtained operating authority for each of its cellular
systems that is currently in operation. Initial operating
licenses are granted for 10 year periods. The FCC has recently
established the procedures and standards for filing renewal
applications, filing petitions to deny applications for renewal
and conducting comparative renewal proceedings between cellular
licensees and challengers filing competing applications. The FCC
will award a "renewal expectancy" to cellular operators meeting
specific criteria that establish that the licensee has adequately
provided service to the public and has complied with applicable
rules and regulations. The ruling establishing the process of
obtaining a "renewal expectancy" and other procedures for renewal
are subject to court review. Licenses may be revoked and license
renewal applications denied for cause. In addition, if a renewal
expectancy is not granted, a license could be awarded to a
competing applicant if it prevails in a comparative hearing. The
licenses for the Company's cellular systems in New York, Dallas-Fort Worth
and Houston are due to expire in 1995 and in Los
Angeles in 1996. The Company plans to seek license renewals in
accordance with the FCC's procedures.
Under FCC rules, the authorized service area for the Company
in each of its markets is referred to as the "cellular geographic
service area" or CGSA. The CGSA is comprised of the composite
service area of the system's cell sites as measured according to
a formula established by the FCC in 1992 and contained in its <PAGE>
<PAGE> 22
rules. The CGSA may be coincident with or smaller than the
related MSA or RSA. The right to serve areas which fall within
the licensee's MSA or RSA but outside of its CGSA is exclusive to
such licensee for a period of 5 years from the date the licensee
receives authority to construct its system. This ruling and the
manner in which the FCC defines the CGSA is currently subject to
further FCC and court review. At the conclusion of such 5-year
period other entities may apply to serve areas within the MSA or
RSA that are unserved by the licensee, and the licensee may apply
to retain the exclusive service rights within its cellular block.
If more than one mutually exclusive application is filed for an
unserved area, the FCC is considering whether to use its auction
authority to choose a winner or whether to award the area by
lottery. In March 1993 the FCC began accepting such unserved
areas applications and the Company expects that there will be
applications filed for unserved areas within MSAs where it holds
the initial A Block licenses. The Company expects that any
unserved areas within its MSAs will be immaterial to the Company.
The Los Angeles partnership was selected by the FCC to serve
areas within its MSA that it has not yet served. In addition,
the Company intends to file several unserved areas applications
to attempt to obtain rights to serve additional territory.
Because of the possibility of other competing applications, the
Company has no assurance that these applications will be granted.
The FCC requires landline telephone carriers in each market
to offer reasonable interconnection facilities to both cellular
systems in the market and to disclose how the B Block licensee
will interconnect with the landline network. The A Block cellular
licensee has the right to interconnect with the landline network
in a manner no less favorable than that of the B Block licensee;
it may, however, negotiate interconnection arrangements that are
not identical to those provided to the B Block licensee in that
market. In addition, the FCC is now considering the issue of
whether commercial mobile radio services such as cellular should
be required to provide interconnection to their networks to other
carriers.
The FCC's rules also generally require persons or entities
holding cellular construction permits or licenses to coordinate
their proposed frequency usage and system design with other
cellular users and licensees in order to avoid electrical
interference between adjacent systems or the capture of another
market's subscribers. The height and power of base stations in
the cellular system are regulated by FCC rules, as are the type
of signals emitted by these stations. In addition to regulation
by the FCC, cellular systems are subject to certain Federal
Aviation Administration regulations respecting the marking,
lighting, siting and construction of cellular transmitter towers
and antennas.
<PAGE>
<PAGE> 23
The FCC has initiated a rulemaking proceeding to update its
rules which ensure that FCC-regulated transmitters do not expose
the public or workers to potentially harmful levels of radio
frequency radiation. The Company does not believe that the
standards that have been proposed will have any significant
impact on the Company or its services.
Applicable law administered by the FCC requires that the
total percentage of shares of the Company owned of record or
voted by non-United States persons or entities shall not exceed
25%.
The Company is also subject to state and local regulation in
some instances. In 1981, the FCC preempted states from exercising
jurisdiction in the areas of licensing, technical standards and
market structure. However, certain state authorities have
regulated several aspects of a cellular operator's business,
including the rates it charges its subscribers and cellular
resellers, the resale of long-distance service to its
subscribers, the technical arrangements and charges for
interconnection with the landline network and the transfer of
interests in cellular systems. The siting and construction of the
cellular facilities, including transmitter towers, antennas and
equipment shelters may also be subject to state or local zoning,
land use and other local regulations.
In 1993, Congress passed legislation preempting state
regulation of cellular and other wireless mobile carriers' market
entry and rates. The legislation permitted states to seek rate
regulatory authority from the FCC in cases where market forces
are inadequate to protect consumers and, moreover, allowed states
that regulated cellular rates before June 1, 1993 to continue
doing so pending FCC review of any rate regulation petitions
submitted to the FCC before August 10, 1994. Three of the states
in which the Company operates cellular systems - California, New
York and Connecticut - timely filed petitions with the FCC to
continue regulating cellular rates. (Texas does not regulate
cellular services.) The FCC has not yet acted on the petitions
but must issue a final opinion on them by August 1995.
The New York Public Service Commission has adopted certain
regulations governing cellular operators in that state. In July
1993, the New York State legislature passed a law that exempted
cellular telephone companies from a 45 day notice requirement for
certain tariff filings. When the California Public Utilities
Commission ("CPUC") petitioned the FCC in August 1994 to allow
the CPUC to continue regulating cellular rates, it also ordered
cellular carriers to interconnect, upon request, to switch-based
resellers at market-based "unbundled" wholesale rates that do not
exceed current wholesale rates. Several resellers have requested <PAGE>
<PAGE> 24
to interconnect their switches with those of the Company's Los
Angeles system. However, due to unresolved technical
considerations, no interconnections are yet in operation.
Pursuant to the terms of a recent CPUC order, the Company's
system and cellular resellers are discussing a test of the
interconnection arrangements. The FCC and Congress also are
considering proposals to mandate interconnections between
wireless carriers (including resellers) in certain circumstances.
Any such proposal, if adopted at the federal level, may preempt
California's interconnection policies.
Employees
As of December 31, 1994, the Company employed 1,581 full-time
and part-time employees in its consolidated cellular
operations (New York and Dallas-Fort Worth), broadcasting and
corporate offices. Twenty-seven of such employees, all of whom
are involved in televisions operations, are represented by
unions. The Company's unconsolidated cellular affiliates (Los
Angeles, Houston and Galveston) employed an additional 1,951
full-time and part-time employees as of year end 1994. The
Company believes that its employee relations are generally good.
Executive Officers
The following individuals are currently serving as executive
officers of the Company:
Steven W. Hooper has been Chief Executive Officer of the
Company since March 1995 and Chief Executive Officer of McCaw
since January 1995. From 1993 to January 1995, he was Executive
Vice President and Chief Financial Officer of McCaw. From 1988
until 1993, he was Senior Vice President-Cellular Operations of
McCaw. Prior to 1988, Mr. Hooper served with McCaw as Executive
Vice President and Chief Operating Officer of its Cable Division
and in various financial positions.
Tom A. Alberg has been a director, President and Chief
Operating Officer of the Company since 1991 and Executive Vice
President of McCaw since 1990. Before joining McCaw, Mr. Alberg
was the Chairman of the Executive Committee and a partner of
Perkins Coie, the largest law firm headquartered in the Pacific
Northwest. Mr. Alberg is a director of Digital Systems
International, Inc., Active Voice Corporation and LIN Television
Corporation.
Wayne M. Perry has been a director and Vice Chairman of the
Board of Directors of the Company since 1990 and Vice Chairman of
the Board of McCaw since 1989. From 1985 to 1989, Mr. Perry
served as President of McCaw.
<PAGE>
<PAGE> 25
Donald Guthrie has been Senior Vice President-Finance of the
Company since 1992 and a Senior Vice President and Treasurer of
McCaw since 1986. He also served as Vice President-Finance of the
Company from 1990 to 1992.
Item 2. PROPERTIES
To provide cellular service, the Company maintains sales and
administrative offices, transmitter or antenna sites and
switching offices. The Company generally leases all of these
facilities, although it does own such premises where it is in the
best interests of the Company to do so. The Company's television
broadcasting operation maintains an administrative office,
television studio and transmitter or antenna site, most of which
are owned by the Company. See Note 4 to the Company's
consolidated financial statements included elsewhere in this Form
10-K.
With the expansion of cellular networks, increased in-filling
of existing networks and the coming needs of PCS and
other technologies, the demand for cell sites is growing.
Increasingly, however, resistance to the placement of new cell
sites is being encountered, largely from groups that object to
these sites on the basis of unknown, but alleged, health hazards
and aesthetic considerations. The possibility of preemptive
federal regulation of the location of cell sites is under review
by the FCC, but for the foreseeable future siting is likely to
remain subject to local regulation. Although the Company has not
yet experienced any significant difficulty in locating cell
sites, it is possible that this could become a greater concern.
Item 3. LEGAL PROCEEDINGS
The Company is from time to time a defendant in and is
threatened with various legal proceedings arising from its
regular business activities. The Company is also party to routine
filings with the FCC and state regulatory authorities and
customary regulatory proceedings pending in connection with
interconnection, rates, and practices and proceedings concerning
the telecommunications industry in general and other proceedings
which management does not expect to have a material adverse
effect on the financial position or results of operations of the
Company.
In August 1993 and in December 1993, two dealers for the Los
Angeles cellular partnership (LACTC) filed lawsuits against the
partnership and certain other parties in California state court,
seeking injunctive relief, damages, treble damages, punitive <PAGE>
<PAGE> 26
damages and restitution. (Goldenwest Cellular Corp. v. Los
Angeles SMSA Ltd. Partnership; PacTel Cellular; The Good Guys
Inc., Case No. 715479 (Superior Court of California, Orange
County), and Autophone, Inc. v. Los Angeles Cellular Telephone
Co.; Los Angeles SMSA Ltd. Partnership; PacTel Cellular, et al.,
Case No. 722299 (Superior Court of California, Orange County)).
These cases are now set for trial in June 1995 and have been
consolidated. The lawsuits allege various torts and statutory
violations, including price-fixing regarding cellular equipment
and service, below-cost sales of equipment, fraud, interference
with economic relationship, unfair competition, discrimination
among agents and conspiracy. A third lawsuit addressing similar
facts and raising many of the same claims (Cellular Activators,
et al. v. Los Angeles Cellular Telephone Company, et al., Case
No. 729278 (Superior Court of California, Orange County)) was
filed in May 1994. Plaintiffs in this case seek damages in excess
of $1,400,000, punitive damages, treble damages, restitution, and
injunctive relief. A fourth suit was filed in February 1994 (Cel-Tech
Communications, Inc. et al. v. Los Angeles Cellular
Telephone Company et al., Case No. VC015535 (Superior Court of
California, Los Angeles County)) containing claims relating to
equipment sales and seeking injunctive relief, restitution and
monetary damages. This case was tried in February and March 1995;
after presentation of the plaintiff's case, the judge granted
LACTC's motion to dismiss the case in its entirety.
In August 1994 a class action was filed against LACTC in
California state court on behalf of the partnership's cellular
telephone service customers and former customers in the greater
Los Angeles area (Thomas and Nicola v. Los Angeles Cellular
Telephone Company, et al., Case No. 734316, Superior Court of
California, Orange County). The complaint alleges that LACTC has
engaged in price fixing for cellular service rates with other
cellular carriers in violation of California law. The complaint
seeks actual damages on behalf of the class in excess of
$100,000,000. The complaint further seeks treble damages and
injunctive relief. A similar class action complaint was also
filed in California state court in November 1994 on behalf of the
customers of Los Angeles SMSA (Euros Cady v. Los Angeles Cellular
Corp., Case No. 739101, Superior Court of California, Orange
County).
Another similar class action complaint was filed against
LACTC in federal court in October of 1994, on behalf of former
and current cellular customers of both LACTC and its competitor
Los Angeles SMSA. This case also specifically named Los Angeles
SMSA and its affiliate AirTouch Cellular (PacTel Cellular) as
defendants. (Kagan and Sifuentes v. Los Angeles Cellular
Telephone Company, et al., Case No. 94-6923, U.S. District Court,
Central District of California). The complaint alleged that
defendants engaged in price fixing for cellular service rates in <PAGE>
<PAGE> 27
violation of Sections 1 and 2 of the Sherman Act and sought
damages, treble damages and injunctive relief. In March 1995, the
judge entered an order granting LACTC's motion for a summary
judgment in this case.
A class action complaint similar to the Thomas case was
filed in November 1993 against PacTel Cellular (AirTouch), Los
Angeles SMSA and others in California state court (Garabedian v.
California, Case No. 721144, Superior Court of California, Orange
County). The complaint, brought on behalf of current and former
customers of Los Angeles SMSA and LACTC, alleges that PacTel
Cellular and LACTC conspired to fix cellular service prices. Like
the Thomas case, the Garabedian complaint seeks damages in excess
of $100,000,000, treble damages and injunctive relief. In March
1995, the court granted the motion of AirTouch and Los Angeles
SMSA to add LACTC as a defendant in this case, and granted the
plaintiffs' motion to certify the class. No trial date has been
set in this case.
LACTC intends to continue to defend the above-referenced
lawsuits vigorously, and believes that it has meritorious
defenses to the allegations contained in the complaints. The
Company does not expect that the decisions in these legal
proceedings will have a material adverse effect on its financial
position or results of operations.
The Company is aware of an antitrust investigation being
conducted by the California State Attorney General involving the
pricing of cellular telephone service in the Los Angeles area
market from about 1986 to the early 1990s. No formal charge or
complaint has been filed. The Company and LACTC are cooperating
fully with the Attorney General's investigation and believe that
the relevant pricing practices were and are in compliance with
the antitrust laws.
In August 1993, a class action lawsuit was filed on behalf
of Texas cellular subscribers in state court in Texas (Crowley,
et al. v. Houston Cellular Telephone Company, et al., Case No.
93-0879, Harrison County, Texas, 71st Judicial District). The
defendants in this action are Houston Cellular Telephone Company,
LIN Broadcasting Corporation, Metroplex Telephone Co., McCaw
Cellular Communications, Inc., and the affiliates of these
entities providing cellular service in the State of Texas. The
most recent petition, filed in March 1995, generally challenges
the liquidated damages and automatic renewal provisions in annual
cellular subscriber contracts. Plaintiffs have made the following
allegations: (1) the contracts are unconscionable and violate the
Texas Deceptive Trade Practices Act; (2) the liquidated damages
provisions contained in the contracts constitute an illegal
penalty; (3) the defendants have engaged in an antitrust
conspiracy with each other and with their competitors to divide <PAGE>
<PAGE> 28
the cellular market in Texas by including the challenged
provisions in their subscriber contracts and have therefore
violated the Texas Free Enterprise and Antitrust Act; (4) the
defendants engaged in a civil conspiracy by which the challenged
provisions were included in the subscriber contracts; and (5) the
defendants fraudulently concealed their illegal acts such that
the running of any applicable statute of limitations has been
suspended. Plaintiffs allege two separate sub-classes: the
"damages" class, consisting of persons who breached their
contracts and were thereby charged liquidated damages; and the
"contracts" class, consisting of persons who are currently
subject to the challenged provisions in their subscriber
contracts. Neither of these sub-classes has been certified by the
court at this time. Plaintiffs seek declaratory relief, damages,
fees, costs and interest. Written and deposition discovery has
commenced. No trial or class certification hearing dates have
been set. The defendants intend to defend the lawsuit vigorously,
and believe they have meritorious defenses to the allegations
contained in the complaint. The Company does not expect that the
decision in this legal proceeding will have a material adverse
effect on its financial position or results of operations. The
Company has been informed that the Office of the Attorney General
of the State of Texas notified the Houston Partnership in March
1995 of that office's intention to file claims against that
partnership that are largely similar to the claims presented in
the Crowley case. Discussions have been held with
representatives of the Attorney General's Office and are
scheduled to continue.
For a description of litigation related to the PMVG, see
"Business - Private Market Value Guarantee - Status of PMVG Sale
Process."
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders
during the quarter ended December 31, 1994.
<PAGE>
<PAGE> 29
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Company's Common Stock is listed for quotation on the
Nasdaq National Market under the symbol LINB. The following table
sets forth, for the calendar quarters indicated, the high and low
sales prices of the Common Stock on the Nasdaq National Market as
reported in published financial sources. These prices reflect
inter-dealer prices, without retail mark-up, mark-down or
commission and may not necessarily represent actual transactions.
The Television Spin-off was completed on December 28, 1994; none
of the following prices have been adjusted for that event, but
prices for the period including and following that date reflect
its effect.
Year High Low
1993
First Quarter . . . .. . . . . . $90 $75-1/2
Second Quarter. . . .. . . . . . $101 $80-1/4
Third Quarter . . . .. . . . . . $121-3/4 $98-1/2
Fourth Quarter. . . .. . . . . . $116-1/2 $108-1/4
1994
First Quarter . .. . . . . . . . $117-1/4 $106-1/2
Second Quarter. .. . . . . . . . $122-1/4 $102-3/4
Third Quarter . .. . . . . . . . $140-3/4 $119-1/4
Fourth Quarter. .. . . . . . . . $146-1/4 $133
1995
First Quarter
(through March 15, 1995). . . $141-1/2 $120-1/4
As of February 28, 1995 there were 1,311 holders of record
of Common Stock (which number does not include the number of
stockholders whose shares are held of record by a broker or
clearing agency but does include such a brokerage house or
clearing agency as one recordholder).
The Company has never paid cash dividends on its Common
Stock. The Board of Directors will determine future dividend
policy based on the Company's results of operations, financial
condition, capital requirements and other circumstances. The
Company's Bank Credit Facilities (described below) restrict the
Company's ability to pay dividends to its stockholders. There are
also restrictions on the ability of the Company's operating
subsidiaries to pay dividends to the Company. It is not
anticipated that any cash dividends will be paid on Common Stock
in the foreseeable future.
<PAGE>
<PAGE> 30
<TABLE>
Item 6. SELECTED CONSOLIDATED FINANCIAL DATA
Set forth below is selected consolidated financial data of the Company for the past five years. This data should be
read in conjunction with the consolidated financial statements of the Company and the notes thereto for the
corresponding periods which are contained elsewhere in this Form 10-K.
<CAPTION>
Year Ended December 31,
(In thousands, except per share data) 1994(1) 1993 1992 1991 1990
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations Data:
Net revenues . . . . . . . . . . . . . . . $876,469 $688,557 $572,521 $468,137 $378,089
Operating income . . . . . . . . . . . . . 206,110 128,305 130,015 81,430 134,912
Equity in income of
unconsolidated affiliates. . . . . . . . 115,010 103,125 96,977 82,338 70,607
Cumulative effect of the change in
accounting for income taxes . . . . . . -- -- -- (693,835) (2) --
Net income (loss). . . . . . . . . . . . . $564,150 (3) $(60,727) $(68,952) $(838,131) $(222,844) (4)
Per Share Amounts:
Income (loss) before cumulative
effect of the change in accounting
for income taxes . . . . . . . . . . . . $10.84 $(1.18) $(1.34) $(2.81) $(4.33)
Cumulative effect of the change in
accounting for income taxes. . . . . . . -- -- -- (13.50) --
-------- -------- -------- -------- --------
Net income (loss). . . . . . . . . . . . . $10.84 $(1.18) $(1.34) $(16.31) $(4.33)
======== ======== ======== ======== ========
Average common and common
equivalent shares outstanding(5) 52,040 51,445 51,417 51,395 51,455
Balance Sheet Data:
Cash, cash equivalents and
marketable securities. . . . . . . . . . $47,467 $102,831 $122,495 $108,924 $63,809
Working capital. . . . . . . . . . . . . . (171,948) (69,269) (6,580) 27,698 63,234
Total assets . . . . . . . . . . . . . . . 2,923,873 2,909,523 2,862,910 2,798,944 2,693,117
Long-term debt . . . . . . . . . . . . . . 1,443,125 1,551,447 1,694,338 1,769,682 1,716,250
Redeemable preferred stock
of a subsidiary. . . . . . . . . . . . . -- 1,305,248 1,170,948 1,036,648 902,348
Stockholders' equity (deficit) . . . . . . $297,738 $(1,102,365) $(1,046,736) $(978,573) $(142,334)
</TABLE>
<PAGE>
<PAGE> 31
(1) On June 24, 1994, the Company disposed of its equity interest
in the Philadelphia cellular operations and its GuestInformant
specialty publishing business in connection with the redemption of
the LCH preferred stock. On December 28, 1994, the Company
completed the Television Spin-off. As a result of these
transactions, results of operations and financial position as of
and for the year ended December 31, 1994 are not directly
comparable to prior periods.
(2) The Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 109, "Accounting for Income Taxes",
effective January 1, 1991. The effect of the adoption was the
$693.8 million charge for the cumulative effect of the change in
accounting and an increase in deferred taxes.
(3) Includes a gain of $468.7 million related to the redemption of
the LCH Preferred Stock.
(4) Includes nonrecurring charges associated with the completion
of the tender offer by McCaw of $292.9 million on a pre-tax basis
and $245.6 million on an after-tax basis.
(5) Common equivalent shares are included only in 1994, since they
would be antidilutive in all other years.<PAGE>
<PAGE> 32
<TABLE>
Selected Proportionate Cellular Operating Data
The following table sets forth unaudited supplemental financial data for the Company's
cellular segment reflecting proportionate consolidation of entities in which the Company has
an interest. This presentation differs from the consolidation methodology used to prepare
the Company's principal financial statements in accordance with generally accepted
accounting principles (see Note 2 to the consolidated financial statements).
<CAPTION>
Year Ended December 31,
(Dollars in thousands) 1994(1) 1993 1992
-----------------------------------------------------------------------------------
<S> <C> <C> <C>
Net revenues $959,174 $755,336 $609,426
Direct costs and expenses 292,494 222,308 172,523
Marketing 263,560 176,298 144,238
Depreciation and amortization 154,277 139,224 126,841
Loss on disposal of fixed assets -- 23,589 --
--------- --------- ---------
Total operating costs 710,331 561,419 443,602
--------- --------- ---------
Operating income - proportionate basis $248,843 $193,917 $165,824
========= ========= =========
Cellular systems:
Proportionate subscribers (2) 1,083,000 865,000 649,000
Proportionate pops (3) 26,000,000 27,200,000 26,900,000
Operating Income Reconciliation
From Consolidation/Equity Accounting to Proportionate Accounting
Operating income -
Consolidation/equity method (4) $148,153 $77,993 $77,273
Equity in income of
unconsolidated affiliates 115,010 103,125 96,977
Minority interests in net income of
consolidated subsidiaries (26,874) (3,896) (18,856)
Net income tax expenses included in
equity in income of unconsolidated
affiliates and minority interests (5) 6,677 5,901 5,222
Other adjustments (6) 5,877 10,794 5,208
--------- --------- ---------
Operating income -
proportionate basis (see above) $248,843 $193,917 $165,824
========= ========= =========
</TABLE>
<PAGE>
<PAGE> 33
------------------------
(1) On June 24, 1994, the Company disposed of its equity interest
in the Philadelphia cellular operation in connection with the
redemption of the LCH preferred stock. On May 31, 1994, the Company
acquired an additional 5.2% interest in the New York cellular
operations. The proportionate operating data reflect these changes
in ownership from the dates of the transactions.
(2) Calculated by multiplying (i) the total subscribers of a
licensee in which, as of the date specified, the Company owned an
interest by (ii) the percentage ownership interest in that licensee
which the Company owned on such date.
(3) Calculated by multiplying (i) the Donnelley Marketing Service
estimate of current year population in a market by (ii) the
percentage ownership interest that the Company owned in a licensee.
(4) See Note 12 to the Company's consolidated financial statements
- "Segment Data."
(5) Includes a $(2,766) cumulative effect of accounting change
during 1993 due to the adoption of SFAS No. 109, "Accounting for
Income Taxes," at the Company's former Philadelphia cellular
affiliate.
(6) Elimination of interest income, interest expense and other
non-operating income and expenses included in equity in income of
unconsolidated affiliates and minority interests. Such amounts
include $3,902 for 1994, $5,715 for 1993 and $1,582 for 1992 due to
equity in losses and interest expenses at the former Philadelphia
affiliate due to that entity's ownership of an interest in a cable
system operator.
<PAGE>
<PAGE> 34
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The FCC has allocated additional spectrum for mobile
communication services and recently concluded auctions for licenses
to a significant portion of this spectrum. Federal and state
authorities are also considering proposals that may result in the
modification of rights held by providers of mobile communications
services and the modification of relationships between facilities-based
cellular carriers and resellers of cellular services. See
"Business - The Company's Cellular Operations-Cellular Competition"
and "Governmental Regulation". The Company believes these
initiatives will result in additional competition for the Company.
The FCC has already authorized one entity to provide a cellular-like
mobile service in certain markets of the Company (in addition
to the B Block cellular competition). Other entities have submitted
winning bids in recent auctions for personal communication services
licenses and are expected to launch service within the next few
years. The Company also intends to pursue rights to offer
additional mobile communications services. In light of the
uncertainty as to the eventual outcome of any of these specific
initiatives, including the nature and timing of the additional
competitive services covered thereby, it is impossible to quantify
at this time the impact of these legislative and regulatory
initiatives or such competition on the Company at this time.
1994 COMPARED TO 1993
LIN completed two transactions during 1994 which, together,
had a significant effect on the Company's results of operations for
the year and financial position as of December 31, 1994. On June
24, 1994, LCH Communications, Inc. ("LCH"), a wholly-owned
subsidiary of the Company, redeemed all of its outstanding
Redeemable Preferred Stock (the "LCH Preferred Stock") held by
Comcast Cellular Communications Inc. in exchange for all of the
capital stock of a subsidiary of LCH, whose assets consisted
primarily of a 49.99% interest in the Philadelphia cellular system
and the GuestInformant specialty publishing business, plus $12.3
million cash (which represented 15% of the fair market value of the
WOOD-TV business). The Company recognized a non-cash tax-free gain
of $468.7 million in connection with this transaction. The
Company's results of operations include the results of the
consolidated publishing business and the equity investment in the
Philadelphia operations through June 24, 1994. On December 28,
1994, the Company distributed all of the issued and outstanding
shares of common stock of its previously wholly-owned subsidiary
LIN TV. The LIN TV operations comprised substantially all of the
Company's former television broadcasting operations. The
distribution was made in the form of a dividend payable to holders <PAGE>
<PAGE> 35
of record of the Company's common stock at the close of business on
December 9, 1994. The Company's shareholders of record on that date
received one share of LIN TV common stock for each two shares of
the Company's common stock owned. The consolidated financial
statements reflect an increase in the Company's additional paid-in
capital of $41.25 million, representing the negative net book value
of the assets and liabilities distributed. The results of
operations of LIN TV are included through December 28, 1994.
LIN reported consolidated net revenues of $876.5 million for
1994, an increase of 27% over 1993 net revenues of $688.6 million,
primarily due to continued strong growth in cellular subscribers.
The Company recorded consolidated net income for 1994 of $564.2
million, or $10.84 per share, compared to a consolidated net loss
of $60.7 million, or $1.18 per share, for 1993. The 1994 results
include a non-recurring gain of $468.7 million and a cessation of
the preferred stock dividends in the second quarter as a result of
the redemption of the LCH Preferred Stock.
Revenues
Net revenues in 1994 for LIN's consolidated cellular
operations (principally New York and Dallas-Fort Worth) increased
33% from 1993. This increase was primarily the result of a 38%
increase in average subscribers, offset, in part, by a 3% decline
in average revenue per subscriber, a trend that the Company expects
will continue for at least the next several years. The decrease in
average revenue per subscriber is primarily the result of a lower
average rate per minute, a decline in long distance revenues per
subscriber and a slight decline in average minutes of use per
subscriber. The average rate decreased due to a number of factors,
including promotional activities and pricing changes, which were
offset in part by a change in the mix of customers. Long distance
revenues per subscriber have declined primarily due to the October
1993 implementation of equal access at the Company's Los Angeles
and Houston cellular operations, where the cellular long distance
service operations are wholly-owned by the Company.
The overall demand for wireless services continued to expand
during 1994 and the Company expects to benefit from the anticipated
continuation of this trend in the future, although there can be no
assurance that this trend will continue at the same rate as it has
historically. The Company is actively working toward improving the
accessibility and value of cellular service in the future by
participating in the development and deployment of important new
services to complement the basic services now offered. During 1994,
the Company continued to market enhanced cellular services in
various of its markets including enhanced directory assistance,
voice recognition, and data transmission services. The Company also
introduced digital cellular service in New York during the first
half of 1994 and continued to increase the market penetration of <PAGE>
<PAGE> 36
digital service in Los Angeles. The Company plans to introduce
commercial digital service in its Dallas and Houston operations
during 1995. During 1995 and beyond, the Company currently plans to
implement such additional service improvements as digital messaging
service, Caller ID and cellular digital packet data service. The
expansion of digital service generally will increase the capacity
of the Company's systems, while providing benefits to customers
such as the enhanced services available only through the digital
network and the longer battery life of digital phones. Continued
growth in demand for basic cellular service, as well as demand for
new services such as those discussed above should contribute to
continued cellular revenue growth for the Company as well as
mitigate the trend of declining revenue per subscriber.
Media revenues increased 9% from 1993, due to continued
improvement in both the national economy and the local economies
where the Company operated, which stimulated growth in advertising
spending. Due to the transactions discussed above, results of media
operations in 1994 are not directly comparable to results of prior
years, and media revenues are not expected to constitute a
significant portion of the Company's revenues in the future.
Operating Costs and Expenses
Direct operating expenses increased 13% from 1993 and
represented 16% of net revenues versus 18% in 1993. This increase
reflects increased cellular network operating expenses due to the
subscriber growth and increased network size, an increase in
television news and programming expenses and an increase in direct
cellular fraud costs. The decline in direct operating expenses as a
percentage of net revenues was primarily due to efficiencies in
cellular network operations as well as a decline, as a percentage
of revenues, in amounts paid to long distance carriers for long
distance service that was resold by the Company to its subscribers.
Selling, general and administrative expenses increased 45% from
1993 and increased to 43% of net revenues in 1994 versus 38% in
1993. The most significant reason for this increase was an increase
in marketing expenses associated with the increase in new cellular
subscribers. The Company added 59% more new subscribers in 1994
than in 1993. The cost per new subscriber added increased slightly
and is expected to continue to increase for at least the next
several years. The Company also had a large increase in costs
related to cellular customer service and support. This reflects
increases in customer support, billing, administration and other
general expenses, including an increase in personnel necessary to
administer cellular fraud related issues. The Company expects that
operating expenses will continue to grow in the future as the
subscriber base expands and additional services are provided. <PAGE>
<PAGE> 37
However, the Company continues to invest in equipment and personnel
to improve the efficiency and effectiveness of customer support and
administration.
Depreciation increased principally due to the addition of
property and equipment to expand and improve the Company's cellular
systems. The Company anticipates continued growth in depreciation
expense in the future as additional capital expenditures will be
required to support growth in the cellular subscriber base and to
provide enhanced cellular services, including digital cellular.
Amortization expense increased due to the effect of acquisitions as
discussed in "Liquidity and Capital Resources" below. Absent any
new acquisitions, annual amortization expense should decrease by
approximately $15 million during 1995 as certain intangible assets
became fully amortized in December 1994. During 1994, the Company
completed the replacement of substantially all of the switching and
cell site equipment in its Dallas operations (see further
discussion in "Liquidity and Capital Resources"). The loss realized
upon sale of the old cellular equipment at an amount less than its
carrying value was provided for in 1993.
Other Income and Expenses
Equity in income of unconsolidated affiliates rose 12% due to
improved results at the affiliates, offset, in part, by the effect
of the disposition of the Philadelphia affiliate in June 1994 as
discussed earlier. Net revenues of these ventures increased 12 due
primarily to an increase in subscribers offset, in part, by a
decrease in average revenue per subscriber as well as the
disposition of the Philadelphia affiliate. The trend of declining
revenue per subscriber was consistent with that of LIN's
consolidated cellular operations. Direct operating expenses of
these ventures increased 28% and represented 12% of revenues versus
11% in the prior year. The increase was attributable primarily to
increased network operations, long distance and roamer fraud
expenses, offset in part by the effect of the Philadelphia
disposition. Selling, general and administrative expenses of the
ventures increased 18% and represented 41% of revenues versus 39%
in the prior year. Selling expenses increased 17%, driven by an
increase in new customer additions. General and administrative
expenses also continued to increase as a result of the growth in
subscribers. Depreciation and amortization expense of these
ventures increased 1%, reflecting additional capital expenditures
for cellular network capacity and coverage expansion, digital
equipment conversion, offset in part by the Philadelphia
disposition. Net other expense declined due to the Philadelphia
disposition and as a result of litigation settlements in 1993.
<PAGE>
<PAGE> 38
Interest expense (which includes the amortization of the
financing and commitment fees) increased $16.2 million from 1993
due primarily to higher interest rates. The Company's weighted
average interest rate on its borrowings was 5.79% during 1994 and
4.94% during 1993. As required under its Bank Credit Facilities (as
defined below), the Company has entered into interest rate cap
agreements. See Note 6 to the consolidated financial statements
contained elsewhere in this Form 10-K.
Minority interests in net income of consolidated subsidiaries
increased $23.0 million primarily due to an increase in the net
income of the Dallas and New York cellular operations, offset in
part by a decrease in the minority interest accrual for the New
York operation in 1994 as a result of the Company's acquisition of
additional interests in that market in May 1994 (see Liquidity and
Capital Resources). The increase in the net income of the Dallas
operation was due in part to a $42.2 million loss incurred in 1993
as a result of the write-down and subsequent disposition of a
substantial portion of cellular equipment.
As discussed previously, the LCH Preferred Stock was redeemed
in the second quarter of 1994. See further discussion in Note 7 to
the consolidated financial statements. As a result, the Company is
no longer required to accrue preferred stock dividends, which
accrued at the rate of 15.8% annually, thereby reducing provisions
for preferred stock dividends by approximately $100 million from
1993.
The Company's effective tax rate of 31.5% in 1994 was
substantially lower than the 47.2% in 1993 primarily due to the
additional tax expense of $15.3 million recorded during 1993 as a
result of the increase in the corporate tax rate from 34% to 35%.
Pursuant to SFAS No. 109, the Company was required to record this
one-time additional tax expense, and corresponding increase in
deferred tax liability, as a result of the increase in the
statutory tax rate.
1993 COMPARED TO 1992
LIN reported net revenues of $688.6 million for 1993, an
increase of 20% over 1992 net revenues of $572.5 million.
Consolidated cellular revenues increased 28% as strong cellular
subscriber growth continued. Media revenues were up 2% from 1992.
The Company recorded a consolidated net loss for 1993 of $60.7
million, or $1.18 per share, compared to a consolidated net loss of
$69.0 million, or $1.34 per share, for 1992.
<PAGE>
<PAGE> 39
Revenues
Net revenues for LIN's consolidated cellular operations
(principally New York and Dallas) increased 28% from 1992. This
increase was primarily the result of a 29% increase in average
subscribers, offset, in part, by an 1% decline in average revenue
per subscriber. The decrease in average revenue per subscriber is
primarily the result of a lower average rate per minute offset by
an increase in average minutes of use per subscriber. The average
rate has decreased due principally to pricing actions such as
actual rate decreases and/or including more minutes for a fixed
price.
Net revenues from the media segment increased 2% from 1992.
However, excluding cyclical political and Olympics revenues from
both years, the increase was 6%.
Operating Costs and Expenses
Direct operating expenses increased 11% from 1992 and
represented 18% of net revenues versus 19% in 1992. This increase
reflects increased cellular network operating expenses due to the
subscriber growth and increased network size, as well as increased
television news and programming expenses. Selling, general and
administrative expenses increased 27% from 1992 and increased to
38% of net revenues in 1993 versus 36% in 1992. Among the factors
contributing to the increase are additional marketing expenses
associated with the increase in new cellular subscribers. The
Company added 20% more new subscribers in 1993 than in 1992. The
Company also had a large increase in costs related to cellular
customer service and support. Depreciation increased principally
due to the addition of property and equipment to expand and improve
the Company's cellular systems. The loss on disposal of cellular
equipment in 1993 reflects the loss realized on the replacement of
cellular network equipment in Dallas-Fort Worth as discussed
earlier.
Other Income and Expenses
Equity in income of unconsolidated affiliates rose 6%.
Revenues of these ventures increased 16% due primarily to an
increase in subscribers offset, in part, by a decrease in average
revenue per subscriber. Direct operating expenses of these ventures
increased 24% and represented 11% of revenues versus 10% in the
prior year. This increase is due primarily to increased network
operations, toll and roamer expenses at those cellular operations.
Selling, general and administrative expenses of the ventures
increased 17% and represented 39% of revenues in 1993 and in 1992.
The majority of this increase was due to increased marketing and
sales expenditures associated with a 28% increase in the number of
new customers. Depreciation expenses of these ventures increased <PAGE>
<PAGE> 40
33%, reflecting additional capital expenditures for capacity
expansion and increased coverage in all the ventures, and digital
service equipment in Los Angeles. Other expenses also grew
significantly due to settlement of certain lawsuits and equity in
losses of a cable affiliate absorbed by Philadelphia.
Interest expense (which includes the amortization of the
financing and commitment fees) decreased $29.8 million from the
1992 amount due to lower interest rates and debt levels. The
Company's weighted average interest rate on its borrowings was
4.94% during 1993 and 6.43% during 1992. This decrease was due both
to reductions in the base borrowing rates as well as the applicable
margin the Company pays. The reduction in borrowings was the result
of scheduled principal repayments on the Bank Credit Facilities.
Minority interests in net income of consolidated subsidiaries
decreased $14.9 million primarily due to the equipment write-down
incurred at the Dallas cellular operations as discussed above.
As mentioned above, the Omnibus Budget Reconciliation Act of
1993 increased the corporate tax rate to 35% from 34%, effective as
of January 1, 1993. Pursuant to SFAS No. 109, the Company recorded
an additional tax expense of $15.3 million, with a corresponding
increase in deferred tax liability.
LIQUIDITY AND CAPITAL RESOURCES
The Company utilizes capital primarily to expand and improve
its cellular systems, to make acquisitions of cellular interests
and to make interest and principal payments on its indebtedness.
The Company's cellular operations continue to require substantial
capital to increase system capacity and coverage areas, to enable
provision of new services, and to expand and improve administrative
support systems. During 1994, the Company completed the replacement
of the existing cellular system in Dallas with a new system
provided by L.M. Ericsson, the system vendor in all of the
Company's markets. The capitalized costs for this project were
approximately $100 million, of which approximately $45 million and
$55 million was expended during 1994 and 1993, respectively.
Additionally, the Company continued to invest in the conversion to
digital cellular equipment and now has introduced commercial
digital service in both New York and Los Angeles. The Company
expects to begin providing digital service in Dallas and Houston in
1995. Although the conversion to digital services requires
significant initial capital and marketing expenditures, there are
several advantages such as an immediate three-fold capacity
expansion and the establishment of a platform for future service
enhancements, including short message transmission caller ID,
improved data transmission and longer phone battery life. The
Company's share of expenditures in connection with the expansion of
digital cellular service totaled approximately $30 million during <PAGE>
<PAGE> 41
1994. Because of the large number of current customers with analog
cellular phones that are not able to utilize the digital cellular
service, the Company expects that the conversion from analog to
digital service will be phased in over a number of years, during
which time the Company will maintain both analog and digital
transmitting equipment. During 1995, the Company expects that it
will continue to invest capital to support the growth of its
businesses, including implementation of digital networks and
microcells, at levels similar to or in excess of its 1994 capital
expenditure levels.
In May 1994, the Company completed the acquisition of an
additional 5.2% interest in the New York cellular market for
approximately $145 million cash and a 100% interest in the
Connecticut RSA-1 adjacent to the New York market for approximately
$30 million cash.
The Company's principal sources of funds are provided by
operations and two bank credit facilities, a senior secured
facility and a senior unsecured facility (together, the "Bank
Credit Facilities"). The $200 million senior unsecured financing
was established in June 1994. Under the Bank Credit Facilities, the
Company had $1.6 billion outstanding and $220 million available as
of December 31, 1994. The Company anticipates drawing on the
available funds in 1995.
All of the Company's cellular operations are owned by its
wholly-owned subsidiary LIN Cellular Network, Inc. and are subject
to the restrictions of the Bank Credit Facilities. With limited
exceptions, none of the cash flows, proceeds of borrowings or
proceeds from sales of assets from these operations are available
to meet the cash needs of the Company for operations other than
cellular operations. The Company's other assets not described above
(principally its remaining television broadcasting interests and an
interest in a mobile satellite corporation and some of its cash)
are held free of any restriction. Under its Bank Credit Facilities,
the Company must remain in compliance with a series of financial
covenants which compare the levels of the Company's indebtedness to
its cash flows as of the end of each quarter. As of December 31,
1994, the Company was in compliance with all covenants under the
Bank Credit Facilities. However, if the Company fails to service
its indebtedness, or satisfy or obtain waivers from the covenants
contained in the Bank Credit Facilities, the Company will be in
default. In such an event, holders of the Company's indebtedness
will be able to exercise their rights including the right to
declare all the borrowed funds and interest thereon immediately due
and payable. If the Company were unable to repay such indebtedness,
the holders of such indebtedness could proceed against their
collateral, if any. The ability of the Company to comply with these
provisions may be affected by events beyond its control.
Substantially all of the Company's assets, including its stock in <PAGE>
<PAGE> 42
subsidiaries and its ownership interests in entities holding
cellular licenses, are pledged or encumbered as security for
indebtedness. Further details with respect to the Company's Bank
Credit Facilities are contained in Note 6 to the consolidated
financial statements contained elsewhere in this Form 10-K.
The Company's indebtedness is due and payable over several
years, with the amortization increasing significantly during the
next few years. While the Company expects to have sufficient funds
from operations and available under the Bank Credit Facilities to
fund its operations and repay its indebtedness when due, there can
be no assurance that this will occur as the Company continues to
have substantial debt service and other operating and capital
requirements. If cash generated from operations is not sufficient
to fund those requirements, the Company will have to modify its
operations or borrow additional amounts under its Bank Credit
Facilities. There are conditions which must be satisfied before the
banks will be required to lend those additional amounts. If these
conditions are not satisfied, the banks may conclude it is not in
their best interest to lend additional amounts to the Company. If
the Company were unable to borrow the required amounts from the
banks, it may seek to refinance the Bank Credit Facilities, issue
additional debt through a private or public offering, sell equity
or sell certain cellular interests or other assets. There can be no
assurance that the Company will be able to obtain such
refinancings, additional financing or asset sales when needed, or
if carried out, that the terms will be favorable to the Company or
its stockholders.
Cash provided by operating activities totaled $216.8 million
in 1994, compared to $221.0 million in 1993. The decrease was
primarily due to an increase in income tax payments and interest
expense and a reduction of cash received from equity affiliates.
The reduction in cash received from equity affiliates was due
primarily to significant additional capital expenditures of both
the Los Angeles and Houston cellular affiliates as those operations
expand their digital cellular networks.
As of December 31, 1994, the Company had a deficit in working
capital of $171.9 million, compared to a deficit of $69.3 million
as of December 31, 1993. Among the factors contributing to the
increased deficit are higher capital expenditures to support
cellular subscriber growth and digital implementation and an
increase in cellular marketing and operating costs in connection
with the accelerated cellular subscriber growth. The Company
expects that additional borrowings on its Bank Credit Facilities
may be required to meet short-term liquidity needs, particularly if
the rapid growth in cellular subscribers continues.
<PAGE>
<PAGE> 43
The Company used $327.5 and $168.5 million of cash and cash
equivalents for investing activities during 1994 and 1993,
respectively, primarily as a result of capital expenditures and
cellular acquisitions. As of December 31, 1994, the Company did not
have any commitments that, in the aggregate or individually, were
material to the Company, other than lease commitments discussed in
Note 11 to the consolidated financial statements.
During 1994, the Company made scheduled principal repayments
of $135.5 million on its Bank Credit Facilities compared to $71.4
million during 1993. Scheduled principal payments on the Bank
Credit Facilities increase to $151.9 million during 1995.
It is the Company's policy to carefully monitor the state of
its business, cash requirements and capital structure. From time to
time, the Company may enter into transactions pursuant to which
debt is extinguished, including sales of assets or equity, joint
ventures, reorganizations or recapitalizations. There can be no
assurance that any further such transactions will be undertaken or,
if undertaken, will be favorable to stockholders.
Inflation
The Company believes that its businesses are affected by
inflation to an extent no greater than other businesses are
generally affected.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's consolidated financial statements and
supplementary data, together with the report of Ernst & Young LLP,
independent auditors, are included elsewhere herein. Reference is
made to the "Index to Financial Statements" immediately preceding
page F-1.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
<PAGE>
<PAGE> 44
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
There is hereby incorporated by reference the information
under the captions "Election of Directors" and "Certain
Transactions" in the Company's Proxy Statement relating to its 1995
annual meeting of stockholders (the "Proxy Statement") and under
"Business - Employees" contained in this Form 10-K.
Item 11. EXECUTIVE COMPENSATION
There is hereby incorporated by reference the information
under the captions "Election of Directors" and "Executive
Compensation" in the Proxy Statement.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
There is hereby incorporated by reference the information
under the captions "Principal Stockholders," "Election of
Directors," "Security Ownership of Management" and "Beneficial
Ownership of Common Stock of AT&T" in the Proxy Statement.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There is hereby incorporated by reference the information
under the captions "Election of Directors" and "Certain
Transactions" in the Proxy Statement.
<PAGE>
<PAGE> 45
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a)(1) Financial Statements Filed
Report of Ernst & Young LLP, Independent Auditors
Consolidated Financial Statements of the Company
- Consolidated Balance Sheets at December 31, 1994 and
1993
- Consolidated Statements of Operations for the Years
Ended December 31, 1994, 1993 and 1992
- Consolidated Statements of Stockholders' Equity
(Deficit) for the Years Ended December 31, 1994,
1993 and 1992
- Consolidated Statements of Cash Flows for the Years
Ended December 31, 1994, 1993 and 1992
- Notes to Consolidated Financial Statements
Report of Ernst & Young LLP, Independent Auditors
Independent Auditors' Report
Report of Independent Public Accountants
Combined Financial Statements of the Company's
Unconsolidated Affiliates
- Combined Balance Sheets at December 31, 1994 and
1993
- Combined Statements of Income for the Years Ended
December 31, 1994, 1993 and 1992
- Combined Statements of Ventures' Equity for the
Years Ended December 31, 1994, 1993 and 1992
- Combined Statements of Cash Flows for the Years
Ended December 31, 1994, 1993 and 1992
- Notes to the Combined Financial Statements
(a)(2) Financial Statement Schedules Filed
Financial Statement Schedules of the Company
I - Condensed Financial Information of Registrant
II - Valuation and Qualifying Accounts and Reserves for
the Years Ended December 31, 1994, 1993 and 1992
Financial Statement Schedule of the Company's
Unconsolidated Affiliates
II - Valuation and Qualifying Accounts and Reserves for
the Years Ended December 31, 1994, 1993 and 1992
<PAGE>
<PAGE> 46
All other schedules have been omitted because the information
is not required or is not applicable, or because the information
required is included in the financial statements or the notes
thereto.
(a)(3) Exhibits
3.1 Restated Certificate of Incorporation of LIN
Broadcasting Corporation (incorporated by
reference to Exhibit 3.1 to the Company's Annual
Report on Form 10-K for the fiscal year ended
December 31, 1992)
3.2 Amended and Restated By Laws.
10.1* Amended and Restated 1969 Stock Option Plan
(incorporated by reference to Appendix A to the
Company's Proxy Statement for the Annual Meeting
of Stockholders held on June 2, 1994)
10.2(a)* Profit Sharing Plan, as amended and restated
effective January 1, 1989 (the "Profit Sharing
Plan") (incorporated by reference to Exhibit
10.2 to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1992)
10.2(b)* Amendment, adopted November 22, 1994, to the
Profit Sharing Plan
10.3* Deferred Compensation Plan, as amended
(incorporated by reference to Exhibit 10(d) to
the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989)
10.4 Partnership Agreement, dated as of March 18,
1983, among LIN Cellular Communications
Corporation, Metromedia, Inc., and Cellular
Systems, Inc. (incorporated by reference to
Exhibit 10.11 to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31,
1992)
10.5 Partnership Agreement, dated as of June 22,
1983, between Los Angeles Cellular Corporation
and LIN Cellular Communications Corporation
(incorporated by reference to Exhibit 10.12 to
the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992)
10.6 Stock Agreement, dated June 5, 1982, by and
among Radio Broadcasting Company, LIN
Broadcasting Corporation, LIN Cellular
Communications Corporation, Metromedia, Inc.,
and AWACS, Inc. (incorporated by reference to
Exhibit 10.13 to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31,
1992)
<PAGE>
<PAGE> 47
10.7 Amended and Restated Partnership Agreement,
dated as of November 9, 1984, among LIN Cellular
Communications Corporation, D/FW Signal, Inc.,
MCI Cellular Telephone Company, Cellular Mobile
Systems, Inc., and Mid-America Cellular Systems,
Inc. (incorporated by reference to Exhibit 10.14
to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1992)
10.8 Amended and Restated Partnership Agreement,
dated as of December 12, 1984, among Metro
Mobile CTS, Cellular Systems, Inc., and Houston
Mobile Cellular Communications Company
(incorporated by reference to Exhibit 10.15 to
the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992)
10.9 Partnership Agreement, dated as of December 12,
1984, among American Mobile Communications of
Houston and the Gulf, Houston Cellular
Corporation, LIN Cellular Communications
Corporation, MCI Cellular Telephone Company,
Charisma Communications Corp. of the Southwest,
and Cellular Mobile Systems of Texas, Inc.
(incorporated by reference to Exhibit 10.16 to
the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992)
10.10 Partnership Agreement, dated as of September
1991, by and between Galveston Mobile
Corporation and LIN Cellular Communications
Corporation (incorporated by reference to
Exhibit 10.17 to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31,
1992)
10.11 Agreement, dated December 11, 1989, between the
Company, MMM Holdings, Inc. and McCaw Cellular
Communications, Inc. (incorporated by reference
to Exhibit (c)(6) to Amendment No. 24 to
Schedule 14D-1 and Amendment No. 30 to Schedule
13D relating to the Offer filed by MMM Holdings,
Inc. and McCaw with the Securities and Exchange
Commission on December 12, 1989)
10.12(a) Private Market Value Guarantee, dated December
11, 1989, between the Company and McCaw Cellular
Communications, Inc. (the "Private Market Value
Guarantee") (incorporated by reference to
Exhibit (c)(7) to Amendment No. 24 to Schedule
14D-1 and Amendment No. 30 to Schedule 13D
relating to the Offer filed by MMM Holdings,
Inc. and McCaw with the Securities and Exchange
Commission on December 12, 1989)
10.12(b) First Amendment, dated June 7, 1994, to the
Private Market Value Guarantee (incorporated by
reference to Exhibit 99.1 to the Company's
Report on Form 8-K dated May 25, 1994)<PAGE>
<PAGE> 48
10.13 Exercise, dated October 27, 1989, of the
Company's Rights of First Refusal to Acquire the
Interests of Metromedia Company in Metro One
Cellular Telephone Company, and Agreement of
Purchase and Sale, dated October 3, 1989, by and
between McCaw Cellular Communications, Inc. and
Metromedia Company (incorporated by reference to
Exhibit 10(u) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31,
1989)
10.14(a) Credit Agreement, dated as of August 1, 1990,
among LIN Cellular Network, Inc., Morgan
Guaranty Trust Company of New York and the
Lenders Named therein (the "1990 Credit
Agreement") (incorporated by reference to
Exhibit 10.21 to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31,
1990)
10.14(b) Amendment No. 1, dated as of June 15, 1993, to
the 1990 Credit Agreement
10.14(c) Amendment No. 2, dated as of May 31, 1994, to
the 1990 Credit Agreement
10.15 Stock Acquisition Agreement, dated as of May 7,
1990, between LCH Cellular, Inc. and Metromedia
Company (incorporated by reference to Exhibit
(b)(i) to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1990)
10.16 Restated Certificate of Incorporation of LCH
Communications, Inc. (formerly LCH Cellular,
Inc.) (incorporated by reference to Exhibit
(b)(ii) to the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1990)
10.17 Stockholders Agreement, dated as of August 10,
1990, among Metromedia Company, LCH Holdings,
Inc. and LCH Communications, Inc. (incorporated
by reference to Exhibit (b)(iii) to the
Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1990)
10.18(a)* Employee Stock Purchase Plan (the "ESPP")
(incorporated by reference to Exhibit 4.3 to the
Company's Registration Statement on Form S-8
dated March 13, 1991 (Registration No. 33-39282))
10.18(b)* Amendment, adopted November 2, 1994, to the ESPP
10.19* Employment Agreement, dated as of October 17,
1990 of Gary Chapman (incorporated by reference
to Exhibit 10.28 to the Company's Annual Report
on Form 10-K for the year ended December 31,
1991)
<PAGE>
<PAGE> 49
10.20* Employment Agreement, dated as of April 16,
1991, of Donald Guthrie (incorporated by
reference to Exhibit 10.30 to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1991)
10.21(a)* LIN Broadcasting Corporation Retirement Plan
(the "Retirement Plan"), as amended and restated
as of January 1, 1989 (incorporated by reference
to Exhibit 10.31 to the Company's Annual Report
on Form 10-K for the year ended December 31,
1991).
10.21(b)* Amendment to the Retirement Plan dated January
1, 1993 (incorporated by reference to Exhibit
10.32 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1992)
10.21(c)* Amendment, adopted November 22, 1994, to the
Retirement Plan
10.22(a)* LIN Broadcasting Corporation Supplemental
Benefit Retirement Plan dated January 1, 1990
(the "Supplemental Plan") (incorporated by
reference to Exhibit 10.33 to the Company's
Annual Report on Form 10-K for the fiscal year
ended December 31, 1992)
10.22(b)* Amendment, adopted November 22, 1994, to the
Supplemental Plan
10.23* LIN Employee Plans, established in connection
with the McCaw-AT&T Merger Agreement
(incorporated by reference to Exhibit 10.34 to
the Company's Annual Report on Form 10-K for the
year ended December 31, 1993)
10.24* LIN Broadcasting Deferred Compensation Plan,
dated December 15, 1993 (incorporated by
reference to Exhibit 10.35 to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1993)
10.25 Distribution Agreement, dated as of December 28,
1994, between the Company and LIN Television
Corporation ("LIN TV") (incorporated by
reference to Exhibit 2.4 to the Report on Form
8-K dated December 28, 1994 filed by LIN
Television Corporation)
10.26 Tax Allocation Agreement, dated as of December
28, 1994, between the Company and LIN TV
(incorporated by reference to Exhibit 99.1 to
the Report on Form 8-K dated December 28, 1994
filed by LIN Television Corporation)
10.27 Management Services Agreement, dated as of
December 28, 1994, between the Company and LIN
TV (incorporated by reference to Exhibit 99.2 to
the Report on Form 8-K dated December 28, 1994
filed by LIN Television Corporation)
<PAGE>
<PAGE> 50
10.28 Employee Benefits Allocation Agreement, dated as
of December 28, 1994, between the Company and
LIN TV (incorporated by reference to Exhibit
99.3 to the Report on Form 8-K dated December
28, 1994 filed by LIN Television Corporation)
10.29 Consulting Agreement, dated as of December 28,
1994, between LIN TV, LCH Communications, Inc.
and LIN Michigan Broadcasting Corporation
(incorporated by reference to Exhibit 99.4 to
the Report on Form 8-K dated December 28, 1994
filed by LIN Television Corporation)
10.30 Right of First Refusal Agreement, dated as of
December 28, 1994, between the Company and LIN
TV (incorporated by reference to Exhibit 99.5 to
the Report on Form 8-K dated December 28, 1994
filed by LIN Television Corporation)
10.31(a) Asset Purchase Agreement, dated June 7, 1994
among the Company, LIN TV, Cook Inlet
Communications Corp. and Cook Inlet
Communications, Inc. (the "Asset Purchase
Agreement") (incorporated by reference to
Exhibit 99.1 to the Company's Report on Form 8-K
dated December 28, 1994)
10.31(b) First Amendment, dated September 26, 1994. to
the Asset Purchase Agreement (incorporated by
reference to Exhibit 99.2 to the Company's
Report on Form 8-K dated December 28, 1994)
10.31(c) Second Amendment, dated December 6, 1994. to the
Asset Purchase Agreement (incorporated by
reference to Exhibit 99.3 to the Company's
Report on Form 8-K dated December 28, 1994)
10.32 Credit Agreement, dated as of June 15, 1994,
among LIN Cellular Network, Inc., Toronto
Dominion (Texas), Inc. and the Lenders named
therein
11 Statement regarding computation of earnings per
share
21 Subsidiaries of the Registrant
23.1 Consent of Ernst & Young LLP
23.2 Consent of Deloitte & Touche LLP
23.3 Consent of Arthur Andersen LLP
24 Powers of Attorney with respect to Certain
Signatures
27 Financial Data Schedule
* Management contract or compensatory plan or arrangement.
<PAGE>
<PAGE> 51
(b) Reports on Form 8-K
A report on Form 8-K dated December 28, 1994 relating to
the completion of the spin-off of LIN Television
Corporation, as well as the selection of appraisers under
the Private Market Value Guarantee process by the
Independent Directors of the Company and AT&T, was filed
dated December 28, 1994.
<PAGE>
<PAGE> 52
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
LIN BROADCASTING CORPORATION
By: TOM A. ALBERG
-----------------------
Tom A. Alberg
President, Chief Operating
Officer
March 31, 1995
Pursuant to the requirements of the Securities Exchange Act of
1934, this Report has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
---------- ----------------- -----------
Chairman of the Board
Lewis M. Chakrin* and Director March 31, 1995
--------------------
Lewis M. Chakrin
Chief Executive Officer
(Principal Executive
Steven W. Hooper* Officer) March 31, 1995
--------------------
Steven W. Hooper
President, Chief
Operating Officer
Tom A. Alberg and Director March 31, 1995
--------------------
Tom A. Alberg
Senior Vice President-Finance
(Principal Financial and
Donald Guthrie Accounting Officer) March 31, 1995
--------------------
Donald Guthrie
Dennis J. Carey* Director March 31, 1995
--------------------
Dennis J. Carey
<PAGE>
<PAGE> 53
Signature Title Date
---------- ----------------- -----------
Harold S. Eastman* Director March 31, 1995
--------------------
Harold S. Eastman
W. Preston Granbery* Director March 31, 1995
--------------------
W. Preston Granbery
William G. Herbster* Director March 31, 1995
--------------------
William G. Herbster
Rolla P. Huff* Director March 31, 1995
--------------------
Rolla P. Huff
Wilma H. Jordan* Director March 31, 1995
--------------------
Wilma H. Jordan
Richard W. Kislik* Director March 31, 1995
--------------------
Richard W. Kislik
Vice Chairman
of the Board
and Director
--------------------
Wayne M. Perry
Director
--------------------
Florence L. Walsh
*By: TOM A. ALBERG
-------------------------
Attorney-in-fact
<PAGE>
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Page
Report of Ernst & Young LLP, Independent Auditors . . . . . . . . .F-1
Consolidated Financial Statements of the Company
Consolidated Balance Sheets at
December 31, 1994 and 1993 . . . . . . . . . . . . . . . . .F-2
Consolidated Statements of Operations for
the Years Ended December 31, 1994,
1993 and 1992. . . . . . . . . . . . . . . . . . . . . . . .F-4
Consolidated Statements of Stockholders'
Equity (Deficit) for the Years Ended
December 31, 1994, 1993 and 1992 . . . . . . . . . . . . . .F-6
Consolidated Statements of Cash Flows for
the Years Ended December 31, 1994,
1993 and 1992. . . . . . . . . . . . . . . . . . . . . . . .F-7
Notes to Consolidated Financial Statements . . . . . . . . . . F-12
Report of Ernst & Young LLP, Independent Auditors . . . . . . . . F-32
Independent Auditors' Report. . . . . . . . . . . . . . . . . . . F-33
Report of Independent Public Accountants. . . . . . . . . . . . . F-34
Combined Financial Statements of the
Company's Unconsolidated Affiliates
Combined Balance Sheets at December 31, 1994
and 1993 . . . . . . . . . . . . . . . . . . . . . . . . . F-35
Combined Statements of Income for the Years Ended
December 31, 1994, 1993 and 1992 . . . . . . . . . . . . . F-37
Combined Statements of Ventures' Equity for
the Years Ended December 31, 1994, 1993
and 1992 . . . . . . . . . . . . . . . . . . . . . . . . . F-38
Combined Statements of Cash Flows for the
Years Ended December 31, 1994, 1993 and 1992 . . . . . . . F-39
Notes to Combined Financial Statements . . . . . . . . . . . . F-42
Financial Statement Schedules of the Company
I - Condensed Financial Information of Registrant. . . . . . . . F-48
II - Valuation and Qualifying Accounts and
Reserves for the Years Ended
December 31, 1994, 1993 and 1992 . . . . . . . . . . . . . F-53
Financial Statement Schedule of the Company's
Unconsolidated Affiliates
II - Valuation and Qualifying Accounts and Reserves
for the Years Ended December 31, 1994,
1993 and 1992. . . . . . . . . . . . . . . . . . . . . . . F-54
<PAGE>
<PAGE> F-1
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Board of Directors and Stockholders of
LIN Broadcasting Corporation
We have audited the accompanying consolidated balance sheets of LIN
Broadcasting Corporation and subsidiaries as of December 31, 1994
and 1993, and the related consolidated statements of operations,
stockholders' equity (deficit), and cash flows for each of the
three years in the period ended December 31, 1994. Our audits also
included the financial statement schedules listed in the Index at
Item 14(a). These financial statements and schedules are the
responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements and schedules
based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform our audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of LIN Broadcasting Corporation and subsidiaries
at December 31, 1994 and 1993, and the consolidated results of
their operations and their cash flows for each of the three years
in the period ended December 31, 1994, in conformity with generally
accepted accounting principles. Also, in our opinion, the related
financial statement schedules, when considered in relation to the
basic financial statements taken as a whole, present fairly, in all
material respects, the information set forth therein.
ERNST & YOUNG LLP
Seattle, Washington
January 20, 1995
<PAGE>
<PAGE> F-2
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1994 AND 1993
(Dollars in thousands)
ASSETS 1994 1993
--------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents $47,467 $86,366
Marketable securities -- 16,465
Accounts receivable, less allowance
for doubtful accounts (1994-$17,395;
1993-$18,138) 136,279 156,784
Inventory 16,848 5,640
Prepaid expenses and other
current assets 9,907 16,320
---------------------------------------------------------------------------
Total current assets 210,501 281,575
----------------------------------------------------------------------------
Property and equipment, at cost, less
accumulated depreciation 450,698 405,762
Other noncurrent assets 47,150 61,807
Investments in and advances to
unconsolidated affiliates 274,830 264,172
Cellular FCC licenses, less
accumulated amortization
(1994-$194,997; 1993-$148,672) 1,727,546 1,627,371
Other intangible assets, less
accumulated amortization
(1994-$141,195; 1993-$145,853) 213,148 268,836
----------------------------------------------------------------------------
Total Assets $2,923,873 $2,909,523
============================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
----------------------------------------------------------------------------
Current Liabilities:
Current portion of long-term debt $151,875 $146,891
Accrued income taxes 34,875 34,241
Accounts payable 67,880 37,975
Unearned revenues 13,165 25,880
Accrued interest payable 5,399 2,685
Payable to McCaw and AT&T 21,069 16,064
Other accruals 88,186 87,108
---------------------------------------------------------------------------
Total current liabilities 382,449 350,844
---------------------------------------------------------------------------
(continued)<PAGE>
<PAGE> F-3
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Continued)
DECEMBER 31, 1994 AND 1993
(Dollars in thousands)
LIABILITIES AND STOCKHOLDERS'
EQUITY (Continued) 1994 1993
--------------------------------------------------------------------------
Long-term debt 1,443,125 1,551,447
Deferred income taxes 735,313 735,049
Other noncurrent liabilities 6,741 13,091
Minority interests in equity of
consolidated subsidiaries 58,507 56,209
Redeemable preferred stock of a subsidiary -- 1,305,248
Stockholders' Equity (Deficit):
Common stock, $.01 par value,
150,000,000 shares authorized,
55,329,000 shares issued 553 553
Paid-in capital 1,055,169 224,689
Deficit (586,055) (1,150,205)
---------------------------------------------------------------------------
469,667 (924,963)
---------------------------------------------------------------------------
Less common stock in treasury,
at cost (1994-3,678,000 shares;
1993-3,826,000 shares) 171,929 177,402
----------------------------------------------------------------------------
Total stockholders' equity (deficit) 297,738 (1,102,365)
---------------------------------------------------------------------------
Total Liabilities and
Stockholders' Equity $2,923,873 $2,909,523
===========================================================================
See accompanying notes.<PAGE>
<PAGE> F-4
<TABLE>
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(Dollars in thousands, except per share amounts)
<CAPTION>
1994 1993 1992
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Revenues $876,469 $688,557 $572,521
Operating Costs and Expenses:
Direct operating 138,579 123,081 110,966
Selling, general and administrative 378,797 261,549 205,365
Corporate expenses 11,831 8,340 7,571
Depreciation 58,066 45,940 39,676
Amortization of intangible assets 83,086 79,190 78,928
Loss on disposal of cellular equipment -- 42,152 --
-------------------------------------------------------------------------------------------------
670,359 560,252 442,506
-------------------------------------------------------------------------------------------------
Operating Income 206,110 128,305 130,015
--------------------------------------------------------------------------------------------------
Other Income (Expenses):
Equity in income of unconsolidated affiliates 115,010 103,125 96,977
Investment income and other 5,717 7,015 9,295
Litigation settlement -- -- 7,032
Interest expense (111,638) (95,407) (125,218)
Gain on redemption of preferred stock 468,689 -- --
-------------------------------------------------------------------------------------------------
477,778 14,733 (11,914)
--------------------------------------------------------------------------------------------------
Income Before Income Tax Expense and
Minority Interests 683,888 143,038 118,101
Income Tax Expense 59,289 65,569 33,897
------------------------------------------------------------------------------------------------
Income Before Minority Interests 624,599 77,469 84,204
(continued)<PAGE>
<PAGE> F-5
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992 (Continued)
(Dollars in thousands, except per share amounts)
<CAPTION>
1994 1993 1992
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Minority Interests:
In net income of consolidated subsidiaries 26,874 3,896 18,856
Provision for preferred stock
dividends of a subsidiary 33,575 134,300 134,300
------------------------------------------------------------------------------------------------
Net Income (Loss) $564,150 $(60,727) $(68,952)
=================================================================================================
Net Income (Loss) Per Share $10.84 $(1.18) $(1.34)
=================================================================================================
See accompanying notes.
<PAGE>
<PAGE> F-6
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(Dollars in thousands)
<CAPTION>
Total
Common Paid-in Treasury Stockholders'
Stock Capital Deficit Stock Deficit
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1991 $553 $221,766 $(1,020,526) $(180,366) $(978,573)
Net loss -- -- (68,952) -- (68,952)
17,911 shares purchased for treasury -- -- -- (1,429) (1,429)
39,192 shares issued from treasury for
employee stock purchase plan, stock option
exercises and tax benefits -- 315 -- 1,903 2,218
--------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1992 553 222,081 (1,089,478) (179,892) (1,046,736)
Net loss -- -- (60,727) -- (60,727)
19,218 shares purchased for treasury -- -- -- (1,798) (1,798)
97,040 shares issued from treasury for
employee stock purchase plan, stock option
exercises and tax benefits -- 2,608 -- 4,288 6,896
--------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1993 553 224,689 (1,150,205) (177,402) (1,102,365)
Net income -- -- 564,150 -- 564,150
9,275 shares purchased for treasury -- -- -- (1,094) (1,094)
155,702 shares issued from treasury for
employee stock purchase plan, stock option
exercises and tax benefits -- 5,404 -- 6,567 11,971
Redemption of preferred stock of a subsidiary -- 783,823 -- -- 783,823
Spin-off of LIN Television Corporation -- 41,253 -- -- 41,253
--------------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1994 $553 $1,055,169 $(586,055) $(171,929) $297,738
===============================================================================================================================
See accompanying notes.<PAGE>
<PAGE> F-7
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(Dollars in thousands)
<CAPTION>
1994 1993 1992
------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES:
<S> <C> <C> <C> <C>
Net income (loss) $564,150 $(60,727) $(68,952)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization 141,152 125,130 118,604
Amortization of cost associated
with long-term debt 9,866 9,793 10,477
Gain on redemption of preferred stock (468,689) -- --
Provision for loss on cellular equipment -- 42,152 --
Litigation settlement -- -- (5,900)
Minority interests in net income of
consolidated subsidiaries 26,874 3,896 18,856
Provision for preferred stock dividends 33,575 134,300 134,300
Provision for losses on accounts receivable 18,200 14,359 14,930
Equity in income of unconsolidated
affiliates (115,010) (103,125) (96,977)
(continued)<PAGE>
<PAGE> F-8
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(Dollars in thousands)
<CAPTION>
1994 1993 1992
------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES (continued):
<S> <C> <C> <C>
Changes in operating assets and liabilities:
Increase in accounts receivable (49,129) (48,394) (34,554)
Increase in inventories and other
current assets (17,529) (3,626) (2,580)
Cash received from equity investees 54,986 67,447 70,927
Increase (decrease) in accounts payable 41,265 (1,194) 4,396
Increase (decrease) in accrued
income taxes 18,242 (8,587) 8,359
Increase (decrease) in other
current liabilities (861) 25,235 (6,742)
Increase (decrease) in deferred
income taxes (25,437) 26,647 (6,563)
Decrease in minority interests (11,158) (1,568) (9,268)
Tax benefits from stock option exercises 4,119 1,428 282
Other (7,865) (2,184) (6,017)
-------------------------------------------------------------------------------------------------
Total adjustments (347,399) 281,709 212,530
-------------------------------------------------------------------------------------------------
Net cash provided by operating activities 216,751 220,982 143,578
-------------------------------------------------------------------------------------------------
(Continued)<PAGE>
<PAGE> F-9
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(Dollars in thousands)
<CAPTION>
1994 1993 1992
-----------------------------------------------------------------------------------------------
<S> <C> <S> <C> <C> <C>
INVESTING ACTIVITIES:
Proceeds from sales of marketable securities 16,368 46,677 34,780
Purchases of marketable securities -- (43,705) (22,260)
Proceeds from sale of property and equipment 8,016 -- --
Capital expenditures (164,330) (150,475) (71,505)
Cellular and television acquisitions (174,993) (36,879) --
Investments in and advances to
unconsolidated affiliates, net (3,494) 15,854 (26,709)
Cash divested in LIN Television spin-off (9,113) -- --
---------------------------------------------------------------------------------------------------
Net cash used for investing activities $(327,546) $(168,528) $(85,694)
--------------------------------------------------------------------------------------------------
(Continued)<PAGE>
<PAGE> F-10
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(Dollars in thousands)
<CAPTION>
1994 1993 1992
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FINANCING ACTIVITIES:
Proceeds from long-term bank loans $350,000 $-- $--
Repayment of long-term bank loans (265,480) (71,344) (31,818)
Increase in deferred commitment/
financing fees (5,467) -- --
Redemption of preferred stock (13,167) -- --
Proceeds from common stock issued for stock
purchase plan and stock options 7,104 4,145 1,641
Purchase of common stock for treasury (1,094) (1,798) (1,429)
-------------------------------------------------------------------------------------------------
Net cash provided (used) for
financing activities 71,896 (68,997) (31,606)
--------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and
Cash Equivalents (38,899) (16,543) 26,278
Cash and Cash Equivalents at Beginning of Year 86,366 102,909 76,631
------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $47,467 $86,366 $102,909
=================================================================================================
(Continued)<PAGE>
<PAGE> F-11
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(Dollars in thousands)
<CAPTION>
1994 1993 1992
----------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
<S> <C> <C> <C>
Cash paid for:
Interest $99,023 $88,373 $119,823
Income taxes $81,997 $47,612 $34,384
Significant non-cash investing and financing activities:
On June 24, 1994, LCH Communications, Inc. ("LCH"), a wholly-owned subsidiary of the
Company, redeemed all of its outstanding Redeemable Preferred Stock held by Comcast Cellular
Communications Inc., in exchange for all of the capital stock of a subsidiary of LCH, whose
assets consisted primarily of a 49.99% interest in the Philadelphia cellular system and the
GuestInformant specialty publishing business, plus $12.3 million cash (which represented 15%
of the fair market value of the WOOD-TV business). The additional $0.9 million cash
reflected in the cash flow statement above represented cash held by GuestInformant.
On December 28, 1994, the Company distributed all of the issued and outstanding shares of
common stock of its previously wholly-owned subsidiary LIN Television Corporation ("LIN
TV"). The Company's stockholders of record on December 9, 1994 received one share of LIN TV
common stock for each two shares of the Company's common stock owned. The $9.1 million cash
reflected in the cash flow statement represented cash held by LIN TV.
See accompanying notes.
</TABLE>
<PAGE>
<PAGE> F-12
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - Organization and Operations
The Company is engaged in the ownership and operation of cellular
telephone systems and one television station. On December 28,
1994, the Company spun-off its LIN Television Corporation
subsidiary which owned six television stations (see Note 3).
McCaw Cellular Communications, Inc. ("McCaw"), a wholly-owned
subsidiary of AT&T Corp. ("AT&T"), currently owns approximately
52% of the outstanding shares of the Company.
NOTE 2 - Significant Accounting Policies
PRINCIPLES OF CONSOLIDATION: The consolidated financial
statements include the accounts of the Company, its majority-owned
subsidiaries and cellular ventures in which the Company has
voting control. The Company's investments in cellular ventures in
which it has voting interests of at least 20% but not more than
50% (Los Angeles, Houston and Galveston) are accounted for on the
equity method. All significant intercompany accounts and
transactions have been eliminated.
CELLULAR FCC LICENSES AND OTHER INTANGIBLE ASSETS: Cellular FCC
licenses represent costs to acquire cellular licenses authorized
by the Federal Communications Commission. Other intangible assets
primarily represent costs allocated in acquisitions to customer
lists, goodwill and other intangibles. Intangible assets acquired
subsequent to October 31, 1970 are being amortized over the
lesser of their useful lives or forty years, in accordance with
Accounting Principles Board Opinion No. 17. The carrying value of
intangible assets will be reviewed if the facts and circumstances
suggest that they may be impaired. If this review indicates that
intangible assets will not be recoverable, the Company's carrying
value of the intangible assets will be reduced by the estimated
shortfall of cash flows.
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES: Certain highly
liquid, short-term investments which have a maturity of three
months or less when purchased are considered cash equivalents.
The Company's excess cash is invested in US Government
obligations and money market instruments. Investments which do
not meet the definition of a cash equivalent are classified as
marketable securities. Marketable securities are carried at
aggregate cost which approximates market value. Net realized
gains and losses on security transactions are determined on a
specific cost basis.
INVENTORY: Inventories are stated at the lower of cost
(first-in, first-out) or market.
<PAGE>
<PAGE> F-13
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - Significant Accounting Policies (continued)
PROPERTY AND EQUIPMENT: Property and equipment, including
renewals and betterments to existing facilities, are recorded at
cost. Depreciation is computed on a straight-line basis over the
estimated useful lives of the assets.
INCOME TAXES: Accelerated depreciation methods are used for tax
purposes. The Company provides deferred taxes relating to these
and other timing differences.
REVENUE RECOGNITION: Cellular airtime is recorded as revenue
when earned. Access fees that are billed in advance to cellular
customers are recognized as revenue in the period when the
cellular services are provided. Broadcast revenue is billed when
contracted and recognized during the period the advertising is
aired.
NET INCOME (LOSS) PER SHARE: Net income (loss) per share is
based upon the weighted average common and equivalent shares
outstanding during the year. Common stock equivalents are
excluded from the calculation when their effect is antidilutive.
Average common and equivalent shares outstanding for the years
ended December 31, 1994, 1993 and 1992 totaled 52,040,000,
51,445,000 and 51,417,000, respectively.
For 1994, a separate earnings per share calculation for the
excess of carrying amount of preferred stock over the fair value
of consideration transferred to the holder of the preferred stock
added to primary net income is shown below:
Amount Per Share
------- ---------
Net income $564,150 $10.84
Excess carrying value of
preferred stock over fair
value of consideration transferred 783,823 15.06
-------- --------
Total $1,347,973 $25.90
========== ========
RECLASSIFICATIONS: Certain reclassifications have been made to
the prior years' financial statements in order to conform to the
1994 presentation.
<PAGE>
<PAGE> F-14
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 - Business Divestiture and Acquisitions
Distribution of LIN Television Corporation: On December 28,
1994, the Company distributed all of the issued and outstanding
shares of common stock of its previously wholly-owned subsidiary
LIN Television Corporation ("LIN TV"). LIN TV operations
comprised substantially all of the Company's former broadcast
media operations. The distribution was made in the form of a
dividend payable to holders of record of the LIN Broadcasting
common stock at the close of business on December 9, 1994. The
Company's stockholders of record on that date received one share
of LIN TV common stock for each two shares of the Company's
common stock owned. The consolidated financial statements reflect
an increase in the Company's additional paid-in capital of $41.25
million, representing the negative net book value of the assets
and liabilities distributed. The results of operations of LIN TV
have been included in the Company's consolidated financial
statements through December 28, 1994. The table below summarizes
the assets and liabilities distributed:
(in thousands) Amount
------------------------------------------------------
Current assets $56,085
Noncurrent assets 154,296
Current liabilities 66,062
Noncurrent liabilities 185,572
Deficit 41,253
The Company entered into a tax allocation agreement with LIN TV
that provides for the allocation between the Company and LIN TV
of responsibilities, liabilities and benefits relating to or
affecting taxes paid or payable by either of them or their
respective subsidiaries for all taxable periods before and after
the distribution. Generally, the tax allocation agreement
provides that the Company will prepare, file and pay taxes
associated with all tax returns for periods beginning before the
distribution date that are required to be filed on a
consolidated, combined or similar group basis unless none of the
Company or its subsidiaries (other than LIN TV and its
subsidiaries) is included in such return. Other tax returns will
be filed by LIN TV if they relate to television businesses (as
defined) or by the Company if they relate to LIN businesses. The
agreement also provides that each of the Company and LIN TV will
pay all taxes that are payable as a result of the distribution
and the failure after the distribution of such party to act in
conformity with statements (insofar as such statements are
applicable to such party) set forth in the Internal Revenue
Service ("IRS") letter ruling regarding the distribution and in
filings with the IRS made in connection with the IRS letter
ruling.<PAGE>
<PAGE> F-15
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 - Business Divestitures and Acquisitions (continued)
Certain subsidiaries of the Company also entered into a
consulting agreement with LIN TV, pursuant to which LIN TV will
provide management and operational consulting for WOOD-TV and
WOTV-TV, and a right of first refusal agreement, pursuant to
which, in the event the Company receives and wishes to accept an
offer to purchase assets associated with WOOD-TV or WOTV-TV, LIN
TV has the right to purchase such assets at the offered price.
During 1994, the Company divested its interests in the
Philadelphia cellular operation and the GuestInformant specialty
publishing business. See further discussion in Note 7.
Acquisitions: On May 31, 1994, the Company acquired an additional
5.2% interest in the New York City cellular licensee for
approximately $145 million in cash, bringing the Company's total
interest in the New York City licensee to 98.3%. The New York
City acquisition was funded through proceeds from the Company's
senior unsecured bank credit facility (see Note 6).
On May 25, 1994, the Company acquired a 100% interest in the
Litchfield County, Connecticut (Connecticut RSA-1) cellular
licensee for aggregate consideration of approximately $30 million
cash.
On October 6, 1993, the Company acquired a 100% interest in the
Newton, Texas (Texas RSA-17) cellular licensee for approximately
$36 million cash.
All of the above acquisitions have been accounted for using the
purchase method, and the excess of the costs over fair market
values of the tangible assets acquired has been assigned to
Cellular FCC licenses, customer lists, goodwill and other
intangible assets.
<PAGE>
<PAGE> F-16
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 - Property and Equipment
The major classifications of property and equipment are as
follows:
December 31,
(in thousands) 1994 1993
-------------------------------------------------------------------------
Land $867 $5,860
Buildings and improvements 39,524 48,307
Broadcasting and publishing equipment 11,976 70,001
Cellular equipment 416,344 412,824
Construction in progress and other 122,993 154,061
-------- --------
591,704 691,053
Less accumulated depreciation 141,006 285,291
-------- --------
$450,698 $405,762
======== ========
NOTE 5 - Investments in and Advances to Unconsolidated Affiliates
As indicated in Note 2, the Company's investments in cellular
partnerships or corporations in which it has voting interests of
at least 20% but not more than 50% (Los Angeles, Houston and
Galveston) are accounted for on the equity method. In June 1994,
the Company disposed of its interest in the Philadelphia cellular
venture in connection with the redemption of preferred stock (see
Note 7).
The Company controlled approximately 1.86 million shares of the
common stock of American Mobile Satellite Corporation ("AMSC") as
of December 31, 1994 and 1993. This investment is accounted for
at cost and amounted to $27.3 million as of December 31, 1994 and
1993. As of December 31, 1994, the market value of AMSC common
stock controlled by the Company was $23.7 million based on the
closing price on that date.
The Company also had loans and advances totaling $13.6 and $10.2
million outstanding as of December 31, 1994 and 1993,
respectively, to certain of its unconsolidated affiliates. The
loans carry interest at prime plus 1% and mature in 1995.
<PAGE>
<PAGE> F-17
<TABLE>
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 - Investments in and Advances to Unconsolidated Affiliates
(continued)
The following is a summary of combined results of operations, assets, liabilities and
equity of significant investments accounted for on the equity method:
<CAPTION>
At 100% (in thousands) 1994 1993 1992
------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net revenues $788,932 $704,550 $606,277
Net income $270,800 $255,685 $238,084
LIN's equity in income $115,010 $103,125 $96,977
Current assets $184,699 $183,577 $137,553
Noncurrent assets 501,928 488,052 423,676
---------- ---------- ----------
Total assets $686,627 $671,629 $561,229
========== ========== ==========
Current liabilities $159,160 $127,976 $83,152
Noncurrent liabilities -- 100,950 130,932
---------- ---------- ----------
Total liabilities 159,160 228,926 214,084
Equity 527,467 442,703 347,145
---------- ---------- ----------
Total liabilities and equity $686,627 $671,629 $561,229
========== ========== ==========
</TABLE>
<PAGE>
<PAGE> F-18
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 - Long-Term Debt
Long-term debt consists of the following:
December 31,
(in thousands) 1994 1993
-------------------------------------------------------------------------
Bank Credit Facilities
LIN Cellular Network, Inc.:
Term credit facilities $1,315,000 $1,316,250
Revolving credit facilities 280,000 160,000
---------- ----------
1,595,000 1,476,250
LIN Television Corporation:
Term credit facility -- 159,088
Revolving credit facility -- 63,000
---------- ----------
-- 222,088
---------- ----------
1,595,000 1,698,338
Less current portion of
long-term debt 151,875 146,891
---------- ----------
$1,443,125 $1,551,447
========== ==========
The Company's wholly-owned subsidiary, LIN Cellular Network, Inc.
("LCNI"), which owns all of the Company's cellular operations,
has a senior secured and a senior unsecured bank credit facility
(the "Bank Credit Facilities"). As of December 31, 1994, the
aggregate additional borrowing capacity available to the Company
under these two facilities totaled $220 million. Fees incurred in
connection with the Bank Credit Facilities are classified as
noncurrent assets and are being amortized over the contractual
terms of the facilities.
The aggregate amounts of principal maturities on the utilized
portions of the Bank Credit Facilities subsequent to December 31,
1994 are as follows:
(in thousands) Amount
-----------------------------------------------------
1995 $151,875
1996 208,625
1997 253,875
1998 299,125
1999 327,500
Thereafter 354,000
---------
$1,595,000
==========<PAGE>
<PAGE> F-19
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 - Long-Term Debt (continued)
Under the Bank Credit Facilities, interest is payable, at the
Company's discretion, at the prevailing prime rate, LIBOR or CD
rates, plus an applicable margin. Interest is fixed for a period
ranging from one month to twelve months, depending on
availability of the interest basis selected, although if the
Company selects a prime-based loan, the interest rate will
fluctuate during the period as the prime rate fluctuates. The
applicable margin for each loan will be determined each quarter
based on LCNI's ratio of adjusted senior debt (as determined
under the appropriate Bank Credit Facility) to cash flow, as
defined. Due to the frequent repricing of the borrowings under
the Bank Credit Facilities, the book values at December 31, 1994
approximate fair values.
The Bank Credit Facilities contain covenants restricting certain
activities by LCNI and its subsidiaries, including, without
limitation, restrictions on (i) acquisitions and investments,
(ii) the incurrence of debt, (iii) distributions and dividends to
stockholders, (iv) mergers and sales of assets, (v) prepayments
of subordinated indebtedness, (vi) the creation of liens and
(vii) the issuance of preferred stock. In addition, LCNI will be
required to apply cash proceeds from certain sales of assets that
are not reinvested in similar assets and excess cash flow, as
defined, to the prepayment of loans. The Company has not
guaranteed the repayment of amounts under the Bank Credit
Facilities.
LCNI is required to maintain compliance with certain financial
covenants set forth in the Bank Credit Facilities, including
ratios of senior debt and combined debt to cash flow and cash
flow to debt service or fixed charges. LCNI pledged as security
the capital stock of certain of its subsidiaries, including those
owning the Company's interests in the New York, Dallas-Fort Worth
and Houston cellular partnerships. The Company also pledged as
security the capital stock of LCNI under the Bank Credit
Facilities.
The Bank Credit Facilities contain customary provisions
concerning events of default, including (i) failure to make
principal or interest payments when due, (ii) failure to comply
with covenants, (iii) misrepresentations, (iv) defaults on other
indebtedness, (v) material adverse change in the business,
condition, operations, performance or properties of the borrower,
(vi) unpaid judgments and (vii) standard ERISA and bankruptcy
defaults. In addition, it shall be an event of default if AT&T or
McCaw fails to have the right to cause the election of its <PAGE>
<PAGE> F-20
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 - Long-Term Debt (continued)
nominees to a majority of the directorships of the Board of
Directors of the Company or of McCaw or if AT&T fails to have
economic ownership of at least 51% of the combined voting power
of all voting stock of McCaw.
The weighted average interest rate was 7.04% for the term and
revolving credit facilities at December 31, 1994. The Bank Credit
Facilities provide for annual fees of .5% of the unused
commitments.
In order to comply with covenants under its Bank Credit
Facilities and to provide protection against rising interest
rates, the Company entered into interest rate cap agreements with
notional amounts of $850 million, $840 million and $1.35 billion
as of December 31, 1994, 1993 and 1992. The rate cap agreements
in effect as of December 31, 1994 have expiration dates ranging
from July 1995 to September 1997. All of the interest rate caps
are based on three month LIBOR and have strike rates ranging from
8% to 8.5%. During the past three years, the prevailing market
rates have been below the rate caps in effect, thus the only
effect on the Company's interest expense has been the
amortization of the cost of the caps of $860, $1,951, and $2,669
during the years ended December 31, 1994, 1993 and 1992,
respectively. In the event that a counterparty to an interest
rate cap fails to fulfill its obligation, the Company would be
required to pay the interest rate on the underlying debt without
the benefit of the hedge.
NOTE 7 - Redeemable Preferred Stock of a Subsidiary
On June 24, 1994, LCH redeemed all of its outstanding Redeemable
Preferred Stock held by Comcast Cellular Communications Inc., in
exchange for all of the capital stock of a subsidiary of LCH,
whose assets consisted primarily of a 49.99% interest in the
Philadelphia cellular system and the GuestInformant specialty
publishing business, plus $12.3 million cash (which represented
15% of the fair market value of the WOOD-TV business).
The Company has accounted for this transaction as a nonmonetary
exchange. Accordingly, the Company recognized a gain of $468.7
million, which represented the excess of the estimated fair
market values over the book values of the assets exchanged. The
$783.8 million difference between the book value of the Preferred
Stock and the fair values of the assets exchanged was credited to
additional paid-in capital. The Company has reported the
redemption to the IRS as a tax-free transaction.
<PAGE>
<PAGE> F-21
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 - Stockholders' Equity
McCaw currently owns approximately 52% of the outstanding Common
Stock of the Company. Pursuant to the Private Market Value
Guarantee ("PMVG") between the Company and McCaw, a process began
on January 1, 1995 to determine the private market price per
share of the Company. The private market value is being
determined by Lehman Brothers Inc. and Bear, Stearns & Co,
designated jointly as the Company's independent directors'
appraiser, and by Morgan Stanley & Co. Incorporated, designated
as McCaw's appraiser, and if necessary by a third party
appraiser. After the price is determined, McCaw will have 45
days to decide whether to proceed with the acquisition of all the
public shares of the Company at that price, subject to the
approval of the Company's public shareholders, or to put the
Company in its entirety up for sale under the direction of the
Company's independent directors. Such a sale would also be
subject to approval by the Company's public shareholders.
The Company is authorized to issue 2,000,000 shares of preferred
stock, without par value, none of which is outstanding. The
Company's board of directors is empowered to set the dividend,
redemption and liquidation rights pertaining to any series of
preferred stock that may be issued from time to time, to
designate whether preferred shares of any series shall be
convertible and the terms of such convertibility, and to
establish the voting rights and any special rights or
restrictions that are to apply to preferred shares of any series.
The Company has never paid or declared a cash dividend on its
common stock. Its dividend policy is subject to future earnings,
financial conditions and other relevant factors (including,
without limitation, dividend restrictions in credit and loan
agreements between the Company and banks).
Pursuant to the Company's 1969 stock option plan, as amended,
incentive and nonqualified options have been granted or are
available for grant to officers and key employees at prices not
less than the fair market value at date of grant. The exercise
price of each outstanding option granted prior to December 28,
1994 to purchase Company stock was adjusted to give effect to the
LIN TV spin-off by reducing the exercise price based on the
relative fair market values of the corresponding common stocks
after the spin-off. As a result, each exercise price was adjusted
to approximately 90% of its original amount.
<PAGE>
<PAGE> F-22
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 - Stockholders' Equity (continued)
Options are generally not exercisable until one year after grant,
have vesting terms ranging from two to five years, and expire ten
years from date of grant. Changes in incentive and nonqualified
stock options granted and outstanding are as follows:
Shares Prices Per Share
---------------------------------------------------------------------------
Options outstanding at
December 31, 1991 818,356 $6.28 - $82.70
Granted 521,350 69.57 - 70.48
Exercised (25,101) 6.28 - 45.30
Canceled or expired (51,410) 39.56 - 82.70
----------
Options outstanding at
December 31, 1992 1,263,195 7.30 - 82.70
Granted 473,300 80.48 - 100.49
Exercised (84,911) 8.47 - 70.48
Canceled or expired (52,335) 20.33 - 69.57
----------
Options outstanding at
December 31, 1993 1,599,249 7.30 - 100.49
Granted 301,550 100.26 - 133.50
Exercised (145,120) 7.30 - 101.83
Canceled or expired (71,605) 39.56 - 100.49
----------
Options outstanding at
December 31, 1994 1,684,074 $13.78 - $133.50
==========
As of December 31, 1994, there were 691,045 exercisable options
to purchase shares and there were 724,895 options available for
future grants. Pursuant to the Company's stock option plan, in
the event of a "change in control" (as defined in the plan) of
the Company, vested options at the time of the change in control
may be surrendered by officers of the Company, subject to Section
16 of the Securities Exchange Act of 1934, as amended, in
exchange for a cash payment per share by the Company equal to the
difference between the exercise price for the option and the
greater of the highest amount paid to any holder of common stock
by the acquiror in connection with the resulting change in
control or the highest selling price of the common stock during
the 90-day period prior to the date of surrender of the option.
<PAGE>
<PAGE> F-23
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 - Stockholders' Equity (continued)
Notwithstanding the foregoing, if a change in control results in
the consolidation or merger of the Company with McCaw or a
successor to McCaw under the PMVG, and McCaw or any such
successor is the surviving company or if McCaw becomes the
beneficial owner of 80% or more of the Company's stock (other
than pursuant to a private market sale, as defined in the
Company's PMVG with McCaw), each outstanding option shall be
converted into an option to purchase McCaw's Class A Common Stock
or the common stock of any such successor (or in the event that
McCaw or any such successor is not publicly traded, the ultimate
parent thereof). If a change in control results from a private
market sale, upon a vote by a majority of the Company's
independent directors, each outstanding option will be converted
into an option to purchase the common stock of the acquirer. If
the independent directors do not approve the conversion, the
Company may (but is not required to) cancel each such option in
exchange for a payment per share in cash equal to the excess of
the purchase price per share in the private market sale over the
exercise price of such option.
The Company's Employee Stock Purchase Plan ("ESPP") allows
eligible employees to purchase shares of the Company's common
stock, through regular payroll deductions, at 85% of the closing
market price of the stock as of the last trading day of each
month. The ESPP restricts participant purchases to no more than
$25,000 of stock in any calendar year. A total of 300,000 shares
have been authorized under the ESPP. There are no charges or
credits to income in connection with the ESPP. During 1994,
common stock was purchased and distributed to employees at prices
ranging from $90.31 to $122.40 per share.
The Company has a Stockholder Rights Plan ("Rights Plan")
designed to strengthen its bargaining position on behalf of its
stockholders in the event of coercive stock accumulation
programs, inadequate offers or other tactics that may be used to
gain control of the Company without offering a fair and adequate
price to all stockholders. Under the Rights Plan, each
stockholder has one right for each share of the Company's
outstanding common stock that entitles the holder to purchase one
one-thousandth (1/1000th) of a share of a participating preferred
stock. At the present time, the rights are attached to the common
stock and are not exercisable, and they do not represent any
significant value to stockholders. The rights become valuable, as
a result of becoming exercisable into capital stock at a
substantial discount price, if any person acquires 15% or more of
the Company's outstanding common stock or upon the occurrence of
certain other events, including a merger or other business
combination involving the Company. The Rights Plan, as amended, <PAGE>
<PAGE> F-24
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 - Stockholders' Equity (continued)
provides that the acquisition of McCaw by AT&T and the
consummation of the transactions contemplated or permitted by the
PMVG will not constitute a Triggering Event or cause AT&T or
McCaw or any of their affiliates to become an Acquiring Person
(each as defined) under the Rights Plan.
NOTE 9 - Income Taxes
Deferred taxes are determined based on the estimated future tax
effects of differences between the financial statement and the
tax basis of assets and liabilities given the provisions of the
enacted tax laws. The components of the net deferred tax
liability are as follows:
Deferred Income Taxes
(in thousands) Assets Liabilities
------------------------------------------------------------------------
December 31, 1994
Intangible assets $-- $642,926
Property and equipment -- 90,288
Other -- 2,099
-------- --------
Total $-- $735,313
======== ========
December 31, 1993
Intangible assets $-- $628,822
Property and equipment -- 82,813
Other 2,365 25,779
-------- --------
Total $2,365 $737,414
======== ========
The components of income tax expense are as follows:
(in thousands) 1994 1993 1992
-------------------------------------------------------------------------
Current:
Federal $54,482 $33,984 $29,753
State 7,459 4,938 14,216
-------- -------- --------
61,941 38,922 43,969
Deferred:
Federal (93) 26,800 (5,828)
State (2,559) (153) (4,244)
-------- -------- --------
(2,652) 26,647 (10,072)
-------- -------- --------
$59,289 $65,569 $33,897
======== ======== =========<PAGE>
<PAGE> F-25
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 9 - Income Taxes (continued)
The deferred tax benefit results largely from the amortization of
intangible assets, offset in part by the excess of tax over
financial statement depreciation.
The Omnibus Budget Reconciliation Act of 1993 increased the
corporate tax rate to 35% from 34% effective as of January 1,
1993. Pursuant to Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes," the Company recorded an
additional tax expense of $15.3 million in the third quarter of
1993, with a corresponding increase in deferred tax liability.
The following table reconciles the amount which would be provided
by applying the 35% federal statutory rate to income before
income tax expense to the federal income taxes actually provided.
(in thousands) 1994 1993 1992
------------------------------------------------------------------------
Expense assuming federal
statutory rate $239,361 $50,064 $40,154
Nontaxable gain on redemption
of preferred stock (164,041) -- --
Equity investments (4,572) (5,672) (4,169)
State and local taxes, net
of federal benefit 3,185 3,110 6,582
Tax expense not provided on
minority partners' share
of income (8,147) 1,027 (4,734)
Change in statutory tax
rate from 34% to 35% -- 15,335 --
Other (6,497) 1,705 (3,936)
-------- -------- --------
Total income tax expense $59,289 $65,569 $33,897
======== ======== ========
NOTE 10 - Retirement Plans
On December 28, 1994, the Company transferred sponsorship of the
contributory retirement plan to LIN TV in connection with the
spin-off of those operations (see Note 3). LIN TV assumed all
rights and responsibilities associated with the Plan. The
transfer was made at book value and no significant gain or loss
was recognized.
Employees of the Company's consolidated cellular operations are
covered by 401(k) plans that provide matching contributions from
the Company.
<PAGE>
<PAGE> F-26
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 - Commitments and Contingencies
The Company leases various property, equipment and cellular sites
under noncancellable operating leases. Rent expense relating to
such leases amounted to $19.1 million, $15.9 million and $13.2
million in 1994, 1993 and 1992, respectively. Annual commitments
for rental payments, principally on real property operating
leases, after December 31, 1994 are as follows: 1995-$19.0
million; 1996-$17.5 million; 1997-$16.7 million; 1998-$16.1
million; 1999-$15.4 million and thereafter-$98.0 million.
The Company and its subsidiaries are from time to time defendants
in and are threatened with various legal proceedings arising from
their regular business activities. In particular, certain of the
Company's unconsolidated cellular affiliates have been named as
defendants in various legal proceedings:
The Los Angeles cellular partnership and several related parties
have been named as defendants in various actions brought in
California state court by dealers, resellers and equipment
sellers for the partnership. The lawsuits variously allege a
variety of torts and statutory violations, including price-fixing
regarding cellular equipment and service, below-cost sales of
equipment, fraud, interference with economic relationship, unfair
competition, discrimination among agents, and conspiracy.
Several of these cases are scheduled for trial in 1995. The
partnership intends to defend each lawsuit vigorously and
believes that it has meritorious defenses to the allegations
contained in the complaints.
The Los Angeles cellular partnership, in some cases along with
other cellular carriers, also has been named as a defendant in
several class actions filed in California state court by current
and former customers alleging violations of federal and state
antitrust law as a result of price-fixing of cellular service.
Trial dates have not been set for the pending cases. The
partnership intends to defend each lawsuit vigorously and
believes that is has meritorious defenses to the allegations
contained in the complaints.
A class action lawsuit, originally filed in August 1993, has been
instituted on behalf of Texas cellular subscribers in Texas state
court against the Houston cellular partnership and several
related parties, including the Company. As amended, the petition
alleges that the liquidated damages and automatic renewal <PAGE>
<PAGE> F-27
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 - Commitments and Contingencies (continued)
provisions in annual cellular subscriber contracts violate or are
contrary to state law in several respects. Plaintiffs seek
declaratory relief, damages, fees, costs and interest. Neither
the class nor any of the subclasses alleged by the plaintiffs
have been certified. Discovery is underway, but no trial date
has been set. The partnership intends to defend the lawsuit
vigorously and believes that it has meritorious defenses to the
allegations contained in the petition.
The Company does not expect that the ultimate results of any of
the foregoing legal proceedings will have a material adverse
effect on its financial position, results of operations or cash
flows.
NOTE 12 - Segment Data
As explained in Note 3, the Company divested substantially all
its media operations through the spin-off of LIN TV and the
preferred stock redemption (see Note 7). Accordingly, 1994 media
operating data includes LIN TV operations through December 28,
1994 and specialty publishing operations through June 24, 1994.
Cellular revenues primarily represent fees charged for providing
cellular telephone service to subscribers. Media revenues are
principally from the sale of television time to advertisers and
also include revenues from the Company's specialty publishing
operation. The cellular business segment data reflects the
consolidation of the Company's controlling interests (principally
New York and Dallas). Cellular interests in Los Angeles,
Galveston and Houston are accounted for by the equity method of
accounting, and thus are not included in the cellular business
segment data which follows:
<PAGE>
<PAGE> F-28
<TABLE>
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12 - Segment Data (continued)
<CAPTION>
(in thousands) Cellular Media Corporate Total
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1994
Net revenues $692,798 $183,671 $-- $876,469
Depreciation and amortization 130,255 10,707 190 141,152
Income (loss) from operations 148,153 69,414 (11,457) 206,110
Capital expenditures 145,678 18,652 -- 164,330
Identifiable assets 2,850,001 32,713 41,159 2,923,873
1993
Net revenues $520,131 $168,426 $-- $688,557
Depreciation and amortization 114,894 10,061 175 125,130
Income (loss) from operations 77,993 58,828 (8,516) 128,305
Capital expenditures 136,662 8,599 92 145,353
Identifiable assets 2,589,995 257,839 61,689 2,909,523
1992
Net revenues $407,721 $164,800 $-- $572,521
Depreciation and amortization 109,263 9,149 192 118,604
Income (loss) from operations 77,273 60,516 (7,774) 130,015
Capital expenditures 89,254 4,489 95 93,838
Identifiable assets 2,554,972 250,259 57,679 2,862,910
</TABLE>
<PAGE>
<PAGE> F-29
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 - Related Party Transactions
Under an inter-company services arrangement negotiated between
the Company and McCaw, McCaw provides management and other
services to the Company. LIN also provided certain services to
McCaw during the same time periods. The Company incurred $6.3
million, $7.3 million and $5.3 million for the net value of
management and other services rendered under the inter-company
services agreement during 1994, 1993 and 1992, respectively.
In addition to the transactions described above, the Company or
its affiliates routinely enter into transactions with AT&T, McCaw
or their affiliates in the ordinary course of business. Among
other things, the Company's cellular affiliates purchase long
distance services and cellular telephones and accessories from
AT&T for resale to cellular subscribers and pay McCaw for
providing cellular service to the Company's subscribers under
roaming agreements, and McCaw pays the Company for similar
services provided by the Company to McCaw's subscribers. The
Company's cellular operations also participate in certain
programs managed by McCaw, such as national advertising
campaigns, national accounts marketing, and the North American
Cellular Network. Such transactions are not separately disclosed
in the financial statements as they are carried out in the normal
course of business.
All of such agreements and arrangements between the Company and
McCaw are on terms that the Company believes are as favorable to
it as would have been obtained with an unrelated third party.
Under the Company's PMVG with McCaw, approval of the majority of
LIN's independent directors is required before the Company enters
into any material transactions with McCaw or its affiliates.
NOTE 14 - Loss on Disposal of Cellular Equipment
In February 1994, the Company's Dallas cellular operations
completed the installation of a new cellular system. As a result,
the Company recorded in 1993 a non-cash pre-tax charge of $42.2
million to reflect the loss on the disposal of the previous
system. The loss amounted to approximately $14.8 million, or
$0.29 per share, after taxes and minority interests.
<PAGE>
<PAGE> F-30
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15 - Other Income and Expenses
In June 1992, the Company settled a lawsuit relating to the McCaw
acquisition. Under the terms of the settlement, the Company
received from the defendants a payment of $3 million and certain
other considerations in July 1992 and payments of $2 million in
July 1993 and June 1994. In addition, the Company will receive a
final payment of $2 million from McCaw on June 30, 1995. After
payment of legal fees and other related costs, this settlement
resulted in a net gain to the Company of approximately $7
million.
<PAGE>
<PAGE> F-31
<TABLE>
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16 - Quarterly Results of Operations (Unaudited)
The financial information presented below reflects all adjustments (consisting of normal
recurring adjustments) which are, in the opinion of management, necessary to a fair
presentation of the results for the interim periods. Summarized quarterly financial data
for 1994 and 1993 is as follows:
<CAPTION>
First Second Third Fourth
(in thousands) Quarter Quarter Quarter Quarter
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1994
Net revenues $191,627 $219,588 $225,027 $240,227
Operating income 27,716 57,364 61,738 59,292
Equity in income of
unconsolidated affiliates 31,848 32,353 28,616 22,193
Net income (loss) (15,095) 506,761 37,893 34,521
Net income (loss) per share (0.29) 9.75 0.73 0.66
1993
Net revenues $151,233 $171,198 $175,145 $190,981
Operating income 32,707 553 44,593 50,452
Equity in income of
unconsolidated affiliates 24,729 24,580 26,906 26,910
Net loss (14,592) (16,614) (26,483) (3,038)
Net loss per share (0.29) (0.32) (0.51) (0.06)
</TABLE>
<PAGE>
<PAGE> F-32
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Board of Directors and Stockholders of
LIN Broadcasting Corporation
We have audited the accompanying combined balance sheets of LIN
Broadcasting Corporation's Unconsolidated Affiliates listed in
Note 1 (the Ventures) as of December 31, 1994 and 1993, and the
related combined statements of income, Ventures' equity, and cash
flows for each of the three years in the period ended December
31, 1994. Our audits also included the financial statement
schedule listed in the Index at Item 14(a). These financial
statements and schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits. We did not
audit the 1993 and 1992 consolidated financial statements of
AWACS, Inc. and subsidiaries, which statements reflect total
assets constituting 24% as of December 31, 1993 and net revenues
constituting 19% and 17% for each of the two years in the period
ended December 31, 1993 of the related combined totals. Those
1993 and 1992 statements were audited by other auditors whose
report, which also places reliance on other auditors, has been
furnished to us, and our opinion, insofar as it relates to data
included for AWACS, Inc. and subsidiaries, is based solely on the
reports of the other auditors.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform our audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits and the reports of other auditors provide a reasonable
basis for our opinion.
In our opinion, based on our audits and the reports of other
auditors, the combined financial statements referred to above
present fairly, in all material respects, the combined financial
position of the Ventures at December 31, 1994 and 1993, and the
combined results of their operations and their cash flows for
each of the three years in the period ended December 31, 1994, in
conformity with generally accepted accounting principles. Also,
in our opinion, based on our audits and the reports of other
auditors, the related financial statement schedule, when
considered in relation to the basic financial statements taken as
a whole, presents fairly, in all material respects, the
information set forth therein.
ERNST & YOUNG LLP
Seattle, Washington
January 20, 1995<PAGE>
<PAGE> F-33
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
AWACS, Inc.
Wayne, Pennsylvania
We have audited the consolidated balance sheet of AWACS, Inc. and
subsidiaries as of December 31, 1993, and the related
consolidated statements of operations and retained earnings and
of cash flows for the years ended December 31, 1993 and 1992 (not
presented separately herein). These financial statements are the
responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our
audits. We did not audit the financial statements of Garden State
Cablevision L.P. ("Garden State"), the Company's investment in
which is accounted for by use of the equity method. The
Company's equity of $32,302,000 and $22,369,000 in that entity's
net losses for the years then ended are included in the
accompanying consolidated financial statements. The financial
statements of Garden State were audited by other auditors whose
report has been furnished to us, and our opinion, insofar as it
relates to the amounts included for Garden State, is based solely
on the report of such other auditors.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other
auditors, such consolidated financial statements present fairly,
in all material respects, the financial position of AWACS, Inc.
and subsidiaries as of December 31, 1993 and the results of their
operations and their cash flows for the years ended December 31,
1993 and 1992, in conformity with generally accepted accounting
principles.
As discussed in the notes to the consolidated financial
statements, the Company changed its method of accounting for
income taxes effective January 1, 1993 to conform with Statement
of Financial Accounting Standards No. 109 "Accounting for Income
Taxes".
DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
February 18, 1994<PAGE>
<PAGE> F-34
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Garden State Cablevision L.P.:
We have audited the accompanying balance sheets of Garden State
Cablevision L.P. (a Delaware Limited Partnership) as of December
31, 1993 and 1992, and the related statements of operations,
partners' (deficit) capital and cash flows for the years then
ended (not presented herein). These financial statements are the
responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion the financial statements referred to above present
fairly, in all material respects, the financial position of
Garden State Cablevision L.P. as of December 31, 1993 and 1992,
and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Philadelphia, Pa.,
February 23, 1994
<PAGE>
<PAGE> F-35
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
COMBINED BALANCE SHEETS
DECEMBER 31, 1994 AND 1993
(Dollars in thousands)
ASSETS 1994 1993
--------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents $12,905 $28,675
Short-term investments -- 25,682
Accounts receivable, less allowance
for doubtful accounts (1994-$27,262,
1993-$9,829) 123,926 111,723
Inventories 36,183 6,079
Prepaid expenses and other 11,685 11,418
----------------------------------------------------------------------------
Total current assets 184,699 183,577
---------------------------------------------------------------------------
Property and equipment, at cost,
less accumulated depreciation 483,269 452,447
Other assets 3,185 2,108
Cellular FCC licenses, less
accumulated amortization
(1994-$856; 1993-$506) 13,214 13,564
Organization costs, less
accumulated amortization
(1994-$7,790; 1993-$6,785) 2,260 3,265
Due from affiliate -- 16,387
Notes receivable, less allowance
for doubtful accounts of $150 -- 281
----------------------------------------------------------------------------
Total Assets $686,627 $671,629
===========================================================================
LIABILITIES AND EQUITY
---------------------------------------------------------------------------
Current Liabilities:
Accounts payable $62,245 $37,801
Accrued expenses 30,075 39,180
Unearned revenues 32,848 27,610
Commissions payable 11,973 14,439
Notes payable to affiliates 14,917 2,946
Other current liabilities 7,102 6,000
---------------------------------------------------------------------------
Total current liabilities 159,160 127,976
---------------------------------------------------------------------------
Notes payable to affiliates -- 63,126
Investment in affiliate -- 32,302
Deferred income taxes -- 4,236
Other long-term liabilities -- 1,286
(continued)<PAGE>
<PAGE> F-36
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
COMBINED BALANCE SHEETS
DECEMBER 31, 1994 AND 1993
(Dollars in thousands)
LIABILITIES AND EQUITY (continued) 1994 1993
--------------------------------------------------------------------------
Equity:
Contributed capital 47,184 78,690
Excess cost of limited
partnership interest -- (70,384)
Retained earnings 480,283 434,397
----------------------------------------------------------------------------
Total equity 527,467 442,703
-----------------------------------------------------------------------------
Total Liabilities and Equity $686,627 $671,629
===========================================================================
See accompanying notes.
<PAGE>
<PAGE> F-37
<TABLE>
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
COMBINED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(Dollars in thousands)
<CAPTION>
1994 1993 1992
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Revenues $788,932 $704,550 $606,277
Operating Costs and Expenses:
Direct operating 96,272 75,140 60,732
Selling, general and administrative 326,824 277,040 236,597
Depreciation and amortization 70,440 69,833 52,595
-------------------------------------------------------------------------------------------------
493,536 422,013 349,924
-------------------------------------------------------------------------------------------------
Operating Income 295,396 282,537 256,353
-------------------------------------------------------------------------------------------------
Other Income (Expense):
Interest expense - affiliates (3,213) (7,515) (3,882)
Interest expense (315) (623) (19)
Equity in loss of affiliate (5,000) (9,933) (2,985)
Litigation settlements -- (12,254) --
Provision for loss on cellular equipment -- -- (4,604)
Other (3,302) 2,578 1,685
--------------------------------------------------------------------------------------------------
(11,830) (27,747) (9,805)
Income Before Provision for Income
Taxes and Cumulative Effect
of Accounting Changes 283,566 254,790 246,548
Provision for Income Taxes 12,766 11,247 8,464
--------------------------------------------------------------------------------------------------
Income Before Cumulative Effect of
Accounting Changes 270,800 243,543 238,084
Cumulative Effect of Accounting Changes -- 12,142 --
--------------------------------------------------------------------------------------------------
Net Income $270,800 $255,685 $238,084
==================================================================================================
See accompanying notes.<PAGE>
<PAGE> F-38
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
COMBINED STATEMENTS OF VENTURES' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(Dollars in thousands)
<CAPTION>
Excess Cost
of Limited
Contributed Partnership Retained Total
Capital Interest Earnings Equity
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1991 $61,137 $-- $306,503 $367,640
Net income -- -- 238,084 238,084
Distributions to partners -- -- (185,945) (185,945)
Acquisition of interest in
Garden State Cablevision L.P. -- (70,384) -- (70,384)
Acquisition of interest in
Galveston Cellular
Telephone Company 2,680 -- (4,930) (2,250)
----------------------------------------------------------------------------------------------------
Balance at December 31, 1992 63,817 (70,384) 353,712 347,145
Net income -- -- 255,685 255,685
Distributions to partners -- -- (175,000) (175,000)
Contributions 809 -- -- 809
In-kind contribution of cellular
FCC license 14,064 -- -- 14,064
---------------------------------------------------------------------------------------------------
Balance at December 31, 1993 78,690 (70,384) 434,397 442,703
Net income -- -- 270,800 270,800
Distributions to partners -- -- (142,000) (142,000)
Divestiture of AWACS, Inc. (31,506) 70,384 (82,914) (44,036)
--------------------------------------------------------------------------------------------------
Balance at December 31, 1994 $47,184 $-- $480,283 $527,467
====================================================================================================
See accompanying notes.<PAGE>
<PAGE> F-39
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(Dollars in thousands)
<CAPTION>
1994 1993 1992
--------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income $270,800 $255,685 $238,084
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 70,440 69,833 52,595
Equity in loss of affiliate 5,000 9,933 2,985
Non-cash interest expense 2,237 6,006 1,403
Provision for losses on accounts receivable 24,110 20,945 21,127
Loss on disposal of cellular equipment 130 -- 4,604
Cumulative effect of accounting changes -- (12,142) --
Changes in operating assets and liabilities
Increase in accounts receivable (65,555) (47,742) (29,300)
Increase in inventory (30,151) (1,051) (3,563)
Increase (decrease) in accounts payable 23,573 15,423 (6,129)
Increase in accrued expenses 15,671 11,295 5,467
Increase in unearned revenues 9,388 10,792 3,445
Increase in commissions payable 2,709 3,571 2,553
Increase in deferred income taxes 629 3,319 3,244
Other, net 2,317 (4,042) 2,494
----------------------------------------------------------------------------------------
Total adjustments 60,498 86,140 60,925
----------------------------------------------------------------------------------------
Net cash provided by operating activities 331,298 341,825 299,099
----------------------------------------------------------------------------------------
(continued)<PAGE>
<PAGE> F-40
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
COMBINED STATEMENTS OF CASH FLOWS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(Dollars in thousands)
<CAPTION>
1994 1993 1992
--------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTING ACTIVITIES:
Advances (to) from majority
stockholder of AWACS (12,236) (16,387) 9,259
Capital expenditures (196,133) (103,944) (112,573)
Purchase of short-term investments, net (3,953) (13,065) (12,617)
----------------------------------------------------------------------------------------
Net cash used for investing activities (212,322) (120,331) (103,314)
----------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Repayment of revolving credit notes -- -- (3,800)
Proceeds from (repayment of)
notes payable to partners 7,254 (33,761) 10,478
Contributions from partners, net -- 809 --
Distributions paid to partners (142,000) (175,000) (185,945)
----------------------------------------------------------------------------------------
Net cash used for financing activities (134,746) (207,952) (179,267)
----------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and
Cash Equivalents (15,770) 477 3,811
Cash and Cash Equivalents at Beginning of Year 28,675 28,198 24,387
----------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $12,905 $28,675 $28,198
========================================================================================
(continued)<PAGE>
<PAGE> F-41
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
COMBINED STATEMENTS OF CASH FLOWS (Continued)
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(Dollars in thousands)
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
<CAPTION>
1994 1993 1992
--------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash paid for:
Income taxes $8,195 $4,900 $6,600
Interest
Partners 17 1,478 3,422
Others 181 242 540
Noncash investing and financing activities:
On September 30, 1992, an indirect subsidiary of AWACS, Inc. issued a note for $51 million
to purchase from the majority stockholder of AWACS, Inc. a 40% limited partnership
interest in Garden State Cablevision L.P. (see Note 5 to the combined financial
statements).
In October 1992, a subsidiary of the Company, together with a third party, acquired an
approximate 56% interest in the parent company of Galveston Cellular Telephone Company. In
1993, the cost basis of this acquisition was pushed-down to the books of Galveston
Cellular Telephone Company.
See accompanying notes.
</TABLE>
<PAGE>
<PAGE> F-42
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
NOTE 1 - Basis of Presentation
These combined financial statements have been prepared to comply
with the Securities and Exchange Commission's Regulation S-X
requirement, in connection with LIN Broadcasting Corporation's
("LIN") consolidated financial statements, which requires
separate or combined financial statements of significant
subsidiaries in which LIN has a 50% or less controlling interest.
These combined financial statements include 100% of the accounts
of the operating ventures listed in the table below in which LIN
has voting interests of 50% or less (the "Ventures"). These
Ventures are included in LIN's consolidated financial statements
on the equity accounting method.
On June 24, 1994, LCH Communications, Inc. ("LCH"), a wholly-owned subsidiary
of LIN, redeemed all of its outstanding
Redeemable Preferred Stock held by Comcast Cellular
Communications Inc., in exchange for all of the capital stock of
a subsidiary of LCH, whose assets consisted of a 49.99% interest
in the Philadelphia cellular system.
Voting/
Name and Location Equity Management
-----------------------------------------------------------------------------
AWACS, Inc., d/b/a
Comcast Metrophone Corporation 49.99% 49.99%
Philadelphia
Los Angeles Cellular
Telephone Co., Partnership 39.97% 50.00%
Los Angeles
Houston Cellular
Telephone Co., Partnership 56.25% 50.00%
Houston
Galveston Cellular
Telephone Co., Corporation 34.60% 50.00%
Galveston
NOTE 2 - Significant Accounting Policies
The following are the Ventures' significant accounting policies:
CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS: Certain highly
liquid, short-term investments which have a maturity of three
months or less when purchased are considered cash equivalents.
Excess cash is primarily invested in US Government obligations.
Short-term investments consist principally of U.S. Government
obligations with a maturity of greater than three months when
purchased.<PAGE>
<PAGE> F-43
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
NOTE 2 - Significant Accounting Policies (continued)
INVENTORIES: Inventories consist primarily of cellular phones,
related parts and accessories and are stated at the lower of cost
(FIFO) or fair market value.
PROPERTY AND EQUIPMENT: Cellular system equipment is recorded at
cost and is depreciated on a straight-line basis over an 8 or 10
year period. All other property and equipment, including
betterments to existing facilities, are recorded at cost and
depreciated on a straight-line basis over their estimated useful
lives of three to twenty years.
CELLULAR FCC LICENSES AND ORGANIZATION COSTS: Cellular FCC
Licenses represent costs to acquire cellular licenses authorized
by the Federal Communications Commission and are amortized using
the straight line method over 40 years. Organization costs,
consisting principally of legal fees, feasibility studies and
other costs related to obtaining required licenses and regulatory
approvals, are amortized using the straight-line method over a 10
year period.
INCOME TAXES: Accelerated depreciation methods are used for tax
purposes. AWACS, Inc., which is a corporation, provides deferred
taxes related to this and other timing differences. Effective
January 1, 1993, AWACS, Inc. adopted the provisions of Statement
of Financial Accounting Standards ("SFAS") No. 109, "Accounting
for Income Taxes" (see Note 7). No provision is made for income
taxes for either the Los Angeles, Houston or Galveston ventures
as the income or loss is included in the tax returns of the
respective partners of these partnerships.
REVENUE RECOGNITION: Cellular airtime is recorded as revenue
when earned. Unearned revenues consist principally of amounts
billed to customers for access fees which are payable one month
in advance.
RECLASSIFICATIONS: Certain reclassifications have been made to
the prior years' combined financial statements in order to
conform to the 1994 presentation.
<PAGE>
<PAGE> F-44
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
NOTE 3 - Property and Equipment
The major classifications of property and equipment were as
follows:
December 31,
(in thousands) 1994 1993
------------------------------------------------------------------------
Land $1,549 $1,379
Buildings and improvements 8,207 6,583
Cellular equipment 658,559 576,655
Other 42,597 70,997
--------- ---------
710,912 655,614
Less accumulated depreciation (227,643) (203,167)
--------- ---------
$483,269 $452,447
========= =========
NOTE 4 - Notes Payable to Affiliates
The Houston venture has entered into agreements with the partners
under which it has borrowed $11,000 as of December 31, 1994. The
note matures in December 1995 and bears interest at the prime
rate plus 1%.
The Galveston venture also entered into an agreement with an
affiliate under which it has borrowed $3,917 as of December 31,
1994. This note matures beginning in 1995 and bears interest at
prime plus 2%.
NOTE 5 - Equity
In accordance with the various partnership agreements, income of
the partnerships is allocated to each owner's respective capital
account in accordance with its respective equity interest.
Additional capital contributions may be called based on annual
construction and operating budgets submitted by the partnerships
and agreed upon by the operating committees of each partnership.
NOTE 6 - Income Taxes
Effective January 1, 1993, AWACS, Inc. adopted SFAS No. 109,
"Accounting for Income Taxes." As a result, AWACS, Inc. recorded
a cumulative effect of accounting change of $12,517. The adoption
of SFAS No. 109 did not have a significant impact on the amount
of income tax expense recorded by AWACS, Inc. during 1993.<PAGE>
<PAGE> F-45
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
NOTE 6 - Income Taxes (continued)
The income tax expense relates to the income of AWACS, Inc. and
consists of the following:
Year Ended December 31,
(in thousands) 1994 1993 1992
--------------------------------------------------------------------
Current:
Federal $8,375 $3,543 $3,179
State 3,762 4,653 2,041
------ ------ ------
12,137 8,196 5,220
Deferred:
Federal 476 4,381 2,509
State 153 (1,330) 735
------ ------ ------
629 3,051 3,244
------ ------ ------
$12,766 $11,247 $8,464
======= ======= ======
No provision is made for income taxes for either the Los Angeles,
Houston or Galveston ventures as the income or loss is included
in the tax returns of the respective partners of these
partnerships.
Deferred taxes are attributable primarily to excess tax over book
depreciation and certain expenses not deductible for tax purposes
until paid.
NOTE 7 - POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
Effective January 1, 1993, AWACS, Inc. adopted SFAS No. 106.
This statement requires AWACS, Inc. to accrue the estimated cost
of retiree benefits earned during the years the employee provides
services. The cumulative effect as of January 1, 1993 of the
adoption of SFAS No. 106 was to reduce the AWACS, Inc. net income
by approximately $375 (net of tax).
NOTE 8 - Related-Party Transactions
For each of the years ended December 31, 1994, 1993 and 1992, two
partnerships recorded management fees payable to affiliates of
their partners of $4,200, for management consultation, legal
services and various other professional services.
<PAGE>
<PAGE> F-46
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
NOTE 8 - Related-Party Transactions (continued)
In addition to the transactions described above, the Ventures
routinely enter into transactions with the Company or other
affiliates of the Company (including AT&T), or other affiliates
of the partners. Such transactions include roaming agreements and
participation in the North American Cellular Network, among other
things. Such transactions are not separately disclosed in the
financial statements as they are carried out in the normal course
of business.
NOTE 9 - Commitments
The Ventures lease office space, land and buildings for cell
sites and vehicles under operating leases which expire through
the year 2010. Total rent expense for the years ended December
31, 1994, 1993 and 1992 was $14,902, $13,945 and $11,909,
respectively. Some of the leases include escalation clauses based
on increases in the Consumer Price Index. Several of the leases
include options to extend the lease term.
Future minimum payments under noncancellable operating leases
with initial or remaining terms of one year or more at December
31, 1994 are:
(in thousands) Amount
-----------------------------------------------------
1995 $13,769
1996 12,618
1997 11,148
1998 8,782
1999 5,153
2000 and beyond 8,255
-------
$59,725
=======
NOTE 10 - Contingencies
The Ventures are from time to time defendants in and are
threatened with various legal proceedings arising from their
regular business activities. The Ventures are also party to
routine filings with the FCC and state regulatory authorities and
customary regulatory proceedings pending in connection with
interconnection, rates, and practices and proceedings concerning
the telecommunications industry in general and other proceedings
which management does not expect to have a material adverse
effect on the financial position or results of operations of the
Ventures.<PAGE>
<PAGE> F-47
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
NOTES TO COMBINED FINANCIAL STATEMENTS
NOTE 10 - Contingencies (continued)
The Los Angeles cellular partnership and several related parties
have been named as defendants in various actions brought in
California state court by dealers, resellers and equipment
sellers for the partnership. The lawsuits variously allege a
variety of torts and statutory violations, including price-fixing
regarding cellular equipment and service, below-cost sales of
equipment, fraud, interference with economic relationship, unfair
competition, discrimination among agents, and conspiracy.
Several of these cases are scheduled for trial in 1995. The
partnership intends to defend each lawsuit vigorously and
believes that it has meritorious defenses to the allegations
contained in the complaints.
The Los Angeles cellular partnership, in some cases along with
other cellular carriers, also has been named as a defendant in
several class actions filed in California state court by current
and former customers alleging violations of federal and state
antitrust law as a result of price-fixing of cellular service.
Trial dates have not been set for the pending cases. The
partnership intends to defend each lawsuit vigorously and
believes that it has meritorious defenses to the allegations
contained in the complaints.
A class action lawsuit originally filed in August 1993, has been
instituted on behalf of Texas cellular subscribers in Texas state
court against the Houston cellular partnership and several
related parties, including the Company. As amended, the petition
alleges that the liquidated damages and automatic renewal
provisions in annual cellular subscriber contracts violate are or
contrary to state law in several respects. Plaintiffs seek
declaratory relief, damages, fees, costs and interest. Neither
the class nor any of the subclasses alleged by the plaintiffs
have been certified. Discovery is underway, but no trial date
has been set. The partnership intends to defend the lawsuit
vigorously and believes that it has meritorious defenses to the
allegations contained in the petition.
Each of the partnerships, subject to the above-described
proceedings, does not expect that the ultimate results of any of
such proceedings will have a material adverse effect on its
financial position or results of operations.<PAGE>
<PAGE> F-48
LIN BROADCASTING CORPORATION
(PARENT COMPANY ONLY)
SCHEDULE I - CONDENSED FINANCIAL INFORMATION
BALANCE SHEETS
DECEMBER 31, 1994 AND 1993
(Dollars in thousands, except share amounts)
ASSETS 1994 1993
-------------------------------------------------------------------------
Current Assets:
Cash and cash equivalents $7,811 $3,551
Marketable securities -- 16,465
Other receivables 1,487 2,744
--------------------------------------------------------------------------
Total current assets 9,298 22,760
---------------------------------------------------------------------------
Investment in consolidated subsidiaries 346,216 --
Property and equipment, at cost, less
accumulated depreciation 380 471
Other noncurrent assets 520 2,949
--------------------------------------------------------------------------
Total Assets $356,414 $26,180
==========================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
---------------------------------------------------------------------------
Current Liabilities:
Accounts payable $201 $--
Payable to affiliates, net 49,610 57,435
Deficiency of investment in
consolidated subsidiaries -- 1,061,401
Accrued expenses 6,733 1,321
--------------------------------------------------------------------------
Total current liabilities 56,544 1,120,157
--------------------------------------------------------------------------
Other noncurrent liabilities 2,132 8,388
Stockholders' Equity (Deficit):
Common stock, $.01 par value,
150,000,000 shares authorized,
55,329,000 shares issued 553 553
Paid-in capital 1,055,169 224,689
Deficit (586,055) (1,150,205)
--------------------------------------------------------------------------
469,667 (924,963)
--------------------------------------------------------------------------
(Continued)<PAGE>
<PAGE> F-49
LIN BROADCASTING CORPORATION
(PARENT COMPANY ONLY)
SCHEDULE I - CONDENSED FINANCIAL INFORMATION
BALANCE SHEETS (Continued)
DECEMBER 31, 1994 AND 1993
(Dollars in thousands, except share amounts)
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) (Continued) 1994 1993
------------------------------------------------------------------------
Less common stock in treasury,
at cost (1994-3,678,000 shares;
1993-3,826,000 shares) 171,929 177,402
-------------------------------------------------------------------------
Total stockholders' equity
(deficit) 297,738 (1,102,365)
Total Liabilities and Stockholders'
Equity $356,414 $26,180
============================================================================
This Schedule I should be read in conjunction with the LIN
Broadcasting Corporation and Subsidiaries Consolidated Financial
Statements and Notes thereto.<PAGE>
<PAGE> F-50
<TABLE>
LIN BROADCASTING CORPORATION
(PARENT COMPANY ONLY)
SCHEDULE I - CONDENSED FINANCIAL INFORMATION (Continued)
STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(Dollars in thousands)
<CAPTION>
1994 1993 1992
-------------------------------------------------------------------------------------------------
<S> <C> <S> <C> <C> <C>
Net Revenues $-- $-- $--
Other Income (Expenses):
Fees charged to subsidiaries and
affiliates, net of corporate expenses 2,266 693 1,424
Depreciation (160) (149) (164)
Litigation settlement -- -- 7,032
Other (249) 1,595 2,131
------------------------------------------------------------------------------------------------
Income Before Income Tax Expense and
Equity in Income (Loss) of Subsidiaries 1,857 2,139 10,423
Income Tax Expense 650 749 3,648
-------------------------------------------------------------------------------------------------
Income Before Equity in Income (Loss)
of Subsidiaries 1,207 1,390 6,775
Equity in Income (Loss) of Subsidiaries 562,943 (62,117) (75,727)
-------------------------------------------------------------------------------------------------
Net Income (Loss) $564,150 $(60,727) $(68,952)
=================================================================================================
This Schedule I should be read in conjunction with the LIN Broadcasting Corporation and
Subsidiaries Consolidated Financial Statements and Notes thereto.
<PAGE>
<PAGE> F-51
LIN BROADCASTING CORPORATION
(PARENT COMPANY ONLY)
SCHEDULE I - CONDENSED FINANCIAL INFORMATION (Continued)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(Dollars in thousands)
<CAPTION>
1994 1993 1992
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET CASH USED IN OPERATING ACTIVITIES $(18,146) $(5,196) $(16,580)
----------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Proceeds from sales of marketable securities 16,368 46,677 34,780
Purchases of marketable securities -- (43,705) (22,260)
Proceeds from sale of equipment 28 92 --
----------------------------------------------------------------------------------------------
Net cash provided by investing activities 16,396 3,064 12,520
----------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Proceeds from common stock issued for stock
purchase plan and stock options 7,104 4,145 1,641
Purchase of common stock for treasury (1,094) (1,798) (1,429)
----------------------------------------------------------------------------------------------
Net cash provided by financing activities 6,010 2,347 212
----------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and
Cash Equivalents 4,260 215 (3,848)
Cash and Cash Equivalents at Beginning of Year 3,551 3,336 7,184
----------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year $7,811 $3,551 $3,336
==============================================================================================
This Schedule I should be read in conjunction with the LIN Broadcasting Corporation and
Subsidiaries Consolidated Financial Statements and Notes thereto.<PAGE>
</TABLE>
<PAGE> F-52
NOTES TO CONDENSED FINANCIAL INFORMATION
NOTE A - Basis of Presentation
In the parent company-only financial statements, the Company's
investment in consolidated subsidiaries is stated at cost plus
equity in undistributed earnings of consolidated subsidiaries
since the date of acquisition.
NOTE B - Dividends
There have been no dividends paid by the Company's subsidiaries
to the Company during the years ended December 31, 1994, 1993 and
1992.<PAGE>
<PAGE> F-53
<TABLE>
LIN BROADCASTING CORPORATION AND SUBSIDIARIES
SCHEDULE II -VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(Dollars in thousands)
<CAPTION>
1994 1993 1992
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at Beginning of Year $18,138 $13,398 $11,869
Additions:
Charged to income 18,200 14,359 14,930
Recoveries 8,088 7,939 4,911
Deductions:
Accounts written off 23,547 17,558 18,312
Spin-off of LIN TV and divestiture
of GuestInformant 3,484 -- --
---------------------------------------------------------------------------------------------------
Balance at End of Year $17,395 $18,138 $13,398
===================================================================================================
<PAGE>
<PAGE> F-54
LIN BROADCASTING CORPORATION'S UNCONSOLIDATED AFFILIATES
SCHEDULE II -VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(Dollars in thousands)
<CAPTION>
1994 1993 1992
---------------------------------------------------------------------------------------------
Balance at Beginning of Year $9,979 $14,638 $11,309
Additions:
Charged to income 24,110 20,945 21,127
Deductions:
Accounts written off 6,827 25,604 17,798
------------------------------------------------------------------------------------------------
Balance at End of Year $27,262 $9,979(1) $14,638 (2)
(1) Includes $150 classified as long-term.
(2) Includes $198 classified as long-term.
</TABLE>
EXHIBIT 3.2
AMENDED AND RESTATED
BY-LAWS
OF
LIN BROADCASTING CORPORATION
INCORPORATED UNDER THE LAWS OF THE
STATE OF DELAWARE
(As amended through March 9, 1994)
<PAGE>
BY-LAWS
OF
LIN BROADCASTING CORPORATION
_________________________
ARTICLE I
MEETING OF STOCKHOLDERS
SECTION 1. Annual Meetings
The annual meeting of the stockholders of LIN Broadcasting
Corporation (hereinafter called the Corporation) for the election
of directors and for the transaction of such other business as
may properly come before the meeting shall be held at such place
in the City of New York, State of New York, as shall be fixed
from time to time by the Board of Directors of the Corporation
(hereinafter called the Board) and specified in the notice of
such meeting at 10:30 o'clock in the forenoon on the last Tuesday
in April of each year (or, if that day shall be a legal holiday
at the place where such meeting is to be held, then on the next
succeeding business day). Such annual meeting for any particular
year may be held on such different day and at such different time
and place (either within or without the State of Delaware) as
shall be fixed by the Board and specified in the notice of such
meeting.
At an annual meeting of the stockholders, only such business
shall be conducted as shall have been properly brought before the
meeting. To be properly brought before an annual meeting,
business must be (a) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of
Directors, (b) otherwise properly brought before the meeting by
or at the direction of the Board of Directors, or (c) otherwise
properly brought before the meeting by a stockholder. For
business to be properly brought before an annual meeting by a
stockholder, the stockholder must have given timely notice
thereof in writing to the Secretary of the Corporation. To be
timely, a stockholder's notice must be delivered to or mailed and
received at the principal executive offices of the Corporation,
not less than 60 days or more than 90 days prior to the meeting;
provided, however, that in the event that less than 70 days
notice or prior public disclosure of the date of the meeting is
given or made to stockholders, notice by the stockholder to be
timely must be so received not later than the close of business
on the tenth day following the date on which such notice of the
date of the annual meeting was mailed or such public disclosure
was made. A stockholder's notice to the Secretary shall set
forth as to each matter the stockholder proposes to bring before
the annual meeting (a) a brief description of the business
desired to be brought before the annual meeting, (b) the name and
address, as they appear on the Corporation's books, of the
stockholder proposing such business, (c) the class and number of
shares of the Corporation which are beneficially owned by the
stockholder, and (d) any material interest of the stockholder in
such business. Notwithstanding anything in the By-Laws to the
contrary, no business shall be conducted at an annual meeting
except in accordance with the procedures set forth in this
Section 1. The presiding officer of an annual meeting shall, if
the facts warrant, determine and declare to the meeting that
business was not properly brought before the meeting in
accordance with the provisions of this Section; and if he should
so determine, he shall so declare to the meeting and any such
business not properly brought before the meeting shall not be
transacted.
SECTION 2. Special Meetings
A special meeting of the stockholders for any purpose or
purposes, unless otherwise prescribed by statute, may be called
at any time by the President or the Board. Special meetings of
stockholders may be held either within or without the State of
Delaware.
SECTION 3. Notice of Meetings
Except as otherwise required by law or by the Certificate of
Incorporation of the Corporation, notice of each meeting of the
stockholders shall be given at least 10 days before the day on
which the meeting is to be held to each stockholder of record
entitled to notice of, or to vote at, such meeting by mailing a
copy of such notice in a postage prepaid envelope addressed to
him at his last post office address appearing on the stock
records of the Corporation. Except as otherwise expressly
required by law, no publication of any notice of a meeting of the
stockholders shall be required. Every such notice shall state
the time and place of the meeting and, in the case of a special
meeting, shall state briefly the purposes for which it was
called. Notice of any meeting need not be given to any
stockholder who attends such meeting in person or by proxy.
Except as otherwise expressly required by law, notice of any
adjourned meeting of the stockholders need not be given.
SECTION 4. Quorum
At each meeting of the stockholders, except as otherwise
expressly required by law, if stockholders holding not less than
a majority of the shares of stock of the Corporation issued,
outstanding and entitled to be voted thereat are present in
person or by proxy, they shall constitute a quorum for the
transaction of business. In the absence of a quorum at any such
meeting or any adjournment or adjournments thereof, a majority in
voting interest of those present in person or by proxy and
entitled to vote thereat, or in the absence therefrom of all the
stockholders, any officer entitled to preside at, or to act as
secretary of, such meeting may adjourn such meeting from time to
time until stockholders holding the amount of stock requisite for
a quorum shall be present or represented. At any such adjourned
meeting at which a quorum may be present any business may be
transacted which might have been transacted at the meeting as
originally called.
SECTION 5. Organization
At each meeting of the stockholders, one of the following
shall act as a chairman of the meeting and preside thereat, in
the following order of precedence:
(a) the President;
(b) any Vice President designated by the Board or the
Executive Committee or the President to act as chairman of said
meeting and to preside thereat; or
(c) a stockholder of record of the Corporation who shall be
chosen chairman of such meeting by a majority in voting interest
of the stockholders present in person or by proxy and entitled to
vote thereat.
The Secretary, or, if he shall be absent from such meeting,
the person (who shall be an Assistant Secretary, if an Assistant
Secretary shall be present thereat) whom the chairman of such
meeting shall appoint, shall act as secretary of such meeting and
keep the minutes thereof.
SECTION 6. Order of Business
The order of business at each meeting of the stockholders
shall be determined by the chairman of such meeting, but such
order of business at any meeting at which a quorum is present may
be changed by the vote of a majority in voting interest of those
present in person or by proxy at such meeting and entitled to
vote thereat.
<PAGE>
SECTION 7. Voting
Each stockholder shall at each meeting of the stockholders
be entitled to one vote in person or by proxy for each share of
stock of the Corporation which has voting power on the matter in
question and which shall have been held by him and registered in
his name on the books of the Corporation:
(a) on the date fixed pursuant to the provisions of Section
5 of Article VI of these By-Laws as the record date for the
determination of stockholders who shall be entitled to receive
notice of, and to vote at, such meeting; or
(b) in the event that no such record date shall have been
so fixed, then at the date of such meeting; provided, however,
that, except where the transfer books of the Corporation shall
have been closed, no share of stock of the Corporation shall be
voted on at any election of directors which shall have been
transferred on the books of the Corporation within 20 days next
preceding such election of directors.
Shares of its own stock belonging to the Corporation shall
not be voted upon directly or indirectly. Any vote on stock of
the Corporation may be given at any meeting of the stockholders
by the stockholder entitled thereto in person or by his proxy
appointed by an instrument in writing delivered to the Secretary
or an Assistant Secretary or to the secretary of the meeting.
The attendance at any meeting of a stockholder who may
theretofore have given a proxy shall not have the effect of
revoking the same unless he shall in writing so notify the
secretary of the meeting prior to the voting of the proxy. At
all meetings of the stockholders all matters, except as otherwise
provided in these By-Laws or by law, shall be decided by the vote
of a majority in voting interest of the stockholders present in
person or by proxy and entitled to vote thereat and thereon, a
quorum being present. Except in the case of votes for the
election of directors, the vote at any meeting of the
stockholders on any question need not be by ballot, unless so
directed by the chairman of the meeting. On a vote by ballot
each ballot shall be signed by the stockholder voting, or by his
proxy, if there be such proxy.
SECTION 8. List of Stockholders
It shall be the duty of the Secretary or other officer of
the Corporation who shall have charge of its stock ledger, either
directly or through another officer of the Corporation designated
by him or through a transfer agent or transfer clerk appointed by
the Board, to prepare and make, at least 10 days before every
meeting of the stockholders called to be held for the election of
directors of the Corporation, a complete list of the stockholders
entitled to vote at said election, arranged in alphabetical order
by class and series thereof and showing the address of each
stockholder and the number of shares of such class or series
registered in the name of each stockholder. Such list shall be
open to the examination of any stockholder during ordinary
business hours for a period of at least 10 days prior to said
meeting and election, either at a place within the city, town or
village where said meeting and election are to be held and which
place shall be specified in the notice of said meeting or, if not
so specified, at the place where said meeting and election are to
be held, and such list shall be produced and kept at the time and
place of said meeting and election during the whole time thereof
and shall be subject to the inspection of any stockholder who may
be present thereat. The original or duplicate stock ledger shall
be the only evidence as to who are the stockholders entitled to
examine such list or the books of the Corporation or to vote in
person or by proxy at such election.
SECTION 9. Inspectors or Judges
The Board, in advance of any meeting of stockholders, may
appoint one or more inspectors or judges to act at such meeting
or any adjournment thereof. If the inspectors or judges shall
not be so appointed, or if any of them shall fail to appear or
act, the chairman of such meeting shall appoint the inspectors or
judges, or such replacement or replacements therefor, as the case
may be. Such inspectors or judges, before entering on the
discharge of their duties, shall take and sign an oath or
affirmation faithfully to execute the duties of inspectors or
judges at meetings for which they are appointed. At such
meeting, the inspectors or judges shall receive and take charge
of the proxies and ballots and decide all questions relating to
the qualification of voters and the validity of proxies and the
acceptance or rejection of votes. An inspector or judge need not
be a stockholder of the Corporation, and any officer of the
Corporation may be an inspector or judge on any questions other
than a vote for or against his election to any position with the
Corporation.
SECTION 10. Procedures for Action by Written Consent
The following procedures shall govern actions by written
consent of stockholders:
(a) Any action which may be taken at any meeting of
stockholders may be taken without a meeting and without a vote,
if a consent or consents in writing, setting forth the action so
taken shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted.
(b) A record date for determining stockholders entitled to
express consent to stockholder action in writing without a
meeting shall be fixed by the Board of Directors of the
Corporation (a "Consent Record Date"). Any stockholder seeking
to have the stockholders authorize or take action by written
consent without a meeting shall give written notice either by
personal delivery or by United States mail, postage prepaid, to
the Secretary of the Corporation, of such stockholder's intent to
take action by written consent, which notice shall request the
Board of Directors to fix a Consent Record Date. The Board of
Directors shall, upon receipt of such notice, fix as the Consent
Record Date a date no later than 30 days after the receipt of
such notice or such later date as shall be requested by such
stockholder.
(c) Any action to be taken by written consent shall be
effective only upon delivery to the Secretary of the Corporation
within 60 days after the Consent Record Date of duly executed and
valid written consents of the holder or holders of shares of
outstanding stock of the Corporation having the requisite voting
power to authorize or take such action.
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. General Powers
The business and affairs of the Corporation shall be managed
by the Board.
SECTION 2. Number and Time of Holding Office
Subject to the requirements of the laws of the State of
Delaware, the Board may from time to time by the vote of the
majority of the whole Board determine the number of directors.
The term "whole Board" as used in the By-Laws shall mean the
number of positions on the Board regardless of the number of
directors then in office. Until the Board shall otherwise so
determine, the number of directors shall be ten. Each of the
directors of the Corporation shall hold office until the annual
meeting next after his election and until his successor shall be
elected. Directors need not be stockholders.
<PAGE>
SECTION 3. Notification of Nominations
Subject to the rights of the holders of any class or series
of stock having a preference over the Common Stock as to
dividends or upon liquidation, nominations for the election of
directors may be made by the Board of Directors or by any
stockholder entitled to vote for the election of directors. Any
stockholder entitled to vote for the election of directors at a
meeting may nominate persons for election as directors only if
written notice of such stockholder's intent to make such
nomination is given, either by personal delivery or by United
States mail, postage prepaid, to the Secretary of the Corporation
not later than (i) with respect to an election to be held at an
annual meeting of stockholders, 90 days in advance of such
meeting, and (ii) with respect to an election to be held at a
special meeting of stockholders for the election of directors,
the close of business on the seventh day following the date on
which notice of such meeting is first given to stockholders.
Each such notice shall set forth: (a) the name and address of
the stockholder who intends to make the nomination and of the
person or persons to be nominated; (b) a representation that the
stockholder is a holder of record of stock of the Corporation
entitled to vote at such meeting and intends to appear in person
or by proxy at the meeting to nominate the person or persons
specified in the notice; (c) a description of all arrangements or
understandings between the stockholder and each nominee and any
other person or persons (naming such person or persons) pursuant
to which the nomination or nominations are to be made by the
stockholder; (d) such other information regarding each nominee
proposed by such stockholder as would have been required to be
included in a proxy statement filed pursuant to the proxy rules
of the Securities and Exchange Commission had each nominee been
nominated, or intended to have been nominated, by the Board of
Directors; and (e) the consent of each nominee to serve as a
director of the Corporation if so elected. The chairman of the
meeting may refuse to acknowledge the nomination of any person
not made after compliance with the foregoing procedure.
SECTION 4. Election of Directors
At each meeting of the stockholders for the election of
directors at which a quorum is present the persons receiving the
greatest number of votes, up to the number of directors to be
elected, shall be the directors.
SECTION 5. Organization and Order of Business
At each meeting of the Board, one of the following shall act
as chairman of the meeting and preside thereat, in the following
order of precedence;
(a) the Chairman of the Board;
(b) the President; or
(c) any director chosen by a majority of the directors
present thereat.
The Secretary, or, if he shall be absent from such meeting,
the person whom the chairman of such meeting shall appoint, shall
act as secretary of such meeting and keep the minutes thereof.
The order of business at each meeting of the Board shall be
determined by the chairman of such meeting.
SECTION 6. Resignations
Any director may resign at any time by giving written notice
of his resignation to the Board, the President or the Secretary.
Any such resignation shall take effect at the time specified
therein, or, if the time when it shall become effective shall not
be specified therein, then it shall take effect immediately upon
its receipt by the Board, the President or the Secretary. Except
as specified therein, the acceptance of such resignation shall
not be necessary to make it effective.
SECTION 7. Vacancies, etc.
In case of any vacancy on the Board or in case of any newly
created directorship, a director to fill the vacancy or the newly
created directorship for the unexpired portion of the term being
filled may be elected by the holders of shares of stock of the
Corporation entitled to vote in respect thereof at an annual or
special meeting of said holders or by a majority of the directors
of the Corporation then in office though less than a quorum.
SECTION 8. Place of Meeting
The Board may hold its meetings at such place or places
within or without the State of Delaware as the Board may from
time to time by resolution determine or shall be specified or
fixed in the respective notices or waivers of notice thereof.
SECTION 9. Annual Meeting
As soon as practicable after each annual election of
directors, the Board shall meet for the purpose of organization,
the election of officers and the transaction of other business.
Unless the Board shall by resolution otherwise determine, such
meeting shall be held at the time and place theretofore fixed by
the Board for the next regular meeting of the Board, and no
notice thereof need be given. If the Board shall determine that
such meeting shall be held at a different place and time, notice
thereof shall be given in the manner hereinafter provided for
special meetings of the Board.
SECTION 10. Regular Meetings
Regular Meetings of the Board shall be held at such times as
the Board shall from time to time determine. Notices of regular
meetings need not be given. If any day fixed for a regular
meeting shall be a legal holiday at the place where the meeting
is to be held, then the meeting which would otherwise be held on
that day shall be postponed until the same hour of the next
succeeding business day.
SECTION 11. Special Meetings; Notice
Special meetings of the Board shall be held whenever called
by the Chairman of the Board, the President or any two of the
directors. A notice of each such special meeting shall be given
as hereinafter in this Section provided, which notice shall
specify the time and place of such meeting, but, except as
otherwise expressly provided by law, the purposes thereof need
not be stated in such notice. Notice of each such meeting shall
be mailed to each director, addressed to him at his residence or
usual place of business at least two days before the day on which
such meeting is to be held or shall be sent addressed to him at
such place by telegraph, cable, wireless or other form of
recorded communication or be delivered personally or by telephone
not later than the day before the day on which such meeting is to
be held. Notice of any meeting of the Board need not, however,
be given to any director if waived by him in writing or by
telegraph, cable, wireless or other form of recorded
communication before, during or after such meeting or if he shall
be present at such meeting; and any meeting of the Board shall be
a legal meeting without any notice thereof having been given if
all the directors of the Corporation then in office shall be
present thereat.
SECTION 12. Quorum and Manner of Acting
Except as otherwise provided in these By-Laws or by law, 50%
of the whole Board shall be present in person at any meeting of
the Board in order to constitute a quorum for the transaction of
business at such meeting, and the act of a majority of the
directors present at any such meeting at which a quorum is
present shall be the act of the Board. In the absence of a
quorum, a majority of the directors present thereat may adjourn
such meeting from time to time until a quorum shall be present
thereat. Notice of any adjourned meeting need not be given. The
directors shall act only as a board and the individual directors
shall have no power as such.
SECTION 13. Action by Consent
Any action which could be taken at a meeting of the Board or
of any committee appointed by the Board may be taken without a
meeting if a written consent setting forth the action so taken is
signed by each of the Directors or by each committee member. Any
such written consent shall be inserted in the minute book as if
it were the minutes of a Board or a committee meeting.
ARTICLE III
COMMITTEES
SECTION 1. Executive Committee; Number, Appointment, Term of
Office, etc.
The Board, by resolution adopted by a majority of the whole
Board, may designate an Executive Committee consisting of the
President of the Corporation and not less than two nor more than
six of the other directors then in office. Each member of the
Executive Committee shall continue to be a member thereof only so
long as he remains a director and at the pleasure of a majority
of the whole Board. Any vacancies on the Executive Committee may
be filled by the majority of the whole Board. The term "whole
Executive Committee" as used in these By-Laws shall mean the
number of positions on the Executive Committee regardless of the
number of members thereof then in the office.
SECTION 2. Functions and Powers
The Executive Committee, between meetings of the Board of
Directors, shall have and may exercise the powers of the Board in
the management of the business and affairs of the Corporation;
provided, however, that except as may be otherwise provided in
the Delaware General Corporation Law as now or hereafter in
effect, neither the Executive Committee nor any other committee
of the Board shall have the power or authority of the Board in
reference to (a) amending the Certificate of Incorporation, (b)
adopting a plan of merger or consolidation, (c) recommending to
the stockholders the sale, lease or exchange or other disposition
of all or substantially all of the property and assets of the
corporation other than in the usual and regular course of
business, (d) recommending to the stockholders a voluntary
dissolution or a revocation thereof, (e) amending these By-laws,
(f) declaring a dividend, or (g) authorizing the issuance of
stock. The Executive Committee may authorize the seal of the
Corporation to be affixed to all papers which may require it.
<PAGE>
SECTION 3. Organization
At each meeting of the Executive Committee, one of the
following shall act as chairman of the meeting and preside
thereat in the following order of precedence:
(a) the President; or
(b) any member of the Executive Committee chosen by a
majority of the Executive Committee present thereat.
SECTION 4. Meetings
Regular meetings of the Executive Committee, of which no
notice shall be necessary, shall be held on such days and at such
places within or without the State of Delaware as shall be fixed
by resolution adopted by a majority of the whole Executive
Committee and communicated to all its members. Special meetings
of the Executive Committee shall be held whenever called by the
President, the Secretary or any two members of the Executive
Committee then in office. Notice of each special meeting of the
Executive Committee shall be given to each member thereof,
addressed to him at his residence or usual place of business at
least two days before the day on which such meeting is to be held
by mail, telegraph, cable, wireless or other form of recorded
communication or be delivered personally or by telephone not
later than the day before the day on which such meeting is to be
held. Notice of any such meeting need not, however, be given to
any member of the Executive Committee if waived by him in writing
or by telegraph, cable, wireless or other form of recorded
communication, before, during or after such meeting or if he
shall be present at such meeting; and any meeting of the
Executive Committee shall be a legal meeting without any notice
thereof having been given if all the members of the Executive
Committee shall be present thereat. The purposes of a meeting
need not be specified in the notice or waiver of notice of any
meeting. Subject to the provisions of these By-Laws, by
resolution adopted by a majority of the whole Executive
Committee, the Executive Committee shall fix its own rules or
procedure, and it shall keep a record of its proceedings and
report them to the Board at the next regular meeting thereof
after such proceedings shall have been taken.
SECTION 5. Quorum and Manner of Acting
Except as otherwise provided in these By-Laws or by law, a
majority of the Executive Committee shall constitute a quorum for
the transaction of business, and the act of a majority of those
present at a meeting thereof at which a quorum is present shall
be the act of the Executive Committee. The members of the
Executive Committee shall act only as a committee, and the
individual members shall have no power as such.
SECTION 6. Resignations
Any member of the Executive Committee may resign therefrom
at any time by giving written notice of his resignation to the
Board, the President, or the Secretary. Any such resignation
shall take effect at the time specified therein or, if the time
when it shall become effective shall not be specified therein,
then it shall take effect immediately upon its receipt by the
Board, the President or the Secretary; and unless otherwise
specified therein, the acceptance of such resignation shall not
be necessary to make it effective.
SECTION 7. Other Committees
The Board, by resolution adopted by a majority of the whole
Board, may designate one or more other committees, which shall in
each case consist of such number of directors and shall have and
may exercise such power of the Board for such periods as the
Board may determine in the respective resolutions designating
such committees or from time to time. A majority of all the
members of any such committee may fix its rules of procedure,
determine its action, fix the time and place, whether within or
without the State of Delaware, of its meetings and specify what
notice thereof, if any, shall be given, unless the Board shall by
resolution otherwise provide. Each member of any such committee
shall continue to be a member thereof only so long as he remains
a director and at the pleasure of a majority of the whole Board.
Any vacancies on any such committee may be filled by a majority
of the whole Board.
ARTICLE IV
OFFICERS
SECTION 1. Titles
The principal officers of the Corporation shall be a
Chairman of the Board (who shall serve as the Chief Executive
Officer of the Corporation), a President, one or more Vice
Presidents (including Group Vice Presidents and other
designations as the Board of Directors may from time to time
determine), a Secretary, a Treasurer and a Controller. Other
officers may be appointed in accordance with the provisions of
SECTION 3 of this ARTICLE IV. One person may hold the office and
perform the duties of any two or more of such officers; provided,
however, that the offices of President and Secretary shall not b
held by the same individual.
SECTION 2. Election, Term of Office and Qualifications
The principal officers shall be elected annually by the
Board of Directors. Each officer, except as may be appointed in
accordance with the provisions of SECTION 3 of this ARTICLE IV,
shall hold office until his successor shall have been chosen and
shall qualify or until his death or until his earlier resignation
or removal in the manner hereinafter provided. To qualify to
serve as an officer of this Corporation, an individual shall,
prior to his election, satisfy all conditions and qualifications
set forth in these By-Laws and all applicable statutes, rules and
regulations.
SECTION 3. Additional Officers
The Board of Directors may from time to time appoint such
other officers and assistant officers as it may deem necessary,
such officers to hold office for such period, have such authority
and perform such duties as are provided in these By-laws or as
the Board of Directors or the Chief Executive Officer may
prescribe. The Board of Directors may delegate to any officer or
agent the power to appoint and to remove any such subordinate
officers or agents and to prescribe their respective terms of
office, authority and duties. Any two or more offices may be
held by the same person.
SECTION 4. Removal
Any officer or agent elected or appointed by the Board of
Directors may be removed by the Board of Directors whenever in
its judgment the best interests of the corporation would be
served thereby, but such removal shall be without prejudice to
the contract rights, if any, of the person so removed.
SECTION 5. Resignations
Any officer may resign at any time by giving written notice
to the Chairman of the Board or to the President or to the
Secretary. Such resignation shall take effect upon receipt of
such notice or at any later time specified therein; and unless
otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
SECTION 6. Vacancies
A vacancy in any office because of death, resignation,
removal or other causes shall be filled for the unexpired portion
of the term in the manner prescribed by these By-Laws for regular
election or appointment to such office.
SECTION 7. The Chairman of the Board
The Chairman of the Board shall be the Chief Executive
Officer of the Corporation and shall have general supervision
over the policies and direction of the Corporation, subject to
the control of the Board of Directors. He shall, when present,
preside at all meetings of the Board of Directors and of the
stockholders. In general, he shall perform all the duties
incident to the office of the Chairman of the Board, shall give
advice and counsel to the President and the other officers of the
Corporation with respect to the policies and directions of the
Corporation, shall supervise the selection of all banks and other
financial and investment institutions which shall transact
business with the Corporation, and shall perform such other
duties as the Board of Directors may from time to time determine
or as may be prescribed in these By-Laws. In the absence or
inability to act of the Chairman of the Board, the President or a
Vice President designated by the Chairman of the Board or, in the
absence of a designation by him, by the Board of Directors, shall
perform the duties of the Chairman of the Board.
SECTION 8. The President
The President shall be the chief operating officer of the
Corporation and have general and active supervision over the
business and affairs of the Corporation, subject to the control
of the Chairman of the Board. In general, he shall perform all
such duties as the Chairman of the Board or the Board of
Directors may from time to time determine or as may be prescribed
by these By-Laws. In the temporary absence or inability to act
of the President, the Chairman of the Board or the Board of
Directors may designate some other officer to perform the duties
of the President.
SECTION 9. Vice Presidents
Each Vice President, including Group Vice Presidents and
other designations of Vice Presidents, shall have such powers and
perform such duties as may from time to time be assigned to him
by the Chief Executive Officer, or by any other office to whom
the right to prescribe such powers and duties has been delegated
by the Chief Executive Officer or by the Board of Directors, or
as may be prescribed in these By-Laws.
<PAGE>
SECTION 10. The Secretary
The Secretary, if present, shall act as secretary at all
meetings of the Board of Directors and of stockholders and keep
the minutes thereof in a book or books to be provided for that
purpose; shall see that all notices required to be given by the
Corporation are duly given and served; shall be custodian of the
seal of the Corporation and shall affix the seal (or a facsimile
thereof) or cause it to be affixed to all certificates of stock
of the Corporation and to all documents the execution of which on
behalf of the Corporation under its seal shall be duly authorized
in accordance with the provisions of these By-Laws; shall have
charge of the option records of the Corporation; shall see that
all reports, statements and other documents required by law
(other than reports, statements and documents relating to
financial and tax matters) are properly kept and filed; may sign,
with any other proper officer of the Corporation thereunto
authorized, certificates for stock of the Corporation; shall be
responsible for monitoring compliance by the Corporation with
equal employment opportunity laws, rules and regulations of the
Corporation and governmental agencies; and, in general, shall
perform all the duties incident to the office of Secretary and
such other duties as from time to time may be assigned to him by
the Chief Executive Officer or the Board of Directors.
SECTION 11. Assistant Secretaries
The Assistant Secretaries shall perform such duties as from
time to time may be assigned to them by the Chief Executive
Officer, the Secretary or the Board of Directors. At the request
of the Secretary or, in case of his absence or inability to act,
at the request of the Chief Executive Officer, any Assistant
Secretary may act in his place.
SECTION 12. The Vice President - Finance
The Vice President - Finance shall be the chief financial
officer of the Corporation and in such capacity he shall have
charge and custody of, and be responsible for, all funds of and
securities owned by the Corporation, and shall deposit, withdraw
and transfer all such funds in the name of the Corporation in
such banks or other depositories which shall transact business
with the Corporation; shall formulate the investment and
financial policies of the Corporation for submission to the Chief
Executive Officer; shall render a statement of the condition of
the finances of the Corporation at all regular meetings of the
Board and prepare a full financial report annually for delivery
to the stockholders; shall receive and give receipt for monies
due and payable to the Corporation from any source whatsoever;
shall be responsible for the preparation and finalization of all
accounting procedures and all financial budgets and projections
of the Corporation and the preparation and filing of all tax
returns and financial reports with governmental entities; and, in
general, shall perform all the duties incident to the office of
chief financial officer and such other duties as from time to
time may be assigned to him by the Chief Executive Officer or the
Board or Directors.
SECTION 13. Treasurer
The Treasurer shall have the charge and custody of, and
shall supervise all transfers of, all the certificates
representing capital stock of the Corporation and may sign, with
any other proper officer of the Corporation, thereunto
authorized, certificates representing capital stock of the
Corporation; shall manage the relationships of the Corporation
with all banks and other financial and investment institutions
which shall transact business with the Corporation; and shall
perform such other duties as from time to time may be assigned to
him by the Chief Executive Officer or the Board of Directors.
SECTION 14. Assistant Treasurers
The Assistant Treasurers shall perform such duties as from
time to time may be assigned to them by the Chief Executive
Officer, the Treasurer or the Board of Directors. At the request
of the Treasurer or, in case of his absence or inability to act,
at the request of the Chief Executive Officer, any Assistant
Treasurer may act in his place.
SECTION 15. Controller
The Controller shall be under the supervision of the Vice
President - Finance and shall have primary responsibility for the
accounting principles and procedures and internal controls to be
followed by the Corporation; the collection of accounts
receivable and payment of accounts payable; the preparation of
periodic reports relating to profit and loss, capital budgets,
and expenses; the coordination of the annual audit of the
Corporation's financial condition and results of operations with
the Corporation's independent accounting firm; accounting and
recordkeeping with respect to each of the Corporation's various
employee benefit and insurance plans; and such other duties as
from time to time may be assigned to him by the Chief Executive
Officer or the Vice President - Finance.
<PAGE>
SECTION 16. Salaries
The salary of the Chairman of the Board shall be fixed from
time to time by the Board of Directors or by any committee to
which the power to fix such salary is delegated by the Board.
The salaries of all other officers, agents, factors and employees
of the Corporation shall be fixed from time to time by the Chief
Executive Officer. No officer shall be prevented from receiving
such salary by reason of the fact that he is also a director of
the Corporation or a member of any committee contemplated by
these By-Laws.
ARTICLE V
CONTRACTS, DEPOSITS AND PROXIES
SECTION 1. Execution of Contracts, etc.
Except as otherwise required by law or by these By-Laws, all
the executive officers of the Corporation shall have power to
execute and deliver any deeds, contracts, mortgages, bonds,
debentures and other documents for and in the name of the
Corporation. The Board may authorize any other officer or
officers or agent or agents to execute and deliver any contract
or other instrument in the name and on behalf of the Corporation,
and such authority may be general or confined to such specific
instances as the Board may by resolution determine.
SECTION 2. Deposits
All funds of the Corporation not otherwise employed shall be
deposited from time to time to the credit of the Corporation or
otherwise as the Board or the President shall direct in such
banks, trust companies or other depositories as the Board may
select or may be selected by any executive officer, or other
officer or agent of the Corporation to whom power in that respect
shall have been delegated by the Board. For the purpose of
deposit and for the purpose of collection for the account of the
Corporation, checks, drafts and other orders for the payment of
money which are payable to the order of the Corporation may be
endorsed, assigned and delivered by any executive officer or
agent of the Corporation.
<PAGE>
SECTION 3. Proxies in Respect of Stock or Other Securities of
Other Corporations
Unless otherwise provided by resolution adopted by the
Board, the Chairman of the Board, the President, or a Vice
President may from time to time appoint an attorney or attorneys
or agent or agents of the Corporation to exercise in the name and
on behalf of the Corporation the powers and rights which the
Corporation may have as the holder of stock or other securities
in any other corporation to vote or consent in respect of such
stock or other securities, the Chairman of the Board, the
President, or a Vice President may instruct the person or persons
so appointed as to the manner of exercising such powers and
rights; and the Chairman of the Board, the President, or a Vice
President may execute or cause to be executed in the name and on
behalf of the Corporation and under its corporate seal, or
otherwise, all such written proxies, powers of attorney or other
instruments as he may deem necessary or proper in order that the
Corporation may exercise its said powers and rights.
ARTICLE VI
SHARES AND THEIR TRANSFER:
EXAMINATION OF BOOKS
SECTION 1. Certificates for Stock
Every owner of stock of the Corporation shall be entitled to
have a certificate or certificates, in such form as the Board
shall prescribe, certifying the number, class and series, if any,
of shares of stock of the Corporation owned by him. The
certificates representing shares of the respective classes and
series, if any, of such stock shall be numbered in the order in
which they shall be issued and shall be signed in the name of the
Corporation by the person who was at the time of signing the
President, or a Vice President and by the person who was at the
time of the signing the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary, and the seal of the
Corporation shall be affixed thereto; provided, however, that
where any such certificate is signed (a) by a transfer agent or
assistant transfer agent or (b) by a transfer clerk acting on
behalf of the Corporation and a registrar, the signature thereon
of such President or Vice President and of such Treasurer or
Assistant Treasurer or Secretary or Assistant Secretary and the
seal of the Corporation affixed thereto may be facsimile. In
case any officer or the officers of the Corporation who shall
have signed, or whose facsimile signature or signatures shall
have been used on, any such certificate or certificates shall
cease to be such officer or officers, whether because of death,
resignation or otherwise, before such certificate or certificates
shall have been delivered by the Corporation, such certificate or
certificates may nevertheless be issued and delivered as though
the person or persons who signed such certificate or certificates
or whose facsimile signature or signatures shall have been used
thereon had not ceased to be such officer or officers. A record
shall be kept of the respective names of the persons, firms or
corporations owning the stock represented by certificates for
stock of the Corporation, the number, class and series, if any,
of shares represented by such certificates, respectively, the
respective dates thereof, and, in case of cancellation, the
respective dates of cancellation. Every certificate surrendered
to the Corporation for exchange or transfer shall be cancelled,
and a new certificate or certificates shall be issued in exchange
for any existing certificate only after such existing certificate
shall have been so cancelled, except in cases provided for in
Section 4 of this Article VI.
SECTION 2. Transfer of Stock
Transfers of shares of the stock of the Corporation shall be
made only on the books of the Corporation by the registered
holder thereof, or by his attorney thereunto authorized by power
of attorney duly executed and filed with the Secretary or with a
transfer clerk or a transfer agent appointed as in Section 3 of
this Article VI provided, and upon surrender of the certificate
or certificates for such shares properly endorsed and payment of
all taxes thereon. The person in whose name shares of stock
stand on the books of the Corporation shall be deemed the owner
thereof for all purposes as regards the Corporation. Whenever
any transfer of shares shall be made for collateral security, and
not absolutely, such fact, if known to the Corporation or to the
transfer agent or clerk making the transfer, shall be so
expressed in the entry of transfer. The transfer agent or clerk
shall inquire, prior to the transfer of shares of stock of the
Corporation, whether such stock is to be owned of record or voted
by or on behalf of an alien or foreign government, shall maintain
a record of shares so owned or to be so voted, and shall not
transfer any shares of stock upon the books of the Corporation if
the result of such transfer would be that more than 25% of the
stock would be so owned or voted.
SECTION 3. Regulations
The Board may make such rules and regulations as it may deem
expedient, not inconsistent with these By-Laws, concerning the
issue, transfer and registration of certificates for stock of the
Corporation. The Board may appoint or authorize any officer or
officers to appoint one or more transfer clerks or one or more
transfer agents and one or more registrars and may require all
certificates for stock to bear the signature or signatures of any
of them.
SECTION 4. Lost, Destroyed and Mutilated Certificates
The Corporation may issue a new certificate of stock of the
Corporation in the place of any certificate theretofore issued by
it, alleged to have been lost or destroyed, or which shall have
been mutilated, and the Board, in its discretion, may require the
owner of such certificate, or his legal representatives, to give
the Corporation a bond in such sum, limited or unlimited, in such
form and with such surety or sureties as the Board shall in its
uncontrolled discretion determine to be sufficient to indemnify
the Corporation against any claim that may be made against it on
account of the alleged loss or destruction of any such
certificate, or the issuance of such new certificate.
SECTION 5. Date for Determining Stockholders of Record
(a) In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or entitled to receive
payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any
other lawful action other than stockholder action by written
consent, the Board of Directors may fix a record date, which
shall not precede the date such record date is fixed and shall
not be more than 60 days nor less than 10 days before the date of
such meeting, nor more than 60 days prior to any such other
action. If no record date is fixed, the record date for
determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the
day next preceding the day on which notice is given. The record
date for any other purpose other than stockholder action by
written consent shall be at the close of business on the day on
which the Board of Directors adopts the resolution relating
thereto. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting; provided, however, that the Board
of Directors may fix a new record the adjourned meeting.
(b) In order that the Corporation may determine the
stockholders entitled to consent to corporate action in writing
without a meeting, the Board of Directors may fix a record date,
which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of
Directors, and shall not be more than 10 days after the date upon
which the resolution fixing the record date is adopted by the
Board of Directors. Any stockholder of record seeking to have
the stockholders authorize or take corporate action by written
consent shall, by written notice to the Secretary, request the
Board of Directors to fix a record date. The Board of Directors
shall promptly, but in any event within l0 days after the date on
which such a request is received, adopt a resolution fixing the
record date. If no record date has been fixed by the Board of
Directors within 10 days of the date on which such a request is
received, the record date for determining stockholders entitled
to consent to corporate action in writing without a meeting, when
no prior action by the Board of Directors is required by
applicable law, shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is
delivered to the Corporation by delivery to its registered office
in the State of Delaware, its principal place of business, or any
officer or agent of the Corporation having custody of the book in
which proceedings of meetings of stockholders are recorded.
Delivery made to the Corporation's registered office shall be by
hand or by certified or registered mail, return receipt
requested. If no record date has been fixed by the Board of
Directors and prior action by the Board of Directors is required
by applicable law, the record date for determining stockholders
entitled to consent to corporate action in writing without a
meeting shall be at the close of business on the date of which
the Board of Directors adopts the resolution taking such prior
action.
SECTION 6. Examination of Books and Records by Stockholders
The Board of Directors shall, subject to any applicable
statutes, have the power to determine, from time to time, whether
and to what extent and at what times and places and under what
conditions and regulations the accounts and books or documents of
the Corporation, or any of them, shall be open to the inspection
of stockholders; and no stockholder shall have any right to
inspect any account or book or document of the Corporation except
as conferred by and only in accordance with the provisions of any
such statute, unless and until authorized to do so by resolution
of the Board of Directors or of the stockholders of the
Corporation entitled to vote in respect thereof.
SECTION 7. Registered Stockholders
The Corporation shall be entitled to treat the holder of
record of any share or shares of capital stock of this
Corporation as the holder in fact thereof, and accordingly shall
not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof,
except as expressly provided by the laws of the State of
Delaware.
ARTICLE VII
OFFICES, ETC.
SECTION 1. Principal Office
The principal office of the Corporation in the State of
Delaware shall be in the City of Wilmington, County of New
Castle, and the name of the resident agent in charge thereof
shall be The Corporation Trust Company.
SECTION 2. Other Offices
The Corporation may also have an office or offices other
than said principal office at such place or places, either within
or without the State of Delaware, as provided in these By-Laws or
as the Board may from time to time appoint or as the business of
the Corporation may require.
SECTION 3. Books and Records
Except as otherwise required by law, the Certificate of
Incorporation of the Corporation or these By-Laws, the
Corporation may keep the books and records of the Corporation in
such place or places within or without the State of Delaware as
the Board may from time to time by resolution determine or the
business of the Corporation may require.
ARTICLE VIII
DIVIDENDS
Subject to the provisions of law, of the Certificate of
Incorporation of the Corporation or these By-Laws, the Board may
declare and pay dividends upon the shares of the stock of the
Corporation either (a) out of its net assets in excess of its
capital as computed in accordance with the provisions of the laws
of the State of Delaware or (b) in case there shall be no such
excess, out of its net profits for the fiscal year then current
and/or the preceding fiscal year, whenever and in such amounts
as, in the opinion of the Board, the condition of the affairs of
the Corporation shall render it advisable.
ARTICLE IX
SEAL
The Board shall provide a corporate seal, which shall be in
the form of a circle and shall bear the full name of the
Corporation and the words and figures "Corporate Seal Delaware
1961," or words and figures of similar import. The seal or a
facsimile thereof may be impressed or affixed or reproduced or
other use made thereof by the Secretary, any Assistant Secretary
or any other officer authorized by the Board.
ARTICLE X
FISCAL YEARS
The fiscal year of the Corporation shall end on December 31
in each year.
ARTICLE XI
WAIVER OF NOTICES
Whenever any notice whatever is required to be given by
these By-Laws or by the Certificate of Incorporation of the
Corporation or by the laws of the State of Delaware, a waiver
thereof in writing, signed by the person or persons entitled to
said notice, whether before or after the time stated therein,
shall be deemed equivalent thereto.
ARTICLE XII
INDEMNIFICATION
SECTION 1. Indemnification
The Corporation shall to the fullest extent permitted by the
Delaware General Corporation Law as the same exists or may
hereafter be amended (but, in the case of any such amendment,
only to the extent that such amendment permits the Corporation to
provide broader indemnification rights than permitted prior
thereto) or by applicable law as then in effect indemnify and
hold harmless any person (the "Indemnitee") who is or was a
director or officer of the Corporation and who is or was involved
in any manner (including, without limitation, as a party or a
witness) or is threatened to be made so involved in any
threatened, pending or completed investigation, claim, action,
suit or proceeding, whether civil, criminal, administrative or
investigative (including, without limitation, any action, suit or
proceeding by or in the right of the Corporation to procure a
judgment in its favor) (a "Proceeding") by reason of the fact
that such person is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise (including, without limitation, any employee benefit
plan) whether the basis of such Proceeding is alleged action in
an official capacity as such a director, officer, employee or
agent or in any other capacity while serving as such a director,
officer, employee or agent, against all expenses (including
attorneys' fees and ERISA excise taxes or penalties),
liabilities, losses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person in
connection with such Proceeding and such indemnification shall
continue as to an Indemnitee who has ceased to be a director,
officer, employee or agent; provided, however, except as provided
in Section 4(d), the foregoing shall not apply to a director or
officer of the Corporation with respect to a Proceeding (or part
thereof) that was commenced by such director or officer unless
the Proceeding (or part thereof) was authorized or ratified by
the Board. Such indemnification shall be a contract right and
shall include the right to receive payment in advance for any
expenses incurred by the Indemnitee in accordance with Section 4
of this Article..
SECTION 2. Insurance, Contracts and Funding
The Corporation may purchase and maintain insurance to
protect itself and any director, officer, employee or agent of
the Corporation or another corporation, partnership, joint
venture, trust or other enterprise, including, without
limitation, any employee benefit plan, against any expenses,
liabilities, losses, judgments, fines and amounts paid in
settlement whether or not the Corporation would have the power to
indemnify such person against such expenses, liabilities, losses,
judgments, fines or amounts paid in settlement under the Delaware
General Corporation Law. The Corporation may enter into
contracts with any person entitled to indemnification under this
Article in furtherance of the provisions of this Article and may
create a trust fund, grant a security interest or use other means
(including, without limitation, a letter of credit) to ensure the
payment of such amounts as may be necessary to effect
indemnification as provided in this Article.
SECTION 3. Indemnification; Not Exclusive Right
The indemnification provided for in this Article shall not
be exclusive of any other rights to which those seeking
indemnification may otherwise be entitled, and the provisions of
this Article shall inure to the benefit of the heirs and legal
representatives of any person entitled to indemnity under this
Article and shall be applicable to Proceedings commenced or
continuing after the adoption of this Article, whether arising
from acts or omissions occurring before or after such adoption.
SECTION 4. Advancement of Expenses; Procedures; Presumptions and
Effect of Certain Proceedings; Remedies
In furtherance, but not in limitation, of the foregoing
provisions, the following procedures, presumptions and remedies
shall apply with respect to advancement of expenses and the right
to indemnification under this Article:
(a) Advancement of Expenses. All reasonable expenses
incurred by or on behalf of the Indemnitee in connection with any
Proceeding shall be advanced to the Indemnitee by the Corporation
within 20 days after the receipt by the Corporation of a
statement or statements from the Indemnitee requesting such
advance or advances from time to time, whether prior to or after
final disposition of such Proceeding. Such statement or
statements shall reasonably evidence the expenses incurred by the
Indemnitee and, if required by law at the time of such advance,
shall include or be accompanied by an undertaking by or on behalf
of the Indemnitee to repay the amounts advanced if it should
ultimately be determined by final judicial decision from which
there is no further right to appeal that the Indemnitee is not
entitled to be indemnified against such expenses pursuant to this
Article.
(b) Procedure for Determination of Entitlement to
Indemnification. To obtain indemnification under this Article,
an Indemnitee shall submit to the Secretary of the Corporation a
written request, including such documentation and information as
is reasonably available to the Indemnitee and reasonably
necessary to determine whether and to what extent the Indemnitee
is entitled to indemnification (the "Supporting Documentation").
The determination of the Indemnitee's entitlement to
indemnification shall be made not later than 60 days after
receipt by the Corporation of the written request for
indemnification together with the Supporting Documentation. The
Secretary of the Corporation shall, promptly upon receipt of such
a request for indemnification, advise the Board of Directors in
writing that the Indemnitee has requested indemnification.
(c) Presumptions. The Indemnitee shall be presumed to be
entitled to indemnification under this Article upon submission of
a request for indemnification together with the Supporting
Documentation in accordance with Section 4(b) of this Article,
and the Corporation shall have the burden of proof to overcome
that presumption in reaching a contrary determination. Neither
the failure of the Corporation (including its Board, independent
legal counsel or its stockholders) to have made a determination
that indemnification of the Indemnitee is proper in the
circumstances prior to the commencement of a judicial proceeding
under the provisions of Section 4(d) of this Article nor an
actual determination by the Corporation (including its Board,
independent legal counsel or its stockholders) that the
Indemnitee is not entitled to indemnification shall be a defense
to the judicial proceeding or create a presumption that the
Indemnitee is not so entitled. The termination of any Proceeding
described in Section 1, or of any claim, issue or matter therein,
by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself,
adversely affect the right of the Indemnitee to indemnification
or create a presumption that the Indemnitee did not act in good
faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the Corporation or, with
respect to any criminal Proceeding, that the Indemnitee had
reasonable cause to believe that his conduct was unlawful.
(d) Remedies of Indemnitee.
(i) If a claim under this Article is not paid in full by
the Corporation within 60 days after a written request has been
submitted to the Corporation in accordance with the provisions of
Section 4(b) of this Article or, in the case of a claim for an
advancement of expenses, 20 days after the receipt by the
Corporation of a statement requesting such advance in accordance
with the provisions of Section 4(a) of this Article, then the
Indemnitee shall be entitled to seek an adjudication of his
entitlement to such indemnification in an appropriate court of
the State of Delaware or any other court of competent
jurisdiction.
(ii) The Corporation shall be precluded from asserting in
any judicial proceeding commenced pursuant to this Section 4(d)
that the procedures and presumptions of this Article are not
valid, binding and enforceable and shall stipulate in any such
court that the Corporation is bound by all the provisions of this
Article.
(iii) In the event that the Indemnitee, pursuant to this
Section 4(d), seeks a judicial adjudication to enforce his rights
under, or to recover damages for breach of, this Article, the
Indemnitee shall be entitled to recover from the Corporation, and
shall be indemnified by the Corporation against, any expenses
actually and reasonably incurred by the Indemnitee if the
Indemnitee prevails in such judicial adjudication in whole or in
part.
SECTION 5. Effect of Amendments
Neither the amendment or repeal of, nor the adoption of a
provision inconsistent with, any provision of this Article
(including, without limitation, this Section 5) shall adversely
affect the rights of any director or officer under this Article
with respect to any Proceeding arising out of any action or
omission occurring prior to such amendment, repeal or adoption of
an inconsistent provision, in either case without the written
consent of such director or officer.
SECTION 6. Severability
If any provision or provisions of this Article shall be held
to be invalid, illegal or unenforceable for any reason
whatsoever, (a) the validity, legality and enforceability of the
remaining provisions of this Article (including, without
limitation, all portions of any paragraph of this Article
containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or
unenforceable) shall not in any way be affected or impaired
thereby; and (b) to the fullest extent possible, the provisions
of this Article (including, without limitation, all portions of
any paragraph of this Article containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves
invalid, illegal or unenforceable) shall be construed so as to
give effect to the intent manifested by the provision held
invalid, illegal or unenforceable.
SECTION 7. Indemnification of Employees and Agents
Notwithstanding any other provision or provisions of this
Article, the Corporation may indemnify any person (other than a
director or officer of the Corporation) who is or who was
involved in any manner (including, without limitation, as a party
or a witness) or is threatened to be made so involved in any
Proceeding by reason of the fact that such person is or was an
employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust
or other enterprise (including, without limitation, any employee
benefit plan) against all expenses (including attorneys' fees and
ERISA excise taxes or penalties), liabilities, losses, judgments,
fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such Proceeding.
SECTION 8. Persons Serving Other Entities
Any person who is or was a director, officer or employee of
the Corporation who is or was serving (a) as a director or
officer of another corporation of which a majority of the shares
entitled to vote in the election of its directors is held by the
Corporation or (b) in an executive or management capacity in a
partnership, joint venture, trust or other enterprise of which
the Corporation or a wholly owned subsidiary of the Corporation
is a general partner or has a majority ownership shall be deemed
to be so serving at the request of the Corporation and entitled
to indemnification and advancement of expenses as provided under
this Article.
ARTICLE XIII
AMENDMENTS
These By-Laws may be amended, altered or repealed by the Board;
but any by-laws made by the Board may be altered, amended or
repealed by the stockholders.
EXHIBIT 10.2(b)
Amendment Adopted By The
LIN Broadcasting Corporation
Board of Directors
11/22/94
AMENDMENT AND TRANSFER OF PROFIT SHARING PLAN
RESOLVED, that the LIN Broadcasting Corporation Profit
Sharing Plan (the "Profit Sharing Plan") is hereby amended as
follows:
1. Effective January 1, 1989, the first sentence of the
definition of "Compensation" in Section 1.1 is amended to
read as follows:
"The aggregate cash remuneration (exclusive of any
payment made under this Plan or any other employee
benefit plan) received by an individual from an
Employer in a Year for services rendered as an
Employee."
2. Effective January 1, 1989, the definition of "Profits"
is deleted in its entirely from Section 1.1.
3. Effective January 1, 1989, Section 3.1 is amended to
read as follows:
"3.1 Subject to the right of the Board to modify,
amend or terminate the Plan, the rights of the
Employers to modify, suspend or discontinue their
respective contributions under the Plan and the
provisions of this Article III, each Employer shall
contribute to the Plan for each Year such amount as the
Board shall determine, or, in the absence of such
determination by the Board, as the board of directors
of each Employer shall determine for such Employer, to
be its Contribution for such Year; provided, however,
that the Contribution of any Employer for such Year
shall not be greater than the amount which is allowable
as a deduction for Federal income tax purposes."
4. Effective January 1, 1989, the second sentence of
Section 3.4 is deleted in its entirety.
5. Effective January 1, 1989, the last sentence of Section
10.2 is amended to read as follows:
"On the complete discontinuance of Contributions by the
Employers or on the total or partial termination of the
Plan, the interest of each affected Participant shall
be payable as provided under Section 7.1 as of the
Valuation Date coinciding with or next following the
date of such discontinuance or termination."
6. Effective upon and subject to the consummation of the
Distribution, the definition of "Company" set for in Section
1.1 is amended to read as follows:
"Company: LIN Television Corporation, a Delaware
corporation, and any successor thereto."
7. Effective upon and subject to the consummation of the
Distribution, Section 1.1 is amended by adding the following
definition of "LIN Broadcasting Affiliate" immediately after
the definition of "Five Percent Shareholder" therein:
"LIN Broadcasting Affiliate: Any corporation which is a
member of a controlled group of corporations (as
defined in Section 414(b) of the Code), which includes
LIN Broadcasting Corporation; any trade or business
(whether or not incorporated) which is under common
control (as defined in Section 414(c) of the Code) with
LIN Broadcasting Corporation; any organization (whether
or not incorporated) which is a member of an affiliated
service group (as defined in Section 414(m) of the
Code), which includes LIN Broadcasting Corporation; and
any other entity required to beaggregated with
LINBroadcasting Corporation pursuant to Regulations
under Section 414(o) of the Code."
8. Effective upon and subject to the consummation of the
Distribution, the definition of "Service" in Section 1.1 is
amended by adding the following at the end thereof:
"Solely for purposes of determining whether a
Participant or former Participant has terminated from
Service for purposes of Article VII, Service with LIN
Broadcasting Corporation or a LIN Broadcasting
Affiliate shall be treated as Service with the
Company."
RESOLVED FURTHER, that effective upon and subject to the
consummation of the Distribution, sponsorship of the Profit
Sharing Plan shall be transferred to Television (subject to
acceptance of such sponsorship by the Board of Directors of
Television) and sponsorship of the trust for the Profit Sharing
Plan, evidenced by the Security Pacific National Bank Trust
Agreement for the LIN Broadcasting Corporation Profit Sharing
Plan, shall be transferred to Television (subject to acceptance
of such sponsorship by the Board of Directors of Television and
the approval of the Trustee of such Trust), in each case on and
subject to the terms and provisions of the Employee Benefits
Allocation Agreement.
RESOLVED FURTHER, that the Retirement Benefit Plans
Committee of this Board is hereby authorized, directed and
empowered to make such other amendments to the Profit Sharing
Plan as it deems necessary or advisable to reflect such change of
sponsorship.
RESOLVED FURTHER, that effective upon and subject to the
consummation of the Distribution, the Security Pacific National
Bank Trust Agreement for the LIN Broadcasting Corporation Profit
Sharing Plan is amended by substituting LIN Television
Corporation for LIN Broadcasting Corporation as the "Employer"
therein (subject to Television's and the Trustee's consent).
RESOLVE FURTHER, that the Administrative Committee is hereby
authorized, directed and empowered to make such other amendments
to the Security Pacific National Bank Trust Agreement for the LIN
Broadcasting Corporation Profit Sharing Plan as it deems
necessary or advisable to reflect such change of sponsorship, or
as the Trustee may require to effectuate such change, and to make
such further amendments to the Profit Sharing Plan as the Trustee
may require to effectuate such change.
RESOLVED FURTHER, that the officers of this corporation, or
any one of them, are hereby authorized, directed and empowered to
notify the Trustee of the trust for the Profit Sharing Plan of
such change of sponsorship and to take such actions (including,
but not limited to, executing such documents), other than the
adoption of amendments to such Plan and Trust, as the Trustee may
require to effectuate such change.
RESOLVED FURTHER, that the officers of this corporation, or
any one of them, are hereby authorized, directed and empowered to
take such other actions (including, but not limited to, executing
such documents) as they, or any one of them, deem necessary or
advisable to effectuate the foregoing resolutions
EXHIBIT 10.14(b)
AMENDMENT NO. 1 TO CREDIT AGREEMENT
AMENDMENT NO. 1, dated as of June 15, 1993, under the
Credit Agreement, dated as of August 1, 1990 (the "Credit
Agreement"), among LIN CELLULAR NETWORK, INC., a Delaware
corporation (the "Borrower"), the LENDERS party thereto, MORGAN
GUARANTY TRUST COMPANY OF NEW YORK ("Morgan"), as administrative
agent (together with any successor appointed pursuant to Article
VII of the Credit Agreement, the "Administrative Agent") for the
Lenders thereunder, CITIBANK, N.A. ("Citibank"), Morgan and THE
TORONTO-DOMINION BANK ("Toronto-Dominion"), as arrangers
(together with any successors appointed pursuant to such Article
VII of the Credit Agreement, the "Arrangers") for the Lenders
thereunder, Citibank, as collateral agent (together with any
successors appointed pursuant to such Article VII of the Credit
Agreement, the "Collateral Agent") and Toronto-Dominion, as
documentation agent (the "Documentation Agent") for the Lenders
thereunder. Unless otherwise defined herein, capitalized terms
used in this Agreement are defined in the Credit Agreement.
PRELIMINARY STATEMENT: The Borrower has requested that
the Lenders and the Agents amend certain provisions of the Credit
Agreement as hereinafter set forth and the Lenders have indicated
their willingness to do so on the terms and conditions stated
below.
NOW, THEREFORE, in consideration of the premises and of
the mutual covenants and agreements contained herein, the parties
hereto hereby agree as follows:
1. Amendment to Section 1.01. (a) The definition of
"Amortization Commencement Date" in Section 1.01 shall be amended
to read in full as follows:
"Amortization Commencement Date" means, in respect of
the Revolving Credit Facility, March 31, 1996.
(b) The definition of "Applicable Margin" shall be
amended by deleting the table set forth in clause (b) thereof in
its entirety and replacing it with the following table:
LIBO Adjusted Base
Rate CD Rate Rate
Ratio of CDCE/ACOCF Advances Advances Advances
10.0 to 1 or greater 2-1/2% 2-5/8% 1-1/2%
7.0 to 1 to 10.0 to 1 1-7/8 2 7/8
6.5 to 1 to 7.0 to 1 1-3/4 1-7/8 3/4
6.0 to 1 to 6.5 to 1 1-5/8 1-3/4 5/8
5.5 to 1 to 6.0 to 1 1-1/2 1-5/8 1/2
4.5 to 1 to 5.5 to 1 1-1/4 1-3/8 1/4
4.0 to 1 to 4.5 to 1 1-1/8 1-1/4 1/8
less than 4.0 to 1 1 1-1/8 --
2. Amendment to Section 2.04(b). Section 2.04(b)
shall be amended by deleting the second sentence set forth in
clause (i) thereof in its entirety and replacing it with the
following sentences:
In addition, on the last day of each calendar quarter (each
such date, together with the last day of each calendar
quarter referred to in the next following sentence, being an
"Amortization Date") in the periods set forth below, the
Term Commitment of each Lender shall automatically and
permanently reduce by the amount obtained by multiplying the
percentage set forth opposite the applicable period set
forth below (as such percentage may be reduced pursuant to
clause (iv) of this Section 2.04(b) or Section 2.07(a)(ii))
by the aggregate principal amount of the Term Advances owing
to such Lender as of September 30, 1993:
Measurement Period Percentage
9/30/93 through 6/30/94 1.250%
9/30/94 through 6/30/95 2.500
9/30/95 through 6/30/96 3.125
9/30/96 through 6/30/97 3.750
9/30/97 through 6/30/98 4.375
9/30/98 through 6/30/00 5.000
On the last day of each calendar quarter in the periods
set forth below, the Revolving Credit Commitment of each Lender
shall automatically and permanently reduce by the amount obtained
by multiplying the percentage set forth opposite the applicable
period set forth below (as such percentage may be reduced
pursuant to clause (iv) of this Section 2.04(b) or Section
2.07(a)(ii)) by the aggregate principal amount of the Revolving
Credit Advances owing to such Lender on the Amortization
Commencement Date:
Measurement Period Percentage
3/31/96 through 12/31/96 2.500%
3/31/97 through 12/31/97 3.750
3/31/98 through 12/31/98 5.000
3/31/99 through 12/31/99 6.250
3/31/00 through 6/30/00 15.000
3. Amendments to Section 5.03(b). Section 5.03(b)
shall be amended by deleting the table set forth in such Section
in its entirety and replacing it with the following table:
Measurement Period CD/COCF SD/COCF
06/1/93 thru 05/31/94 6.50 6.00
06/1/94 thru 11/30/94 6.00 5.50
12/1/94 thru 5/31/95 6.00 5.25
06/1/95 thru 11/30/95 6.00 5.00
12/1/95 thru 5/31/96 5.50 4.50
06/1/96 and thereafter 5.00 4.00
4. Amendment Fees. (a) The Borrower agrees to pay
to the Administrative Agent for the account of each of the Term
Lenders that execute this Amendment, in consideration for such
execution, an amendment fee, payable upon the Effective Date (as
defined below), in an amount equal to 1/4 of 1% of the sum of the
Term Advances of such Lenders as of the Effective Date, such
amount to be paid by the Administrative Agent promptly to such
Term Lenders ratably in accordance with their Term Commitments.
(b) The Borrower agrees to pay to the Administrative
Agent for the account of the Revolving Credit Lenders, in
consideration for the execution by such Lenders of this
Amendment, an amendment fee, payable upon the Effective Date, in
an amount equal to 3/8 of 1% of the sum of the Revolving Credit
Advances and the aggregate unused portion of the Revolving Credit
Commitments as of the Effective Date, such amount to be paid by
the Administrative Agent promptly to the Revolving Credit Lenders
ratably in accordance with their Revolving Credit Commitments.
(c) The Borrower shall pay to the Agents for their own
accounts such fees as may be agreed upon between the Borrower and
the Agents.
5. Conditions of Effectiveness. This Amendment shall
become effective when, and only when, the Administrative Agent
shall have received (a) two counterparts of this Amendment
executed by the Borrower, the Required Lenders and each of the
Revolving Credit Lenders or, as to any of the Lenders, advice
satisfactory to the Administrative Agent that such Lenders have
executed this Amendment and (b) a certificate of a Financial
Officer of the Borrower dated the date of the receipt by the
Administrative Agent, and otherwise in form and substance
satisfactory to the Administrative Agent, stating that no Default
has occurred and is continuing (the date on which all of the
conditions set forth in this Section 5 have been satisfied being
referred to herein as the "Effective Date").
6. Reference to and Effect on the Loan
Documents. (a) Upon the effectiveness of this Amendment, on and
after the date hereof each reference in the Credit Agreement to
"this Agreement", "hereunder", "hereof", or words of like import
referring to the Credit Agreement, and each reference in the Loan
Documents to "the Credit Agreement", "hereunder", "hereof", or
words of like import referring to the Credit Agreement, shall
mean and be a reference to the Credit Agreement, subject, as
applicable, to the amendments herein.
(b) The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or
remedy of any Lender or any Agent under any of the Loan
Documents, except to the extent expressly set forth herein.
7. Ratification. Except to the extent that the
provisions of Sections 1.01, 2.04(b) and 5.03(b) are amended
hereby, the Credit Agreement and the other Loan Documents are and
shall continue to be in full force and effect in accordance with
the provisions thereof as in effect on the date hereof and are
hereby in all respects ratified and confirmed. Without limiting
the generality of the foregoing, each Security Agreement and all
of the Collateral described therein do and shall continue to
secure the payment of all obligations of the Borrower under the
Credit Agreement.
8. Entire Agreement. The provisions of this
Amendment contain the entire agreement between the parties
relating to the subject matter hereof and supersede all prior
agreements and understandings relating thereto.
9. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
10. Execution in Counterparts. This Amendment may be
executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement. Delivery of any
executed counterpart of a signature page to this Amendment by
telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by the respective officers thereunto
duly authorized, as of the date first above written.
LIN CELLULAR NETWORK, INC.
By __________________________
Name:
Title:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
as Administrative Agent,
Arranger and Lender
By __________________________
Name:
Title:
CITIBANK, N.A.
as Collateral Agent, Arranger
and Lender
By __________________________
Name:
Title:
THE TORONTO-DOMINION BANK
as Documentation Agent, Arranger
and Lender
By __________________________
Name:
Title:
<PAGE>
ATHENA LOAN INVESTORS, L.P.
By __________________________
Name:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By __________________________
Name:
Title:
BANK OF HAWAII
By __________________________
Name:
Title:
BANK OF IRELAND
By __________________________
Name:
Title:
BANK OF MONTREAL, CHICAGO BRANCH
By __________________________
Name:
Title:
THE BANK OF NEW YORK
By __________________________
Name:
Title:
<PAGE>
THE BANK OF NOVA SCOTIA
By __________________________
Name:
Title:
BANQUE NATIONALE DE PARIS
By __________________________
Name:
Title:
By __________________________
Name:
Title:
BARCLAYS BANK PLC
By __________________________
Name:
Title:
CANADIAN IMPERIAL BANK OF
COMMERCE
By __________________________
Name:
Title:
THE CHUO TRUST & BANKING CO., LTD.
LOS ANGELES AGENCY
By __________________________
Name:
Title:
<PAGE>
CREDIT LYONNAIS
CAYMAN ISLANDS BRANCH
By __________________________
Name:
Title:
THE DAI-ICHI KANGYO BANK, LIMITED
By __________________________
Name:
Title:
DEUTSCHE BANK AG NEW YORK AND/OR
CAYMAN ISLAND BRANCHES
By __________________________
Name:
Title:
By __________________________
Name:
Title:
DIAMOND LEASE (U.S.A.), INC.
By __________________________
Name:
Title:
EATON VANCE PRIME RATE RESERVES
By __________________________
Name:
Title:
<PAGE>
FIRST NATIONAL BANK OF BOSTON
By __________________________
Name:
Title:
FIRST NATIONAL BANK OF MARYLAND
By __________________________
Name:
Title:
THE FUJI BANK, LIMITED
LOS ANGELES AGENCY
By __________________________
Name:
Title:
FUYO GENERAL LEASE (USA), INC.
By __________________________
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN,
LIMITED
By __________________________
Name:
Title:
J.P. MORGAN DELAWARE
By __________________________
Name:
Title:
<PAGE>
KANSALLIS-OSAKE-PANKKI
By __________________________
Name:
Title:
By __________________________
Name:
Title:
KLEINWORT BENSON LIMITED
By __________________________
Name:
Title:
LIL U.S.A. CO., LTD.
By __________________________
Name:
Title:
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD.
LOS ANGELES AGENCY
By __________________________
Name:
Title:
<PAGE>
LUMBERMENS MUTUAL CASUALTY
COMPANY
By __________________________
Name:
Title:
By __________________________
Name:
Title:
MERIDIAN BANK
By __________________________
Name:
Title:
MERRILL LYNCH PRIME FUND, INC.
By __________________________
Name:
Title:
MERRILL LYNCH PRIME RATE PORTFOLIO
By __________________________
Name:
Title:
THE MITSUI TRUST & BANKING CO.,
LTD.
LOS ANGELES AGENCY
By __________________________
Name:
Title:
<PAGE>
NATIONAL WESTMINSTER USA
By __________________________
Name:
Title:
NATIONSBANK OF TEXAS
By __________________________
Name:
Title:
THE NIPPON CREDIT BANK, LTD.
NEW YORK BRANCH
By __________________________
Name:
Title:
ORIX USA CORPORATION
By __________________________
Name:
Title:
PILGRIM PRIME RATE TRUST
By __________________________
Name:
Title:
PNC BANK, N.A.
By __________________________
Name:
Title:
<PAGE>
THE SAKURA BANK, LIMITED LOS
ANGELES AGENCY
By __________________________
Name:
Title:
SECURITY PACIFIC NATIONAL BANK
By __________________________
Name:
Title:
SHAWMUT BANK CONNECTICUT, N.A.
By __________________________
Name:
Title:
THE SUMITOMO BANK, LIMITED
CHICAGO BRANCH
By __________________________
Name:
Title:
THE TORONTO DOMINION BANK,
CAYMAN ISLANDS BRANCH
By __________________________
Name:
Title:
VAN KAMPEN MERRITT PRIME RATE
FUND
By __________________________
Name:
Title:
EXHIBIT 10.14(c)
CONFORMED COPY
AMENDMENT NO. 2 TO CREDIT AGREEMENT
AMENDMENT NO. 2 (this "Amendment"), dated as of May 31,
1994, under the Credit Agreement, dated as of August 1, 1990 as
amended by Amendment No. 1, dated as of June 15, 1993 (as so
amended, the "Credit Agreement"), among LIN CELLULAR NETWORK,
INC., a Delaware corporation (the "Borrower"), the LENDERS party
thereto, MORGAN GUARANTY TRUST COMPANY OF NEW YORK ("Morgan"), as
administrative agent (together with any successor appointed
pursuant to Article VII of the Credit Agreement, the
"Administrative Agent") for the Lenders thereunder, CITIBANK,
N.A. ("Citibank"), Morgan and THE TORONTO-DOMINION BANK
("Toronto-Dominion"), as arrangers (together with any successors
appointed pursuant to such Article VII of the Credit Agreement,
the "Arrangers") for the Lenders thereunder, Citibank, as
collateral agent (together with any successor appointed pursuant
to such Article VII of the Credit Agreement, the "Collateral
Agent") and Toronto-Dominion, as documentation agent (the
"Documentation Agent") for the Lenders thereunder. Unless
otherwise defined herein, capitalized terms used in this
Agreement are defined in the Credit Agreement.
PRELIMINARY STATEMENT: The Borrower has requested that
the Lenders and the Agents amend certain provisions of the Credit
Agreement as hereinafter set forth and the Lenders have indicated
their willingness to do so on the terms and conditions stated
below.
NOW, THEREFORE, in consideration of the premises and of
the mutual covenants and agreements contained herein, the parties
hereto hereby agree as follows:
1. Amendments to the Credit Agreement.
(a) Amendments to Section 1.01. The following
definitions shall be added to Section 1.01 in the appropriate
alphabetical order:
"AT&T" means AT&T Corporation, a New York corporation.
"AT&T Merger Agreement" means the Agreement and Plan of
Merger dated August 16, 1993 among AT&T, Ridge and McCaw, as
in effect on May 31, 1994 as the same may be amended to the
extent that any such amendment is not adverse to the rights
and remedies of the Agents or any Lender under the Loan
Documents or the ability of any Loan Party to perform its
obligations under any Loan Document.
"Economic Ownership" means for purposes of determining
the percentage of Voting Stock legally and beneficially
owned by AT&T (a) all Voting Stock of which AT&T is the sole
legal and beneficial owner and (b) a portion of the Voting
Stock legally and beneficially owned by a Majority Entity
equal to the percentage ownership interest that AT&T holds
directly or indirectly in such Majority Entity.
Notwithstanding any other provision set forth herein, Voting
Stock legally or beneficially owned by an entity that is not
a Majority Entity (other than AT&T) shall not be included in
the determination of Economic Ownership.
"Majority Entity" means, with respect to AT&T, any
Person of which AT&T legally and beneficially owns more than
50% of the combined voting power of all of such Person's
Voting Stock.
"Merger" means the merger of Ridge with and into McCaw
with McCaw as the surviving corporation in accordance with
the terms set forth in the AT&T Merger Agreement.
"1994 Credit Agreement" means the $200,000,000 Senior
Unsecured Credit Agreement to be entered into as of June 15,
1994 among the Borrower, the Lenders party thereto, Toronto
Dominion and The Bank of Nova Scotia, as Managing Agents,
and Toronto Dominion as Administrative Agent,substantially
on the terms set forth on Exhibit A hereto, as the same may
be amended to the extent that any such amendment is not
adverse to the rights and remedies of the Agents or any
Lender under the Loan Documents or the ability of any Loan
Party to perform its obligations under any Loan Document.
"Ridge" means Ridge Merger Corporation, a Delaware
corporation wholly owned by AT&T.
"Supermajority Lenders" means, at any time, Lenders
owed or holding in the aggregate at least 66-2/3% of the sum
of (a) the then aggregate unpaid principal amount of the
Advances plus (b) the then aggregate unused Revolving Credit
Commitments.
(b) Amendment to Section 5.02(b)(i). Section
5.02(b)(i) shall be amended by deleting the "and" at the end of
clause (B), deleting the word "or" at the end of clause (C) and
inserting in lieu thereof at the end of clause (C) the word "and"
and a new clause (D) to read as follows:
"(D) Indebtedness under the 1994 Credit Agreement in an
aggregate principal amount not to exceed $200,000,000
at any time outstanding; or"
(c) Amendment to Section 5.02(k). Section 5.02(k)
shall be amended by deleting the word "and" before clause (B) and
by adding (i) a "," before such clause (B) and (ii) new clause
(C) at the end of such clause (B) to read as follows:
"and (C) optional prepayments of the 1994 Credit
Agreement in accordance with Section 2.07(a) thereof."
(d) Amendment to Section 5.02(m). Section 5.02(m)
shall be amended by deleting the "and" before subsection (v)
thereof, and by adding at the end of subsection (v) (i) (a) ","
and (ii) a new subsection (vi) to read as follows "(vi) as set
forth in Section 5.02(a) of the 1994 Credit Agreement".
(e) Amendment to Section 5.03. Section 5.03 shall be
amended by adding (i) after the words "Required Lenders" in the
third line thereof the words "(or , with respect to the
requirements set forth in clause (c) below, the Supermajority
Lenders)" and (ii) at the end thereof a new subsection (c) to
read as follows:
"(c) Consolidated Debt. Not permit, at any time,
Consolidated Debt to exceed $2,000,000,000."
(f) Additional Amendment to Section 5.03. Section
5.03(b) shall be amended by adding at the end thereof the
following proviso:
"; provided that for purposes of calculating the ratio
of Senior Debt to Consolidated Operating Cash Flow,
Senior Debt shall not include Indebtedness in an
aggregate amount not to exceed $200,000,000 at any time
outstanding under the 1994 Credit Agreement."
(g) Amendment to Section 6.01(i). Section 6.01(i)
shall be amended in its entirety to read as follows:
"(i) At any time before the consummation of the
Merger, Craig O. McCaw or a Designated Party, and at
any time after the consummation of the Merger, AT&T
shall fail to have the right to cause the election of
his or its nominees to a majority of the directorships
of the Board of Directors of McCaw; or".
(h) Amendment to Section 6.01(j). Section 6.01(j)
shall be amended by (i) deleting the word "The" and inserting the
words "(i) At any time before the consummation of the Merger,
the" in lieu thereof and (ii) adding immediately prior to the ";"
at the end thereof the following:
"or (ii) at any time after the consummation of the
Merger, AT&T shall for any reason cease to have
Economic Ownership of Voting Stock representing in the
aggregate at least 51% of the combined voting power of
all Voting Stock of McCaw".
(i) Amendment to Section 6.01(k). Section 6.01(k)
shall be amended by (i) inserting the words "(i) At any time
before the consummation of the Merger," before the word "McCaw"
at the beginning thereof and (ii) adding immediately prior to the
";" at the end thereof the following:
"or (ii) at any time after the consummation of the
Merger, McCaw or AT&T shall fail to have the right to
cause the election of its nominees to a majority of the
directorships of the Board of Directors of LIN."
(j) Amendment to Schedule VIII. Schedule VIII of the
Credit agreement shall be amended in its entirety to read as
Exhibit B hereto.
2. Conditions of Effectiveness. This Amendment shall
become effective when, and only when, the Administrative Agent
shall have received (a) two counterparts of this Amendment
executed by the Borrower, the Required Lenders or, as to any of
the Lenders, advice satisfactory to the Administrative Agent that
such Lenders have executed this Amendment, (b) a certificate of a
Financial Officer of the Borrower dated the date of the receipt
by the Administrative Agent, and otherwise in form and substance
satisfactory to the Administrative Agent, stating that no Default
has occurred and is continuing and (c) two counterparts of the
Consent of Guarantors in the form annexed hereto executed by each
of the Guarantors (the date on which all of the conditions set
forth in this Section 2 have been satisfied being referred to
herein as the "Effective Date").
3. Reference to and Effect on the Loan Documents.
(a) Upon the effectiveness of this Amendment, on and after the
date hereof each reference in the Credit Agreement to "this
Agreement", "hereunder", "hereof", or words of like import
referring to the Credit Agreement, and each reference in the Loan
Documents to "the Credit Agreement", "hereunder", "hereof", or
words of like import referring to the Credit Agreement, shall
mean and be a reference to the Credit Agreement, subject, as
applicable, to the amendments herein.
(b) The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or
remedy of any Lender or any Agent under any of the Loan
Documents, except to the extent expressly set forth herein.
4. Ratification. Except as specifically amended
above, the Credit Agreement and the other Loan Documents are and
shall continue to be in full force and effect in accordance with
the provisions thereof as in effect on the date hereof and are
hereby in all respects ratified and confirmed. Without limiting
the generality of the foregoing, each Security Agreement and all
of the Collateral described therein do and shall continue to
secure the payment of all obligations of the Borrower under the
Credit Agreement.
5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
6. Execution in Counterparts. This Amendment may be
executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement. Delivery of any
executed counterpart of a signature page to this Amendment by
telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by the respective officers thereunto
duly authorized, as of the date first above written.
LIN CELLULAR NETWORK, INC.
By /s/ Donald Guthrie
Senior Vice President - Finance
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
as Administrative Agent,
Arranger and Lender
By /s/ Stephen J. Kenneally
Vice President
CITIBANK, N.A.
as Collateral Agent, Arranger
and Lender
By /s/ Eric Huttner
Attorney-in-Fact
THE TORONTO-DOMINION BANK
as Documentation Agent,
Arranger and Lender
By /s/ Steven Shindler
Managing Director
ABN AMRO BANK N.V.
By /s/ Lee-Lee Miao
Vice President
By /s/ Jan-Kees Monster
Assistant Vice President
ATHENA LOAN INVESTORS, L.P.
By
Name:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ James C. Colegate
Senior Vice President
BANK OF HAWAII
By /s/ J. Bryan Scearce
Assistant Vice President
BANK OF IRELAND
By /s/ Gary A. Ladolcetta
Vice President
BANK OF MONTREAL, CHICAGO
BRANCH
By /s/ Yvonne Bos
Managing Director
THE BANK OF NEW YORK
By /s/ Brendan T. Nedzi
Vice President
THE BANK OF NOVA SCOTIA
By /s/ Mark Vigil
<PAGE>
BANQUE NATIONALE DE PARIS
By /s/ Deborah Gohh
Vice President
By /s/Jennifer Cho
Vice President
BARCLAYS BANK PLC
By /s/ Andrew Wynn
Director
CANADIAN IMPERIAL BANK OF
COMMERCE
By /s/ Leslie L. Rogers
Vice President
THE CHUO TRUST & BANKING
CO., LTD., LOS ANGELES AGENCY
By /s/ Y. Takata
Senior Manager
<PAGE>
CREDIT LYONNAIS
CAYMAN ISLANDS BRANCH
By /s/ Bruce M. Yeager
Authorized Signature
THE DAI-ICHI KANGYO BANK, LIMITED
By /s/ Seiji Imai
Assistant Vice President
DEUTSCHE BANK AG
NEW YORK AND/OR CAYMAN
ISLAND BRANCHES
By /s/ John R. Lilly
Vice President
By /s/Alain M. Bolea
Director
DIAMOND LEASE (U.S.A.), INC.
By
Name:
Title:
<PAGE>
FIRST NATIONAL BANK OF BOSTON
By /s/ John S. Rudberg
Division Executive
FIRST NATIONAL BANK OF MARYLAND
By /s/ Mark L. Cook
Vice President
THE FUJI BANK, LIMITED
LOS ANGELES AGENCY
By /s/ Yasuji Ikawa
Joint General Manager
FUYO GENERAL LEASE (USA), INC.
By /s/ Atsushi Ishii
Executive Vice President
THE INDUSTRIAL BANK OF JAPAN,
LIMITED
By /s/ Junri Oda
Senior Vice President and
Senior Manager
<PAGE>
J.P. MORGAN DELAWARE
By /s/ David J. Morri
Vice President
KANSALLIS-OSAKE-PANKKI
By /s/ William S. Bennett
Vice President
By /s/ Mark S. Gronich
Assistant Vice President
KLEINWORT BENSON LIMITED
By
Name:
Title:
LIL U.S.A. CO., LTD.
By
Name:
Title:
<PAGE>
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD.
LOS ANGELES AGENCY
By /s/ Yutaka Kamisawa
Deputy General Manager
LTCB LEASING (U.K.) LIMITED
By
Name:
Title:
LUMBERMENS MUTUAL CASUALTY
COMPANY
By
Name:
Title:
By
Name:
Title:
MERIDIAN BANK
By
Name:
Title:
<PAGE>
THE MITSUI TRUST & BANKING
CO., LTD.
LOS ANGELES AGENCY
By /s/ Hiroshi Uenishi
Deputy General Manager
NATIONAL CITY BANK
By /s/ Christopher M. Karr
Assistant Vice President
NATIONAL WESTMINSTER USA
By /s/ Alex Sade
Vice President
NATIONSBANK OF TEXAS
By
Name:
Title:
THE NIPPON CREDIT BANK, LTD.
NEW YORK BRANCH
By /s/ Peter F.Griffith
Vice President<PAGE>
ORIX USA CORPORATION
By
Name:
Title:
PNC BANK, N.A.
By /s/ Steven R. Bitner
Assistant Vice President
THE SAKURA BANK, LIMITED
LOS ANGELES AGENCY
By /s/ Ofusa Sato
Senior Vice President and
Assistant General Manager
SECURITY PACIFIC NATIONAL BANK
By
Name:
Title:
SHAWMUT BANK CONNECTICUT, N.A.
By
Name:
Title:
<PAGE>
THE SUMITOMO BANK, LIMITED
CHICAGO BRANCH
By
Name:
Title:
THE TORONTO DOMINION BANK,
CAYMAN ISLANDS BRANCH
By
Name:
Title:
U.S. BANK OF WASHINGTON
By
Name:
Title:
U.S. NATIONAL BANK OF OREGON
By
Name:
Title:
VAN KAMPEN MERRITT PRIME RATE
INCOME TRUST
By /s/ Jeffrey W. Maillet
Vice President and Portfolio
Manager
<PAGE>
CONSENT OF GUARANTORS
Dated as of May 31, 1994
Each of the undersigned hereby consents to the foregoing
Amendment No. 2 to the Credit Agreement and hereby confirms and
agrees that (i) all obligations of the undersigned under each
Loan Document to which it is party are, and shall continue to be,
in full force and effect and each such Loan Document is hereby
ratified and confirmed and (ii) the Security Agreement to which
it is a party and all of the Collateral described therein do, and
shall continue to, secure the payment of all of the Secured
Obligations (as defined therein).
LCN HOLDINGS, INC.
By: /s/ Donald Guthrie
Vice President - Finance
LIN CELLULAR HOLDINGS, INC.
By: /s/ Donald Guthrie
Vice President - Finance
<PAGE>
Exhibit B
Schedule VIII
Limitations on Dividends and Distributions(19)
Company(20) Agreement Containing Limitation
LIN Cellular Communications
Corporation (Texas) Partnership Agreement, dated as
of December 12, 1984, among
American Mobile Communications
of Houston & the Gulf, Houston
Cellular Corporation, LIN
Cellular Communications
Corporation, MCI Cellular
Telephone Co., Charisma
Communications Corp. of the
Southwest and Cellular Mobile
Systems of Texas Inc. (as
amended through the date hereof,
the "HMCC Partnership
Agreement").
Houston Mobile Cellular
Communications Company,
a Texas partnership HMCC Partnership Agreement.
LIN Long Distance (Texas), Inc. Partnership Agreement, dated
September 5, 1989, between LIN
Long Distance Texas, Inc. and
Cellular Mobile Systems of
Texas, Inc. (the "Metrocel Long
Distance Agreement").
Metrocel Long Distance Company Metrocel Long Distance
Agreement.
LIN Cellular Network, Inc. Credit Agreement to be entered
into as of June 15, 1994 among
LIN Cellular Network, Inc.,the
Lenders party thereto, The
Toronto-Dominion Bank ("Toronto
Dominion") and the Bank of Nova
Scotia, as Managing Agents for
the Lenders, and Toronto-Dominion, as
Administrative
Agent for the Lenders.
(19) Referred to in Section 4.01(x); limitations scheduled are
subsequent to the Restructuring.
(20) Unless otherwise indicated herein, all entities are
corporations.<PAGE>
Cellular Systems Partnership Agreement, dated
February 25, 1985, between LIN
Cellular Communications
Corporation (Texas) and Houston
Cellular Corporation (as
successors to the original
partners) (the "Cellular Systems
Partnership Agreement").
The Existing Partnership Agreements also contain limitations
on dividends and distributions that affect the Principal Cellular
Partnerships and the Borrower's Subsidiaries that are parties
thereto.
See also agreements pertaining to Indebtedness listed on
Schedule IX. Vendor and bank financing agreements (to the extent
permitted from time to time under the Credit Agreement) generally
allow dividends or distributions consisting of a portion of cash
flow available for distributions (as determined under such
agreements) if specified levels of cash flow are achieved.
The entities listed or referred to above are subject to such
regulations of the FCC and state public services commissions as
may be generally applicable in the cellular industry.
EXHIBIT 10.18(b)
Amendment Adopted by the
LIN Broadcasting Corporation
Board of Directors 11/2/94
APPROVAL OF AMENDMENT TO EMPLOYEE STOCK PURCHASE PLAN
RESOLVED, that Section 1(i) of this corporation's Employee
Stock Purchase Plan is hereby amended by adding the
following language at the end thereof to give the
Compensation Committee of the Board of Directors the
discretion to waive the six-month employment requirement for
eligibility under the Plan for employees of acquired
companies:
"; provided, however, that in the sole discretion of the
Committee, any person who, immediately prior to becoming an
Employee, has completed six months of employment with an
employer that becomes a Subsidiary or is otherwise acquired
by the Company shall be an Eligible Employee beginning on
the date he or she first becomes an Employee, provided such
person otherwise meets the requirements of (1) through (4)
of this Section 1(i)."
EXHIBIT 10.21(c)
Amendments Adopted By The
LIN Broadcasting Corporation
Board of Directors 11/22/94
AMENDMENT AND TRANSFER OF RETIREMENT PLAN
RESOLVED, that the LIN Broadcasting Corporation Retirement
Plan (the "Retirement Plan") is hereby amended as follows:
1. Effective upon and subject to the consummation of the
Distribution, the definition of "Company" set forth in
Section 1.1 is amended to read as follows:
"Company: LIN Television Corporation, a Delaware
corporation, or any successor to it in ownership of all
or substantially all of its assets."
2. Effective upon and subject to the consummation of the
Distribution, the definition of "Hour of Service" in Section
1.1 is amended by adding the following at the end thereof:
"Solely for purposes of determining a Participant's
Years of Vesting Service and whether a Participant is
eligible for early retirement benefits under the Plan,
Service with GuestInformant after June 27, 1994 shall
be treated as Service with the Company. Solely for
purposes of determining a Participant's Years of
Vesting Service, whether a Participant has terminated
from Service for purposes of Article VI and whether a
Participant is eligible for early retirement benefits
under the Plan, Service with LIN Broadcasting
Corporation or a LIN Broadcasting Affiliate shall be
treated as Service with the Company."
3. Effective upon and subject to the consummation of the
Distribution, Section 1.1 is amended by adding the following
definition of "LIN Broadcasting Affiliate" immediately after
the definition of "KXAS Plan":
"LIN Broadcasting Affiliate: Any corporation which is
a member of a controlled group of corporations (as
defined in Section 414(b) of the Code), which includes
LIN Broadcasting Corporation; any trade or business
(whether or not incorporated) which is under common
control (as defined in Section 414(c) of the Code) with
the LIN Broadcasting Corporation; any organization
(whether or not incorporated) which is a member of an
affiliated service group (as defined in Section 414(m)
of the Code), which includes LIN Broadcasting
Corporation; and any other entity required to be
aggregated with LIN Broadcasting Corporation pursuant
to Regulations under Section 414(o) of the Code."
4. Effective upon and subject to the consummation of the
Distribution, the definition of "Service" in Section 1.1 is
amended by adding the following at the end thereof:
"Solely for purposes of determining a Participant's
Years of Vesting Service, whether a Participant has
terminated from Service for purposes of Article VI and
whether a Participant is eligible for early retirement
benefits under the Plan, Service with LIN Broadcasting
corporation or a LIN Broadcasting Affiliate shall be
treated as Service with the Company."
5. Effective December __, 1994, the first sentence of
Section 11.1 is amended by deleting the proviso, so that the
first sentence reads as follows:
"Except as hereinafter provided, the Company (for
itself and the other Employers) may at any time amend
the Plan, retroactively or otherwise, in any manner
that it deems expedient or proper."
6. Effective December __, 1994, Article XIV is amended by
renumbering Sections 14.1 through 14.5 as Section 14.2
through 14.6, respectively, and by inserting the following
new Section 14.1:
"14.1 Effective Date
This Article shall apply only to Changes in Control
which occur prior to December __, 1994. No PAY/COLA
Increase (or any other increase in an Employee's
Accrued Benefit) shall be made under this Article with
respect to a Change in Control that occurs on or after
December __, 1994."
RESOLVED FURTHER, that effective upon and subject to the
consummation of the Distribution, LCH Communications, Inc.
shall cease to be a participating employer in the Retirement
Plan and employees of LCH Communications, Inc. shall cease
to accrue additional benefits under such Plan on and after
such date.
RESOLVED FURTHER, that effective upon and subject to the
consummation of the Distribution, sponsorship of the
Retirement Plan shall be transferred to Television (subject
to acceptance of such sponsorship by the Board of Directors
of Television) and sponsorship of the trust for the
Retirement Plan, evidenced by the Security Pacific National
Bank Trust Agreement for the Retirement Plan, shall be
transferred to Television (subject to acceptance of such
sponsorship by the Board of Directors of Television and the
approval of the Trustee of such Trust), in each case on and
subject to the terms and provisions of the Employee
Benefits Allocation Agreement.
RESOLVED FURTHER, that the Retirement Benefit Plans
Committee of this Board is hereby authorized, directed and
empowered to make such other amendments to the Retirement
Plan as it deems necessary or advisable to reflect such
change of sponsorship.
RESOLVED FURTHER, that effective upon and subject to the
consummation of the Distribution, Security Pacific National
Bank trust Agreement for the LIN Broadcasting Corporation
Retirement Plan is amended by substituting LIN Television
Corporation for LIN Broadcasting Corporation as the
"Employer" therein (subject to Television's and the
Trustee's approval).
RESOLVED FURTHER, that the Administrative Committee is
hereby authorized, directed and empowered to make such other
amendments to the Security Pacific Bank Agreement for the
LIN Broadcasting Corporation Retirement Plan as it deems
necessary or advisable to reflect such change of
sponsorship, or as the Trustee may require to effectuate
such change, and to make such further amendments to the
Retirement Plan as the Trustee may require to effectuate
such change.
RESOLVED FURTHER, that the officers of this corporation, or
any one of them, are hereby authorized, directed and
empowered to notify the Trustee of the trust for the
Retirement Plan of such change of sponsorship and to take
such actions (including, but not limited to, executing such
documents), other than the adoption of amendments to such
Plan and Trust, as the Trustee may require to effectuate
such change.
RESOLVED FURTHER, that the officers of this corporation, or
any one of them, are hereby authorized, directed and
empowered to take such other actions (including, but not
limited to, executing such documents) as they, or any one of
them, deem necessary or advisable to effectuate the
foregoing resolutions.
EXHIBIT 10.22(b)
Amendment Adopted By The
LIN Broadcasting Corporation
Board Of Directors 11/22/94
AMENDMENT AND TRANSFER OF SUPPLEMENTAL BENEFIT RETIREMENT PLAN
RESOLVED, that effective January 1, 1994, the "Purpose"
section of the Supplemental Benefit Retirement Plan for LIN
Broadcasting Corporation and Subsidiary Companies ("SERB")
is amended as follows:
1. The following new sentence is added after the second
sentence thereof:
Effective January 1, 1994, the Omnibus Budget
Reconciliation Act of 1993 ("OBRA") reduced the maximum
amount of annual compensation that may be taken into
account under the Retirement Plan for any year to
$150,000, as adjusted pursuant to Section 401(a)(17)(B)
of the Code.
2. The third sentence thereof (determined prior to adding
the sentence set forth in 1 above) is amended to read as
follows:
LIN Broadcasting Corporation ("LIN") has amended the
Retirement Plan to conform to the benefit and
compensation limitations of the Code, the Act, TEFRA,
TRA-86 and OBRA, and such amendments (the "Limitations
Amendments") will reduce the benefits that certain
employees and former employees (and their
beneficiaries) of LIN and any other Employer (as such
term is defined in the Retirement Plan) would otherwise
be entitled to receive under the Retirement Plan.
RESOLVED FURTHER, that effective upon and subject to the
consummation of the Distribution, sponsorship of the SERB
shall be transferred to Television (subject to acceptance of
such sponsorship by the Board of Directors of Television),
on and subject to the terms and provisions of the Employee
Benefits Allocation Agreement.
RESOLVED FURTHER, that the officers of this corporation, or
any one of them, are hereby authorized, directed and
empowered to take such actions (including, but not limited
to, executing such documents) as they, or any one of them,
deem necessary or advisable to effectuate the foregoing
resolutions.
EXHIBIT 10.32
EXECUTION COPY
$200,000,000
CREDIT AGREEMENT
Dated as of June 15, 1994
Among
LIN CELLULAR NETWORK, INC.,
as Borrower,
THE LENDERS NAMED HEREIN,
as Lenders,
TORONTO DOMINION (TEXAS), INC.,
as Administrative Agent,
and
THE BANK OF NOVA SCOTIA
and
THE TORONTO-DOMINION BANK,
as Managing Agents
<PAGE>
T A B L E O F C O N T E N T S
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms. . . . . . . . . . . . . . . 1
1.02. Computation of Time Periods. . . . . . . . . . . . 30
1.03. Accounting Terms and Computations. . . . . . . . . 30
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
2.01. The Advances . . . . . . . . . . . . . . . . . . . 30
2.02. Making the Advances. . . . . . . . . . . . . . . . 31
2.03. Fees . . . . . . . . . . . . . . . . . . . . . . . 33
2.04. Reduction of the Commitments . . . . . . . . . . . 34
2.05. Repayment. . . . . . . . . . . . . . . . . . . . . 34
2.06. Interest . . . . . . . . . . . . . . . . . . . . . 34
2.07. Prepayments. . . . . . . . . . . . . . . . . . . . 35
2.08. Conversion of Advances . . . . . . . . . . . . . . 36
2.09. Interest Rate Determination. . . . . . . . . . . . 37
2.10. Increased Costs, Etc.. . . . . . . . . . . . . . . 37
2.11. Payments and Computations. . . . . . . . . . . . . 38
2.12. Taxes. . . . . . . . . . . . . . . . . . . . . . . 39
2.13. Sharing of Payments, Etc.. . . . . . . . . . . . . 42
2.14. Use of Proceeds. . . . . . . . . . . . . . . . . . 42
2.15. Evidence of Indebtedness . . . . . . . . . . . . . 42
ARTICLE III
CONDITIONS OF LENDING
3.01. Conditions Precedent to Initial Borrowing. . . . . 43
3.02. Conditions Precedent to Each Borrowing . . . . . . 46
3.03. Conditions Precedent to Certain Borrowings . . . . 47
3.04. Determinations Under Sections 3.01, 3.02
and 3.03. . . . . . . . . . . . . . . . . . . . 47
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Borrower . . 48
(a) Organization of the Loan Parties. . . . . . . . 48
(b) Organization of the Borrower's Subsidiaries,
the Principal Cellular Partnerships and
Minority Entities . . . . . . . . . . . . . . . 48
(c) Compliance with Law . . . . . . . . . . . . . . 49
(d) Approvals . . . . . . . . . . . . . . . . . . . 49
(e) Legal Effect. . . . . . . . . . . . . . . . . . 50
(f) Financial Information . . . . . . . . . . . . . 50
(g) Pro Forma Financial Information . . . . . . . . 50
(h) Disclosure. . . . . . . . . . . . . . . . . . . 51
(i) Material Litigation . . . . . . . . . . . . . . 51
(j) ERISA Plans . . . . . . . . . . . . . . . . . . 51
(k) No Reportable Event . . . . . . . . . . . . . . 51
(l) Plan Funding. . . . . . . . . . . . . . . . . . 51
(m) Post Retirement Benefit Obligations . . . . . . 52
(n) No Catastrophic Events. . . . . . . . . . . . . 52
(o) Compliance with Environmental Law . . . . . . . 52
(p) No Burdensome Agreements. . . . . . . . . . . . 52
(q) Taxes . . . . . . . . . . . . . . . . . . . . . 52
(r) Investment Company Act of 1940. . . . . . . . . 52
(s) Solvency. . . . . . . . . . . . . . . . . . . . 53
(t) Condition of System . . . . . . . . . . . . . . 53
(u) Fees. . . . . . . . . . . . . . . . . . . . . . 53
(v) Public Utility Holding Company Act. . . . . . . 53
(w) Capital Stock . . . . . . . . . . . . . . . . . 53
(x) No Limitations on Dividends and Distributions . 54
(y) Licenses. . . . . . . . . . . . . . . . . . . . 54
(z) Regulation of the Lenders . . . . . . . . . . . 54
(aa) Existing Indebtedness . . . . . . . . . . . . . 54
(bb) Material Agreements . . . . . . . . . . . . . . 54
(cc) Ownership . . . . . . . . . . . . . . . . . . . 55
(dd) Title to Property . . . . . . . . . . . . . . . 55
(ee) Deposit Accounts. . . . . . . . . . . . . . . . 55
<PAGE>
ARTICLE V
COVENANTS OF THE BORROWER
5.01. Affirmative Covenants. . . . . . . . . . . . . . . 56
(a) Compliance with Laws, Etc.. . . . . . . . . . . 56
(b) Payment of Taxes, Etc.. . . . . . . . . . . . . 56
(c) Maintenance of Insurance. . . . . . . . . . . . 56
(d) Preservation of Corporate and Partnership
Existence, Etc. . . . . . . . . . . . . . . . . 57
(e) Visitation Rights . . . . . . . . . . . . . . . 57
(f) Keeping of Books. . . . . . . . . . . . . . . . 57
(g) Maintenance of Properties, Etc. . . . . . . . . 57
(h) Performance of Material Agreements. . . . . . . 58
(i) Transactions with Affiliates. . . . . . . . . . 58
(j) Reporting Requirements. . . . . . . . . . . . . 59
(k) Maintenance of Corporate Separateness . . . . . 63
5.02. Negative Covenants . . . . . . . . . . . . . . . . 64
(a) Liens, Etc. . . . . . . . . . . . . . . . . . . 64
(b) Indebtedness. . . . . . . . . . . . . . . . . . 65
(c) Mergers, Etc. . . . . . . . . . . . . . . . . . 67
(d) Sales, Etc. of Assets . . . . . . . . . . . . . 67
(e) Investments in Other Persons. . . . . . . . . . 68
(f) Dividends, Etc. . . . . . . . . . . . . . . . . 69
(g) Change in Nature of Business. . . . . . . . . . 70
(h) Compliance with ERISA . . . . . . . . . . . . . 71
(i) Plan Amendments . . . . . . . . . . . . . . . . 71
(j) Accounting Changes. . . . . . . . . . . . . . . 71
(k) Prepayments, Amendments, Etc. of Debt . . . . . 71
(l) Amendments, Etc.. . . . . . . . . . . . . . . . 71
(m) Negative Pledge . . . . . . . . . . . . . . . . 72
(n) Preferred Stock . . . . . . . . . . . . . . . . 72
(o) Service Agreements. . . . . . . . . . . . . . . 72
(p) Holding Company Status. . . . . . . . . . . . . 73
(q) Minority Entities . . . . . . . . . . . . . . . 73
(r) Deposit Accounts. . . . . . . . . . . . . . . . 73
5.03. Financial Covenants. . . . . . . . . . . . . . . . 73
(a) Consolidated Operating Cash Flow to
Consolidated Debt Service Ratio . . . . . . . . 73
(b) Consolidated Debt to Consolidated Operating
Cash Flow Ratio . . . . . . . . . . . . . . . . 73
(c) Consolidated Debt . . . . . . . . . . . . . . . 74
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default. . . . . . . . . . . . . . . . . 74
ARTICLE VII
THE AGENTS
7.01. Authorization and Action . . . . . . . . . . . . . 79
7.02. Agents' Reliance, Etc. . . . . . . . . . . . . . . 80
7.03. TD (Texas), Toronto-Dominion and Scotiabank and
Affiliates . . . . . . . . . . . . . . . . . . . . . 80
7.04. Lender Credit Decision . . . . . . . . . . . . . . 81
7.05. Indemnification. . . . . . . . . . . . . . . . . . 81
7.06. Successor Administrative Agent; Successor
Managing Agents. . . . . . . . . . . . . . . . . . . 81
ARTICLE VIII
MISCELLANEOUS
8.01. Amendments, Etc. . . . . . . . . . . . . . . . . . 83
8.02. Notices, Etc.. . . . . . . . . . . . . . . . . . . 83
8.03. No Waiver; Remedies. . . . . . . . . . . . . . . . 84
8.04. Costs; Expenses. . . . . . . . . . . . . . . . . . 84
8.05. Right of Set-off . . . . . . . . . . . . . . . . . 86
8.06. Binding Effect; Survival . . . . . . . . . . . . . 86
8.07. Assignments and Participations . . . . . . . . . . 87
8.08. Governing Law. . . . . . . . . . . . . . . . . . . 90
8.09. Execution in Counterparts. . . . . . . . . . . . . 90
8.10. Confidentiality. . . . . . . . . . . . . . . . . . 90
8.11. Waiver of Jury Trial . . . . . . . . . . . . . . . 91
<PAGE>
SCHEDULES
Schedule I - Commitments and Applicable Lending Offices
Schedule II - Existing Indebtedness
Schedule III - Terms of Subordination
Schedule IV - Disclosed Litigation
Schedule V - Subsidiaries, Principal Cellular Partnerships
and Minority Entities
Schedule VI - Approvals
Schedule VII - ERISA Plans
Schedule VIII - Limitation on Dividends and Distributions
Schedule IX - Material Agreements
Schedule X - Existing Liens and Rights of First Refusal<PAGE>
EXHIBITS
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Compliance Certificate
Exhibit C - Form of Notice of Borrowing
Exhibit D - Form of Amendment
Exhibit E - Form of Solvency Certificate
Exhibit F - Form of Opinion of Vice President-Law of the
Borrower
Exhibit G - Form of Opinion of FCC counsel to the
Borrower
Exhibit H - Form of Opinion of PUC counsel to the
Borrower
Exhibit I - Form of Opinion of special counsel to the
Managing Agents<PAGE>
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of June 15, 1994 among LIN
CELLULAR NETWORK, INC., a Delaware corporation (the "Borrower"),
the banks and financial institutions (together with their
assigns, the "Lenders") listed on the signature pages hereof,
TORONTO DOMINION (TEXAS), INC. ("TD (Texas)"), as administrative
agent for the Lenders hereunder (together with any successor
appointed pursuant to Article VII, the "Administrative Agent"),
THE BANK OF NOVA SCOTIA ("Scotiabank") and THE TORONTO-DOMINION
BANK ("Toronto-Dominion"), as managing agents for the Lenders
hereunder (together with any successors appointed pursuant to
Article VII, the "Managing Agents"). Capitalized terms used in
this Agreement are defined in Article I.
PRELIMINARY STATEMENTS
(1) The Borrower has requested that the Lenders
make Advances to the Borrower in an aggregate amount up to
$200,000,000 to finance the acquisition of certain cellular
properties and for general corporate purposes.
(2) The Lenders are willing, upon the terms and
conditions set forth herein, to make Advances under the Term
Facility and the Revolving Credit Facility to the Borrower for
the purposes described herein.
NOW, THEREFORE, in consideration of the premises and
of the mutual covenants and agreements contained herein, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings
(such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Acquisitions" has the meaning specified in Section
2.14.
"Additional Working Capital Debt" has the meaning
specified in Section 6.01(q).
"Adjusted CD Rate" means, for the Interest Period for
each Adjusted CD Rate Advance comprising part of the same
Borrowing, an interest rate per annum equal to the sum of:
(a) the rate per annum obtained by dividing (i)
the rate of interest determined by the Administrative
Agent to be the average (rounded upward to the nearest
whole multiple of 1/100 of 1% per annum, if such
average is not such a multiple) of the consensus bid
rate determined by each of the Reference Lenders for
the bid rates per annum, at 9:00 A.M. (New York City
time) (or as soon thereafter as practicable) on the
first day of such Interest Period, of New York
certificate of deposit dealers of recognized standing
selected by such Reference Lender for the purchase at
face value of certificates of deposit of such
Reference Lender in an amount substantially equal to
such Reference Lender's Adjusted CD Rate Advance
comprising part of such Borrowing and with a maturity
equal to such Interest Period, by (ii) a percentage
equal to 100% minus the Adjusted CD Rate Reserve
Percentage (as defined below) for such Interest
Period, plus
(b) the Assessment Rate (as defined below) for
such Interest Period.
"Adjusted CD Rate Advance" means an Advance that bears
interest as provided in Section 2.06(b).
"Adjusted CD Rate Reserve Percentage" for the Interest
Period for each Adjusted CD Rate Advance comprising part of
the same Borrowing means the reserve percentage applicable
on the first day of such Interest Period under regulations
issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including, but not limited
to, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System
in New York City with deposits exceeding one billion Dollars
with respect to liabilities consisting of or including
(among other liabilities) Dollar nonpersonal time deposits
in the United States with a maturity equal to such Interest
Period. The "Assessment Rate" for the Interest Period for
each Adjusted CD Rate Advance comprising part of the same
Borrowing means the annual assessment rate estimated by the
Administrative Agent on the first day of such Interest
Period for determining the then current annual assessment
payable by Toronto-Dominion to the Federal Deposit Insurance
Corporation (or any successor) for insuring Dollar deposits
of Toronto-Dominion in the United States. The Adjusted CD
Rate for each Interest Period for each Adjusted CD Rate
Advance comprising part of the same Borrowing shall be
determined by the Administrative Agent on the basis of
applicable rates furnished to and received by the
Administrative Agent from the Reference Lenders on the first
day of such Interest Period, subject, however, to the
provisions of Sections 2.02(b) and 2.09.
"Administrative Agent" has the meaning specified in
the recital of parties to this Agreement.
"Administrative Agent's Account" means the account of
the Administrative Agent maintained by the Administrative
Agent at the Federal Reserve Bank of New York or as
otherwise designated in a written notice by the
Administrative Agent to the Managing Agents, the Lenders and
the Borrower from time to time.
"Advance" means a Term Advance or a Revolving Credit
Advance.
"Affiliate" means, as to any Person, any other Person
that, directly or indirectly, controls, is controlled by, or
is under common control with, such Person or is a spouse of
or any other relative (by blood, adoption or marriage) of
such Person within the third degree or is a partner, member,
director, officer or employee of such Person. For purposes
of this definition, the term "control" (including the terms
"controlling", "controlled by" and "under common control
with") of a Person means the possession, direct or indirect,
of the power to vote 10% or more of the Voting Stock of such
Person or to direct or cause the direction of the management
and policies of such Person, whether through the ownership
of Voting Stock or partnership interests or by contract or
otherwise.
"Agents" means, collectively, the Administrative Agent
and the Managing Agents.
"Amendment" means Amendment No. 2 to the 1990 Credit
Agreement dated as of May 31, 1994.
"Applicable Lending Office" means, for each Lender,
such Lender's Domestic Lending Office in the case of a Base
Rate Advance, such Lender's CD Lending Office in the case of
an Adjusted CD Rate Advance and such Lender's LIBO Lending
Office in the case of a LIBO Rate Advance.
"Applicable Margin" means (a) for the period
commencing on the date of the initial Borrowing through, and
including, June 30, 1996 (i) for LIBO Rate Advances, 2-1/2%,
(ii) for Adjusted CD Rate Advances, 2-5/8% and (iii) for
Base Rate Advances, 1-1/2% and (b) at all times thereafter
for each Advance, a percentage per annum as set forth below
under the applicable LIBO Rate Advances column, Adjusted CD
Rate Advances column or Base Rate Advances column during the
period set forth below:
Period LIBO Rate Adjusted CD Base Rate
Advances Rate Advances Advances
--------------------------------------------------------
July 1, 1996
through
June 30, 1997 3% 3-1/8% 2%
July 1, 1997
through
June 30, 1998 3-1/2% 3-5/8% 2-1/2%
July 1, 1998
and all times
thereafter 4% 4-1/8% 3%
"Appropriate Lender" means, as to any Facility, a
Lender that has a Commitment for a portion of such Facility.
"Approved Accountants" means any of Arthur Andersen &
Co., Price Waterhouse, KPMG Peat Marwick, Deloitte & Touche,
Coopers & Lybrand and Ernst & Young (or any of their
respective successors).
"Approved Cellular Assets" means any Franchise Interest
in an MSA that meets the following criteria: (a) the
Cellular Entity in which such Franchise Interest is being
acquired is (or would become after giving effect to the
acquisition of such Franchise Interest) one of the
Borrower's Subsidiaries and (b) such Franchise Interest is
located in one of the ten largest MSAs (measured at the time
of acquisition by reference to the then most recent Donnelly
Marketing Service population estimates).
"Approved Services Agreement" means the Approved
Services Agreement dated as of August 1, 1990 between the
Borrower and LIN.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender and an Eligible
Assignee, and accepted by the Administrative Agent, in
accordance with Section 8.07 and in substantially the form
of Exhibit A hereto.
"Attributable Share" means, for purposes of determining
the income, Indebtedness, Pops, Operating Cash Flow, Cash
Equivalents or other measured characteristic of any Person,
the percentage ownership interest in such Person held
directly or indirectly by the Borrower.
"AT&T" means AT&T Corporation, a New York corporation.
"AT&T Merger Agreement" means the Agreement and Plan of
Merger dated August 16, 1993 among AT&T, Ridge and McCaw, as
in effect on the date hereof, as such agreement may be
amended to the extent that any such amendment is not adverse
to the rights and remedies of any Agent or any Lender under
this Agreement or the ability of the Borrower to perform its
obligations hereunder.
"Base Rate" means a fluctuating interest rate per annum
as shall be in effect from time to time, which rate per
annum shall at all times be equal to the rate of interest
announced publicly by Toronto-Dominion in New York, New
York, from time to time, as its base rate; provided that,
with respect to any Advance that is made during a Year End
Period, such rate per annum for such Advance during such
period (regardless of whether the Interest Period for such
Advance shall extend beyond such period) shall at all times
be equal to the higher of such base rate and a rate equal to
1/2 of 1% per annum above the Federal Funds Rate.
"Base Rate Advance" means an Advance that bears
interest as provided in Section 2.06(c).
"Board of Directors" of any Person means the board of
directors of such Person or any duly authorized committee of
such board.
"Borrower" has the meaning specified in the recital of
parties to this Agreement.
"Borrower Restrictive Agreement" has the meaning
specified in Section 6.01(q).
"Borrower's Account" means the account of the Borrower
at a depository of the Borrower's choosing and otherwise as
designated by the Borrower in a written notice to the
Administrative Agent.
"Borrowing" means a Term Borrowing or a Revolving
Credit Borrowing.
"Broadcast Borrower" means LIN Television Corporation,
a Delaware corporation.
"Business Day" means a day of the year on which banks
are not required or authorized to close in New York City
and, if the applicable Business Day relates to any LIBO Rate
Advances, on which dealings are carried on in the London
interbank market.
"Capital Expenditures" means, for any period, the sum
of (without duplication) (a) all expenditures during such
period for real property or improvements and equipment
utilized in a Cellular Business and other business
operations, or for replacements or substitutions therefor or
additions thereto, that have a useful life of more than one
year plus (b) the entire principal amount of any
Indebtedness assumed or incurred in connection with any such
expenditures.
"Capitalized Leases" has the meaning specified in
clause (e) of the definition of Indebtedness.
"Cash Equivalents" means any of the following, to the
extent owned free and clear of all Liens: (a) Dollars on
hand and in insured demand deposit accounts; (b) direct
obligations of the Government of the United States or any
agency or instrumentality thereof or obligations
unconditionally guaranteed by the full faith and credit of
the United States; (c) certificates of deposit or bankers'
acceptances that become payable within one year after the
date of issuance and that are issued by (i) any Lender or
(ii) any other commercial bank organized under the laws of
the United States or any state thereof or any other country
that is a member of the OECD or any political subdivision of
such country and having combined capital and surplus of at
least $1,000,000,000; (d) commercial paper issued by any
corporation organized under the laws of any state or the
United States with a rating of at least "Prime-1" (or the
equivalent grade) by Moody's Investors Service, Inc. or "A-1"
(or the equivalent grade) by Standard & Poor's
Corporation; and (e) repurchase and reverse repurchase
agreements with any securities dealer with respect to
securities of the types specified in clauses (a) through (d)
in respect of an aggregate principal amount of securities
not in excess of $25,000,000 and that are fully
collateralized by any of the securities specified in clauses
(a) through (d) above.
"CD Lending Office" means, for any Lender, the office
of such Lender specified as its "CD Lending Office" opposite
its name in Schedule I hereto or in the Assignment and
Acceptance pursuant to which it became a Lender (or, if no
such office is specified, its Domestic Lending Office), or
such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Administrative
Agent.
"Cellular Assets" means each Cellular System or
Franchise Interest owned directly or indirectly by the
Borrower, any of the Borrower's Subsidiaries or any
Principal Cellular Partnership.
"Cellular Business" means the business of operating one
or more Cellular Systems and other businesses directly
related thereto.
"Cellular Entity" means a Cellular Licensee, Cellular
Permittee or Cellular Tentative Selectee.
"Cellular Licensee" means any Person that is authorized
by the FCC to own, control and operate a Cellular System in
an MSA or RSA.
"Cellular Permittee" means a Person that is authorized
by the FCC to construct a Cellular System in an MSA or RSA.
"Cellular System" means a domestic public cellular
radio telecommunications service system licensed under Part
22 of the FCC's Rules.
"Cellular Tentative Selectee" means a Person designated
in a public notice issued by the FCC to become a Cellular
Permittee unless and until such designation shall have been
reversed or revoked by the FCC.
"Class B Shares" means Class B Common Stock, par value
$.01, of McCaw.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated
and the rulings issued thereunder.
"Commitment" means a Term Commitment or a Revolving
Credit Commitment.
"Compliance Certificate" means a certificate of a
Financial Officer of the Borrower in substantially the form
of Exhibit B hereto to be delivered pursuant to Sections
5.01(j)(iii) and (iv).
"Confidential Information" has the meaning specified in
Section 8.10.
"Consolidated" refers to the consolidation of financial
statements in accordance with GAAP.
"Consolidated Debt" means, for any date of
determination, the sum of (without duplication):
(a) the Consolidated Indebtedness of the Borrower
and the Borrower's wholly owned Subsidiaries; and
(b) the Attributable Share of the Indebtedness of
each of the Borrower's other Subsidiaries and each
Principal Cellular Partnership;
provided that Indebtedness owing by one of the Borrower's
Subsidiaries or by a Principal Cellular Partnership to the
Borrower or to another of the Borrower's Subsidiaries or to
another Principal Cellular Partnership or by the Borrower to
any of the Borrower's Subsidiaries or to a Principal
Cellular Partnership shall not be included in this
calculation.
"Consolidated Debt Service" means, for any date of
determination, the sum (without duplication) of all amounts
paid during the current fiscal quarter and all amounts
scheduled to be paid during the three consecutive fiscal
quarters following such current fiscal quarter with respect
to:
(a) scheduled reductions of Consolidated Debt
(other than the Facilities) during such current fiscal
quarter and of such Consolidated Debt outstanding on
the date of determination for each such other fiscal
quarter;
(b) reductions of the Commitments pursuant to
Section 2.04(b)(i) of the 1990 Credit Agreement as in
effect on the date hereof;
(c) interest on such Consolidated Debt and the
Facilities (excluding amortization of debt discount and
expense but including imputed interest on capital lease
obligations and assuming, in the case of fluctuating
interest rates that cannot be determined in advance,
that the rate in effect on the date of determination
will remain in effect throughout such period);
(d) commitment, agency or other fees with respect
to such Consolidated Debt and the Facilities (other
than, in the case of such other fees, amounts paid to
lenders upon the initial incurrence of such
Consolidated Debt to induce such lenders to provide
such Consolidated Debt);
(e) dividends and other distributions (other than
dividends payable in additional shares of such
Preferred Stock) with respect to Preferred Stock
outstanding during such current fiscal quarter and with
respect to Preferred Stock outstanding on the date of
determination for each such other fiscal quarter, after
giving effect to any such Preferred Stock proposed on
the date of determination to be created and to the
concurrent retirement of any other Preferred Stock on
such date; and
(f) all interest rate swap agreements outstanding
during such current fiscal quarter and all interest
rate swap agreements outstanding on the date of
determination for each such other fiscal quarter, less
amounts, if any, received during the current fiscal
quarter under all interest rate swap agreements and
amounts scheduled to be received during each such other
fiscal quarter under all interest rate swap agreements
outstanding on the date of determination, such
calculation to assume that, in the case of such
agreements outstanding on the date of determination,
the reference rate under each such agreement in effect
on the date of determination will remain in effect
throughout such period;
provided that principal and interest in respect of any
guarantee for borrowed money shall be deemed to be payable
as if (i) the principal amount of such guarantee were
subject to the same rate of repayment as the Indebtedness
guaranteed and (ii) interest in respect thereof were payable
at the same rate as the Indebtedness guaranteed.
"Consolidated Operating Cash Flow" means, for any
period, the sum of (without duplication):
(a) Consolidated Operating Cash Flow of the
Borrower and the Borrower's wholly owned Subsidiaries
and
(b) the Attributable Share of the Operating Cash
Flow of each of the Borrower's other Subsidiaries and
each Principal Cellular Partnership.
"Conversion", "Convert" and "Converted" each refers to
a conversion of Advances of one Type into Advances of the
other Type pursuant to Section 2.08 or 2.10.
"Dallas Partnership" means Metroplex Telephone Company,
a partnership organized pursuant to the Dallas Partnership
Agreement.
"Dallas Partnership Agreement" means the Amended and
Restated Partnership Agreement dated as of November 9, 1984
among LIN Cellular Communications Corporation, D/FW Signal,
Inc., MCI Cellular Telephone Co., Cellular Mobile Systems of
Texas, Inc. and Mid-America Cellular Systems, Inc.
"Default" means any Event of Default or any event that
would constitute an Event of Default but for the requirement
that notice be given or time elapse or both.
"Designated Party" has the meaning specified in the
Shareholders Agreement as in effect on February 26, 1990.
"Disclosed Litigation" has the meaning specified in
Section 3.01(c).
"Dollars" and the sign "$" each mean lawful money of
the United States of America.
"Domestic Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Domestic
Lending Office" set forth opposite its name in Schedule I
hereto or in the Assignment and Acceptance pursuant to which
it became a Lender, or such other office of such Lender as
such Lender may from time to time specify to the Borrower
and the Administrative Agent.
"Economic Ownership" means, for purposes of determining
the percentage of Voting Stock legally and beneficially
owned by AT&T, (a) all Voting Stock of which AT&T is the
sole legal and beneficial owner and (b) a portion of the
Voting Stock legally and beneficially owned by a Majority
Entity equal to the percentage ownership interest that AT&T
holds directly or indirectly in such Majority Entity.
Notwithstanding any other provision set forth herein, Voting
Stock legally or beneficially owned by an entity that is not
a Majority Entity (other than AT&T) shall not be included in
the determination of Economic Ownership.
"Eligible Assignee" means (a) a commercial bank
organized under the laws of the United States, or any state
thereof, and having total assets in excess of $500,000,000
and a combined capital and surplus of at least $100,000,000;
(b) a savings and loan association or savings bank organized
under the laws of the United States, or any state thereof,
and having total assets in excess of $500,000,000 and a
combined capital and surplus of at least $100,000,000; (c) a
commercial bank organized under the laws of any other
country that is a member of the OECD or has concluded
special lending arrangements with the International Monetary
Fund associated with its General Arrangements to Borrow or
of the Cayman Islands, or a political subdivision of any
such country, and having total assets in excess of
$500,000,000 and a combined capital and surplus of at least
$100,000,000; provided that such bank is acting through a
branch or agency located in the United States; (d) the
central bank of any country that is a member of the OECD;
(e) a finance company, insurance company or other financial
institution or fund (whether a corporation, partnership,
trust or other entity) that is engaged in making, purchasing
or otherwise investing in commercial loans in the ordinary
course of its business, and having total assets in excess of
$250,000,000 and (other than in the case of a fund or trust)
a combined capital and surplus of at least $100,000,000; and
(f) any Affiliate of any Lender acceptable to the Borrower;
provided that such acceptance by the Borrower shall not be
unreasonably withheld (and shall be deemed to be given if
the Borrower fails to respond to a written request therefor
within ten Business Days after its receipt thereof).
"Environmental Law" means any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or
award relating to the environment, health or safety or to
the release of any materials into the environment,
including, without limitation, the Clean Air Act, as
amended, the Clean Water Act of 1977, as amended, the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, the Hazardous Materials
Transportation Act, as amended, the Toxic Substance Control
Act, as amended, and the Resource Conservation and Recovery
Act of 1976, as amended.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the
regulations promulgated and rulings issued thereunder.
"ERISA Affiliate" of any Person means any other Person
that for purposes of Title IV of ERISA is a member of such
Person's controlled group, or under common control with such
Person, within the meaning of Section 414 of the Code and
the regulations promulgated and rulings issued thereunder.
"ERISA Event" means (a) a reportable event, within the
meaning of Section 4043 of ERISA, unless the 30-day notice
requirement with respect thereto has been waived by the
PBGC; (b) the provision by the administrator of any Plan of
a notice of intent to terminate such Plan, pursuant to
Section 4041(a)(2) of ERISA (including any such notice with
respect to a plan amendment referred to in Section 4041(e)
of ERISA); (c) the cessation of operations at a facility in
the circumstances described in Section 4062(e) of ERISA; (d)
the withdrawal by the Borrower or an ERISA Affiliate from a
Multiple Employer Plan during a plan year for which it was a
substantial employer, as defined in Section 4001(a)(2) of
ERISA; (e) the failure by the Borrower or any ERISA
Affiliate to make a payment to a Plan required under Section
302(f)(1) of ERISA; (f) the adoption of an amendment to a
Plan requiring the provision of security to such Plan,
pursuant to Section 307 of ERISA; or (g) the institution by
the PBGC of proceedings to terminate a Plan, pursuant to
Section 4042 of ERISA, or the occurrence of any event or
condition that might constitute grounds under Section 4042
of ERISA for the termination of, or the appointment of a
trustee to administer, a Plan.
"Eurocurrency Liabilities" has the meaning specified in
Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Events of Default" has the meaning specified in
Section 6.01.
"Excess Cash Flow" means, for any fiscal year, the sum,
if positive, of Consolidated Operating Cash Flow for such
fiscal year plus the Net Cash Proceeds from extraordinary
transactions received by the Borrower or any of the
Borrower's wholly owned Subsidiaries and the Attributable
Share of the Net Cash Proceeds from extraordinary
transactions received by each of the Borrower's other
Subsidiaries and each Principal Cellular Partnership during
the relevant fiscal year less (without duplication):
(a) scheduled repayments and mandatory
prepayments (other than prepayments in respect of 1990
Commitment reductions pursuant to Section 2.04(b)(iii)
of the 1990 Credit Agreement) of principal of
Consolidated Debt and dividends and other distributions
scheduled to be paid with respect to capital stock
included in Consolidated Debt (other than dividends
payable in additional shares of such capital stock and
any amounts applied to enable LCH to pay dividends on
the LCH Preferred Stock);
(b) voluntary prepayments of principal of the
Facilities pursuant to Section 2.07(a) to the extent
that such amounts may not be reborrowed pursuant to
Section 2.01(a) or (b) and voluntary prepayments of
principal under Section 2.07(a) of the 1990 Credit
Agreement to the extent that such amounts may not be
reborrowed pursuant to the terms thereof;
(c) premium charges and Interest Expense on
Consolidated Debt;
(d) commitment, agency or other fees with respect
to Consolidated Debt;
(e) Capital Expenditures by the Borrower or any
of the Borrower's wholly owned Subsidiaries and the
Attributable Share of Capital Expenditures by each of
the Borrower's other Subsidiaries and each Principal
Cellular Partnership; and
(f) cash expenditures for losses with respect to
extraordinary items incurred by the Borrower or any of
the Borrower's wholly owned Subsidiaries and the
Attributable Share of such cash expenditures for losses
incurred by each of the Borrower's other Subsidiaries
and each Principal Cellular Partnership;
in the case of each of clauses (a) through (f) above, to the
extent, but only to the extent, that the amounts so deducted
are actually paid during such fiscal year.
"Existing Indebtedness" means the Indebtedness of the
Borrower, the Borrower's Subsidiaries and the Principal
Cellular Partnerships as of the date hereof, as set forth in
Schedule II hereto.
"Existing Partnership Agreements" means (a) the Houston
Partnership Agreement, (b) the Dallas Partnership Agreement,
(c) the Los Angeles Partnership Agreement and (d) the New
York Partnership Agreement.
"Facilities" means the Term Facility and the Revolving
Credit Facility.
"FCC" means the Federal Communications Commission or
any successor agency or entity performing substantially the
same functions.
"FCC License" means any mobile telephone, cellular
telephone, mobile satellite, microwave or other
communications license, permit, certificate of compliance,
franchise, approval or authorization granted or issued by
the FCC, whether for control, ownership, construction or
operation of or provision of service by a Cellular System.
"Federal Funds Rate" means, for any period, a
fluctuating interest rate per annum equal for each day
during such period to the weighted average of the rates on
overnight Federal funds transactions, with members of the
Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business
Day, for the next preceding 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 of
the quotations for such day for such transactions received
by the Administrative Agent from three Federal funds brokers
of recognized standing selected by it.
"Final Maturity Date" means the earlier of September
30, 2000 and the date of termination in whole of the
Commitments pursuant to Section 2.04 or 6.01.
"Financial Officer" means, as to any Person, the chief
executive officer, the chief financial officer, any vice
president-finance, the treasurer or the controller of that
Person.
"Franchise" means a franchise, permit or license
(including, without limitation, an FCC License), designation
(including, without limitation, as a Cellular Tentative
Selectee) or certificate granted by the United States or any
other country or state or any city, town, county or other
municipality (to the extent subject to regulation thereby),
public utility commission or public service commission,
power company or any other regulatory authority pursuant to
which a Person has the right to own, control, construct or
operate a Cellular System.
"Franchise Interest" means a direct or indirect
ownership interest in any Person that is a Cellular Entity.
"GAAP" has the meaning specified in Section 1.03.
"Geographically Related RSA" means (a) an RSA located
adjacent to or within 25 miles of an MSA Cellular System
controlled by the Borrower, any of the Borrower's
Subsidiaries or any Principal Cellular Partnership and (b)
each of NY-5, NY-6, CT-1 and CA-4, as such terms are defined
by the FCC for purposes of Cellular System licensing.
"Hazardous Materials" means all materials subject to
any Environmental Law, including, without limitation,
materials listed in 49 C.F.R. Section 172.101, materials defined
as hazardous pursuant to Section 101(14) of the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, flammable, explosive or
radioactive materials, hazardous or toxic wastes or
substances, petroleum or petroleum distillates, PCBs or
asbestos or materials containing asbestos.
"Hedge Agreements" means interest rate swap, cap,
ceiling, hedge or other interest rate protection agreements
designed to hedge against fluctuations in interest rates.
"Houston Partnership" means Houston Cellular Telephone
Company.
"Houston Partnership Agreement" means the Amended and
Restated Partnership Agreement dated as of December 12,
1984, among Metro Mobile CTS, Cellular Systems, Inc. and
Houston Mobile Cellular Communications Company, as amended
through August 1, 1990.
"Indebtedness" of any Person means (without
duplication):
(a) all indebtedness of such Person for borrowed
money;
(b) all obligations of such Person for the
deferred purchase price of capital assets (including
amounts owed to sellers of Franchise Interests or
Cellular Systems for the acquisition thereof);
(c) all obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments
(other than performance bonds, letters of credit and
similar undertakings in connection with the
construction, development or operation of a business,
to the extent such undertakings do not secure an
obligation for borrowed money or the deferred purchase
price of property or services);
(d) all indebtedness created or arising under any
conditional sale or other title retention agreement
with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender
under such agreement in the event of default are
limited to repossession or sale of such property);
(e) all obligations of such Person as lessee
under leases that have been or should be, in accordance
with GAAP, recorded as capital leases ("Capitalized
Leases"), to the extent properly classified as a
liability on the balance sheet of such Person;
(f) all obligations, contingent or otherwise, of
such Person under acceptance, letter of credit or other
similar facilities (other than letters of credit and
similar undertakings in connection with the
construction, development or operation of a business,
to the extent such undertakings do not secure an
obligation for borrowed money or the deferred purchase
price of property or services);
(g) all obligations of such Person to purchase,
redeem, retire, defease or otherwise acquire for value,
any capital stock of such Person or any warrants,
rights or options to acquire such capital stock, which
obligations shall be valued, in the case of Redeemable
Preferred Stock, at the greater of its voluntary or
involuntary liquidation preference plus accrued and
unpaid dividends and, in the case of other such
obligations, at the amount that, in light of all the
facts and circumstances existing at the time of
determination, can reasonably be expected to become
payable;
(h) all Indebtedness referred to in clauses (a)
through (g) above guaranteed directly or indirectly by
such Person, or in effect guaranteed directly or
indirectly by such Person through an agreement, (i) to
pay or purchase such Indebtedness or to advance or
supply funds for the payment or purchase of such
Indebtedness, (ii) to purchase, sell or lease (as
lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the
debtor to make payment of such Indebtedness or to
assure the holder of such Indebtedness against loss,
(iii) to supply funds to or in any other manner invest
in the debtor (including any agreement to pay for
property or services irrespective of whether such
property is received or such services are rendered, but
excluding any obligation to make capital contributions
to a Principal Cellular Partnership in accordance with
the terms of the applicable Existing Partnership
Agreement other than an obligation to make such
contributions to assure a creditor of such Principal
Cellular Partnership against loss), or (iv) otherwise
to assure a creditor against loss; and
(i) all Indebtedness referred to in clauses (a)
through (g) above secured by (or for which the holder
of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts and contract
rights) owned by such Person, even though such Person
has not assumed or become liable for the payment of
such Indebtedness.
"Indemnified Party" has the meaning specified in
Section 8.04(b).
"Insufficiency" means, with respect to any Plan, the
amount, if any, of its unfunded benefit liabilities within
the meaning of Section 4001(a)(18) of ERISA.
"Interest Expense" means, for any period, interest
expense for such period, including, without limitation,
imputed interest on Capitalized Leases, financing fees paid
to lenders in connection with Indebtedness permitted by
Section 5.02(b) (excluding, without limitation,
reimbursement of expenses, indemnification or other similar
costs) and fees paid to hedge lenders for Hedge Agreements.
"Interest Period" means, for each Adjusted CD Rate
Advance comprising part of the same Borrowing or each LIBO
Rate Advance comprising part of the same Borrowing, the
period commencing on the date of such Advance or the date of
the Conversion of any Advance into such an Advance, and
ending on the last day of the period selected by the
Borrower pursuant to the provisions below and, thereafter,
each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last
day of the period selected by the Borrower pursuant to the
provisions below. The duration of each such Interest Period
shall be (a) in the case of a LIBO Rate Advance, one, two or
three months and, subject to clause (iv) below, six months,
and (b) in the case of an Adjusted CD Rate Advance, 30, 60,
90 or 180 days, as the Borrower, upon notice received by the
Administrative Agent not later than 11:00 A.M. (New York
City time) on the third Business Day (in the case of a LIBO
Rate Advance) or the second Business Day (in the case of an
Adjusted CD Rate Advance) prior to the first day of such
Interest Period, may select; provided, however, that:
(i) the Borrower may not select any Interest
Period that ends after the Final Maturity Date;
(ii) the Borrower may, subject to Section
2.02(b)(i), make more than one Borrowing on any
Business Day, but Interest Periods commencing on the
same date for LIBO Rate Advances or Adjusted CD Rate
Advances comprising part of the same Borrowing shall be
of the same duration;
(iii) whenever the last day of any Interest
Period would otherwise occur on a day other than a
Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding
Business Day; provided, however, that, in the case of
the Interest Period for a LIBO Rate Advance, if such
extension would cause the last day of such Interest
Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on the
next preceding Business Day;
(iv) with respect to LIBO Rate Advances, the
Borrower shall not be entitled to elect an Interest
Period having a duration of six months if, by the close
of business (New York City time) on the third Business
Day prior to the first day of such Interest Period, any
Appropriate Lender notifies the Administrative Agent
(which shall deliver a copy of such notice to the
Borrower) that such Lender would be unable to obtain
funding for, or that the LIBO Rate will not reflect the
cost to such Lender of funding or maintaining, the LIBO
Rate Advance to be made by such Lender for the period
selected by the Borrower and any such Advances made by
the Appropriate Lenders on the first day of such
Interest Period shall be Base Rate Advances; following
receipt of such notice, the Borrower's right to select
Interest Periods of LIBO Rate Advances having a
duration of six months shall be suspended until such
Lender subsequently notifies the Administrative Agent
that the circumstances causing such suspension no
longer exist; and
(v) whenever the first day of any Interest Period
occurs on a day of an initial calendar month for which
there is no numerically corresponding day in the
calendar month that succeeds such initial calendar
month by the number of months equal to the number of
months in such Interest Period, such Interest Period
shall end on the last Business Day of such succeeding
calendar month.
"Investment" in any Person means any loan or advance to
such Person, any purchase or other acquisition of any
capital stock, warrants, rights, options, obligations or
other securities of such Person, any capital contribution to
such Person or any other investment in such Person,
including, without limitation, any arrangement pursuant to
which the investor incurs Indebtedness of the types referred
to in the definition of "Indebtedness" in respect of such
Person.
"LCH" means LCH Communications, Inc., a Delaware
corporation.
"LCH Assets" means all assets of LCH held on the date
of the initial borrowing under the 1990 Credit Agreement,
including, without limitation, WOTV and all capital stock of
LIN-Penn, but excluding all capital stock of LCN.
"LCH Preferred Stock" means all of LCH's Class A
Redeemable Preferred Stock.
"LCN" means LCN Holdings, Inc., a Delaware corporation.
"Lenders" means the banks and the other financial
institutions and investors listed on the signature pages
hereof and each Eligible Assignee that shall become a party
hereto pursuant to Section 8.07.
"LIBO Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "LIBO
Lending Office" set forth opposite its name in Schedule I
hereto or in the Assignment and Acceptance pursuant to which
it became a Lender (or, if no such office is specified, its
Domestic Lending Office), or such other office of such
Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
"LIBO Rate" means, for the Interest Period for each
LIBO Rate Advance comprising part of the same Borrowing, an
interest rate per annum equal to the rate per annum obtained
by dividing (a) the average (rounded upward to the nearest
whole multiple of 1/16 of 1% per annum, if such average is
not such a multiple) of the rate per annum at which deposits
in Dollars are offered to the Reference Lenders by leading
banks in the London interbank market at 11:00 A.M. (London
time) two Business Days before the first day of such
Interest Period in an amount substantially equal to such
Reference Lender's LIBO Rate Advance comprising part of such
Borrowing to be outstanding during such Interest Period and
for a period equal to such Interest Period by (b) a
percentage equal to 100% minus the LIBO Rate Reserve
Percentage for such Interest Period. The LIBO Rate for the
Interest Period for each LIBO Rate Advance comprising part
of the same Borrowing shall be determined by the
Administrative Agent on the basis of applicable rates
furnished to and received by the Administrative Agent from
the Reference Lenders two Business Days before the first day
of such Interest Period, subject, however, to the provisions
of Sections 2.02(b) and 2.09.
"LIBO Rate Advance" means an Advance that bears
interest as provided in Section 2.06(a).
"LIBO Rate Reserve Percentage" means, for the Interest
Period for each LIBO Rate Advance comprising part of the
same Borrowing, the reserve percentage applicable two
Business Days before the first day of such Interest Period
under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor)
for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other
marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other
category of liabilities that includes deposits by reference
to which the interest rate on LIBO Rate Advances is
determined) having a term equal to such Interest Period.
"Lien" means any lien, security interest or other
charge or encumbrance of any kind, or any other type of
preferential arrangement, including, without limitation, the
lien or retained security title of a conditional vendor and
any easement, right of way or other encumbrance on title to
real property, but not including any inchoate right of set-off as such.
"LIN" means LIN Broadcasting Corporation, a Delaware
corporation.
"LIN Cellular Holdings" means LIN Cellular Holdings,
Inc., a New York corporation.
"LIN Parties" means the Borrower, LIN Cellular Holdings
and LCN.
"LIN Penn" means LIN Cellular Communications
Corporation, a Pennsylvania corporation.
"LIN Satellite" means LIN Satellite Communications
Corporation, a Delaware corporation.
"LIN Share" means each issued and outstanding share of
LIN's common stock.
"Los Angeles Partnership" means Los Angeles Cellular
Telephone Company.
"Los Angeles Partnership Agreement" means the
Partnership Agreement dated as of June 22, 1983 among Los
Angeles Cellular Corporation and LIN Cellular Communications
Corporation, as amended through August 1, 1990.
"Majority Entity" means, with respect to AT&T, any
Person of which AT&T legally and beneficially owns more than
50% of the combined voting power of all of such Person's
Voting Stock.
"Managing Agents" has the meaning specified in the
recital of parties to this Agreement.
"Material Agreement" means each agreement that is
material to the business, condition (financial or
otherwise), operations, properties or prospects of the
Borrower, any of the Borrower's Subsidiaries or any of the
Principal Cellular Partnerships (other than agreements that
relate to Indebtedness permitted by Section 5.02(b)).
"Material Entity" means (i) any entity that
individually generated at least 20% of Consolidated
Operating Cash Flow for any period of four consecutive
fiscal quarters or (ii) any group of entities, none of the
members of which individually generated 20% or more of
Consolidated Operating Cash Flow for any such period, but
that in the aggregate generated at least 20% of Consolidated
Operating Cash Flow for any period of four consecutive
fiscal quarters.
"Material Event" means, with respect to the Private
Market Value Guarantee, any of the following: (i) the
determination of a private market price for LIN Shares
pursuant to Section 2(C) thereof; (ii) the execution of an
agreement with LIN pursuant to which McCaw will proceed with
an Acquisition (as defined in Section 2(D) thereof); (iii)
the approval by the public stockholders of LIN of an
Acquisition by McCaw as required by Section 2(E) thereof;
and (iv) the determination by McCaw to proceed with a sale
of LIN pursuant to Section 2(F) thereof.
"McCaw" means McCaw Cellular Communications, Inc., a
Delaware corporation.
"McCaw Family" has the meaning specified in the
Shareholders Agreement as in effect on February 26, 1990.
"Merger" means the merger of Ridge with and into McCaw,
with McCaw as the surviving corporation in accordance with
the terms set forth in the AT&T Merger Agreement.
"Minority Entity" means any Person that owns or
operates a Cellular Business, other than (a) one of the
Borrower's Subsidiaries or a Principal Cellular Partnership,
in which any of the Borrower's Subsidiaries holds an equity
or other ownership interest and (b) LCH Holdings, Inc., a
Delaware corporation.
"MMM Holdings" means MMM Holdings, Inc., a Delaware
corporation.
"MSA" means a "Metropolitan Statistical Area", as such
term is defined and modified by the FCC for purposes of
Cellular System licensing.
"Multiemployer Plan" means a multiemployer plan, as
defined in Section 4001(a)(3) of ERISA, to which the
Borrower or any of its ERISA Affiliates is making or
accruing an obligation to make contributions, or has within
any of the preceding five plan years made or accrued an
obligation to make contributions, such plan being maintained
pursuant to one or more collective bargaining agreements.
"Multiple Employer Plan" means a single employer plan,
as defined in Section 4001(a)(15) of ERISA, that (a) is
maintained for employees of the Borrower or any of its ERISA
Affiliates and at least one Person other than the Borrower
and its ERISA Affiliates or (b) was so maintained and in
respect of which the Borrower or any of its ERISA Affiliates
could have liability under Section 4064 or 4069 of ERISA in
the event such plan has been or were to be terminated.
"1990 Collateral Agent" means the "Collateral Agent",
as such term is defined in the 1990 Credit Agreement.
"1990 Commitments" means the "Commitments", as such
term is defined in the 1990 Credit Agreement.
"1990 Credit Agreement" means the $1,750,000,000 Credit
Agreement dated as of August 1, 1990 among the Borrower,
Morgan Trust Company of New York, as administrative agent
and as arranger, Citibank, N.A., as arranger and collateral
agent, Toronto-Dominion, as arranger, and the financial
institutions named therein as lenders, as amended by
Amendment No. 1 dated as of June 15, 1993 and by the
Amendment, and as such agreement may be further amended to
the extent that any such amendment is not adverse to the
rights and remedies of the Agents or any Lender hereunder or
the ability of the Borrower to perform its obligations under
this Agreement.
"1990 Lenders" means the "Lenders", as such term is
defined in the 1990 Credit Agreement.
"1990 Loan Documents" means the 1990 Credit Agreement
and the "Security Agreements" and the "Guarantees", in each
case as such term is defined in the 1990 Credit Agreement.
"1990 Required Lenders" means the "Required Lenders",
as such term is defined in the 1990 Credit Agreement.
"Net Cash Proceeds" means, for any sale, lease,
transfer or disposition of any asset by any Person or any
extraordinary transaction by such Person, the aggregate
amount of cash received by or on behalf of such Person for
such asset or from such transaction after deducting
therefrom: (a) the amount of such proceeds required to be
applied to repay Indebtedness incurred by it or any
Subsidiary of such Person or any Principal Cellular
Partnership or Indebtedness secured by a Lien on any asset
so disposed; (b) brokerage commissions, legal fees, finder's
fees and other similar fees and commissions; (c) taxes
payable on or before the first anniversary of the
consummation of such transaction in connection with or as a
result of such transaction; and (d) other out-of-pocket
costs incurred in connection therewith, in the case of each
of clauses (a), (b), (c) and (d) above to the extent, but
only to the extent, that the amounts so deducted are, at or
about the time of receipt of such cash, actually paid to a
Person that is not an Affiliate of such Person (or, if paid
to such an Affiliate, to the extent the terms of such
payment are no more favorable to such Affiliate than such
terms would be in an arm's-length transaction) and are
properly attributable to such transaction or to the asset
that is the subject thereof.
"Net Income" means, for any Person and for any period,
the net income (or net loss) of such Person for such period;
provided that such amount shall be adjusted to exclude (to
the extent otherwise included therein):
(a) any restoration to income of any contingency
reserve, except to the extent that provision for such
reserve was made out of income accrued during such
period and except for normal accruals and reversals in
the ordinary course of business;
(b) any write-up or write-down of any asset;
(c) any net gain from the collection of the
proceeds of life insurance policies;
(d) any gain or loss arising from the acquisition
of any securities or Indebtedness of such Person and
any net loss arising from the exercise of any warrant
of such Person;
(e) any deferred credit representing the excess
of equity in any Person at the date of acquisition over
the cost of the Investment in such Person;
(f) any aggregate net gain (or loss) during such
period arising from the sale, exchange or other
disposition of capital assets (such term to include all
fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of
fixed assets, and all securities) other than (i) any
sale, exchange or other disposition in the ordinary
course of business and (ii) any sale, exchange or
disposition of equipment utilized in the business of
such Person, the ratable share of Net Income of which
is included herein;
(g) all extraordinary items; and
(h) any net income that is attributable to an
entity that is neither a Subsidiary of such Person nor
a Principal Cellular Partnership, other than amounts
actually received by such Person as a distribution or a
dividend.
"New York Partnership" means Cellular Telephone
Company.
"New York Partnership Agreement" means the Partnership
Agreement dated as of March 18, 1983 among LIN Cellular
Communications Corporation, Metromedia, Inc. and Cellular
Systems, Inc., as amended through August 1, 1990.
"Notice of Borrowing" has the meaning specified in
Section 2.02(a).
"NYPSC" means the New York Public Service Commission or
any successor agency or entity performing substantially the
same functions.
"OECD" means the Organization for Economic Cooperation
and Development.
"Operating Cash Flow" means, for any Person for any
period, the sum of:
(a) the Net Income of such Person for such
period; plus
(b) the sum of the following items (to the extent
deducted in the computation of such Net Income):
(i) depreciation expense;
(ii) amortization expense;
(iii) Interest Expense;
(iv) charges for reserves for deferred taxes
established with respect to such period (less
reversals during such period of reserves for
deferred taxes); and
(v) other non-cash items.
"Other Taxes" has the meaning specified in Section
2.12(b).
"Parent Restrictive Agreement" has the meaning
specified in Section 6.01(q).
"PBGC" means the Pension Benefit Guaranty Corporation,
or any successor agency or entity performing substantially
the same functions.
"Permitted Asset Swap" means any disposition of
Cellular Assets (other than any interest in the New York
Partnership or the Los Angeles Partnership) by the Borrower
or any of the Borrower's Subsidiaries meeting the following
criteria:
(a) such disposition shall be in exchange for
Approved Cellular Assets that have an aggregate fair
market value equivalent to the Cellular Assets disposed
of, such determination to be made in the good faith
judgment of a Financial Officer of the Borrower and so
stated in a certificate of such Financial Officer of
the Borrower delivered to the Administrative Agent upon
consummation of such disposition and acquisition of
Cellular Assets; or
(b) such disposition shall be for fair value and
for cash and shall be followed by an acquisition of
Approved Cellular Assets meeting the following
criteria: (i) within 30 days after the consummation of
such disposition, a Financial Officer of the Borrower
shall have delivered a certificate to the
Administrative Agent stating that the Borrower or one
of the Borrower's Subsidiaries shall have entered into
one or more binding agreements to acquire Approved
Cellular Assets having an aggregate fair market value
equivalent to the Cellular Assets disposed of (such
determination to be made in the good faith judgment of
such Financial Officer of the Borrower and so stated in
such certificate) and (ii) within 270 days after the
date on which such binding agreement or agreements have
been executed and delivered by the parties thereto, a
Financial Officer of the Borrower shall have delivered
a certificate to the Administrative Agent stating that
the Borrower or one of the Borrower's Subsidiaries
shall have consummated such acquisition.
"Permitted Liens" means such of the following as to
which no enforcement, collection, execution, levy or
foreclosure proceeding shall have been commenced (unless
otherwise provided in this definition):
(a) Liens for taxes, assessments and governmental
charges or levies to the extent not required to be paid
by the Borrower, any of the Borrower's Subsidiaries or
any Principal Cellular Partnership under Section
5.01(b);
(b) Liens imposed by law, such as materialmen's,
mechanics', carriers', workmen's and repairmen's Liens
and other similar Liens arising in the ordinary course
of business securing obligations that are not overdue
for a period of more than 60 days;
(c) Liens (other than any Lien imposed by ERISA)
or deposits made in the ordinary course of business to
secure obligations under workers' compensation,
unemployment insurance and other types of social
security, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, performance
and return-of-money bonds and other similar obligations
(to the extent such undertakings do not secure
obligations for the payment of borrowed money or the
deferred purchase price of property or services);
(d) easements, rights of way and other
encumbrances on title to real property that do not
materially adversely affect the use of such property
for its present purposes; and
(e) judgment Liens that in the aggregate do not
exceed $5,000,000, each of which has not been in
existence for a period of more than 60 days or the
execution of each of which has been stayed pending
appeal.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity,
or a government or any political subdivision or agency
thereof.
"Plan" means a Single Employer Plan or a Multiple
Employer Plan.
"Pops" means, for any MSA or RSA, the number of
residents of such MSA or RSA (as the case may be) as
reflected in the Donnelly Marketing Service population
estimates for 1989.
"Preferred Stock" means, for any corporation, capital
stock issued by such corporation that is entitled to a
preference or a priority over any other capital stock issued
by such corporation upon any distribution of such
corporation's assets, whether by dividend or upon
liquidation.
"Principal Cellular Partnership" means each of the
Dallas Partnership, the Houston Partnership, the Los Angeles
Partnership and the New York Partnership.
"Private Market Value Guarantee" means the Private
Market Value Guarantee dated December 11, 1989 between McCaw
and LIN.
"PUC" means any state regulatory agency or body that
exercises jurisdiction over the ownership, construction or
operation of Cellular Systems.
"Redeemable" means, with respect to any capital stock,
Indebtedness or other right or obligation, any such right or
obligation that (a) the issuer has undertaken to redeem at a
fixed or determinable date or dates, whether by operation of
a sinking fund or otherwise, or upon the occurrence of a
condition not solely within the control of the issuer or (b)
is redeemable at the option of the holder.
"Reference Lenders" means Toronto-Dominion and
Scotiabank.
"Register" has the meaning specified in Section
8.07(c).
"Regulatory Authority" means the FCC, the NYPSC, each
other PUC and any other comparable state or local authority
that has jurisdiction over the control, ownership,
licensing, construction or operation of all or any part of
any Cellular System or the provision of service or the
charges for such service in any Cellular System.
"Required Appropriate Lenders" means, for either
Facility, at any time, Lenders owed more than 50% of the
then aggregate unpaid principal amount of the Advances owing
to Lenders under such Facility or, if no such principal
amount is outstanding, Lenders having more than 50% of the
Commitments for such Facility.
"Required Lenders" means, at any time, Lenders owed or
holding in the aggregate more than 50% of the sum of (a) the
then aggregate unpaid principal amount of the Advances plus
(b) the then aggregate Unused Revolving Credit Commitments.
"Restrictive Agreement" has the meaning specified in
Section 6.01(q).
"Revolving Credit Advance" has the meaning specified in
Section 2.01(b).
"Revolving Credit Borrowing" means a borrowing
consisting of simultaneous Revolving Credit Advances of the
same Type made by the Revolving Credit Lenders.
"Revolving Credit Commitment" means for each Lender the
amount set forth opposite such Lender's name in Schedule I
hereto under the heading "Revolving Credit Commitment" or,
if such Lender has entered into one or more Assignments and
Acceptances, set forth for such Lender in the Register
maintained by the Administrative Agent pursuant to Section
8.07(c), as the same may be reduced pursuant to Section
2.04.
"Revolving Credit Facility" means the aggregate amount
of the Revolving Credit Lenders' Revolving Credit
Commitments.
"Revolving Credit Lender" means any Lender that has a
Revolving Credit Commitment.
"Ridge" means Ridge Merger Corporation, a Delaware
corporation wholly owned by AT&T.
"RSA" means a "Rural Service Area", as such term is
defined and modified by the FCC for purposes of Cellular
System licensing.
"Scotiabank" has the meaning specified in the recital
of parties to this Agreement.
"Senior Debt" means Consolidated Debt, other than
Subordinated Debt.
"Severable Equipment" means any addition, modification
or improvement to the initial configuration of any Cellular
System that may be removed therefrom without diminishing or
impairing the function, utility, performance or operating
condition of the initial configuration as in effect
immediately prior to the making or installation of such
addition, modification or improvement.
"Shareholders Agreement" means the Shareholders
Agreement dated as of May 31, 1989 among McCaw, the Trustees
under the will of the late Eben D. Jordan, the Trustees of
the Taylor Voting Trust, the holders of certain units of the
Taylor Voting Trust, Craig O. McCaw, John E. McCaw, Jr.,
Bruce R. McCaw, Keith W. McCaw and the other parties named
therein, as amended from time to time.
"Single Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, that (a) is
maintained for employees of the Borrower or any of its ERISA
Affiliates and no Person other than the Borrower and its
ERISA Affiliates or (b) was so maintained and in respect of
which the Borrower or any of its ERISA Affiliates could have
liability under Section 4069 of ERISA in the event such plan
has been or were to be terminated.
"Solvent" and "Solvency" mean, with respect to any
Person on a particular date, that on such date (a) the fair
value of the property of such Person is greater than the
total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (b) the present fair
salable value of the assets of such Person is not less than
the amount that will be required to pay the probable
liability of such Person on its debts as they become
absolute and matured, (c) such Person does not intend to,
and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such
debts and liabilities mature and (d) such Person is not
engaged in business or a transaction, and is not about to
engage in business or a transaction, for which such Person's
property would constitute an unreasonably small capital.
The amount of contingent liabilities at any time shall be
computed as the amount that, in light of all the facts and
circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or
matured liability.
"Subordinated Debt" means all Indebtedness of the
Borrower that is subordinated to the obligations of the
Borrower under or in respect of the 1990 Loan Documents and
this Agreement on terms of subordination no less favorable
to the Lenders than the terms set forth on Schedule III
hereto, or as the Required Lenders may otherwise agree, and
that otherwise contains terms and conditions satisfactory to
the Required Lenders (including, without limitation,
acceptable amortization schedules).
"Subscriber Equipment" means any cellular mobile
telephones, cellular portable telephones, speakers, mounting
hardware, subscriber test equipment and similar subscriber
equipment.
"Subsidiary" of any Person means (a) any corporation of
which more than 50% of the issued and outstanding capital
stock having ordinary voting power to elect a majority of
the Board of Directors of such corporation (irrespective of
whether at the time capital stock of any other class or
classes of such corporation shall or might have voting power
upon the occurrence of any contingency) is at the time
directly or indirectly owned or controlled by such Person,
by such Person and one or more of its other Subsidiaries or
by one or more of such Person's other Subsidiaries and (b)
any partnership, joint venture, trust, estate or other
association of which more than 50% of the equity interests
having the power to vote to direct or control the management
of such partnership, joint venture, trust, estate or other
association is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of
the other Subsidiaries or by one or more of such Person's
other Subsidiaries.
"Supermajority Lenders" means, at any time, Lenders
owed or holding in the aggregate at least 66-2/3% of the sum
of (a) the then aggregate unpaid principal amount of the
Advances plus (b) the then aggregate Unused Revolving Credit
Commitments.
"Tax Sharing Agreement" means the Tax Sharing Agreement
dated August 10, 1990 between LIN and the Borrower.
"Taxes" has the meaning specified in Section 2.12(a).
"Term Advance" has the meaning specified in Section
2.01(a).
"Term Borrowing" means a borrowing consisting of
simultaneous Term Advances of the same Type made by the Term
Lenders.
"Term Commitment" means for each Lender the amount set
forth opposite such Lender's name in Schedule I hereto under
the heading "Term Commitment" or, if such Lender has entered
into one or more Assignments and Acceptances, set forth for
such Lender in the Register maintained by the Administrative
Agent pursuant to Section 8.07(c), as the same may be
reduced pursuant to Section 2.04.
"Term Facility" means the aggregate amount of the Term
Lenders' Term Commitments.
"Term Lender" means any Lender that has a Term
Commitment.
"TD (Texas)" has the meaning specified in the recital
of parties to this Agreement.
"Toronto-Dominion" has the meaning specified in the
recital of parties to this Agreement.
"Type" refers to the distinction between Advances
bearing interest at the Base Rate, Advances bearing interest
at the LIBO Rate and Advances bearing interest at the
Adjusted CD Rate.
"Unused Revolving Credit Commitments" means, with
respect to any Revolving Credit Lender at any time, such
Lender's Revolving Credit Commitment at such time minus the
aggregate principal amount of all Revolving Credit Advances
made by such Lender and outstanding at such time.
"United States" means the United States of America.
"Voting Stock" means capital stock issued by a
corporation, or equivalent interests in any other Person,
the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of
directors (or persons performing similar functions) of such
Person, even though the right to so vote has been suspended
by the happening of such a contingency.
"Welfare Plan" means a welfare plan, as defined in
Section 3(1) of ERISA, maintained for employees of the
Borrower or any of its ERISA Affiliates.
"Withdrawal Liability" has the meaning given such term
under Part 1 of Subtitle E of Part IV of ERISA.
"WOTV" means television station WOTV broadcasting from
Grand Rapids, Michigan and the assets related thereto.
"Year End Period" means the period from December 15th
of any year through January 15th of the following year.
SECTION 1.02. Computation of Time Periods. In this
Agreement in the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including" and each of the words "to" and "until" means "to but
excluding".
SECTION 1.03. Accounting Terms and Computations. All
accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting
principles consistent with those applied in the preparation of
the financial statements referred to in Section 4.01(f) ("GAAP").
Unless otherwise provided herein, all computations and
calculations to be made under this Agreement, including, without
limitation, computations under Section 5.03, shall be made in
accordance with GAAP.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. (a) The Term Advances.
Each Term Lender severally agrees, on the terms and conditions
hereinafter set forth, to make a single advance (a "Term
Advance") to the Borrower on any Business Day during the period
from the date hereof until June 30, 1994 in an amount not to
exceed such Lender's Term Commitment on such Business Day.
Amounts borrowed under this Section 2.01(a) and repaid or prepaid
may not be re-borrowed.
(b) The Revolving Credit Advances. Each Revolving
Credit Lender severally agrees, on the terms and conditions
hereinafter set forth, to make advances (each, a "Revolving
Credit Advance") to the Borrower from time to time on any
Business Day during the period from the date hereof until the
Final Maturity Date in an amount for each such Advance not to
exceed such Lender's Unused Revolving Credit Commitment on such
Business Day. Each Revolving Credit Borrowing shall be in an
aggregate amount of not less than $50,000,000 or an integral
multiple of $50,000,000 in excess thereof and shall consist of
Revolving Credit Advances of the same Type made on the same day
by the Revolving Credit Lenders ratably according to their
Revolving Credit Commitments. Within the limits of each
Revolving Credit Lender's Unused Revolving Credit Commitment in
effect from time to time, the Borrower may borrow under this
Section 2.01(b), prepay pursuant to Section 2.07(a) and reborrow
under this Section 2.01(b).
SECTION 2.02. Making the Advances. (a) Each
Borrowing shall be made on notice given not later than 11:00 A.M.
(New York City time) on the third Business Day (in the case of a
LIBO Rate Advance), on the second Business Day (in the case of an
Adjusted CD Rate Advance), or on the Business Day (in the case of
a Base Rate Advance) prior to the date of the proposed Borrowing
by the Borrower to the Administrative Agent, which shall give to
each Appropriate Lender prompt notice thereof by telecopier.
Each such notice of a Borrowing (a "Notice of Borrowing") shall
be by telephonic notice, confirmed immediately in writing by
telecopier, in substantially the form of Exhibit C hereto,
specifying therein the requested (i) date of such Borrowing, (ii)
Facility under which such Borrowing is being made, (iii) Type of
Advances comprising such Borrowing, (iv) aggregate amount of such
Borrowing, (v) purpose or purposes for which the proceeds of such
Borrowing will be used and (vi) Interest Period for each such
Advance. In the case of a proposed Borrowing comprised of LIBO
Rate Advances or Adjusted CD Rate Advances, the Administrative
Agent shall promptly notify each Appropriate Lender of the
applicable interest rate under Section 2.06(a) or (b). Each
Appropriate Lender shall, before 1:00 P.M. (New York City time)
on the date of such Borrowing, make available for the account of
its Applicable Lending Office to the Administrative Agent at the
Administrative Agent's Account, in same day funds, such Lender's
ratable portion of such Borrowing. After the Administrative
Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the
Borrower by crediting the Borrower's Account.
(b) Notwithstanding the foregoing:
(i) the Borrower shall not be entitled to make a
Borrowing if, after giving effect to such Borrowing, there
would be outstanding more than ten different Borrowings that
bear interest at the LIBO Rate or the Adjusted CD Rate;
(ii) if any Appropriate Lender shall, at least one
Business Day before the date of any requested Borrowing to
bear interest at the LIBO Rate, or at any other time from
time to time, notify the Administrative Agent that the
introduction of or any change in or in the interpretation of
any law or regulation makes it unlawful, or that any central
bank or other governmental authority asserts that it is
unlawful, for such Lender or its LIBO Lending Office to
perform its obligations hereunder to make LIBO Rate Advances
or to fund or maintain LIBO Rate Advances hereunder, the
right of the Borrower to select LIBO Rate Advances for such
Borrowing or any subsequent Borrowing or to Convert any
Advances into LIBO Rate Advances shall be suspended until
such Lender shall notify the Administrative Agent that the
circumstances that caused such suspension no longer exist,
and each Advance comprising such Borrowing shall be or
Convert into (on the last day of the then existing Interest
Period therefor), as the case may be, a Base Rate Advance;
(iii) if neither Reference Lender furnishes timely
information to the Administrative Agent for determining the
Adjusted CD Rate for any Adjusted CD Rate Advances, or the
LIBO Rate for any LIBO Rate Advances, comprising any
requested Borrowing:
(A) the Administrative Agent shall promptly
notify the Borrower and the Lenders that the interest
rate cannot be determined for such Adjusted CD Rate
Advances or LIBO Rate Advances (as the case may be);
(B) the right of the Borrower to select Adjusted
CD Rate Advances or LIBO Rate Advances (as the case may
be) for such Borrowing or any subsequent Borrowing or
to Convert any Advances into Adjusted CD Rate Advances
or LIBO Rate Advances (as the case may be) shall be
automatically suspended until the Administrative Agent
shall notify the Borrower and the Lenders that the
circumstances that caused such suspension no longer
exist; and
(C) each Advance comprising such Borrowing shall
be or Convert into (on the last day of the then
existing Interest Period therefor), as the case may be,
a Base Rate Advance; and
(iv) if the Required Appropriate Lenders shall, at
least one Business Day before the date of any requested
Borrowing to bear interest at the LIBO Rate, or at any other
time from time to time, notify the Administrative Agent that
the LIBO Rate for LIBO Rate Advances for any Interest Period
for such Advances will not adequately reflect the cost to
such Lenders of making, funding or maintaining their
respective LIBO Rate Advances for such Interest Period, the
right of the Borrower to select LIBO Rate Advances for such
Borrowing or any subsequent Borrowing or to Convert any
Advances into LIBO Rate Advances shall be suspended until
the Administrative Agent shall notify the Borrower and the
Lenders that the circumstances that caused such suspension
no longer exist, and each Advance comprising such Borrowing
shall be or Convert into (on the last day of the then
existing Interest Period therefor), as the case may be, a
Base Rate Advance.
(c) Each Notice of Borrowing shall be irrevocable and
binding on the Borrower. In the case of any Borrowing that the
related Notice of Borrowing specifies is to be comprised of
Adjusted CD Rate Advances or LIBO Rate Advances, the Borrower
shall indemnify each Appropriate Lender against any loss, cost or
expense incurred by such Lender as a result of any failure to
fulfill on or before the date specified in such Notice of
Borrowing for such Borrowing the applicable conditions set forth
in Article III, including, without limitation, any loss
(including loss of anticipated profits), cost or expense incurred
by reason of the liquidation or reemployment of deposits or other
funds acquired by such Lender to fund the Advance to be made by
such Lender as part of such Borrowing when such Advance, as a
result of such failure, is not made on such date.
(d) Unless the Administrative Agent shall have
received notice from an Appropriate Lender prior to the date of
any Borrowing under a Facility under which such Lender has a
Commitment that such Lender will not make available to the
Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender
has made such portion available to the Administrative Agent on
the date of such Borrowing in accordance with subsection (a) of
this Section 2.02, and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower on such date
a corresponding amount. If and to the extent that such Lender
shall not have so made such ratable portion available to the
Administrative Agent, such Lender and the Borrower severally
agree to repay to the Administrative Agent forthwith on demand
such corresponding amount together with interest thereon, for
each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the
Administrative Agent, at (i) in the case of the Borrower, the
interest rate applicable at such time under Section 2.06 to
Advances comprising such Borrowing and (ii) in the case of such
Lender, the Federal Funds Rate. If such Lender shall repay to
the Administrative Agent such corresponding amount, such amount
so repaid shall constitute such Lender's Advance as part of such
Borrowing for purposes of this Agreement and the Borrower shall
no longer be obligated to repay such amount to the Administrative
Agent.
(e) The failure of any Lender to make the Advance to
be made by it as part of any Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its
Advance on the date of such Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on the date of any
Borrowing.
SECTION 2.03. Fees. (a) Facility Fees. The
Borrower agrees to pay to the Administrative Agent for the
account of each Lender a facility fee on the amount of such
Lender's Commitment payable on the date of execution of this
Agreement by the parties hereto, at a rate equal to 1-1/2%.
(b) Commitment Fees. The Borrower agrees to pay to
the Administrative Agent for the account of the Lenders a
commitment fee on the average daily unused portion of each
Lender's Commitments from the date of the Borrower's acceptance
of each such Lender's Commitment in the case of each Lender that
is a signatory hereto, and from the effective date specified in
the Assignment and Acceptance pursuant to which it became a
Lender in the case of each other Lender, until the Final Maturity
Date at the rate of 3/4 of 1% per annum, payable in arrears on
the date of execution of this Agreement by the parties hereto,
and thereafter quarterly in arrears on the last Business Day of
each March, June, September and December commencing on June 30,
1994 and on the Final Maturity Date.
(c) Agents' Fees. The Borrower shall pay to the
Managing Agents and the Administrative Agent for their own
accounts such fees as may from time to time be agreed between the
Borrower and the Managing Agents and the Administrative Agent,
respectively.
SECTION 2.04. Reduction of the Commitments. (a)
Optional. The Borrower shall have the right, upon at least three
Business Days' notice to the Administrative Agent, to terminate
in whole or reduce ratably in part the unused portions of the
Term Commitments and the Unused Revolving Credit Commitments;
provided, however, that each partial reduction of a Facility (i)
shall be in the minimum aggregate amount of $20,000,000 or an
integral multiple of $10,000,000 in excess thereof and (ii) shall
be made ratably among the Appropriate Lenders in accordance with
their Commitments with respect to such Facility.
(b) Mandatory. Upon repayment in full of all amounts
outstanding under the 1990 Credit Agreement and the termination
of the 1990 Commitments in accordance with the terms of the 1990
Credit Agreement, each of the Term Facility and the Revolving
Credit Facility shall thereafter be automatically and permanently
reduced upon (x) any sale, lease, transfer or other disposition
of assets of the Borrower or any of the Borrower's Subsidiaries
(other than dispositions of assets (other than Franchise
Interests) in the ordinary course of business and Permitted Asset
Swaps) and (y) the failure of any disposition of assets to
continue to constitute a Permitted Asset Swap, in each case by an
amount equal to the Net Cash Proceeds of the assets so sold,
leased, transferred or otherwise disposed of, such reduction to
be allocated to the Facilities first, to prepay ratably the
aggregate outstanding principal amount of the Term Advances, and
second, to permanently reduce, ratably, the Revolving Credit
Facility.
SECTION 2.05. Repayment. The Borrower shall repay to
the Administrative Agent for the account of the Lenders the
outstanding principal amount of each Advance on the Final
Maturity Date.
SECTION 2.06. Interest. The Borrower shall pay
interest on the unpaid principal amount of each Advance owing to
each Lender from the date of such Advance until such principal
amount shall be paid in full, at the following rates per annum:
(a) LIBO Rate Advances. If such Advance is a LIBO
Rate Advance, a rate per annum equal at all times during the
Interest Period for such Advance to the sum of (i) the LIBO
Rate for such Interest Period for such Advance plus (ii) the
Applicable Margin in effect from time to time on the first
day of such Interest Period, payable in arrears on the last
day of such Interest Period and, if such Interest Period has
a duration of more than three months, on each day that
occurs during such Interest Period every three months from
the first day of such Interest Period (or, if there is no
numerically corresponding day in such third month, the last
day of such month).
(b) Adjusted CD Rate Advances. If such Advance is an
Adjusted CD Rate Advance, a rate per annum equal at all
times during the Interest Period for such Advance to the sum
of (i) the Adjusted CD Rate for such Interest Period for
such Advance plus (ii) the Applicable Margin in effect from
time to time during such Interest Period, payable in arrears
on the last day of such Interest Period and, if such
Interest Period has a duration of more than 90 days, on each
day that occurs during such Interest Period every 90 days
from the first day of such Interest Period.
(c) Base Rate Advances. If such Advance is a Base
Rate Advance, a rate per annum equal at all times to the sum
of (i) the Base Rate in effect from time to time plus (ii)
the Applicable Margin in effect from time to time, payable
in arrears quarterly on the last Business Day of March,
June, September and December in each fiscal year of the
Borrower and on the date such Base Rate Advance shall be
Converted or paid in full.
(d) Default Interest. Upon the occurrence and during
the continuance of a Default, the Borrower shall pay
interest on the unpaid principal amount of each Advance
owing to each Lender, and on the unpaid amount of all
interest, fees and other amounts payable hereunder that is
not paid when due, payable in arrears on the dates referred
to in subsection (a), (b) or (c) above and on demand, at a
rate per annum equal at all times to 2% per annum above the
rate per annum required to be paid on such Advance pursuant
to subsection (a), (b) or (c) above or, in the case of such
other amounts, above the rate per annum required to be paid
on Base Rate Advances pursuant to subsection (c) above.
SECTION 2.07. Prepayments. (a) Optional. After
making any mandatory reduction of the 1990 Commitments or any
mandatory prepayments under the 1990 Credit Agreement pursuant to
Sections 2.04(b) or 2.07(b) of the 1990 Credit Agreement,
respectively, the Borrower may, upon at least one Business Day's
notice with respect to Base Rate Advances and five Business Days'
notice with respect to LIBO Rate Advances and Adjusted CD Rate
Advances to the Administrative Agent stating the proposed date
and aggregate principal amount of the prepayment, and, if such
notice is given, the Borrower shall, prepay the outstanding
principal amount of the Advances comprising part of the same
Borrowing in whole or ratably in part, together with accrued
interest to the date of such prepayment on the principal amount
prepaid; provided, however, that (i) each partial prepayment
shall be in an aggregate principal amount not less than
$20,000,000 or an integral multiple of $10,000,000 in excess
thereof and (ii) in the event any prepayment of a LIBO Rate
Advance or an Adjusted CD Rate Advance shall be made on any day
other than on the last day of the Interest Period therefor, the
Borrower shall reimburse the Lenders in respect thereof pursuant
to Section 8.04(c).
(b) Mandatory Prepayments. (i) Upon repayment in
full of all amounts outstanding under the 1990 Credit Agreement
and the termination of the 1990 Commitments in accordance with
the terms of the 1990 Credit Agreement, the Borrower shall
thereafter, upon any sale, lease, transfer, or other disposition
of assets (other than dispositions of assets (other than
Franchise Interests) in the ordinary course of business and
Permitted Asset Swaps) prepay an aggregate principal amount of
the Advances comprising part of the same Borrowings equal to such
Net Cash Proceeds. Each such prepayment shall be applied first,
ratably to the Term Facility and second, ratably to the Revolving
Credit Facility.
(ii) All prepayments under this subsection (b) shall be
made together with accrued interest to the date of such
prepayment on the principal amount prepaid.
SECTION 2.08. Conversion of Advances. (a) Optional.
The Borrower may on any Business Day, upon notice given to the
Administrative Agent not later than 11:00 A.M. (New York City
time) on the third Business Day prior to the date of the proposed
Conversion and subject to the provisions of Section 2.10, Convert
all or any portion of the Advances of one Type comprising the
same Borrowing into Advances of another Type; provided, however,
that (i) any Conversion of any Adjusted CD Rate Advances or LIBO
Rate Advances into Base Rate Advances shall be made only on the
last day of an Interest Period for such Adjusted CD Rate Advances
or LIBO Rate Advances, (ii) any Conversion of any Adjusted CD
Rate Advances or LIBO Rate Advances into Base Rate Advances shall
be in an amount not less than $10,000,000 or an integral multiple
of $1,000,000 in excess thereof and (iii) no Conversion of any
Advances shall result in more separate Borrowings than permitted
under Section 2.02(b). Each such notice of Conversion shall,
within the restrictions specified above, specify (x) the date of
such Conversion, (y) the Advances to be Converted and (z) if such
Conversion is into Adjusted CD Rate Advances or LIBO Rate
Advances, the duration of the initial Interest Period for such
Advances. Each notice of Conversion shall be irrevocable and
binding on the Borrower.
(b) Mandatory. If the Borrower shall fail to select
the duration of any Interest Period for any Adjusted CD Rate
Advances or any LIBO Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in
Section 1.01, the Administrative Agent will forthwith so notify
the Borrower and the Appropriate Lenders, whereupon each such
Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance.
SECTION 2.09. Interest Rate Determination. (a) Each
Reference Lender agrees to furnish to the Administrative Agent
timely information for the purpose of determining each Adjusted
CD Rate or LIBO Rate, as applicable. Subject to Section
2.02(b)(iii), if any one of the Reference Lenders shall not
furnish such timely information to the Administrative Agent for
the purpose of determining any such interest rate, the
Administrative Agent shall determine such interest rate on the
basis of timely information furnished by the remaining Reference
Lender.
(b) The Administrative Agent shall give prompt notice
to the Borrower and the Lenders of the applicable interest rate
determined by the Administrative Agent for purposes of Section
2.06(a), (b) or (c) and the applicable rate, if any, furnished by
each Reference Lender for the purpose of determining the
applicable interest rate under Section 2.06(a) or (b).
SECTION 2.10. Increased Costs, Etc. (a) If, due to
either (i) the introduction of or any change (other than any
change by way of imposition or increase of reserve requirements
included in the Adjusted CD Rate Reserve Percentage or the LIBO
Rate Reserve Percentage) in or in the interpretation of any law
or regulation or (ii) the compliance with any guideline or
request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any
increase in the cost to any Lender of agreeing to make or making,
funding or maintaining Adjusted CD Rate Advances or LIBO Rate
Advances (as the case may be), then the Borrower shall from time
to time, upon demand by such Lender (with a copy of such demand
to the Administrative Agent), pay to the Administrative Agent for
the account of such Lender additional amounts sufficient to
compensate such Lender for such increased cost. A certificate as
to the amount of such increased cost, submitted to the Borrower
by such Lender, shall be conclusive and binding for all purposes,
absent manifest error.
(b) If any Lender determines that compliance with any
law or regulation or any guideline or request from any central
bank or other governmental authority (whether or not having the
force of law) affects or would affect the amount of capital
required or expected to be maintained by such Lender or any
corporation controlling such Lender and that the amount of such
capital is increased by or based upon the existence of such
Lender's commitment to lend hereunder and other commitments of
this type, then, upon demand by such Lender (with a copy of such
demand to the Administrative Agent), the Borrower shall pay to
the Administrative Agent for the account of such Lender, from
time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender in the light of such
circumstances, to the extent that such Lender reasonably
determines such increase in capital to be allocable to the
existence of such Lender's commitment to lend hereunder. A
certificate as to such amounts submitted to the Borrower by such
Lender shall be conclusive and binding for all purposes, absent
manifest error.
(c) Upon the occurrence and during the continuance of
any Default, (i) each Adjusted CD Rate Advance and LIBO Rate
Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance and
(ii) the obligation of the Lender to make, or to Convert Advances
into, Adjusted CD Rate Advances and LIBO Rate Advances shall be
suspended.
SECTION 2.11. Payments and Computations. (a) The
Borrower shall make each payment hereunder not later than 11:00
A.M. (New York City time) on the day when due in Dollars to the
Administrative Agent at the Administrative Agent's Account in
same day funds. The Administrative Agent will promptly
thereafter cause like funds to be distributed (i) if such payment
by the Borrower is in respect of principal or interest,
commitment fees or any other obligation then payable hereunder to
more than one Lender, to such Lenders for the account of their
Applicable Lending Offices ratably in accordance with the amounts
of such respective obligations then payable to such Lenders and
(ii) if such payment by the Borrower is in respect of any
obligation then payable hereunder to one Lender, to such Lender
for the account of its Applicable Lending Office, in each case to
be applied in accordance with the terms of this Agreement. Upon
its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to
Section 8.07(c), from and after the effective date of such
Assignment and Acceptance, the Administrative Agent shall make
all payments hereunder in respect of the interest assigned
thereby to the Lender assignee thereunder, and the parties to
such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective
date directly between themselves.
(b) If the Administrative Agent receives funds for
application to the Advances under circumstances for which this
Agreement does not specify the Advances or the Facility to which,
or the manner in which, such funds are to be applied, the
Administrative Agent (i) shall, prior to any distribution of such
funds, notify the Borrower that it has received such funds and
(ii) may, on the Business Day following delivery of such notice
to the Borrower, but shall not be obligated to, elect to
distribute such funds to each Lender ratably in accordance with
such Lender's proportionate share of all outstanding Advances, in
prepayment or repayment of such of the outstanding Advances or
other obligations owed to such Lender, and for application to
such principal installments, as the Administrative Agent shall
direct.
(c) The Borrower hereby authorizes each Lender, if and
to the extent payment owed to such Lender is not made when due
hereunder, to charge from time to time against any or all of the
Borrower's accounts with such Lender any amount so due.
(d) All computations of interest based on the Base
Rate, the Adjusted CD Rate, the LIBO Rate or the Federal Funds
Rate and of commitment fees shall be made by the Administrative
Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the
last day) occurring in the period for which such interest or fees
are payable. Each determination by the Administrative Agent of
an interest rate or fee hereunder shall be conclusive and binding
for all purposes, absent manifest error.
(e) Whenever any payment hereunder shall be stated to
be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment
of interest or commitment fee, as the case may be; provided that
if such extension would cause payment of interest on or principal
of LIBO Rate Advances to be made in the next following calendar
month, such payment shall be made on the next preceding Business
Day.
(f) Unless the Administrative Agent shall have
received notice from the Borrower prior to the date on which any
payment is due to any Lender hereunder that the Borrower will not
make such payment in full, the Administrative Agent may assume
that the Borrower has made such payment in full to the
Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to
each such Lender on such due date an amount equal to the amount
then due such Lender. If and to the extent the Borrower shall
not have so made such payment in full to the Administrative
Agent, each such Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender
together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender
repays such amount to the Administrative Agent, at the Federal
Funds Rate.
SECTION 2.12. Taxes. (a) Any and all payments by the
Borrower hereunder shall be made, in accordance with Section
2.11, free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and each Agent, taxes
measured by its net income that are imposed on it by the
jurisdiction under the laws of which such Lender or such Agent
(as the case may be) is organized or qualified to do business or
any political subdivision thereof and, in the case of each
Lender, by the jurisdiction of such Lender's Applicable Lending
Office or any political subdivision thereof and excluding any
gross receipts tax imposed on an Agent or Lender (as the case may
be) in lieu of a net income tax by a jurisdiction (other than the
United States) under the laws of which such Agent or Lender is
organized, is qualified to do business or has its Applicable
Lending Office or any political subdivision of any such
jurisdiction (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum
payable hereunder to any Lender or any Agent, (i) the sum payable
shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to
additional sums payable under this Section 2.12) such Lender or
such Agent (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 taxation
authority or other authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any
present or future stamp or documentary taxes or any other excise
or property taxes, charges or similar levies that arise from any
payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement
(hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender and each
Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 2.12) paid by
such Lender or such Agent (as the case may be) and any liability
(including penalties, additions to tax, interest and expenses)
arising therefrom or with respect thereto. This indemnification
shall be made within 30 days from the date such Lender or such
Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of
Taxes, the Borrower will furnish to the Administrative Agent, at
its address referred to in Section 8.02, appropriate evidence of
payment thereof. If no Taxes are payable in respect of any
payment hereunder by or on behalf of the Borrower through an
account or branch outside the United States or on behalf of the
Borrower by a payor that is not a United States person, the
Borrower will furnish, or will cause such payor to furnish, to
the Administrative Agent, at such address, a certificate from
each appropriate taxing authority or authorities, or an opinion
of counsel acceptable to the Administrative Agent, in either case
stating that such payment is exempt from or not subject to Taxes.
For purposes of this subsection (d) and subsection (e) hereof,
the terms "United States" and "United States person" shall have
the meanings specified in Section 7701 of the Code.
(e) Each Lender organized under the laws of a
jurisdiction outside the United States shall, on or prior to the
date of its execution and delivery of this Agreement in the case
of each initial Lender and on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender in the case of
each other Lender, and from time to time thereafter if requested
in writing by the Borrower or by the Administrative Agent (but
only so long as such Lender remains lawfully able to do so),
provide the Borrower and the Administrative Agent with Internal
Revenue Service Form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service,
certifying that such Lender is entitled to benefits under an
income tax treaty to which the United States is a party that
reduces the rate of withholding tax on payments under this
Agreement or certifying that the income receivable pursuant to
this Agreement is effectively connected with the conduct of a
trade or business in the United States. If the form provided by
an initial Lender at the time such Lender first becomes a party
to this Agreement indicates a United States interest withholding
tax rate in excess of zero, withholding tax at such rate shall be
considered excluded from Taxes in the case of such initial Lender
and in the case of any assignee of such initial Lender (to the
extent interest payments to such assignee are subject to
withholding tax on the date of the Assignment and Acceptance
pursuant to which such assignee became a Lender hereunder). In
addition, if the form provided by any assignee Lender on the date
of the Assignment and Acceptance pursuant to which such Lender
became a Lender indicates a United States interest withholding
tax at a rate in excess of the rate of such tax applicable to the
assignor Lender on such date, the increase in such rate shall
also be excluded from Taxes in the case of such assignee Lender.
If any form or document referred to in this subsection (e)
requires the disclosure of information, other than information
necessary to compute the tax payable and information required on
the date hereof by Internal Revenue Service Form 1001 or 4224,
that the Lender reasonably considers to be confidential, the
Lender shall give notice thereof to the Borrower and shall not be
obligated to include in such form or document such confidential
information.
(f) For any period with respect to which a Lender has
failed to provide the Borrower with the appropriate form
described in subsection (e), including any failure to provide
confidential information on such form pursuant to subsection (e)
(other than any failure to provide a form or information that is
due to a change in law occurring after the date on which a form
originally was required to be provided, or if such form otherwise
is not required under subsection (e)), such Lender shall not be
entitled to indemnification under subsection (a) with respect to
Taxes imposed by the United States; provided, however, that
should a Lender become subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such
steps as such Lender shall reasonably request to assist such
Lender to recover such Taxes.
(g) Notwithstanding any contrary provisions of this
Agreement, in the event that a Lender that originally provided
such form as may be required under subsection (e) thereafter
ceases to qualify for complete exemption from United States
withholding tax, such Lender may assign its interest under this
Agreement to any assignee and such assignee shall be entitled to
the same benefits under this Section 2.12 as the assignor
provided that the rate of United States withholding tax
applicable to such assignee shall not exceed the rate then
applicable to the assignor.
(h) Any Lender claiming any additional amounts payable
pursuant to this Section 2.12 shall use its best efforts
(consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Applicable
Lending Office if the making of such a change would avoid the
need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable
judgment of such Lender, be otherwise disadvantageous to such
Lender.
SECTION 2.13. Sharing of Payments, Etc. If any Lender
shall obtain any payment (whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise) on account of
the Advances owing to it under any Facility (other than pursuant
to Section 2.10, 2.12 or 8.04(c)) in excess of its ratable share
of payments on account of the Advances under such Facility
obtained by all the Appropriate Lenders, such Lender shall
forthwith purchase from the other Appropriate Lenders such
participations in the Advances under such Facility owing to them
as shall be necessary to cause such purchasing Lender to share
the excess payment ratably with each of them; provided, however,
that, if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender, such purchase from each
Appropriate Lender shall be rescinded and such Lender shall repay
to the purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such Lender's ratable
share (according to the proportion of (i) the amount of such
Lender's required repayment to (ii) the total amount so recovered
from the purchasing Lender) of any interest or other amount paid
or payable by the purchasing Lender in respect of the total
amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this
Section 2.13 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off)
with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount of
such participation.
SECTION 2.14. Use of Proceeds. The proceeds of the
Advances shall be available (and the Borrower agrees that it
shall use such proceeds) solely to pay transaction fees and
expenses, to finance or refinance, as the case may be, the
acquisition of certain interests in and to the Cellular Entities
serving the New York, New York MSA and the Litchfield,
Connecticut RSA, respectively (such acquisitions, the
"Acquisitions"), and for general corporate purposes.
SECTION 2.15. Evidence of Indebtedness. (a) 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 Advance owing to such Lender
from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time
hereunder.
(b) The Register maintained by the Administrative
Agent pursuant to Section 8.07(c) shall include a control
account, and a subsidiary account for each Lender, in which
accounts (taken together) shall be recorded (i) the date and
amount of each Borrowing made, the Type of Advances comprising
such Borrowing and any Interest Period applicable thereto, (ii)
the terms of each Assignment and Acceptance delivered to and
accepted by it, (iii) the amount of any principal or interest due
and payable or to become due and payable from the Borrower to
each Lender hereunder and (iv) the amount of any sum received by
the Administrative Agent from the Borrower hereunder and each
Lender's share thereof.
(c) The entries made in the Register shall be
conclusive and binding for all purposes, absent manifest error.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial
Borrowing. The obligation of each Lender to make an Advance on
the occasion of the initial Borrowing is subject to the following
conditions precedent:
(a) The AT&T Merger Agreement shall be in full force
and effect and shall not have been terminated.
(b) There shall have occurred no material adverse
change in the business, condition (financial or otherwise),
operations, properties or prospects of the Borrower or any
Principal Cellular Partnership or in the cellular industry
generally since March 31, 1994.
(c) There shall exist no action, suit, investigation,
litigation or proceeding affecting any LIN Party, any of the
Borrower's other Subsidiaries or any Principal Cellular
Partnership or the cellular industry generally pending or
threatened before any court, governmental agency or
arbitrator that (i) would be reasonably likely to have a
material adverse effect on the business, condition
(financial or otherwise), operations, properties or
prospects of the Borrower or any Principal Cellular
Partnership, (ii) could, in the good faith judgment of the
Lenders, have a material adverse effect on (a) the rights
and remedies of the Agents or the Lenders under this
Agreement or (b) the ability of any LIN Party to perform its
obligations under this Agreement or the consummation of
transactions contemplated hereby (other than the matters set
forth in Schedule IV (the "Disclosed Litigation"),
including, without limitation, the Acquisitions, or (iii)
purports to affect the legality, validity or enforceability
of the Merger, this Agreement or the confirmation of the
transactions contemplated hereby, and there shall have been
no adverse change in the status, or financial effect on the
Borrower, the New York Partnership, the Los Angeles
Partnership or any other Material Entity, or any Principal
Cellular Partnership, of the Disclosed Litigation from that
described on Schedule IV hereto.
(d) The Borrower shall have paid all accrued fees and
expenses of the Agents and the Lenders (including, without
limitation, the accrued fees and expenses of counsel to the
Managing Agents).
(e) All governmental consents and approvals and third
party consents and approvals necessary in connection with
this Agreement and the transactions contemplated hereby,
including, without limitation, the Acquisitions, shall have
been obtained (without the imposition of any conditions or
contingencies that are not acceptable to the Lenders) and
shall remain in full force and effect (except as set forth
on Schedule VI), and all applicable waiting periods shall
have expired without any action being taken by any competent
authority and no law or regulation shall be applicable that,
in the good faith judgment of the Lenders, restrains,
prevents or imposes materially adverse conditions upon this
Agreement and the transactions contemplated hereby
(including, without limitation, the Acquisitions) (except as
set forth on Schedule VI).
(f) The 1990 Required Lenders shall have executed the
Amendment and the Amendment shall be in full force and
effect.
(g) The Administrative Agent shall have received on or
before the date of the initial Borrowing (unless otherwise
specified) the following, each dated (unless otherwise
specified) such date of delivery, in form and substance
satisfactory to the Lenders (unless otherwise specified),
and in sufficient copies for each Lender (unless otherwise
specified):
(i) Certified copies of the resolutions of the
Board of Directors of the Borrower approving this
Agreement and the Acquisitions, and certified copies of
all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect
to this Agreement and the Acquisitions.
(ii) A copy of the charter of the Borrower and
each amendment thereto, certified (as of a date
reasonably near the date of the initial Borrowing
hereunder) by the Secretary of State of Delaware as
being a true and correct copy thereof.
(iii) A copy of a certificate of the Secretary
of State of the Borrower's state of incorporation,
dated reasonably near the date of the initial
Borrowing, listing the charter of the Borrower and each
amendment thereto on file in his office and certifying
that (A) the Borrower has paid all franchise taxes to
the date of such certificate and (B) the Borrower is
duly incorporated and in good standing under the laws
of such state.
(iv) A telegram from the Secretary of State of the
Borrower's state of incorporation dated on or about the
date of the initial Borrowing certifying that the
Borrower is a presently subsisting corporation in such
state and in good standing under the laws of such
state.
(v) A certificate of the Borrower, signed on
behalf of the Borrower by its president or a vice
president and its secretary or any assistant secretary,
dated the date of the initial Borrowing (the statements
made in which shall be true on and as of the date of
the initial Borrowing), certifying as to (A) the
absence of any amendments to the charter of the
Borrower since the date of the certificate referred to
in Section 3.01(g)(iii), (B) a true and correct copy of
the bylaws of the Borrower as in effect on the date of
the initial Borrowing, (C) the due incorporation and
good standing of the Borrower, as a corporation
organized under the laws of its state of incorporation,
and the absence of any proceeding for the dissolution
or liquidation of the Borrower, (D) the truth of the
representations and warranties contained in this
Agreement as though made on and as of the date of the
initial Borrowing and (E) the absence of any event
occurring and continuing, or resulting from the initial
Borrowing, that constitutes a Default.
(vi) A certificate of the secretary or an
assistant secretary of the Borrower certifying the
names and true signatures of the officers of the
Borrower signing this Agreement and the other documents
to be delivered hereunder.
(vii) A certified copy of the Amendment, in
substantially the form of Exhibit D hereto, duly
executed by the parties thereto.
(viii) Such financial, business and other
information regarding each LIN Party and its respective
Subsidiaries and each Principal Cellular Partnership as
any Lender shall have requested, including, without
limitation, information as to possible contingent
liabilities, tax information, environmental
information, obligations under ERISA and Welfare Plans,
collective bargaining agreements and other arrangements
with employees, annual financial statements dated
December 31, 1993 and interim financial statements
dated the end of the most recent fiscal quarter for
which financial statements are available; provided,
however, that no Lender shall be entitled to receive
any such information if the Borrower reasonably
believes that the disclosure of such information to
such Lender would violate the confidentiality
provisions of an Existing Partnership Agreement.
(ix) Certificates and letters attesting to the
Solvency of the Borrower after giving effect to the
transactions contemplated hereby, from the Borrower's
chief financial officer, such certificate to be
substantially in the form of Exhibit E.
(x) A certificate of the Borrower having attached
thereto a true and correct copy of each of the Material
Agreements and all amendments thereto (such copies to
be retained by the Administrative Agent; provided that
any Lender may, at any reasonable time and upon
reasonable notice to the Administrative Agent, examine
such copies).
(xi) A favorable opinion of Andrew A. Quartner,
Vice President-Law of the Borrower, in substantially
the form of Exhibit F hereto, and as to such other
matters as any Lender through the Administrative Agent
may reasonably request.
(xii) Favorable opinions of Cathleen Massey,
Esq., FCC counsel to the Borrower, in substantially the
form of Exhibit G hereto, and of Scott Morris, Vice-President
Law of McCaw, PUC counsel to the Borrower, in
substantially the form of Exhibit H hereto, and as to
such other matters as any Lender through the
Administrative Agent may reasonably request and such
other favorable opinions of such other FCC and PUC
counsel as any Lender through the Administrative Agent
may reasonably request.
(xiii) A favorable opinion of Shearman &
Sterling, special counsel to the Managing Agents, in
substantially the form of Exhibit I hereto.
(xiv) Such other documents as any Lender
through the Administrative Agent may reasonably
request.
SECTION 3.02. Conditions Precedent to Each Borrowing.
The obligation of each Appropriate Lender to make an Advance on
the occasion of each Borrowing (including the initial Borrowing)
shall be subject to the further conditions precedent that on the
date of such Borrowing the following statements shall be true
(and each of the giving of the applicable Notice of Borrowing and
the acceptance by the Borrower of the proceeds of such Borrowing
or, in the event that the Borrower does not deliver a Notice of
Borrowing, the acceptance by the Borrower of the proceeds of such
Borrowing shall constitute a representation and warranty by the
Borrower that on the date of such Borrowing such statements are
true):
(a) no event has occurred and is continuing, or would
result from such Borrowing or from the application of the
proceeds therefrom, that constitutes an Event of Default;
and
(b) such Borrowing has been duly authorized by all
necessary corporate action.
SECTION 3.03. Conditions Precedent to Certain
Borrowings. The obligation of each Appropriate Lender to make an
Advance on the occasion of each Borrowing (including the initial
Borrowing) that would increase the aggregate outstanding amount
of Advances owing to such Lender immediately prior to the making
of such Advance shall be subject to the further condition
precedent that on the date of such Borrowing (a) the following
statements shall be true (and each of the giving of the
applicable Notice of Borrowing and the acceptance by the Borrower
of the proceeds of such Borrowing shall constitute a
representation and warranty by the Borrower that on the date of
such Borrowing such statements are true):
(i) the representations and warranties contained in
this Agreement are correct on and as of the date of such
Borrowing, before and after giving effect to such Borrowing
and to the application of the proceeds therefrom, as though
made on and as of such date, except to the extent that any
such representation or warranty by its terms relates to a
specified prior date; and
(ii) no event has occurred and is continuing, or would
result from such Borrowing or from the application of the
proceeds therefrom, that constitutes a Default;
and (b) the Administrative Agent shall have received such other
approvals, opinions or documents as any Appropriate Lender
through the Administrative Agent may reasonably request; provided
that the obligations of each Lender to make an Advance pursuant
to Section 8.04(d) shall be absolute and unconditional and shall
be made by such Lender notwithstanding the failure of the
Borrower to satisfy any condition set forth in Section 3.02 or
3.03.
SECTION 3.04. Determinations Under Sections 3.01, 3.02
and 3.03. For purposes of determining compliance with the
conditions specified in Section 3.01, or, in the case of the
initial Borrowing, Sections 3.02 or 3.03, each Lender shall be
deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder
to be consented to or approved by or acceptable or satisfactory
to the Lenders unless an officer of the Administrative Agent
responsible for the transactions contemplated by this Agreement
shall have received notice from such Lender prior to a Borrowing
specifying its objection thereto (unless such objection shall
have been withdrawn by notice to the Administrative Agent to that
effect or such Lender shall have made available to the
Administrative Agent such Lender's ratable portion of such
Borrowing (as the case may be)).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the
Borrower. The Borrower represents and warrants as follows:
(a) Organization of the Loan Parties. Each LIN Party
(i) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in
which it owns or leases property or in which the conduct of
its business requires it to so qualify or be licensed except
where the failure to so qualify or be licensed would not
have a material adverse effect on its business, condition
(financial or otherwise), operations, properties or
prospects and (iii) has all requisite corporate power and
authority to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be
conducted.
(b) Organization of the Borrower's Subsidiaries, the
Principal Cellular Partnerships and Minority Entities. Set
forth in Schedule V hereto is a complete and accurate list,
as of the date hereof, of all of the Borrower's
Subsidiaries, the Principal Cellular Partnerships and all of
the Minority Entities, showing as of the date hereof (as to
each such Person) (i) for each of the Borrower's
Subsidiaries, the jurisdiction of its incorporation, the
number of shares of each class of capital stock authorized,
and the number outstanding on the date hereof and the
percentage of the outstanding shares of each such class
owned (directly or indirectly) by the Borrower and the
number of shares covered by all outstanding options,
warrants, rights of conversion or purchase and similar
rights at the date hereof and (ii) for each Principal
Cellular Partnership and each Minority Entity, the
percentage of equity interests owned by, and the percentage
of voting power held by, the Borrower or one of the
Borrower's Subsidiaries. All of the outstanding capital
stock of all of the Borrower's Subsidiaries has been validly
issued, is fully paid and non-assessable and all such shares
are owned directly or indirectly by the Borrower, free and
clear of all Liens (other than Liens created by the 1990
Loan Documents and the rights created by the instruments
referred to in Schedule X hereto). Each of the Borrower's
Subsidiaries and each Principal Cellular Partnership (i) is
a corporation or partnership (as the case may be) duly
organized, validly existing and, with respect to the
Borrower's corporate Subsidiaries, in good standing under
the laws of the jurisdiction of its incorporation or
formation (as the case may be), (ii) is, in the case of the
Borrower's corporate Subsidiaries, duly qualified as a
foreign corporation and is in good standing in each other
jurisdiction in which it owns or leases property or in which
the conduct of its business requires it to so qualify or be
licensed, except where the failure to so qualify or be
licensed would not have a material adverse effect on its
business, condition (financial or otherwise), operations,
properties or prospects and (iii) has all requisite
corporate or partnership power and authority (as the case
may be) to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be
conducted.
(c) Compliance with Law. The execution, delivery and
performance by the Borrower of this Agreement and the
consummation of the other transactions contemplated hereby
are within the corporate power of the Borrower, have been
duly authorized by all necessary corporate action and do not
and will not upon the consummation thereof (i) contravene
the charter or bylaws of the Borrower, (ii) violate any law
(including, without limitation, the Securities Exchange Act
of 1934, as amended, the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control Act of
1970, as amended, and the Communications Act of 1934, as
amended), rule, regulation (including, without limitation,
Regulations X and G of the Board of Governors of the Federal
Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the
breach of, or constitute a default under, any loan or credit
agreement, indenture, mortgage, deed of trust, lease,
material contract, agreement or instrument binding on or
affecting the Borrower, any of the Borrower's Subsidiaries
or any Principal Cellular Partnership or any of their
respective properties or (iv) result in or require the
creation or imposition of any Lien upon or with respect to
any of the properties of the Borrower, any of the Borrower's
Subsidiaries or any Principal Cellular Partnership. No LIN
Party, Subsidiary of such LIN Party or Principal Cellular
Partnership is in violation of any such law, rule,
regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such contract,
loan agreement, indenture, mortgage, deed of trust, lease,
contract, agreement or credit instrument, the violation or
breach of which could have a material adverse effect on the
business, condition (financial or otherwise), operations,
properties or prospects of the Borrower, the New York
Partnership, the Los Angeles Partnership or any other
Material Entity.
(d) Approvals. No authorization, consent, approval or
other action by, and no notice to or filing with, any
governmental authority or regulatory body or any other third
party (including, without limitation, all Regulatory
Authorities) is required for the due execution, delivery and
performance by the Borrower of this Agreement, the
Acquisitions or for the consummation of the other
transactions contemplated hereby or thereby, except as
otherwise noted on Schedule VI. All applicable waiting
periods in connection with the Acquisitions and the other
transactions contemplated hereby have expired, or prior to
the consummation thereof will have expired, without any
action having been taken by any competent authority
restraining, preventing or imposing materially adverse
conditions upon the Acquisitions or the rights of any LIN
Party, any of such LIN Party's Subsidiaries or any Principal
Cellular Partnership freely to transfer or otherwise dispose
of, or to create any Lien on, any properties now owned or
hereafter acquired by any of them, except as otherwise set
forth in Schedule VI hereto.
(e) Legal Effect. This Agreement has been duly
executed by the Borrower. This Agreement is the legal,
valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its terms, subject
to the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting
creditors' rights generally.
(f) Financial Information. (i) The Consolidated
balance sheets of LIN and LIN's Subsidiaries as at December
31, 1993, and the related Consolidated statements of income,
stockholders' equity and cash flows of LIN and LIN's
Subsidiaries for the fiscal year then ended, and the
combined balance sheets of LIN's unconsolidated Affiliates
as at December 31, 1993, and the related combined statements
of income, partners' equity and cash flows of LIN's
unconsolidated Affiliates for the fiscal year then ended,
accompanied by an opinion of Ernst & Young, independent
public accountants, and (ii) the Consolidated condensed
balance sheets of LIN and LIN's Subsidiaries as at March 31,
1994, and the related Consolidated statements of income and
cash flows of LIN and LIN's Subsidiaries for the three
months then ended, duly certified by a Financial Officer of
the Borrower, copies of which have been furnished to each
Lender, present fairly, in all material respects, subject,
in the case of said balance sheets as at March 31, 1994, and
said statements of income and cash flows for the three
months then ended, to year-end audit adjustments, the
Consolidated financial position of LIN and LIN's
Subsidiaries and the consolidated results of operations and
cash flows and the combined financial position of LIN's
unconsolidated Affiliates and the combined results of
operations and cash flows, in each case as at such dates and
for the periods ended on such dates, all in conformity with
GAAP, and, since March 31, 1994, there has been no material
adverse change in the business, condition (financial or
otherwise), operations, properties or prospects of the
Borrower, LIN Cellular Holdings, the New York Partnership,
the Los Angeles Partnership or any other Material Entity or
in the cellular industry generally.
(g) Pro Forma Financial Information. The combined pro
forma balance sheet of the Borrower, the Borrower's
Subsidiaries and the other Principal Cellular Partnerships
(prepared on an Attributable Share basis) as at March 31,
1994, certified by a Financial Officer of the Borrower,
copies of which have been furnished to each Lender, presents
fairly, in all material respects, the combined pro forma
financial position of the Borrower, the Borrower's
Subsidiaries and the other Principal Cellular Partnerships
(as described above) as at such date, giving effect to the
consummation of the transactions contemplated hereby, all in
conformity with GAAP other than such financial information,
which has been presented on an Attributable Share basis.
(h) Disclosure. No information, exhibit or report
furnished by any LIN Party to any Agent or any Lender in
connection with the negotiation of this Agreement or
pursuant to the terms of this Agreement contains any untrue
statement of a material fact or omits to state a material
fact necessary to make the statements made therein, in light
of the circumstances under which they were made, not
misleading; provided that, with respect to financial
projections and forecasts included therein, the Borrower
represents that such projections and forecasts were prepared
in good faith based on the assumptions stated therein, which
assumptions were reasonable in light of the conditions
existing at the time of delivery of such projections and
forecasts, and represented, at the time of delivery, the
Borrower's best estimate of its future financial
performance.
(i) Material Litigation. Other than the Disclosed
Litigation, there is no action, suit, investigation,
litigation or proceeding affecting any LIN Party, any of
such LIN Party's Subsidiaries or any Principal Cellular
Partnership pending or threatened before any court,
arbitrator, governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, that
could have a material adverse effect on (i) the business,
condition (financial or otherwise), operations, properties
or prospects of the Borrower or the New York Partnership,
the Los Angeles Partnership or any other Material Entity,
(ii) the rights and remedies of the Agents or the Lenders
under this Agreement or (iii) the ability of the Borrower to
perform its obligations under this Agreement, or that
purports to affect the legality, validity or enforceability
of this Agreement, or the consummation of the transactions
contemplated hereby; and there has been no adverse change in
the status, or financial effect on the Borrower, the New
York Partnership, the Los Angeles Partnership or any other
Material Entity, of the Disclosed Litigation from that
described on Schedule IV.
(j) ERISA Plans. Set forth in Schedule VII hereto is
a complete and accurate list, as of the date hereof, of all
Plans, Multiemployer Plans and Welfare Plans with respect to
any employees of the Borrower or any of the Borrower's
Subsidiaries and all Welfare Plans that provide health or
medical benefits to former employees of the Borrower or any
of the Borrower's Subsidiaries.
(k) No Reportable Event. As of the date hereof, no
ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan.
(l) Plan Funding. Schedule B (Actuarial Information)
to the 1992 annual report (Form 5500 Series) for each Plan,
copies of which have been filed with the Internal Revenue
Service and furnished to the Lenders, is complete and
accurate and fairly presents the funding status of such
Plan, and since the date of such Schedule B there has been
no material adverse change in such funding status.
(m) Post Retirement Benefit Obligations. Except as
set forth on the Borrower's financial statements provided
under Section 3.01(g)(viii), the Borrower and its
Subsidiaries have no material liability with respect to
"expected post retirement benefit obligations" within the
meaning of Statement of Financial Accounting Standards No.
106.
(n) No Catastrophic Events. Neither the business nor
the properties of any LIN Party, any of such LIN Party's
Subsidiaries or any Principal Cellular Partnership are
affected by any fire, explosion, accident, strike, lockout
or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that could have a
material adverse effect on the business, condition
(financial or otherwise), operations, properties or
prospects of the Borrower, the New York Partnership, the Los
Angeles Partnership or any other Material Entity.
(o) Compliance with Environmental Law. The operations
and properties of each LIN Party, each of such LIN Party's
Subsidiaries and each Principal Cellular Partnership comply
in all material respects with all Environmental Laws and
neither utilize, contain nor are affected by any Hazardous
Materials that are not treated in compliance with all
Environmental Laws, and no LIN Party, or any of such LIN
Party's Subsidiaries or any Principal Cellular Partnership
has any material liability, contingent or otherwise, under
any Environmental Law.
(p) No Burdensome Agreements. No LIN Party,
Subsidiary of such LIN Party or Principal Cellular
Partnership is a party to any indenture, loan or credit
agreement or any lease or other agreement or instrument or
subject to any charter, corporate restriction or partnership
restriction that could have a material adverse effect on (i)
the business, condition (financial or otherwise),
operations, properties or prospects of the Borrower, the New
York Partnership, the Los Angeles Partnership or any other
Material Entity, (ii) the rights and remedies of the Agents
or the Lenders under this Agreement or (iii) the ability of
the Borrower to carry out its obligations under this
Agreement.
(q) Taxes. Each LIN Party, each of such LIN Party's
Subsidiaries and each Principal Cellular Partnership has
caused to be filed or has been included in all tax returns
(Federal, state and local) required to be filed by or with
respect to each such Person or its property and has paid all
taxes shown thereon to be due, together with applicable
interest and penalties.
(r) Investment Company Act of 1940. No LIN Party or
Subsidiary of such LIN Party is an "investment company" or
an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended.
Neither the making of any Advances, nor the application of
the proceeds or repayment thereof by the Borrower nor the
consummation of the other transactions contemplated hereby
will violate any provision of such Act or any rule,
regulation or order of the Securities and Exchange
Commission thereunder.
(s) Solvency. The Borrower is Solvent.
(t) Condition of System. All of the material
properties, equipment and systems of each LIN Party, each of
such LIN Party's Subsidiaries and each Principal Cellular
Partnership are, and all material properties, equipment and
systems to be added in connection with any contemplated
system expansion or construction will be, in good repair,
working order and condition and are and will be in material
compliance with all applicable standards, rules or
requirements imposed by (i) any governmental agency or
authority (including, without limitation, any Regulatory
Authority), (ii) any material Franchise and (iii) any
agreements with telephone companies.
(u) Fees. Each LIN Party, each of such LIN Party's
Subsidiaries and each Principal Cellular Partnership has
paid all franchise, license or other fees and charges that
have become due pursuant to any material Franchise in
respect of its Cellular Businesses and has made adequate
provisions for any such fees and charges that have accrued,
except where the failure to pay such fees and charges would
not be reasonably likely to (i) have a material adverse
effect on the business, condition (financial or otherwise),
operations, properties or prospects of the Borrower, the New
York Partnership, the Los Angeles Partnership or any other
Material Entity or (ii) result in the revocation,
termination or adverse modification of a material Franchise
held by such LIN Party, such Subsidiary or such Principal
Cellular Partnership.
(v) Public Utility Holding Company Act. No LIN Party
is a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company"
or of a "subsidiary company" of a "holding company", as such
terms are defined in the Public Utility Holding Company Act
of 1935, as amended.
(w) Capital Stock. On the date hereof, the authorized
capital stock of the Borrower consists of 50,000 shares of
common stock, par value $1.00 per share, of which 300 shares
are issued and outstanding. All of such outstanding common
stock of the Borrower has been validly issued, is fully paid
and non-assessable and is owned by LCN free and clear of all
Liens (other than Liens created by the 1990 Loan Documents).
On the date hereof, there are no commitments by the Borrower
for the sale or other disposition of, and no outstanding
options to purchase, any of its capital stock. Neither the
Borrower nor any of the Borrower's Subsidiaries is subject
to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any shares of its capital stock
except as permitted under Section 5.02(f)(ii).
(x) No Limitations on Dividends and Distributions. No
LIN Party, Subsidiary of such LIN Party or Principal
Cellular Partnership is subject or party to any agreement,
Lien, charter, bylaw, partnership, regulatory or other
provision (except for applicable statutory corporate law)
restricting, directly or indirectly, the payment of
dividends by such LIN Party's Subsidiary or the making of
distributions, advances or other cash payments by any such
Subsidiary or Principal Cellular Partnership other than the
limitations contained in the agreements set forth in
Schedule VIII hereto.
(y) Licenses. Each LIN Party, each of such LIN
Party's Subsidiaries and each Principal Cellular Partnership
has obtained all necessary Franchises from, and has filed
all required registrations, applications, reports and other
documents with, all Regulatory Authorities for its
respective businesses as currently conducted. Each such
Franchise is valid and in full force and effect; no event
has occurred that would be reasonably likely to (i) result
in the revocation, termination or adverse modification of
any such Franchise, or (ii) affect materially and adversely
any rights of the Borrower or any Principal Cellular
Partnership thereunder; no such Person has any reason to
believe that such Franchises will not be renewed in the
ordinary course; and each such Person has sufficient time,
materials, equipment, contract rights and other required
resources to complete, in a timely fashion and in full,
construction of all their Cellular Systems in compliance
with all applicable technical standards and construction
requirements and deadlines of any applicable Regulatory
Authority.
(z) Regulation of the Lenders. Neither any Agent nor
any Lender will, by reason of the execution, delivery and
performance (other than the enforcement of remedies) of this
Agreement, be subject to the regulation or control of either
the FCC or any other Regulatory Authority.
(aa) Existing Indebtedness. Set forth in Schedule II
hereto is a complete and accurate list of all Existing
Indebtedness, showing as of the date hereof the principal
amount outstanding thereunder.
(bb) Material Agreements. Set forth in Schedule IX
hereto is a complete and accurate list of all Material
Agreements as of the date hereof, showing the parties,
subject matter and term thereof. Each Material Agreement
set forth in such Schedule IX has been duly authorized,
executed and delivered by all parties thereto, has not been
amended or otherwise modified (other than as indicated on
Schedule IX hereto and as permitted by Section 5.02(l)), is
in full force and effect and is binding upon and enforceable
against all parties thereto in accordance with its terms,
and, to the Borrower's knowledge, there exists no default
under any Material Agreement by any party thereto. Each
such Material Agreement complies with all applicable rules,
regulations and standards of the FCC and other Regulatory
Authorities.
(cc) Ownership. Schedule V hereto sets forth as of the
date hereof a complete and correct list of (i) each Cellular
Entity in which any of the Borrower's Subsidiaries or any
Principal Cellular Partnership has a Franchise Interest
showing whether such Entity is a Cellular Licensee, Cellular
Permittee or Cellular Tentative Selectee, (ii) each MSA or
RSA that such Cellular Entity is authorized to serve, (iii)
the name of each of the Borrower's Subsidiaries and each
Principal Cellular Partnership that owns any such Franchise
Interest, (iv) the form, class and percentage ownership and
voting interest of each of the Borrower's Subsidiaries and
each Principal Cellular Partnership in such Cellular Entity,
(v) the population of each MSA or RSA authorized to be
served by each such Cellular Entity according to the
Donnelly Marketing Service population estimates for 1989,
(vi) the expiration date, if any, of the Franchise of such
Cellular Entity, (vii) to the extent not otherwise set forth
in Schedule V, each ownership interest of any of the
Borrower's Subsidiaries or any Principal Cellular
Partnership in any Person, and the form, class and
percentage of such ownership interest and (viii) the
percentage of all outstanding Franchise Interests owned or
subject to any agreement to purchase or sell or any option,
put or call to which the Borrower or any of the Borrower's
Subsidiaries or any Principal Cellular Partnership is a
party.
(dd) Title to Property. Each LIN Party, each of such
LIN Party's Subsidiaries and each Principal Cellular
Partnership has good and sufficient title to its respective
properties and assets free and clear of all Liens, other
than Liens created or permitted by the 1990 Loan Documents.
(ee) Deposit Accounts. Neither the Borrower nor any of
the Borrower's Subsidiaries has any deposit accounts other
than the deposit accounts expressly permitted under the 1990
Credit Agreement.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any
Advance shall remain unpaid or any Lender shall have any
Commitment hereunder, the Borrower will, unless the Required
Lenders shall otherwise consent in writing:
(a) Compliance with Laws, Etc. (i) Comply, and cause
each of the Borrower's Subsidiaries and each Principal
Cellular Partnership to comply, in all material respects,
with all applicable law, rules, regulations and orders, such
compliance to include, without limitation, compliance with
the Communications Act of 1934, as amended, ERISA, all
applicable Environmental Law and the Racketeer Influenced
and Corrupt Organizations Chapter of the Organized Crime
Control Act of 1970, as amended, and (ii) obtain and
maintain, and cause each of the Borrower's Subsidiaries and
each Principal Cellular Partnership to obtain and maintain,
all licenses, permits, franchises or other governmental
authorizations and approvals necessary to own, acquire or
dispose of their respective properties, to conduct their
respective businesses or to comply with the FCC's or any
other Regulatory Authority's construction, operating and
reporting requirements, the violation of which or the
failure to obtain or maintain which could materially
adversely affect the business, condition (financial or
otherwise), operations, properties or prospects of the
Borrower, the New York Partnership, the Los Angeles
Partnership or any other Material Entity.
(b) Payment of Taxes, Etc. Pay and discharge, and
cause each of the Borrower's Subsidiaries and each Principal
Cellular Partnership to pay and discharge, before the same
shall become delinquent, (i) all taxes, assessments and
governmental charges or levies imposed upon such Person or
upon such Person's property and (ii) all lawful claims that,
if unpaid, might by law become a Lien upon its property;
provided, however, that neither the Borrower nor any of the
Borrower's Subsidiaries nor any Principal Cellular
Partnership shall be required to pay or discharge any such
tax, assessment, charge or claim that is being contested in
good faith and by proper proceedings and as to which
appropriate reserves are being maintained.
(c) Maintenance of Insurance. Maintain, and cause
each of the Borrower's Subsidiaries and each Principal
Cellular Partnership to maintain, insurance with responsible
and reputable insurance companies or associations in such
amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning similar
properties in the same general areas in which the Borrower,
such Subsidiary or such Principal Cellular Partnership
operates.
(d) Preservation of Corporate and Partnership
Existence, Etc. Preserve and maintain, and cause each of
the Borrower's Subsidiaries and each Principal Cellular
Partnership to preserve and maintain, its corporate or
partnership existence, rights (charter and statutory) and
franchises; provided, however, that neither the Borrower,
nor any of the Borrower's Subsidiaries nor any Principal
Cellular Partnership shall be required to preserve any right
or franchise (other than any Franchise and the corporate or
partnership existence of any Person, the equity interest of
which are subject to the Security Agreements) if the Board
of Directors of the Borrower or such corporate Subsidiary or
the partnership committee of such other Subsidiary or
Principal Cellular Partnership shall determine that the
preservation thereof is no longer desirable in the conduct
of the business of the Borrower, such Subsidiary or such
Principal Cellular Partnership (as the case may be) and if
the loss thereof is not disadvantageous in any material
respect to the Borrower, the New York Partnership, the Los
Angeles Partnership or any other Material Entity or to the
Lenders.
(e) Visitation Rights. At any reasonable time and
from time to time and upon prior reasonable notice to the
Borrower, permit any Agent, any of the Lenders or any agents
or representatives thereof to examine and make copies of and
abstracts from the records and books of account of, and
visit the properties of, the Borrower, any of the Borrower's
Subsidiaries and any Principal Cellular Partnership and to
discuss the affairs, finances and accounts of the Borrower,
any of the Borrower's Subsidiaries and any Principal
Cellular Partnership with any of their officers or directors
or partners (as the case may be) and with their independent
certified public accountants; provided, however, that, to
the extent any such actions are prohibited by the terms of
any Existing Partnership Agreement, the Borrower shall use
its best efforts to obtain the consent of the other parties
thereto to such actions.
(f) Keeping of Books. Keep, and cause each of the
Borrower's Subsidiaries and each Principal Cellular
Partnership to keep, proper books of record and account, in
which full and correct entries shall be made of all
financial transactions and the assets and business of the
Borrower, each such Subsidiary and each such Principal
Cellular Partnership in accordance with GAAP.
(g) Maintenance of Properties, Etc. (i) Maintain and
preserve, and cause each of the Borrower's Subsidiaries and
each Principal Cellular Partnership to maintain and
preserve, all of its properties that are then useful in the
conduct of its business in good working order and condition,
ordinary wear and tear excepted, and, from time to time,
make or cause to be made all appropriate and proper repairs,
renewals, replacements, additions and improvements thereto
and keep all systems and equipment that are then subject to
compliance with any standards or rules (including, without
limitation, compliance with requirements as to the time
periods in which system construction must be completed)
imposed by any governmental agency or authority (including,
without limitation, the FCC or any other Regulatory
Authority) in material compliance with such standards or
rules, (ii) install and maintain all equipment and systems,
and cause each of the Borrower's Subsidiaries and each
Principal Cellular Partnership to install and maintain all
equipment and systems in compliance with any material
requirement (x) imposed under FCC or any other Regulatory
Authority regulations, permits, or licenses or (y) under
agreements affecting the Borrower, any of the Borrower's
Subsidiaries or any Principal Cellular Partnership and (iii)
maintain, preserve, protect and renew, and cause each of the
Borrower's Subsidiaries and each Principal Cellular
Partnership to maintain, preserve, protect and renew, all
material Franchises, service marks, trademarks and trade
names held by any of them that are useful or necessary to
operate their respective Cellular Systems.
(h) Performance of Material Agreements. Perform and
observe all the terms and provisions of each Material
Agreement to be performed or observed by it, maintain each
such Material Agreement in full force and effect, enforce
each such Material Agreement in accordance with its terms in
a manner consistent with the Borrower's best interests (such
determination to be made in the reasonable judgment of the
Required Lenders), take all such action to such end as may
be from time to time reasonably requested by the
Administrative Agent and is consistent with the terms of
such Material Agreement and, upon request of the
Administrative Agent, make to each other party to each such
Material Agreement such demands and requests for information
and reports or for action as the Borrower is entitled to
make under such Material Agreement, and cause each of the
Borrower's Subsidiaries and each Principal Cellular
Partnership to do so. Notwithstanding the foregoing,
nothing in this Section 5.01(h) shall prevent the Borrower,
any of the Borrower's Subsidiaries or any Principal Cellular
Partnership from amending, modifying or changing any term of
a Material Agreement to the extent permitted by Section
5.02(l).
(i) Transactions with Affiliates. Conduct, and cause
each of the Borrower's Subsidiaries and each of the
Principal Cellular Partnerships to conduct, all transactions
otherwise permitted hereunder and under the 1990 Loan
Documents with any of their Affiliates on terms that in all
material respects are fair and reasonable and no less
favorable to the Borrower, such Subsidiary or such Principal
Cellular Partnership (as the case may be) than it would
obtain in a comparable arm's-length transaction with a
Person not an Affiliate, other than (i) transactions
conducted in accordance with the provisions of the Tax
Sharing Agreement, (ii) transactions conducted in accordance
with the provisions of the Approved Services Agreement,
(iii) the acquisition of the LCH Assets to the extent
permitted by Section 5.02(e)(iii), (iv) subject to the
provisions of clause (v) below, transactions among the
Borrower and any of the Borrower's Subsidiaries or any
Principal Cellular Partnership, other than any of the
Borrower's Subsidiaries or any Principal Cellular
Partnership in which an Affiliate (other than the Borrower
and the Borrower's Subsidiaries) has an equity or other
ownership interest and (v) transactions with the Dallas
Partnership so long as the aggregate percentage of equity
interests having the power to vote to direct or control the
management of the Dallas Partnership that are owned directly
or indirectly by McCaw or an Affiliate thereof (other than
the Borrower and the Borrower's Subsidiaries) at the time of
consummation of any such transaction does not exceed the
percentage held by McCaw and its Affiliates on August 1,
1990.
(j) Reporting Requirements. Furnish to the Lenders:
(i) as soon as possible and in any event within
two days after the occurrence of each Default
continuing on the date of such statement, a statement
of a Financial Officer of the Borrower setting forth
details of such Default and the action that the
Borrower has taken and proposes to take with respect
thereto;
(ii) as soon as available and in any event within
60 days after the end of the first three fiscal
quarters of each fiscal year of the Borrower, a
Consolidated balance sheet of LIN and LIN's
Subsidiaries as of the end of such quarter and
Consolidated statements of income and cash flows of LIN
and LIN's Subsidiaries for such quarter and for the
period commencing at the end of the previous fiscal
year and ending with the end of such quarter, setting
forth in each case in comparative form the
corresponding figures for the corresponding periods of
the preceding fiscal year, all in reasonable detail and
duly certified (which certification may be subject to
year-end audit adjustments) by a Financial Officer of
LIN as having been prepared in conformity with GAAP;
(iii) as soon as available and in any event
within 60 days after the end of each fiscal quarter of
each fiscal year of the Borrower, (A) a combined
balance sheet of the Borrower, the Borrower's
Subsidiaries and the other Principal Cellular
Partnerships (prepared on an Attributable Share basis)
and a balance sheet of each of the New York
Partnership, the Dallas Partnership and, together, the
Houston Partnership and the Los Angeles Partnership, in
each case as of the end of such quarter and (B) a
combined statement of income of the Borrower, the
Borrower's Subsidiaries and the other Principal
Cellular Partnerships (prepared on an Attributable
Share basis), a statement of the aggregate amount of
capital expenditures of the Borrower, the Borrower's
Subsidiaries and the other Principal Cellular
Partnerships (determined on an Attributable Share
basis), a statement of cash flows of the Borrower,
statements of income of each of the New York
Partnership, the Dallas Partnership and, together, the
Houston Partnership and the Los Angeles Partnership and
a statement of the aggregate amount of capital
expenditures of such Partnership or Partnerships (as
the case may be), in each case for such quarter and for
the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, setting
forth in each case in comparative form the
corresponding figures for the corresponding period of
the preceding fiscal year all in reasonable detail and
duly certified (which certification may be subject to
year-end audit adjustments) by a Financial Officer of
the Borrower as having been prepared in conformity with
GAAP, except that such certification shall state that
such financial information has been presented on an
Attributable Share basis, together with (x) a
certificate of a Financial Officer of the Borrower
stating (1) that no Default has occurred and is
continuing or, if a Default has occurred and is
continuing, a statement as to the nature thereof and
the action that the Borrower has taken and proposes to
take with respect thereto and (2) the aggregate number
of subscribers served by all Cellular Entities in which
the Borrower, any of the Borrower's Subsidiaries or any
Principal Cellular Partnership has a Franchise Interest
and (y) a Compliance Certificate, including or
accompanied by information sufficient to enable the
Lenders to verify the calculations therein;
(iv) as soon as available and in any event within
120 days after the end of each fiscal year of the
Borrower, a copy of the annual audit report for such
year for LIN and LIN's Subsidiaries, including therein
a Consolidated balance sheet of LIN and LIN's
Subsidiaries as of the end of such fiscal year,
Consolidated statements of income, stockholders' equity
and cash flows of LIN and LIN's Subsidiaries, in each
case for such fiscal year and certified in a manner
acceptable to the Required Lenders by Ernst & Young,
any other Approved Accountant or any other independent
public accountants of recognized standing acceptable to
the Required Lenders, together with (A) a certificate
of such accounting firm to the Lenders stating that in
the course of the regular audit of the business of LIN
and LIN's Subsidiaries, which audit was conducted by
such accounting firm in accordance with generally
accepted auditing standards, such accounting firm has
obtained no knowledge that a Default has occurred and
is continuing, or if, in the opinion of such accounting
firm, a Default has occurred and is continuing, a
statement as to the nature thereof, (B) a certificate
of such accounting firm to the Lenders stating that the
financial statements of the Borrower, the Borrower's
Subsidiaries and the other Principal Cellular
Partnerships for the last quarter of such fiscal year
were prepared in conformity with GAAP (other than that
such financial information was presented on an
Attributable Share basis), (C) a Compliance
Certificate, including or accompanied by information
sufficient to enable the Lenders to verify the
calculations therein, (D) a certificate of a Financial
Officer of the Borrower stating that no Default has
occurred and is continuing or, if a Default has
occurred and is continuing, a statement as to the
nature thereof and the action that the Borrower has
taken and proposes to take with respect thereto and (E)
concurrently with the delivery of the financial
statements for fiscal year 1995 and for each fiscal
year occurring thereafter, a certificate of a Financial
Officer of the Borrower, in form satisfactory to the
Managing Agents, setting forth the Excess Cash Flow for
each such fiscal year and the calculation thereof;
(v) promptly and in any event within fifteen days
after the Borrower or any ERISA Affiliate knows or has
reason to know that any ERISA Event has occurred, a
statement of a Financial Officer of the Borrower
describing such ERISA Event and the action, if any,
that the Borrower or such ERISA Affiliate has taken or
proposes to take with respect thereto;
(vi) promptly and in any event within five
Business Days after receipt thereof by the Borrower or
any ERISA Affiliate, copies of each notice from the
PBGC stating its intention to terminate any Plan or to
have a trustee appointed to administer any Plan;
(vii) promptly and in any event within 30 days
after the filing thereof with the Internal Revenue
Service, copies of each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series)
with respect to each Plan maintained or participated in
by the Borrower, any of the Borrower's Subsidiaries or
any Principal Cellular Partnership that is an ERISA
Affiliate of the Borrower;
(viii) promptly and in any event within ten
Business Days after receipt thereof by the Borrower or
any ERISA Affiliate from the sponsor of a Multiemployer
Plan, a copy of each notice received by the Borrower or
any ERISA Affiliate concerning (A) the imposition of
Withdrawal Liability by any Multiemployer Plan, (B) the
reorganization or termination, within the meaning of
Title IV of ERISA, of any Multiemployer Plan or (C) the
amount of liability incurred, or that may be incurred,
by the Borrower or any ERISA Affiliate in connection
with any event described in clause (A) or (B) above;
(ix) promptly upon receipt thereof, copies of all
material financial reports or material written
recommendations, if any, submitted to LIN by its
auditors or received by the Borrower from the auditors
of any Principal Cellular Partnership, in connection
with each annual or interim audit or examination of its
books or the books of any of LIN's Subsidiaries or any
Principal Cellular Partnership (as the case may be);
provided that the Borrower shall not be obligated to
furnish any information pursuant to this clause (ix)
the disclosure of which the Borrower reasonably
believes would violate the confidentiality provisions
of any of the Existing Partnership Agreements; and
provided further that the Borrower shall use all
reasonable efforts to obtain the release of any such
information;
(x) promptly after the commencement thereof,
notice of all actions, suits and proceedings before any
court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign,
affecting the Borrower, any of the Borrower's
Subsidiaries or any Principal Cellular Partnership of
the type described in Section 4.01(i);
(xi) promptly after the sending or filing thereof,
copies of all proxy statements, financial statements
and reports that LIN, LCN, the Borrower or any of the
Borrower's Subsidiaries sends to its public
stockholders, and copies of all regular, periodic and
special reports, and all registration statements (other
than Registration Statements on Form S-8) that LIN,
LCN, the Borrower or any of the Borrower's Subsidiaries
files with, and any comments or correspondence (other
than those of a routine nature) received by LIN, LCN,
the Borrower or any of the Borrower's Subsidiaries
from, the Securities and Exchange Commission or any
governmental authority that may be substituted therefor
or with any national securities exchange;
(xii) promptly after the furnishing thereof,
any communication from any trustee, financial
institution or other Person acting in a similar
capacity pursuant to the terms of any indenture, loan
or credit or similar agreement with respect to a
principal amount of Indebtedness of $25,000,000 or more
that relates to the occurrence or continuance of an
event of default, the acceleration of Indebtedness or
the amendment, modification or waiver of any provision
of any such agreement;
(xiii) promptly after LIN, the Borrower or any
of the Borrower's Subsidiaries has reason to know, a
statement of a Financial Officer describing in
reasonable detail any (A) refusal or failure by any
instrumentality to renew or extend any Franchise with
respect to the Cellular Businesses of the Borrower, any
of the Borrower's Subsidiaries or any Principal
Cellular Partnership, (B) proposed abandonment or
proposed or actual revocation, termination or
materially adverse modification of any Franchise or any
dispute related thereto, (C) denial or threatened
denial or revocation or material modification by any
Regulatory Authority of any Franchise including,
without limitation, by the FCC of any FCC Licenses, (D)
notice from any Regulatory Authority of the imposition
of any fines or penalties or forfeitures or (E) threats,
notices or requests by any Regulatory Authority with
respect to any of the foregoing, or with respect to any
proceeding or hearing relating to the foregoing, that might
result in any of the foregoing, either individually or in the
aggregate, being materially adverse to the Borrower, the New York
Partnership, the Los Angeles Partnership or any other Material
Entity;
(xiv) promptly and in any event within five
Business Days after the occurrence thereof, notice of
each Material Event under the Private Market Value
Guarantee;
(xv) promptly after the sending or filing thereof,
any publicly available annual report or other
comparable report delivered by the Borrower, any of the
Borrower's Subsidiaries or any Principal Cellular
Partnership to any PUC;
(xvi) promptly after request therefor by any
Lender, a statement of the number of subscribers (as of
the end of any quarter) served by each of the New York
Partnership, the Dallas Partnership and, on a combined
basis, the Houston Partnership and the Los Angeles
Partnership; and
(xvii) promptly after request therefor, such
other information respecting the business, condition
(financial or otherwise), operations, properties or
prospects of the Borrower, any of the Borrower's
Subsidiaries or any Principal Cellular Partnership as
any Lender may from time to time reasonably request;
provided that a Lender shall not be entitled to receive
any information the disclosure of which the Borrower
reasonably believes would violate (A) the restrictions
regarding security imposed by the government of the
United States or any agency thereof with respect to
government contracts or (B) the confidentiality
provisions of any of the Existing Partnership
Agreements; provided further that the Borrower shall
use all reasonable efforts to obtain the release of any
such information requested pursuant to this clause
(xvii).
(k) Maintenance of Corporate Separateness. Conduct
its business and operations and the business and operations
of its Subsidiaries separately from McCaw, LIN and their
respective Subsidiaries (other than the Borrower and its
Subsidiaries), including, without limitation, (i) not
commingling funds or other assets of McCaw, LIN and their
respective Subsidiaries (other than the Borrower and its
Subsidiaries) with the funds or other assets of the Borrower
or one of its Subsidiaries, (ii) maintaining separate
corporate and financial records and observing all corporate
formalities, (iii) paying and causing each of its
Subsidiaries to pay its liabilities from its assets, (iv)
maintaining capitalization adequate to meet the business
needs of each of its Subsidiaries and (v) conducting and
causing each of its Subsidiaries to conduct its dealings with
third parties in its own name and as a separate
and independent entity.
SECTION 5.02. Negative Covenants. So long as any
Advance shall remain unpaid or any Lender shall have any
Commitment hereunder, the Borrower will not, without the written
consent of the Required Lenders:
(a) Liens, Etc. Create, incur, assume or suffer to
exist, or permit any of the Borrower's Subsidiaries or any
Principal Cellular Partnership to create, incur, assume or
suffer to exist, any Lien on or with respect to any of its
properties of any character (including, without limitation,
accounts) whether now owned or hereafter acquired, or sign
or file, or permit any of the Borrower's Subsidiaries or any
Principal Cellular Partnership to sign or file, under the
Uniform Commercial Code of any jurisdiction, a financing
statement that names the Borrower or any of the Borrower's
Subsidiaries or any Principal Cellular Partnership as
debtor, or sign, or permit any of the Borrower's
Subsidiaries or any Principal Cellular Partnership to sign,
any security agreement authorizing any secured party
thereunder to file such financing statement, or assign, or
permit any of the Borrower's Subsidiaries or any Principal
Cellular Partnership to assign, any accounts or other right
to receive income; excluding, however, from the operation of
the foregoing restrictions, the following:
(i) Liens created by the 1990 Loan Documents;
(ii) Permitted Liens;
(iii) the Liens described on Schedule X;
(iv) (A) Liens incurred in connection with
Indebtedness permitted by Section 5.02(b)(ii)(B) and
(B) purchase money Liens upon equipment or inventory
held or acquired by the Borrower, any of the Borrower's
Subsidiaries or any Principal Cellular Partnership in
the ordinary course of business to secure the purchase
price of such equipment and inventory and to secure
Indebtedness incurred by the Borrower, any of the
Borrower's Subsidiaries or any Principal Cellular
Partnership solely for the purpose of acquiring such
property; provided that no such Lien shall extend to or
cover any property other than (x) the property being
acquired and (y) in the case of Indebtedness permitted
by Section 5.02(b)(ii)(B)(2), (1) the capital stock of
or partnership interest in the Subsidiary of the
Borrower that is the borrower of the Indebtedness
secured by such Lien (other than any such capital stock
or partnership interest that constitutes collateral
under the 1990 Loan Documents) and (2) any leases of
cellular equipment or facilities (or, with respect to
such facilities, leases directly related thereto)
acquired with the proceeds of such Indebtedness;
(v) Liens incurred in connection with
Indebtedness permitted by Section 5.02(b)(ii)(C);
provided that such Liens shall extend only to the
assets of the Person that has become one of the
Borrower's Subsidiaries or to the equity interests of
the Borrower or one of the Borrower's Subsidiaries in
the Person that has become one of the Borrower's
Subsidiaries so long as such Person has not become a
direct Subsidiary of the Borrower or LIN Cellular
Holdings; and
(vi) the replacement, extension or renewal of any
Lien permitted by clause (iii) above upon or in the
same property theretofore subject thereto or the
replacement, extension or renewal (without increase of
principal amount) of the Indebtedness secured thereby.
(b) Indebtedness. (i) Create, incur, assume or
suffer to exist any Indebtedness other than the Indebtedness
set forth below; provided that, prior to and after giving
effect to the incurrence or assumption of such Indebtedness,
the Borrower is in compliance with the provisions of Section
5.03:
(A) Indebtedness under this Agreement;
(B) Indebtedness under the 1990 Loan Documents;
(C) additional unsecured Senior Debt that is on
terms (other than interest rate, prepayment premiums,
fees and other similar financial terms) no less
favorable to the Lenders and the Borrower than the
terms of the Indebtedness under the 1990 Loan Documents
and this Agreement and that has a weighted average life
to maturity at least equal to the then remaining
weighted average life of the Indebtedness under the
1990 Loan Documents and this Agreement; and
(D) Subordinated Debt; or
(ii) Permit any of the Borrower's Subsidiaries or any
Principal Cellular Partnership to create, incur, assume or
suffer to exist any Indebtedness other than, in the case of
each of the Borrower's Subsidiaries or any Principal
Cellular Partnership, the Indebtedness set forth below;
provided that, prior to and after giving effect to the
incurrence or assumption of such Indebtedness, the Borrower
is in compliance with the provisions of Section 5.03:
(A) Existing Indebtedness and extensions,
renewals and refinancings thereof that are on terms
(other than interest rate, prepayment premiums, fees
and other similar financial terms) no less favorable to
the Lenders and such Subsidiary or such Principal
Cellular Partnership (as the case may be) than such
Existing Indebtedness and that have a weighted average
life to maturity at least equal to the then remaining
weighted average life of such Existing Indebtedness;
(B) (1) Capitalized Leases of and purchase money
Indebtedness for equipment and inventory held or
acquired by any of the Borrower's Subsidiaries or any
Principal Cellular Partnership in the ordinary course
of business, (2) Indebtedness incurred solely to
finance the acquisition of cellular equipment or the
construction of facilities to be used in connection
with a Cellular Business including Indebtedness
incurred in connection with the development of any
newly acquired Cellular Business including guaranties
thereof; provided that, if such Indebtedness
constitutes a guarantee, such guarantee shall not
secure an amount of Indebtedness in excess of the
Attributable Share of the aggregate amount of all
Indebtedness so guaranteed, (3) Indebtedness incurred
to finance Severable Equipment in an aggregate
outstanding amount for any Cellular System not to
exceed the greater of (x) $25,000 in any Cellular
System or (y) ten cents for each Pop in such Cellular
System and (4) Indebtedness incurred to finance
Subscriber Equipment in an aggregate outstanding amount
for any Cellular System not to exceed fifty cents for
each Pop in such Cellular System; provided that the
aggregate amount of all such Indebtedness permitted to
be outstanding at any one time under this clause (B)
shall not exceed $400,000,000;
(C) Indebtedness of a Person that was outstanding
at the time such Person became one of the Borrower's
Subsidiaries (provided that such Indebtedness was not
incurred in anticipation of becoming such a Subsidiary)
and refinancings thereof on terms (other than interest
rate, prepayment premiums, fees and other similar
financial terms) no less favorable to the Lenders and
such Subsidiary than such outstanding Indebtedness and
that have a weighted average life to maturity at least
equal to the then remaining weighted average life of
such outstanding Indebtedness;
(D) Indebtedness (other than Indebtedness
described in clause (B)(2) above) attributable to one
of the Borrower's Subsidiaries or to a Principal
Cellular Partnership by reason of its holding or owning
a Minority Entity unless the partnership or other
agreement pursuant to which such Subsidiary or such
Principal Cellular Partnership holds or owns such
Minority Entity permits the Borrower, such Subsidiary
or such Principal Cellular Partnership to prohibit the
incurrence of such Indebtedness;
(E) Indebtedness to the Borrower or any other LIN
Party; provided that, upon the incurrence of such
Indebtedness, the Borrower or such other LIN Party
grants to the 1990 Collateral Agent, for the benefit of
the 1990 Lenders, a valid, perfected, first priority
Lien on such Indebtedness, in form and substance
satisfactory to the 1990 Required Lenders; and
(F) Indebtedness to another of the Borrower's
Subsidiaries; provided that promissory notes evidencing
such Indebtedness shall provide by their terms that
such Indebtedness shall, if not previously repaid,
automatically be cancelled upon any sale or other
disposition of the Subsidiary obligor thereunder in
connection with the exercise of remedies under the
appropriate 1990 Loan Documents.
(c) Mergers, Etc. Merge with or into, or consolidate
with or into, or transfer or dispose of all or substantially
all of its assets to any other Person or permit LIN Cellular
Holdings to do any of the foregoing; or permit any of the
Borrower's other Subsidiaries or any Principal Cellular
Partnership to merge with or into or consolidate with or
into, or transfer or dispose of all or substantially all of
its assets to, any other Person, unless (i) immediately
after giving effect thereto, no event shall have occurred
and be continuing that constitutes a Default, (ii) if the
surviving entity is not one of the Borrower's Subsidiaries
or a Principal Cellular Partnership, the disposition of such
Subsidiary or Principal Cellular Partnership shall otherwise
have been permitted under Section 5.02(d) and (iii) the
Borrower shall have delivered to the Administrative Agent a
certificate of a Financial Officer of the Borrower showing
in sufficient detail so as to permit computation that,
immediately after giving effect thereto, the Borrower is in
compliance with the covenants set forth in Section 5.03.
(d) Sales, Etc. of Assets. Sell, lease, transfer or
otherwise dispose of, or permit any of the Borrower's
Subsidiaries or any Principal Cellular Partnership to sell,
lease, transfer or otherwise dispose of, any of its assets,
including, without limitation, substantially all assets
constituting the business of a division, branch or other
unit operation, except:
(i) dispositions of assets (other than Franchise
Interests) in the ordinary course of business;
(ii) dispositions of assets in connection with
Permitted Asset Swaps; and
(iii) dispositions of assets if the Net Cash
Proceeds thereof are applied to prepay in full all
amounts payable by all LIN Parties under the 1990 Loan
Documents and the 1990 Commitments shall have been
terminated in accordance with the terms of the 1990
Credit Agreement and, thereafter, to prepay in full all
amounts payable by the Borrower hereunder and the
Commitments of the Lenders shall have been terminated.
(e) Investments in Other Persons. Make, or permit any
of the Borrower's Subsidiaries or any Principal Cellular
Partnership to make, any Investment in any Person, other
than:
(i) acquisitions of Cash Equivalents or
repurchase agreements and reverse repurchase agreements
with any securities dealer with respect to Cash
Equivalents that are fully collateralized by Cash
Equivalents;
(ii) acquisitions of Franchise Interests in MSAs
and Geographically Related RSAs, other than Franchise
Interests in McCaw, LIN or any of LIN's Subsidiaries
that is not also one of the Borrower's Subsidiaries
(other than as permitted by clause (iii) below);
(iii) the acquisition of the LCH Assets for a
purchase price not to exceed the redemption price of
the LCH Preferred Stock, so long as (A) the Borrower,
following the initial borrowing under the 1990 Credit
Agreement and prior to or at the time of such
acquisition, shall have received a cash capital
contribution to its common equity in an amount equal to
at least 50% of the sum of such purchase price plus the
amount of any dividends paid with respect to the LCH
Preferred Stock permitted by Section 5.02(f)(iv), (B)
the ratio of Consolidated Debt to Consolidated
Operating Cash Flow for the two fiscal quarters set
forth in the most recent Compliance Certificate
delivered by the Borrower to the Administrative Agent
multiplied by two (prior to and after giving effect to
such acquisition) is less than 5.5 to 1 and (C) prior
to and after giving effect to such acquisition no event
shall have occurred and be continuing that constitutes
a Default;
(iv) Investments in a Subsidiary of the Borrower,
a Principal Cellular Partnership or a Minority Entity;
provided that (x) any Indebtedness of a Subsidiary of
the Borrower or a Principal Cellular Partnership
resulting therefrom shall, to the extent it is owed to
the Borrower or any other LIN Party, be evidenced by a
promissory note that has been pledged to the 1990
Collateral Agent for the benefit of the 1990 Lenders
and (y) with respect to an Investment in a Principal
Cellular Partnership or a Minority Entity, such
Investment does not exceed the Attributable Share of
the aggregate Investments in such Partnership or
Minority Entity to be made by all other Persons;
provided that the limitation set forth in this clause
(y) shall not apply to the New York Partnership;
(v) loans and advances to employees that in the
aggregate do not exceed $10,000,000 at any time
outstanding;
(vi) loans and advances in the ordinary course of
business that in the aggregate do not exceed
$20,000,000 at any time outstanding;
(vii) loans or advances to LIN Satellite or
one of its wholly owned Subsidiaries in an aggregate
amount not to exceed $25,000,000 at any time
outstanding; provided that the Indebtedness resulting
therefrom shall be evidenced by a promissory note that
has been pledged to the 1990 Collateral Agent for the
benefit of the 1990 Lenders; and
(viii) Investments in an aggregate amount not
to exceed $20,000,000 at any time outstanding in
Persons that operate Cellular Businesses that are
directly related to the business conducted by any
Cellular Entity in which the Borrower, any of the
Borrower's Subsidiaries or any Principal Cellular
Partnership owns a Franchise Interest.
(f) Dividends, Etc. Declare or pay any dividends on
any of its capital stock or purchase, redeem, retire,
defease or otherwise acquire for value any of its capital
stock or capital stock of LIN or any capital stock of any of
LIN's Subsidiaries (other than the Borrower's Subsidiaries)
or any warrants, rights or options to acquire such capital
stock, now or hereafter outstanding, return any capital to
its stockholders as such or make any distribution of assets,
capital stock, warrants, rights, options, obligations or
securities to its stockholders as such, or permit any of the
Borrower's Subsidiaries to purchase, redeem, retire, defease
or otherwise acquire for value any capital stock of the
Borrower or capital stock of LIN or any capital stock of
LIN's Subsidiaries (other than the Borrower's Subsidiaries)
or any warrants, rights or options to acquire such capital
stock, except that the Borrower may:
(i) declare and pay dividends and distributions
payable only in, or purchase, redeem, retire, defease
or otherwise acquire such capital stock for value
consisting of, common stock of the Borrower or
Preferred Stock that complies with the requirements of
Section 5.02(n) or warrants, rights or options to
purchase such stock of the Borrower;
(ii) redeem equity issued as part of the
consideration for the acquisition of Franchise
Interests (other than the LCH Assets);
(iii) declare and pay cash dividends to LCN in
an amount not to exceed the amount necessary to enable
LIN to repurchase (A) LIN employee common stock and
options in an aggregate amount not exceeding, in any
fiscal year of LIN, 1/2 of 1% of the then issued and
outstanding LIN Shares and in an aggregate amount not
exceeding, from the date hereof, 1% of such LIN Shares
and (B) LIN Shares resulting from the application of
laws and regulations governing foreign ownership in an
aggregate amount not to exceed $100,000,000;
(iv) beginning with the fiscal year ended
December 31, 1995, declare and pay cash dividends to
LCN in an amount sufficient to enable LCN to fund
dividends actually paid by LCH with respect to the LCH
Preferred Stock in accordance with the terms thereof
from (x) cumulative Excess Cash Flow for the period
from the date of the initial Borrowing through the
fiscal year ended December 31, 1994 and (y) 50% of all
Excess Cash Flow for 1995 and each succeeding fiscal
year of the Borrower; and
(v) declare and pay dividends to the extent such
dividends are applied to the acquisition of the LCH
Assets as permitted by Section 5.02(e)(iii);
provided that (A) with respect to dividends or other
distributions of cash, such dividends may not be paid with
the proceeds of Indebtedness, (B) immediately after giving
effect to each such dividend, purchase, repurchase,
redemption or distribution, no event shall have occurred and
be continuing that constitutes a Default, (C) with respect
to purchases, repurchases or redemptions, such purchases,
repurchases or redemptions are made at a price that does not
exceed the then existing market price, subject, however, to
clause (D) below and (D) with respect to repurchases to be
made pursuant to employee severance agreements in effect on
August 1, 1990 covering in the aggregate not more than
75,000 LIN Shares, such repurchases are made at a price not
to exceed the purchase price set forth in such severance
agreements.
(g) Change in Nature of Business. Permit any of the
Borrower's Subsidiaries or any Principal Cellular
Partnership to engage in any business other than the
Cellular Business and any other business owned by one of the
Borrower's Subsidiaries on the date hereof or acquired
incidental to the acquisition of Cellular Businesses;
provided that the foregoing restriction shall not prohibit
the Broadcast Borrower from becoming one of the Borrower's
Subsidiaries with the consent of the Required Lenders.
Notwithstanding the foregoing authorization to acquire
incidental businesses, the Borrower, each of the Borrower's
Subsidiaries and each Principal Cellular Partnership shall
remain at all times primarily engaged in the business of
owning and operating Cellular Businesses.
(h) Compliance with ERISA. (i) Terminate, or permit
any ERISA Affiliate to terminate, any Plan so as to result
in any material liability of the Borrower and its ERISA
Affiliates as a whole to the PBGC or (ii) permit to continue
unremedied any Reportable Event (as defined in Title IV of
ERISA), or any other event or condition, that presents a
material risk of such a termination by the PBGC of any Plan.
(i) Plan Amendments. Amend, modify or change in any
manner, or permit any of the Borrower's Subsidiaries to
amend, modify or change in any manner, any Plan,
Multiemployer Plan or Welfare Plan sponsored, maintained or
contributed to by the Borrower or the Borrower's
Subsidiaries if such amendment, modification or change,
together with all other such amendments, modifications and
changes, would result in a material increase in the costs
and expenses in respect of such Plans, Multiemployer Plans
and Welfare Plans of the Borrower and its Subsidiaries taken
as a whole.
(j) Accounting Changes. Make or permit, or permit any
of the Borrower's Subsidiaries or any Principal Cellular
Partnership to make or permit, any significant change in
accounting policies or reporting practices, except as
required or permitted by GAAP.
(k) Prepayments, Amendments, Etc. of Debt. (i)
Prepay, redeem, purchase, defease or otherwise satisfy prior
to the scheduled maturity thereof in any manner any
Indebtedness of the Borrower or permit any of the Borrower's
Subsidiaries or any Principal Cellular Partnership to do any
of the foregoing, other than (A) prepayments with the
proceeds of refinancing thereof on terms no less favorable
to the Lenders and the Borrower than such Indebtedness of
the Borrower and having a weighted average life to maturity
at least equal to the then remaining weighted average life
of such Indebtedness of the Borrower, (B) prepayments of the
1990 Credit Agreement and (C) prepayments of the Facilities,
(ii) make, or permit any of its Subsidiaries or any
Principal Cellular Partnership to make, any payment in
violation of any subordination terms of any Subordinated
Debt or (iii) amend, modify or change in any manner any term
or condition of any Indebtedness of the Borrower if such
amendment would be adverse to the Lenders.
(l) Amendments, Etc. Amend, modify, or change in any
manner or permit any of the Borrower's Subsidiaries or any
Principal Cellular Partnership to amend, modify or change in
any manner any term or condition of, give any consent,
waiver or approval under or waive any default under or
breach of any term or condition of its or such Subsidiary's
charter or bylaws or such Principal Cellular Partnership's
Existing Partnership Agreement or any Material Agreement,
except amendments, modifications and waivers that (i) with
respect to the Existing Partnership Agreements, do not
reduce the partnership interest, voting rights, right to
receive distributions or any other material right of the
Borrower or any of its Subsidiaries and (ii) would not have
a material adverse effect on (A) the business, condition
(financial or otherwise), operations, properties or
prospects of the Borrower, the New York Partnership, the Los
Angeles Partnership or any other Material Entity, (B) the
rights and remedies of the Agents or the Lenders under this
Agreement or (C) the ability of the Borrower to perform its
obligations under this Agreement.
(m) Negative Pledge. Enter into or suffer to exist
any agreement prohibiting the creation or assumption of any
Lien upon any of its property or assets (including, without
limitation, any agreement requiring that an equal and
ratable Lien be granted to a lender or lenders) other than
in favor of the Agents or the Lenders, or permit any of the
Borrower's Subsidiaries or any Principal Cellular
Partnership to enter into or suffer to exist any agreement
prohibiting the creation of Liens upon any of its property
or assets (including, without limitation, any agreement
requiring that an equal and ratable Lien be granted to a
lender or lenders) other than (i) prohibitions against the
creation of Liens contained in the 1990 Loan Documents as in
effect on the date hereof, (ii) Liens in favor of the Agents
or the Lenders, (iii) with respect to such Subsidiary, any
existing prohibitions against the creation of Liens and any
agreement to which such entity is subject on the date it
first becomes one of the Borrower's Subsidiaries, (iv) with
respect to Indebtedness permitted by Section 5.02(b)(ii)(B),
(v) with respect to any Principal Cellular Partnership, any
prohibitions of the creation of Liens set forth in any
agreement listed on Schedule IX hereof and (vi) with respect
to performance bonds, a prohibition of the creation of Liens
that applies solely to the assets to which such performance
bonds relate.
(n) Preferred Stock. Issue or authorize the issuance
of, or permit any of the Borrower's Subsidiaries to issue or
authorize the issuance of, any Preferred Stock of the
Borrower or such Subsidiary, respectively, other than
Preferred Stock of the Borrower issued in connection with an
Investment permitted by Section 5.02(e) or Preferred Stock
of the Borrower that (i) is either not convertible or is
convertible only into common stock of the Borrower, (ii) is
not accorded voting rights, either before or after
conversion or the occurrence of any other event, that would
result in a change of control contemplated by Section
6.01(h), 6.01(i), 6.01(j) or 6.01(k) and (iii) is not
subject to mandatory redemption earlier than 180 days
following the Final Maturity Date.
(o) Service Agreements. Agree to directly or
indirectly pay or become liable to McCaw, LIN or any of
their respective Affiliates (other than the Borrower and any
of the Borrower's wholly owned Subsidiaries) for any sum or
property for fees for corporate, management or other similar
services, or permit any of the Borrower's Subsidiaries or
any Principal Cellular Partnership to do so, provided that
(i) the Borrower may enter into the Approved Services
Agreement with LIN and (ii) any of the Borrower's
Subsidiaries and any Principal Cellular Partnership may
enter into an agreement to pay such fees to a non-wholly
owned Subsidiary of the Borrower if such agreement provides
that, upon the exercise of remedies by any Agent or any
Lender under this Agreement, such agreement may be (x)
transferred to the purchaser of the business or Subsidiary
to which such agreement relates or (y) terminated without
penalty (such determination to be made by such purchaser).
(p) Holding Company Status. In the case of the
Borrower or LIN Cellular Holdings, own directly or acquire
any assets other than (i) shares of capital stock of its
respective Subsidiaries, (ii) Investments in Minority
Entities permitted under the 1990 Loan Documents, (iii)
promissory notes of one of the Borrower's Subsidiaries, a
Principal Cellular Partnership or LIN Satellite or one of
LIN Satellite's wholly owned Subsidiaries that have been
pledged to the 1990 Lenders pursuant to the 1990 Loan
Documents and (iv) with respect to the Borrower, immaterial
amounts of other assets. Without limiting the generality of
the foregoing, neither the Borrower nor LIN Cellular
Holdings shall be a general partner in a partnership.
(q) Minority Entities. Permit any of the Borrower's
Subsidiaries to own, hold, acquire or commit to acquire,
directly or indirectly, any equity or other ownership
interest in any Minority Entity if, after giving effect to
such acquisition, the Attributable Share of the Pops of all
Minority Entities would be greater than ten percent (10%) of
the Attributable Share of all Pops of the Borrower, the
Borrower's Subsidiaries, the Principal Cellular Partnerships
and each Minority Entity.
(r) Deposit Accounts. Maintain or permit any of the
Borrower's Subsidiaries to maintain any deposit accounts
other than the accounts expressly permitted under the 1990
Credit Agreement.
SECTION 5.03. Financial Covenants. So long as any
Advance remains unpaid or any Lender shall have any Commitment
hereunder, the Borrower will, unless the Required Lenders (or,
with respect to the requirements of clause (c) below, the
Supermajority Lenders) shall otherwise consent in writing:
(a) Consolidated Operating Cash Flow to Consolidated
Debt Service Ratio. Cause, on the last day of each fiscal
quarter, the ratio of Consolidated Operating Cash Flow for
the current fiscal quarter and for the fiscal quarter
immediately preceding such fiscal quarter, multiplied by
two, to Consolidated Debt Service to be equal to or greater
than 1.15x.
(b) Consolidated Debt to Consolidated Operating Cash
Flow Ratio. Maintain at all times a ratio of Consolidated
Debt to Consolidated Operating Cash Flow for the two fiscal
quarters set forth in the most recent Compliance Certificate
delivered by the Borrower to the Administrative Agent,
multiplied by two, (i) for the period from the date of the
Initial Borrowing to March 31, 1995, not greater than 6.5x
and (ii) at all times thereafter, not greater than 6.0x.
(c) Consolidated Debt. Not permit, at any time,
Consolidated Debt to exceed $2,000,000,000.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the
following events ("Events of Default") shall occur and be
continuing:
(a) The Borrower shall fail to pay any principal of,
or interest on, any Advance, or shall fail to make any other
payment hereunder, in each case when the same becomes due
and payable; or
(b) Any representation or warranty made by the
Borrower (or any of its officers) under or in connection
with this Agreement or any certificate or financial
information delivered pursuant thereto shall prove to have
been incorrect in any material respect when made; or
(c) (i) The Borrower shall fail to perform or observe
any term, covenant or agreement contained in Section
5.01(d), (i), (j)(i) or 5.02(a), (b), (c), (d), (e), (f),
(g), (h), (i), (k), (l), (m), (n), (o) or (p) or 5.03; or
(ii) the Borrower shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement if
such failure shall remain unremedied for ten days after
written notice thereof shall have been given to the Borrower
by any Agent or any Lender; or
(d) Any LIN Party, any of such LIN Party's
Subsidiaries or any Principal Cellular Partnership shall
fail to pay any principal of, premium or interest on, or
other amounts payable in respect of, Indebtedness with an
aggregate outstanding principal amount of $25,000,000 or
more (but excluding Indebtedness outstanding hereunder) of
such LIN Party, such Subsidiary or such Principal Cellular
Partnership (as the case may be), in each case when the same
becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument
relating to such Indebtedness; or any other event shall
occur or condition shall exist under any agreement or
instrument relating to any such Indebtedness and shall
continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of
such failure, event or condition is to accelerate, or to
permit the acceleration of, the maturity of such
Indebtedness or any such Indebtedness shall be declared to
be due and payable or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or
redemption) purchased or defeased, or an offer to prepay,
redeem, purchase or defease such Indebtedness shall be
required to be made, in each case prior to the stated
maturity thereof; or
(e) McCaw, MMM Holdings, LIN, the Borrower, any of
LIN's Subsidiaries or any Principal Cellular Partnership
shall generally not pay its debts as such debts become due,
or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted
by or against McCaw, MMM Holdings, LIN, the Borrower, any of
LIN's Subsidiaries or any Principal Cellular Partnership
seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its
debt under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any
substantial part of its property and, in the case of any
proceeding instituted against it (but not instituted by it)
that is being diligently contested by in good faith, such
proceeding shall remain undismissed or unstayed for a period
of 45 days; or McCaw, MMM Holdings, LIN, the Borrower, any
of LIN's Subsidiaries or any Principal Cellular Partnership
shall take any corporate or partnership action (as the case
may be) to authorize any of the actions set forth above in
this subsection (e); provided that, in the case of any of
the foregoing events with respect to McCaw, MMM Holdings or
any of LIN's Subsidiaries (other than LCH, any LIN Party or
any of such LIN Party's Subsidiaries), the Required Lenders
shall have determined that such event described above is
reasonably likely to have a material adverse effect on (i)
the Borrower, the New York Partnership, the Los Angeles
Partnership or any other Material Entity, (ii) the ability
of the Borrower to perform its obligations under this
Agreement or (iii) the rights and remedies of the Agents or
the Lenders under this Agreement; or
(f) Any judgments or orders for the payment of money
in the aggregate equal to or in excess of $5,000,000 shall
be rendered against any LIN Party, any of such LIN Party's
Subsidiaries or any Principal Cellular Partnership and there
shall be any period of 60 consecutive days during which a
stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or
(g) Any nonmonetary judgment or order shall be
rendered against any LIN Party, any of such LIN Party's
Subsidiaries or any Principal Cellular Partnership that
could have a material adverse effect on (i) the business,
condition (financial or otherwise), operations, properties
or prospects of the Borrower, the New York Partnership, the
Los Angeles Partnership or any other Material Entity, (ii)
the ability of the Borrower to perform its obligations under
this Agreement or (iii) the rights and remedies of the
Agents or the Lenders under this Agreement, and there shall
be any period of ten consecutive days during which a stay of
enforcement of such judgment or order, by reason of pending
appeal or otherwise, shall not be in effect; or
(h) At any time before the consummation of the Merger,
Craig O. McCaw or a Designated Party, and at any time after
the consummation of the Merger, AT&T, shall fail to have the
right to cause the election of his or its nominees to a
majority of the directorships of the Board of Directors of
McCaw; or
(i) (i) At any time before the consummation of the
Merger, the McCaw Family shall at any time for any reason
cease to be the legal and beneficial owner of at least
20,000,000 Class B Shares (or such other number of Class B
Shares as may be determined after adjustment to give effect
to increases or decreases in the number of Class B Shares,
including, without limitation, increases or decreases
resulting from stock dividends, stock splits,
reclassifications or combinations effected with respect to
such Class B Shares, such adjustments to be calculated in a
manner approved by the Managing Agents) or (ii) at any time
after the consummation of the Merger, AT&T shall for any
reason cease to have Economic Ownership of Voting Stock
representing in the aggregate at least 51% of the combined
voting power of all Voting Stock of McCaw; or
(j) (i) At any time before the consummation of the
Merger, McCaw shall fail to have the right to cause the
election of its nominees to a majority of the directorships
of the Board of Directors of LIN or (ii) at any time after
the consummation of the Merger, McCaw or AT&T shall fail to
have the right to cause the election of its nominees to a
majority of the directorships of the Board of Directors of
LIN; or
(k) LIN shall fail to own directly or indirectly at
least a majority of the issued and outstanding capital stock
of the Borrower; or
(l) Any ERISA Event shall have occurred with respect
to a Plan of any LIN Party and, 30 days after notice thereof
shall have been given to such LIN Party by the
Administrative Agent, (i) such ERISA Event shall still exist
and (ii) the sum (determined as of the date of occurrence of
such ERISA Event) of the Insufficiency of such Plan and the
Insufficiency of any and all other Plans of any LIN Party
with respect to which an ERISA Event shall have occurred and
then exist (or, in the case of a Plan with respect to which
a termination described in clauses (c) through (f) of the
definition of ERISA Event shall have occurred and then
exist, the liability related thereto is equal to or greater
than $25,000,000; or
(m) Any LIN Party or any of its ERISA Affiliates shall
have been notified by the sponsor of a Multiemployer Plan
that it has incurred Withdrawal Liability to such
Multiemployer Plan in an amount that, when aggregated with
all other amounts required to be paid to MultiEmployer Plans
by the LIN Parties and their ERISA Affiliates as Withdrawal
Liabilities (determined as of the date of such
notification), exceeds $25,000,000 and any part of such
Withdrawal Liability shall not have been paid when the same
becomes due and payable; or
(n) Any LIN Party or any of its ERISA Affiliates shall
have been notified by the sponsor of a Multiemployer Plan
that such Multiemployer Plan is in reorganization or is
being terminated, within the meaning of Title IV of ERISA,
if as a result of such reorganization or termination the
aggregate annual contributions of the LIN Parties and their
ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer
Plans for the plan year of each such Multiemployer Plan
immediately preceding the plan year in which such
reorganization or termination occurs by an amount exceeding
$25,000,000; or
(o) Any LIN Party or any of its ERISA Affiliates shall
have committed a failure described in Section 302(f)(1) of
ERISA and the amount determined under Section 302(f)(3) of
ERISA is equal to or greater than $25,000,000; or
(p) There shall occur any material adverse change in
the business, condition (financial or otherwise),
operations, properties or prospects of the Borrower or the
New York Partnership, the Los Angeles Partnership or any
other Material Entity; or
(q) The Borrower, any of the Borrower's Subsidiaries
or any Principal Cellular Partnership or, with respect to
clauses (iv) and (v) below, LIN or LCN shall become subject
to restrictions (whether through a covenant, a provision
entitling any party to accelerate the maturity of any
obligation or otherwise) under (x) in the case of the
Borrower, any of the Borrower's Subsidiaries or any
Principal Cellular Partnership, an agreement related to any
Indebtedness of, or with shareholders of, McCaw, LIN or any
of their respective Subsidiaries (other than the Borrower or
any of its Subsidiaries) (any such agreement being a
"Borrower Restrictive Agreement") or (y) in the case of LIN
or LCN, an agreement related to any Indebtedness of, or with
shareholders of, McCaw or MMM Holdings, Inc. (any such
agreement being a "Parent Restrictive Agreement"; all such
Agreements, together with the Borrower Restrictive
Agreements, being the "Restrictive Agreements"), unless in
any such case such Restrictive Agreements permits (or does
not prohibit) the Borrower, the Borrower's Subsidiaries and
the Principal Cellular Partnerships and, with respect to
clauses (iv) and (v) below, LIN and LCN, without the need to
obtain the consent of any party to any such Restrictive
Agreement:
(i) to prepay, redeem, repurchase, defease, extend,
renew or refinance its Indebtedness and to amend,
modify or waive any provision of any agreement related
to such Indebtedness (including, without limitation,
amendments that would increase the rate of interest
payable under such agreement or require the payment of
fees or other amounts in connection therewith);
(ii) to pay dividends to the Borrower;
(iii) to incur Indebtedness for working capital and
other similar corporate purposes, including, without
limitation, for capital expenditures, operations and
debt service and costs related thereto (such
Indebtedness being the "Additional Working Capital
Debt");
(iv) to grant Liens on its assets in connection
with any Additional Working Capital Debt or the
Borrower's, any of the Borrower's Subsidiaries' or any
Principal Cellular Partnership's Indebtedness,
including, without limitation, the Facilities and any
extensions, renewals or refinancings thereof;
(v) to provide guarantees or other similar
undertakings (including, without limitation,
undertakings of the types referred to in clauses (h) or
(i) of the definition of "Indebtedness") with respect
to any Additional Working Capital Debt or the
Borrower's, any of the Borrower's Subsidiaries' or any
Principal Cellular Partnership's Indebtedness,
including, without limitation, the facilities and any
extensions, renewals or refinancings thereof; and
(vi) to sell, lease, transfer or otherwise dispose
of any assets to repay the Borrower's, such
Subsidiary's or such Principal Cellular Partnership's
Indebtedness or to satisfy such Person's working
capital and other cash needs; provided that a Borrower
Restrictive Agreement may require that such Person
receive an opinion of an investment banker of national
reputation that the amount received upon any such
disposition of stock or capital assets represents fair
value under the circumstances; or
(r) Prior to January 1, 1994, the Borrower shall cease
to be a member of an "affiliated group" (within the meaning
of Section 1504(a)(i) of the Code) of which LIN is the
common parent unless at the time the Borrower ceases to be a
member of such group, the Borrower receives a cash capital
contribution in an amount equal to the present value of the
expected net benefit, if any, of the remaining net operating
losses of LIN that have been allocated to the Borrower under
the Tax Sharing Agreement, such value to be determined in a
manner approved by the Managing Agents; or
(s) LIN shall fail to make any payment under the Tax
Sharing Agreement when the same becomes due and payable, or
LIN shall fail to perform or observe any other term,
covenant or agreement contained in the Tax Sharing Agreement
if such failure shall remain unremedied for ten days after
written notice thereof shall have been given to LIN by any
Agent or any Lender;
then, and in any such event, the Administrative Agent (i) shall
at the request, or may with the consent, of the Required Lenders,
by notice to the Borrower, declare the obligation of each Lender
to make Advances to be terminated, whereupon the same shall
forthwith terminate, and (ii) shall at the request, or may with
the consent, of the Required Lenders, by notice to the Borrower,
declare the Advances and all interest thereon and all amounts
hereunder to be forthwith due and payable, whereupon the
Advances, all such interest and all such amounts shall become and
be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby
expressly waived by the Borrower; provided, however, that in the
event of an actual or deemed entry of an order for relief with
respect to any LIN Party under the Federal Bankruptcy Code, (A)
the obligation of each Lender to make Advances shall
automatically be terminated and (B) the Advances, all such
interest and all such amounts shall automatically become and be
due and payable, without presentment, demand, protest or any
notice of any kind, all of which are hereby expressly waived by
the Borrower.
ARTICLE VII
THE AGENTS
SECTION 7.01. Authorization and Action. Each Lender
hereby appoints and authorizes each Agent to take such action as
agent on its behalf and to exercise such powers and discretion
under this Agreement as are delegated to such Agent by the terms
hereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly
provided for by this Agreement (including, without limitation,
enforcement or collection of the Indebtedness resulting from the
Advances), none of the Agents shall be required to exercise any
discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required
Lenders, and such instructions shall be binding upon all Lenders;
provided, however, that none of the Agents shall be required to
take any action that exposes any Agent to personal liability or
that is contrary to this Agreement or applicable law. The
Administrative Agent agrees to give to each Lender prompt notice
of each notice given to it by the Borrower pursuant to the terms
of this Agreement.
SECTION 7.02. Agents' Reliance, Etc. Neither the
Agents nor any of their respective directors, officers, agents or
employees shall be liable for any action taken or omitted to be
taken by it or them, under or in connection with this Agreement,
except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the
foregoing, each Agent: (i) may treat the Lender that made any
Advance as the holder of the Indebtedness resulting therefrom
until the Administrative Agent receives and accepts an Assignment
and Acceptance entered into by such Lender, as assignor, and an
Eligible Assignee, as assignee, as provided in Section 8.07; (ii)
may consult with legal counsel (including counsel for any LIN
Party), independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to
be taken in good faith by it in accordance with the advice of
such counsel, accountants or experts; (iii) makes no warranty or
representation to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations made in
or in connection with this Agreement; (iv) shall not have any
duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this
Agreement on the part of the Borrower or to inspect the property
(including the books and records) of any LIN Party; (v) shall not
be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of
this Agreement or any other instrument or document furnished
pursuant hereto; and (vi) shall incur no liability under or in
respect of this Agreement by acting upon any notice, consent,
certificate or other instrument or writing (which may be by
telegram, telecopy, or telex) believed by it to be genuine and
signed or sent by the proper party or parties.
SECTION 7.03. TD (Texas), Toronto-Dominion and
Scotiabank and Affiliates. With respect to its Commitments and
the Advances made by it, each of TD (Texas), Toronto-Dominion and
Scotiabank shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though
it were not a Managing Agent or the Administrative Agent (as the
case may be); and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include each of TD (Texas),
Toronto-Dominion and Scotiabank in its individual capacity. Each
of TD (Texas), Toronto-Dominion and Scotiabank and its Affiliates
may accept deposits from, lend money to, act as trustee under
indentures of, accept investment banking engagements from and
generally engage in any kind of business with, any LIN Party, any
of such LIN Party's Subsidiaries and any Person who may do
business with or own securities of any LIN Party or any such
Subsidiary, all as if each of TD (Texas), Toronto-Dominion and
Scotiabank were not a Managing Agent or the Administrative Agent
(as the case may be) and without any duty to account therefor to
the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance upon
the Agents or any other Lender and based on the financial
statements referred to in Section 4.01 and such other 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 deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to
indemnify each Agent (to the extent not promptly reimbursed by
the Borrower pursuant to another provision of this Agreement),
ratably according to the respective principal amounts of the
Advances then owing to each such Lender (or if no Advances are at
the time outstanding or if any Advances are then owing to Persons
that are not Lenders, ratably according to the respective amounts
of their Commitments), from and against any and all liabilities,
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 such Agent (as the case may be) in any way relating to or
arising out of this Agreement or any action taken or omitted by
such Agent under this Agreement; provided that no Lender shall be
liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Agent's gross negligence or
willful misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse each Agent promptly upon demand for
its ratable share of any costs and expenses payable by the
Borrower under Section 8.04 (other than any costs and expenses
payable to the financial institution acting as such Agent in its
capacity as a Lender), to the extent that such Agent is not
promptly reimbursed for such costs and expenses by the Borrower.
SECTION 7.06. Successor Administrative Agent;
Successor Managing Agents. (a) The Administrative Agent may
resign as to either or both of the Facilities at any time by
giving written notice thereof to each of the Lenders and the
Borrower and may be removed as to both of the Facilities at any
time with or without cause by the Required Lenders. Upon any
such resignation or removal, the Required Lenders shall have the
right to appoint a successor Administrative Agent (as to such of
the Facilities as to which the Administrative Agent has resigned
or been removed). If no successor Administrative Agent shall
have been so appointed by the Required Lenders, and shall have
accepted such appointment, within 30 days after the retiring
Administrative Agent's giving of notice of resignation or the
Required Lenders' removal of the retiring Administrative Agent,
then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent, which shall be
a commercial bank organized under the laws of the United States
or of any state thereof and having a combined capital and surplus
of at least $100,000,000. Upon the acceptance of any appointment
as Administrative Agent hereunder by a successor Administrative
Agent as to both of the Facilities, such successor
Administrative Agent shall thereupon succeed to and become vested
with all the rights, powers, discretion, privileges and duties of
the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and
obligations under this Agreement. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor
Administrative Agent as to one of the Facilities, such successor
Administrative Agent shall thereupon succeed to and become vested
with all the rights, powers, discretion, privileges and duties of
the retiring Administrative Agent as to such Facility, other
than, with respect to funds transfers and other similar aspects
of the administration of the Borrowings under such Facility and
payments by Borrower in respect of such Facility, and the
retiring Administrative Agent shall be discharged from its
duties and obligations under this Agreement as to such Facility,
other than as aforesaid. After any retiring Administrative
Agent's resignation or removal hereunder as Administrative Agent
as to both of the Facilities, the provisions of this Article VII
shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent as to either
Facility under this Agreement.
(b) Any Managing Agent may resign as to either or both
of the Facilities at any time by giving written notice thereof to
each of the Lenders and the Borrower and may be removed as to
both of the Facilities at any time with or without cause by the
Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor
Managing Agent (as to such of the Facilities as to which the
Managing Agent has resigned or been removed). If, at any time, a
Managing Agent has been removed or has delivered a notice of
resignation and has not been replaced within 30 days after the
first date on which such circumstance exists, then the remaining
Managing Agent may, on behalf of the Lenders, appoint a successor
Managing Agent. Each such successor Managing Agent shall be a
commercial bank organized under the laws of the United States or
of any state thereof and having a combined capital and surplus of
at least $100,000,000. Upon the acceptance of any appointment as
a Managing Agent hereunder by a successor Managing Agent as to
both of the Facilities, such successor Managing Agent shall
thereupon succeed to and become vested with both the rights,
powers, discretion, privileges and duties of the remaining
Managing Agent and the retiring Managing Agent shall be
discharged from its duties and obligations under this Agreement.
Upon the acceptance of any appointment as a Managing Agent
hereunder by a successor Managing Agent as to one of the
Facilities, such successor Managing Agent shall thereupon succeed
to and become vested with all the rights, powers, discretion,
privileges and duties of the retiring Managing Agent as to such
Facility, and the retiring Managing Agent shall be discharged
from its duties and obligations under this Agreement as to such
Facility. After any retiring Managing Agent's resignation or
removal hereunder as a Managing Agent as to both of the
Facilities, the provisions of this Article VII shall inure to its
benefit as to any actions taken or omitted to be taken by it
while it was a Managing Agent as to either Facility under this
Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver
of any provision of this Agreement, nor consent to any departure
by the Borrower therefrom, shall in any event be effective unless
the same shall be in writing and signed by the Required Lenders,
and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given;
provided, however, that (a) no amendment, waiver or consent
shall, unless in writing and signed by all the Lenders, do any of
the following: (i) waive any of the conditions set forth in
Section 3.01 or, in the case of the initial Borrowing, Section
3.02 or 3.03, (ii) change the percentage of the Commitments or of
the aggregate unpaid principal amount of the Advances, or the
number of Lenders that shall be required for the Lenders or any
of them to take action hereunder, including, without limitation,
any action to be taken by the Required Lenders or the
Supermajority Lenders under Section 5.03 or (iii) amend this
Section 8.01, and (b) no amendment, waiver or consent shall,
unless in writing and signed by the Required Lenders and each
Lender that has a Commitment under the Facility affected thereby,
(i) increase the Commitments of such Lender or subject such
Lender to any additional obligations, (ii) reduce the principal
of, or interest on, the Advances payable to such Lender or any
fees or other amounts payable hereunder to such Lender, (iii)
postpone any date fixed for any payment of principal of, or
interest on, the Advances payable hereunder to such Lender or any
fees or other amounts payable hereunder to such Lender or (iv)
change the order of application of any prepayment set forth in
Section 2.07 or reduction of Commitments set forth in Section
2.04 in any manner that materially affects such Lender; provided
further that no amendment, waiver or consent shall, unless in
writing and signed by the Administrative Agent or each Managing
Agent (as the case may be) in addition to the Lenders required
above to take such action, affect the rights or duties of the
Administrative Agent or the Managing Agents (as the case may be)
under this Agreement. Notwithstanding the foregoing, no
amendment of any provision of this Agreement shall, unless in
writing and signed by the Borrower in addition to the Lenders and
Agents required above to take such action, affect the rights or
the duties of the Borrower under this Agreement.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing
(including telegraphic, telecopy or telex communications) and
telegraphed, telecopied, telexed, mailed or delivered, if to the
Borrower, at its address at 5400 Carillon Point, Kirkland,
Washington 98033, Attention: Donald Guthrie, Senior Vice
President, Finance, telecopy number: (206) 828-1900, with a copy
to LIN Cellular Network, Inc., 1150 Connecticut Avenue, N.W. 4th
Floor, Washington, D.C. 20036, Attention: Andrew A. Quartner,
Vice President-Law, telecopy number: (212) 223-9095; if to any
Lender that is a signatory hereto, at its Domestic Lending Office
specified opposite its name in Schedule I hereto; if to any other
Lender, at its Domestic Lending Office specified in the
Assignment and Acceptance pursuant to which it became a Lender;
if to the Administrative Agent, at its address at 909 Fannin,
Suite 1700, Houston, Texas 77010, Attention: Manager, Agency, with a copy to
The Toronto-Dominion Bank, 31 West 52nd Street, New York, New
York 10019, Attention: Managing Director, Communications
Finance; and if to any Managing Agent, at its Domestic Lending
Office specified opposite its name in Schedule I hereto or, as to
the Borrower or the Administrative Agent, at such other address
as shall be designated by such party in a written notice to the
other parties and, as to each other party, at such other address
as shall be designated by such party in a written notice to the
Borrower and the Administrative Agent. All such notices and
communications shall, when telegraphed, telecopied or telexed, be
effective when delivered to the telegraph company, transmitted by
telecopier, confirmed by telex answerback or shall be effective
five days after being deposited in the mails, respectively,
except that notices and communications to the Administrative
Agent pursuant to Article II, III or VII and any Compliance
Certificate shall not be effective until received by the
Administrative Agent.
SECTION 8.03. No Waiver; Remedies. No failure on the
part of any Lender or the Agents to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such
right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs; Expenses. (a) The Borrower
agrees to pay on demand: (i) all costs and expenses of the
Agents in connection with the preparation, execution, delivery,
administration, modification and amendment of this Agreement,
including, without limitation, (A) all due diligence,
transportation, computer, duplication, appraisal, audit,
consultant, search, filing and recording fees and expenses and
(B) the reasonable fees and expenses of counsel for the Agents
with respect thereto and with respect to advising any of the
Agents as to their respective rights and responsibilities, or the
perfection, protection or preservation of rights or interests,
under this Agreement and with respect to negotiations with the
Borrower regarding any Default or any events or circumstances
that may give rise to a Default and (ii) all costs and expenses
of the Agents and the Lenders in connection with the enforcement
of this Agreement whether in any action, suit or litigation, any
bankruptcy, insolvency or other similar proceeding affecting
creditors' rights generally or otherwise (including, without
limitation, the reasonable fees and expenses of counsel for any
Agent or any Lender with respect thereto).
(b) The Borrower agrees to indemnify and hold harmless
each Agent and each Lender and each of their respective
Affiliates and their respective officers, directors, employees,
agents and advisors (each, an "Indemnified Party") from and
against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and
expenses of counsel for the Lenders as a group; provided that any
Lender or group of Lenders that has determined in good faith that
due to potential conflicts of interest such Lender or group of
Lenders cannot be adequately represented by such counsel may
retain
separate counsel to represent such Lender or group of Lenders,
such representation to be limited, to the extent practicable, to
the issues to which such potential conflict relates) that may be
incurred by or asserted or awarded against any Indemnified Party,
in each case arising out of or in connection with or by reason
of, or in connection with the preparation for a defense of, any
investigation, litigation or proceeding arising out of, related
to or in connection with any acquisition or proposed acquisition
by the Borrower or any of the Borrower's Subsidiaries or
Affiliates of all or any part of the stock or substantially all
the assets of any Person (including, without limitation, the
Acquisitions) and any of the other transactions contemplated
hereby, whether or not an Indemnified Party is a party thereto
and whether or not the transactions contemplated hereby are
consummated, except to the extent such claim, damage, loss,
liability or expense is found in a final, nonappealable judgment
by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct.
(c) If any payment of principal of, or Conversion of,
any LIBO Rate Advance or Adjusted CD Rate Advance is made by the
Borrower to or for the account of a Lender other than on the last
day of the Interest Period for such Advance, as a result of a
payment pursuant to Section 2.07, acceleration of the maturity of
the Advances pursuant to Section 6.01 or for any other reason, or
by the Borrower or an Eligible Assignee to a Lender other than on
the last day of the Interest Period for such Advance if a Lender
is required to assign its rights and obligations under this
Agreement pursuant to Section 8.07 as a result of a demand by the
Borrower pursuant to Section 8.07(a), the Borrower shall, upon
demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the
account of such Lender any amounts required to compensate such
Lender for any additional losses, costs or expenses that it may
reasonably incur as a result of such payment or Conversion,
including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired
by any Lender to fund or maintain such Advance.
(d) If the Borrower fails to pay when due any costs,
expenses or other amounts payable by it under this Agreement,
including, without limitation, fees and expenses of counsel and
indemnities, such amount may be paid on behalf of the Borrower by
any Agent or any Lender, in its sole discretion. Immediately
upon the making of each such payment, such Agent or such Lender
shall be deemed to have sold and transferred to each other
Lender, and each other Lender shall be deemed to have purchased
and received from such Agent or such Lender, in each case
irrevocably and without any further action by any party, an
undivided interest and participation in such payment and the
obligations of the Borrower under this Agreement in respect
thereof in an amount equal to the product of (x) a fraction the
numerator of which is the amount of the Commitments of such
Lender and the denominator of which is the sum of the Revolving
Credit Facility and the Term Facility times (y) the amount of
such payment. Any such payment by such Agent or any Lender shall
constitute for all purposes of this Agreement the making by such
Agent or such Lender of an Advance, which shall be a Base Rate
Advance, in the amount of such payment (but without any
requirement for compliance with the conditions set forth in
Article III). In the event that such payment is not reimbursed
by the Borrower by 11:00 A.M. (New York City time) on the first
Business Day after such payment, such Agent or such Lender shall
promptly notify the Agent and each other Lender. Each such
Lender shall, notwithstanding the then unused amount of its
Commitments or any termination thereof, on the first Business Day
following such notification, make an Advance, which shall be a
Base Rate Advance, in an amount equal to the amount of its
participation in such payment for application to reimburse such
Agent or Lender (but without any requirement for compliance with
the applicable conditions set forth in Article III) and shall
make available for the account of its Applicable Lending Office
to the Administrative Agent for its own account or for the
account of such other Agent or such Lender, by deposit to the
Administrative Agent's Account, in same day funds, the amount of
such Advance. If and to the extent that any Lender shall not
have so made the amount of such Advance available to the
Administrative Agent, such Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such
amount together with interest thereon, for each day from the date
of demand by the Administrative Agent or such Agent or such
Lender until the date such amount is paid to the Administrative
Agent, at (i) in the case of the Borrower, the interest rate
applicable at such time under Section 2.06(d) to Base Rate
Advances and (ii) in the case of such Agent or such Lender, the
Federal Funds Rate. If such Lender shall pay to the
Administrative Agent such amount, such amount so paid shall
constitute such Lender's Advance for purposes of this Agreement.
SECTION 8.05. Right of Set-off. Upon (a) the
occurrence and during the continuance of any Event of Default and
(b) the making of the request or the granting of the consent
specified by Section 6.01 to authorize the Administrative Agent
to declare the Advances due and payable pursuant to the
provisions of Section 6.01, 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 or any
branch, agency, Subsidiary or Affiliate of such Lender to or for
the credit or the account of the Borrower against any and all of
the obligations of the Borrower now or hereafter existing under
or in respect of this Agreement, irrespective of whether such
Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. Each Lender agrees
promptly to notify the Borrower after any such set-off and
application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Lender under this
Section are in addition to other rights and remedies (including,
without limitation, other rights of set-off) that such Lender may
have.
SECTION 8.06. Binding Effect; Survival. This
Agreement shall become effective when it shall have been executed
by the Borrower and the Administrative Agent and when the
Administrative Agent shall have been notified by each Lender that
such Lender has executed it and thereafter shall be binding upon
and inure to the benefit of the Borrower, the Agents and each
Lender and their respective successors and assigns, except that
the Borrower shall not have the right to assign its rights
hereunder or any interest herein without the prior written
consent of the Lenders. Without prejudice to the survival of the
other agreements of the Borrower hereunder, the agreements of the
Borrower contained in Sections 2.10, 2.12 and 8.04 shall survive
the payment in full of the obligations of the Borrower hereunder.
SECTION 8.07. Assignments and Participations. (a)
Each Lender may, and, if demanded by the Borrower (following a
demand by such Lender pursuant to Section 2.10 or 2.12, or notice
by such Lender pursuant to Section 2.02(b)(ii) or within 60 days
after such Lender's failure to grant a consent or waiver, or to
execute an amendment, which consent, waiver or amendment was
requested by the Borrower in writing) upon at least ten Business
Days' notice to such Lender and the Administrative Agent, shall
promptly, assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its
Commitments and the Advances owing to it); provided, however,
that (i) each such Assignment shall be of a uniform, and not a
varying, percentage of all rights and obligations under or in
respect of one or more of the Facilities, (ii) except in the case
of an assignment to a Person that, immediately prior to such
assignment, was a Lender or an assignment of all of a Lender's
rights and obligations under this Agreement, the amount of the
Commitment of the assigning Lender being assigned pursuant to
each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event
be less than $5,000,000 unless the Borrower shall otherwise
consent in writing, (iii) with respect to any such assignment
(other than an assignment made as a result of a demand by the
Borrower pursuant to this Section 8.07(a)) by a Lender that is an
original signatory hereto, such Lender shall, unless the Borrower
shall otherwise consent in writing, retain a Commitment under
both Facilities that is equal to or greater than $5,000,000, (iv)
each such assignment made as a result of a demand by the Borrower
pursuant to this Section 8.07(a): (A) shall be arranged by the
Borrower after consultation with the Administrative Agent, (B)
shall be either an assignment of all of the rights and
obligations of the assigning Lender under this Agreement or an
assignment of a portion of such rights and obligations made
concurrently with another such assignment or other such
assignments that together cover all of the rights and obligations
of the assigning Lender under this Agreement, except that the
provisions of Sections 2.10, 2.12 and 8.04 shall inure to its
benefit as to any actions taken or omitted to be taken by it
while it was a Lender under this Agreement, and (C) if demanded
by the Borrower due to the failure of such Lender to grant a
consent or waiver or to execute an amendment requested by the
Borrower, which consent, waiver or amendment has not been
approved by the Required Lenders, all the rights and obligations
of each other Lender that has failed to grant such consent or
waiver or execute such amendment shall have been assigned to one
or more Lenders and/or Eligible Assignees who shall have granted
such consent or waiver or executed such amendment (or, in the
case of an Eligible Assignee that is not a Lender at such time,
shall have agreed to grant such consent or waiver or to execute
such amendment), (v) no Lender shall be obligated to make any
such assignment as a result of a demand by the Borrower pursuant
to this Section 8.07(a) unless and until such Lender shall have
received one or more payments from either the Borrower or one or
more Eligible Assignees in an aggregate amount at least equal to
the aggregate outstanding principal amount of the Advances owing
to such Lender, together with accrued interest thereon to the
date of payment of such principal amount and all other amounts
payable to such Lender under the Loan Documents and (vi) the
parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with a
processing and recordation fee of $2,500.00 (which, (a) in the
case of any assignment made as a result of a demand by the
Borrower under this Section 8.07(a), shall be payable by the
Borrower and (b) shall not be payable in the case of any
assignment by a Lender to an Affiliate thereof). Upon such
execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, (A)
the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned
to it pursuant to such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder and (B) the Lender assignor
thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment
and Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee
thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) other than as provided in such
Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in
or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of
this Agreement or any other instrument or document furnished
pursuant hereto; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with
respect to the financial condition of any LIN Party, any of
Subsidiary of such LIN Party or any Principal Cellular
Partnership or the performance or observance by any LIN Party or
any of Subsidiary of such LIN Party's of any of its obligations
under this Agreement or any other instrument or document
furnished pursuant hereto; (iii) such assignee confirms that it
has received a copy of this Agreement, together with copies of
the financial statements referred to in Section 4.01 and such
other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee agrees that it
will, independently and without reliance upon the Agents, such
assigning Lender or any other Lender and based on such documents
and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee confirms that it
is an Eligible Assignee; (vi) such assignee appoints and
authorizes the Agents to take such action as agent on its behalf
and to exercise such powers and discretion under this Agreement
as are delegated to the Agents by the terms hereof, together with
such powers and discretion as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as a Lender.
(c) The Administrative Agent shall maintain at its
address referred to in Section 8.02 a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and the
Commitment under each Facility of, and principal amount of the
Advances owing under each Facility to, each Lender from time to
time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error,
and the Borrower, the Agents and the Lenders may treat each
Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall
be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee representing that
it is an Eligible Assignee, the Administrative Agent shall, if
such Assignment and Acceptance has been completed and is in the
form of Exhibit A hereto with such immaterial changes as are
acceptable to the Administrative Agent, (i) accept such
Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to
the Borrower.
(e) Each Lender may sell participations to one or more
financial institutions or other entities (other than any entity
that owns or operates a Cellular Business or any Affiliate
thereof) in or to all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a
portion of its Commitments and the Advances owing to it);
provided, however, that (i) such Lender's obligations under this
Agreement (including, without limitation, its Commitments) shall
remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of
such obligations, (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, (iv) no participant shall have any right to
approve any amendment or waiver of any provision of any Loan
Document, or any consent to any departure by any Loan Party
therefrom, except to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the
Advances, or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, postpone any
date fixed for any payment of principal of, or interest on, the
Advances or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, and (v) each
participant shall represent to such Lender that it is not an
entity that owns or operates a Cellular Business or an Affiliate
thereof.
(f) Any Lender may, in connection with any assignment
or participation or proposed assignment or participation pursuant
to this Section 8.07, disclose to the assignee or participant or
proposed assignee or participant any Confidential Information;
provided, however, that, prior to any such disclosure, the
assignee or participant or proposed assignee or participant shall
agree to preserve the confidentiality of such Confidential
Information as set forth in Section 8.10.
(g) Nothwithstanding any other provision set forth in
this Agreement, any Lender may at any time create a security
interest in all or any portion of its rights under this Agreement
(including, without limitation, the Advances owing to it) in
favor of any Federal Reserve Bank in accordance with Regulation A
of the Board of Governors of the Federal Reserve System.
SECTION 8.08. Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the
State of New York.
SECTION 8.09. Execution in Counterparts. This
Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Agreement.
SECTION 8.10. Confidentiality. The Agents and the
Lenders agree that they will not disclose Confidential
Information (as defined below) without the prior consent of the
Borrower (other than to their directors, employees, auditors or
counsel); provided that any Agent and any Lender is authorized to
make such disclosure of Confidential Information without any
consent of the Borrower (a) as may be required by law (such as
pursuant to any subpoena or civil investigative demand) and as
may be requested or required by any state or federal authority,
examiner, regulatory body or agency having jurisdiction over any
Agent or any Lender and (b) as permitted by Section 8.07(f). Any
Agent or Lender authorized to disclose Confidential Information
pursuant to the preceding proviso shall use its best efforts to
give the Borrower prior notice of such disclosure (other than
with respect to any disclosure requested or required by any state
or federal authority, examiner, regulatory body or agency having
jurisdiction over such Agent or Lender). The term "Confidential
Information" means any information delivered by or on behalf of
the Borrower in connection with this Agreement (whether before or
after the date hereof), including, without limitation, Section
5.01(j), that relates to the business, operations or financial
condition of LIN or any of LIN's Subsidiaries or any Principal
Cellular Partnership or any competitor of LIN or any of LIN's
Subsidiaries or any Principal Cellular Partnership or a proposed
acquisition by the Borrower, any of the Borrower's Subsidiaries
or any Principal Cellular Partnership, other than information (a)
that is, or generally becomes, available to the public, (b) that
was available to any Agent or any Lender on a nonconfidential
basis prior to its disclosure to such Agent or such Lender (as
the case may be) by the Borrower or any Affiliate or (c) that
becomes available to any Agent or any Lender from a Person or
other source that is not, to the best knowledge of such Agent or
such Lender (as the case may be), otherwise bound by a
confidentiality obligation to the Borrower.
SECTION 8.11. Waiver of Jury Trial. Each of the
Borrower, the Agents and the Lenders hereby irrevocably waives
all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise)
arising out of or relating to this Agreement, the Advances or the
action of any Agent or any Lender in the negotiation,
administration, performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
LIN CELLULAR NETWORK, INC.
By
Title:
Administrative Agent
TORONTO DOMINION (TEXAS), INC.
as Administrative Agent
By
Title:
Managing Agents
THE TORONTO-DOMINION BANK
as Managing Agent
By
Title:
THE BANK OF NOVA SCOTIA
as Managing Agent
By
Title:
Lenders
BANK OF MONTREAL
By________________________________
Title:
THE BANK OF NEW YORK
By
Title:
THE BANK OF NOVA SCOTIA
By
Title:
BARCLAYS BANK PLC
By
Title:
CANADIAN IMPERIAL BANK OF
COMMERCE
By
Title:
DEUTSCHE BANK AG,
LOS ANGELES BRANCH AND/OR
CAYMAN ISLANDS BRANCH
By
Title:
By
Title:
NATIONSBANK OF TEXAS, N.A.
By
Title:
PNC BANK
By
Title:
SOCIETE GENERALE
By
Title:
THE TORONTO-DOMINION BANK
By
Title:
<PAGE>
SCHEDULE III
Terms of Subordination
DEFINITION ARTICLE
"Bank Agent" means the agent or other representative
designated as the principal representative of the lenders under a
Bank Credit Agreement for purposes of administration of such Bank
Credit Agreement.
"Bank Credit Agreement" means (a) the Credit Agreement
dated as of June 15, 1994 among LIN Cellular Network, Inc., the
banks and financial institutions parties thereto (the "Lenders"),
Toronto Dominion (Texas), Inc., as administrative agent for the
Lenders, and The Toronto-Dominion Bank and The Bank of Nova
Scotia, as managing agents for the Lenders, as such Credit
Agreement may be amended, supplemented or otherwise modified from
time to time, and (b) following payment in full of all amounts
outstanding under such Credit Agreement and termination of all
commitments to lend thereunder, each credit or loan agreement
refinancing, refunding or replacing, in whole or in part, such
Credit Agreement.
"Bank Loan Documents" means each Bank Credit Agreement,
all agreements entered into to secure, guarantee or support
obligations under or in respect of such Bank Credit Agreement,
and each other agreement, document or instrument delivered
pursuant to or in respect of such Bank Credit Agreement or any
such agreement to secure, guarantee or support, as any of the
foregoing may be amended, supplemented or otherwise modified from
time to time (including any refinancings, refundings, or
replacements thereof).
"Cash Equivalents" means (a) obligations issued or
unconditionally guaranteed by the United States or any agency
thereof; (b) insured certificates of deposit of any commercial
bank organized under the laws of the United States or any state
thereof or any other country that is a member of the Organization
for Economic Cooperation and Development or any political
subdivision of such country and having combined capital and
surplus of at least $1 billion; or (c) commercial paper with a
rating at the time of receipt thereof by a holder or owner of
Senior Indebtedness of at least "Prime-1" by Moody's Investors
Services, Inc. or "A-1" by Standard & Poor's Corporation.
"Hedging Agreement" means an interest rate swap
agreement or any other similar agreement designed to hedge
against fluctuations in interest rates.
"Requisite Holder" means (a) any holder or holders of
(or any representative thereof, including a trustee under an
indenture governing Senior Indebtedness) at least (i) $200
million aggregate outstanding principal amount of Senior
Indebtedness or (ii) 40% of the outstanding principal amount of
all Senior Indebtedness or (b) the Bank Agent.
"Senior Indebtedness" means all obligations of the
Company now or hereafter existing under or in respect of the
following, whether for principal, premium, if any, interest
(including, without limitation, interest following the filing of
a petition initiating any proceeding referred to in Section
.02, whether or not such interest accrues after the filing of
such petition for purposes of the Bankruptcy Code or is an
allowed claim in such proceeding), fees, expenses, indemnities or
otherwise: (i) the Bank Loan Documents, (ii) Hedging
Agreements[, (iii) list any other specified Senior Indebtedness]
and ( ) all other Indebtedness (present or future) created,
incurred or assumed by the Company (and all amendments,
supplements, renewals, extensions or refundings thereof), unless,
in the case of any of clauses (i), (ii)[, (iii)] and ( ) above,
the instrument under or in respect of which any such obligation
or Indebtedness is created, incurred or assumed expressly
provides that such obligation or Indebtedness is not senior in
right of payment to the Securities, but Senior Indebtedness does
not include (a) Indebtedness of the Company to any of its
Subsidiaries or Affiliates (other than an Affiliate which
controls, directly or indirectly, the Company, or a Subsidiary of
such an Affiliate, unless the instrument under which any such
Indebtedness is created, incurred or assumed expressly provides
that such Indebtedness is not senior in right of payment to the
Securities), (b) any Indebtedness or liability for compensation
to employees of the Company, or incurred for the purchase of
goods or materials or for services obtained in the ordinary
course of business and which constitutes a trade payable and (c)
[list any specified pari passu or subordinated Indebtedness]
which shall rank equally with [or subordinated to] the
Securities.
"Subordinated Indebtedness" means all obligations of
the Company in respect of Indebtedness now or hereafter existing
under this Indenture and the Securities (whether created directly
or acquired by assignment or otherwise), whether for principal,
premium, if any, interest, fees, expenses, indemnities or other
amounts payable in respect thereof, including, without
limitation, amounts payable to acquire any Securities or on
account of the redemption or repurchase provisions of this
Indenture or the Securities; provided that Subordinated
Indebtedness does not include any fees, indemnities and other
amounts payable to the Trustee for its own account pursuant to
this Indenture.
DEFAULTS AND REMEDIES ARTICLE
Include as a limitation on the effectiveness of a vote
to accelerate the Securities and on other remedies with respect
to the Securities:
provided, however, that until all Senior Indebtedness under or in
respect of the Bank Loan Documents has been paid in full, (i)
upon a declaration of acceleration, such principal and accrued
interest shall be due and payable upon the first to occur of an
acceleration under the Bank Credit Agreement or the day which is
five Business Days after the giving to the Company and the Bank
Agent of such written notice if such Event of Default is
continuing on such day and (ii) the Trustee or any holder or
owner of Subordinated Indebtedness may pursue any remedy
available hereunder or at law or in equity only upon or after the
day that is five Business Days after the giving to the Company
and the Bank Agent written notice, at a time at which it is
otherwise entitled to pursue such remedy, of its intention to do
so, specifying such remedy.<PAGE>
SUBORDINATION ARTICLE
Section .01. Agreement to Subordinate. The Company
agrees, and each Securityholder by accepting a Security agrees,
that the Subordinated Indebtedness is subordinated in right of
payment, to the extent and in the manner provided in this
Article, to the prior payment in full of all Senior Indebtedness,
that the subordination is for the benefit of the holders and
owners of Senior Indebtedness and that such holders and owners
are made obligees hereunder and any one or more of them may
enforce the provisions of this Article directly.
For purposes of this Indenture, unless a holder or
owner of Senior Indebtedness agrees otherwise in writing at the
time or unless otherwise provided in the instrument under which
any Senior Indebtedness is created, incurred or assumed (which
writing or instrument must specifically refer to this Section),
no Senior Indebtedness shall be deemed to have been paid in full
until the holders or owners of such Senior Indebtedness shall
have received payment in full of such Senior Indebtedness in cash
or Cash Equivalents.
Section .02. Liquidation; Dissolution; Bankruptcy.
Upon any payment or distribution to creditors of the Company in a
liquidation or dissolution of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property or in an assignment for
the benefit of creditors or any marshalling of the assets and
liabilities of the Company:
(1) holders and owners of Senior Indebtedness shall be
entitled to receive payment in full of all Senior
Indebtedness before any payment may be made under or in
respect of the Subordinated Indebtedness; and
(2) until all Senior Indebtedness is paid in full, any
payment of all or any of the Subordinated Indebtedness, and
any payment or distribution of any kind (whether in cash,
property or securities) that otherwise would be payable or
deliverable upon or with respect to the Subordinated
Indebtedness in any such case, proceeding, assignment,
marshalling or otherwise shall be paid or delivered directly
to the Bank Agent and to the holders or owners of the other
Senior Indebtedness or their representatives, ratably in
accordance with the outstanding amount of Senior
Indebtedness under or in respect of the Bank Loan Documents
and such other Senior Indebtedness, respectively, for
application (in the case of cash or Cash Equivalents) to, or
as collateral (in the case of non-cash property or
securities other than Cash Equivalents) for, the payment or
prepayment of the Senior Indebtedness until the Senior
Indebtedness shall have been paid in full.
Section .03. Default on Senior Indebtedness. Upon
the final maturity of any Senior Indebtedness by lapse of time,
acceleration or otherwise, all such Senior Indebtedness shall
first be paid in full before any payment or distribution may be
made under or in respect of the Subordinated Indebtedness.
No payment or distribution under or in respect of the
Subordinated Indebtedness (including payments pursuant to
[mandatory redemption, sinking fund or other similar provisions],
except payments made in Securities acquired by the Company before
the maturity of such Senior Indebtedness) may be made during any
period in which:
(i) a default in the payment of principal, premium, if
any, or interest on Senior Indebtedness occurs and is
continuing; or
(ii) the Company receives a notice from any Requisite
Holder of Senior Indebtedness of a default, other than a
payment default, under any Senior Indebtedness permitting an
acceleration thereof or which would permit an acceleration
thereof with the giving of notice or the passage of time or
both and such default is continuing and 180 days (or such
longer period in the event of certain circumstances
described below) have not passed since the date of receipt
of such notice (such date being the "Initial Date").
The Company may resume payments on and distributions in
respect of the Subordinated Indebtedness when:
(1) the default is cured or waived, or
(2) in the case of a default referred to in clause
(ii) above, 180 days (or such longer period as described
below) have passed since the Initial Date, or each of the
Requisite Holders of Senior Indebtedness which have given
notices commencing such 180-day period rescind such notices,
if this Article otherwise permits the payment or distribution at
the time of such payment or distribution.
Only one such 180-day period during which the Company
may not make any payment or distribution in respect of the
Subordinated Indebtedness may commence within any 360 consecutive
days; provided that following the delivery of a notice by any
Requisite Holder commencing such a 180-day period, any other
Requisite Holder may send a similar notice commencing such a
180-day period as of the same Initial Date, each of which notices
may only be rescinded by the Requisite Holder which gave it; and
provided further that if, after the commencement of any such
180-day period or of any subsequent 180-day period commenced
pursuant to this further proviso (such period, whether the
initial such period or a subsequent such period, being herein
called the "Existing Period"), either (x) there shall be a New
Default (as defined below) or (y) there shall be material
deterioration (in the good faith judgment of any Requisite Holder
of Senior Indebtedness which gave a notice commencing such
180-day period) in the condition, operations or prospects of the
Company and its Subsidiaries, compared to their respective
condition, operations or prospects at the time of commencement of
the Existing Period, this sentence shall not prevent any
Requisite Holder of Senior Indebtedness which gave a notice
commencing such 180-day period (by written notice to the Trustee,
which notice shall specify the facts and circumstances giving
rise to such notice) from commencing a subsequent 180-day period.
"New Default" means any default (including an unmatured
event of default) under Senior Indebtedness which (1) was not a
default which existed at the time of commencement of the Existing
Period and of which the Requisite Holder of Senior Indebtedness
which gave the notice on the Initial Date had actual knowledge at
such time, (2) was not a default which arose solely out of facts
or circumstances in existence at the time of commencement of the
Existing Period and of which facts and circumstances the
Requisite Holder of Senior Indebtedness which gave the notice on
the Initial Date had actual knowledge at such time, and (3) has
not been cured or waived.
Section .04. Acceleration of Securities. If payment
of the Securities is accelerated because of an Event of Default,
the Company shall promptly notify the holders and owners of
Senior Indebtedness of the acceleration. A copy of such notice
shall be given to the Trustee. Nothing contained in this Article
will limit the right of the Trustee or the Securityholders to
take any action to accelerate the maturity of the Securities
pursuant to Section ___ or to pursue, pursuant to Section __, any
rights or remedies hereunder against the Company; provided that
all Senior Indebtedness then or thereafter due or declared to be
due shall first be paid in full before any payment or
distribution may be made under or in respect of the Subordinated
Indebtedness.
Section .05. When Distribution Must Be Paid Over.
If a payment or distribution is made to the Trustee or any holder
or owner of Subordinated Indebtedness that because of this
Article should not have been made to it, the Trustee or such
holder or owner of Subordinated Indebtedness who receives the
payment or distribution shall hold it in trust for the benefit
of, and shall forthwith pay it over to, the Bank Agent and to the
holders or owners of the other Senior Indebtedness or their
representatives, ratably in accordance with the outstanding
amount of Senior Indebtedness under or in respect of the Bank
Loan Documents and such other Senior Indebtedness, respectively,
for application (in the case of cash or Cash Equivalents) to, or
to be held as collateral (in the case of non-cash property or
securities other than Cash Equivalents) for, the payment or
prepayment in full of all Senior Indebtedness after giving effect
to any concurrent payment or distribution to or for the holders
and owners of Senior Indebtedness.
With respect to the holders and owners of Senior
Indebtedness, the Trustee undertakes to perform only such
obligations on the part of the Trustee as are specifically set
forth in this Article, and no implied covenants or obligations
with respect to the holders or owners of Senior Indebtedness
shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the
holders or owners of Senior Indebtedness, and shall not be liable
to any such holders or owners if the Trustee shall pay over or
distribute to or on behalf of Securityholders or the Company or
any other person money or assets to which any holders or owners
of Senior Indebtedness shall be entitled by virtue of this
Article, except if such payment is made as a result of the
willful misconduct or negligence of the Trustee.
Section .06. Notice by Company. The Company shall
promptly notify the Trustee and the Payment Agent of any facts
known to the Company that would cause a payment or distribution
under or in respect of the Subordinated Indebtedness to violate
this Article, but failure to give such notice shall not affect
the subordination of the Subordinated Indebtedness to the Senior
Indebtedness provided in this Article.
Section .07. Subrogation. After all Senior
Indebtedness is paid in full and until the Securities are paid in
full, Securityholders shall be subrogated to the rights of
holders and owners of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness to the extent
that distributions otherwise payable to the Securityholders have
been applied to the payment of Senior Indebtedness. A
distribution made under this Article to holders of Senior
Indebtedness which otherwise would have been made to
Securityholders is not, as between the Company and
Securityholders, a payment by the Company on the Senior
Indebtedness.
Section .08. Relative Rights. This Article defines
the relative rights of Securityholders and holders of Senior
Indebtedness. Nothing in this Indenture shall:
(1) impair, as between the Company and
Securityholders, the obligation of the Company, which is
absolute and unconditional, to pay principal of and interest
on the Securities in accordance with their terms;
(2) affect the relative rights of Securityholders and
creditors of the Company other than their rights in relation
to holders and owners of Senior Indebtedness; or
(3) other than as specifically set forth in this
Indenture and, subject to the rights of holders and owners
of Senior Indebtedness to receive distributions and payments
otherwise payable to holders or owners of Subordinated
Indebtedness, prevent the Trustee or any Securityholder from
exercising its available remedies upon a Default or Event of
Default.
If the Company fails because of this Article to pay
principal of or interest on a Security on the due date, the
failure is still a Default or Event of Default.
Section .09. Subordination May Not Be Impaired by
Company. No right of any holder or owner of Senior Indebtedness
to enforce the subordination of the Subordinated Indebtedness
shall be impaired by any act or failure to act by the Company or
by its failure to comply with this Indenture.
Section .10. Distribution or Notice to
Representative. Whenever a distribution is to be made or a
notice given to holders or owners of Senior Indebtedness, the
distribution may be made and the notice given to their
representative.
Upon any payment or distribution of assets of the
Company referred to in this Article, the Trustee and the
Securityholders shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction or upon any
certificate of such representative or of the liquidating trustee
or agent or other duly authorized person making any distribution
to the Trustee or to the Securityholders for the purpose of
ascertaining the persons entitled to participate in such
distribution, the holders and owners of the Senior Indebtedness
and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article.
Section .11. Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article or any other
provision of this Indenture, the Trustee shall not be charged
with knowledge of the existence of any facts which would prohibit
the making of any payment or distribution by the Trustee and the
Trustee or Paying Agent may continue to make payments on the
Securities unless it shall have received at its Corporate Trust
Office at least five (5) Business Days prior to the date of such
payment written notice of facts that would cause the payment of
any Subordinated Indebtedness to violate this Article. Only the
Company, the Bank Agent, a representative or a holder or owner of
an issue of Senior Indebtedness that has no representative may
give the notice. Nothing in this Section is intended to or shall
relieve any holder or owner of Subordinated Indebtedness from the
obligations imposed under Section .05 with respect to moneys or
other distributions received in violation of the provisions
hereof.
The Trustee in its individual or any other capacity may
hold Senior Indebtedness with the same rights it would have if it
were not Trustee. Any Paying Agent may do the same with like
rights.
Section .12. Authorization to Effect Subordination.
(a) Each holder or owner of Subordinated Indebtedness by his
acceptance thereof authorizes and directs the Trustee on his or
her behalf to take such action as may be necessary or appropriate
to effectuate the subordination as provided in this Article, and
appoints the Trustee his or her attorney-in-fact for any and all
such purposes, including, in the event of any dissolution,
winding up, liquidation or reorganization of the Company (whether
voluntary or involuntary, in bankruptcy, insolvency,
receivership, arrangement, reorganization, or relief proceedings
or upon an assignment for the benefit of creditors or any
marshalling of the assets and liabilities of the Company or any
other similar remedy or otherwise), the immediate filing of a
claim for the unpaid balance of the Subordinated Indebtedness in
the form required in said proceedings and causing said claim to
be approved. If the Trustee does not file a proper claim or
proof of debt in the form required in such proceeding prior to 30
days before the expiration of the time to file such claim or
claims, then the holders and owners of Senior Indebtedness are
hereby authorized to file an appropriate claim for and on behalf
of the holders or owners of the Subordinated Indebtedness.
(b) The Bank Agent is hereby authorized to demand
specific performance of the provisions of this Article at any
time when the holders or owners of the Subordinated Indebtedness
or the Trustee shall have failed to comply with any of the
provisions of this Article applicable to them. The holders or
owners of the Subordinated Indebtedness and the Trustee hereby
acknowledge that the provisions of this Article are intended to
be enforceable at all times, whether before or after the
commencement of a proceeding referred to in Section .02. In no
event shall this Section .12 allow the holders of any Senior
Indebtedness, as such, to vote the Subordinated Indebtedness.
Section .13. Subordination May Not Be Impaired. No
right of any holder of Senior Indebtedness to enforce the
subordination of the Subordinated Indebtedness evidenced by the
Securities shall be impaired by (i) any act or failure to act by
the Company or by its failure to comply with this Indenture,
(ii) any act or failure to act by holders of Senior Indebtedness
which results, or may result, in effecting, impairing or
extinguishing any right of reimbursement or subrogation or other
right or remedy of the holders or owners of Subordinated
Indebtedness, and (iii) any other act or failure to act by any
holder of Senior Indebtedness regardless of any knowledge of any
failure by the Company to comply with this Indenture that any
such holder may have or otherwise be charged with.
Without in any way limiting the generality of the
foregoing paragraph, the holders of Senior Indebtedness may, at
any time and from time to time, without the consent of or notice
to the Trustee or the holders or owners of Subordinated
Indebtedness, without incurring responsibility to the holders or
owners of Subordinated Indebtedness and without impairing or
releasing the subordination provided in this Article or the
obligations hereunder of the holders or owners of Subordinated
Indebtedness to the holders of the Senior Indebtedness, do any
one or more of the following: (i) change the manner, place or
terms of payment or extend the time of payment of, or renew or
alter, or increase or decrease the rate of interest or fees
applicable to, Senior Indebtedness, or otherwise amend or
supplement in any manner Senior Indebtedness or any instrument
evidencing the same or any agreement under which Senior
Indebtedness is outstanding; (ii) sell, exchange, release,
foreclose upon or otherwise deal with any property pledged,
mortgaged or otherwise securing Senior Indebtedness; (iii)
release any person liable in any manner for the payment or
collection of Senior Indebtedness; (iv) exercise or refrain from
exercising any rights against the Company and any other person;
and (v) decrease or increase the principal amount of such Senior
Indebtedness. Nothing in this Section .13 shall be construed as
providing that if any Senior Indebtedness is paid in full, the
subordination of the Subordinated Indebtedness is not released
with respect to such Senior Indebtedness; provided that the
provisions of this Article shall continue to be effective
or be reinstated, as the case may be, if at any time any payment
in respect of Senior Indebtedness is rescinded or must otherwise
be returned by the Bank Agent or any other holder or owner of
Senior Indebtedness upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, all as though such
payment had not been made.
<PAGE>
EXHIBIT A
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of
June 15, 1994 (the "Credit Agreement") among LIN Cellular
Network, Inc., a Delaware corporation (the "Borrower"), the
Lenders party thereto (the "Lenders"), Toronto Dominion (Texas),
Inc., as administrative agent for the Lenders (together with any
successor appointed pursuant to the Credit Agreement, the
"Administrative Agent"), and The Bank of Nova Scotia and The
Toronto-Dominion Bank, as managing agents for the Lenders
(together with any successors appointed pursuant to the Credit
Agreement, the "Managing Agents"). Terms defined in the Credit
Agreement are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on
Schedule I agree as follows:
1. The Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes from the
Assignor, an interest in and to all of the Assignor's rights and
obligations under the Credit Agreement as of the date hereof
equal to the percentage interest specified on Schedule I of all
outstanding rights and obligations under the Facility or
Facilities specified on Schedule I other than the Assignor's
right to receive payment under Section 2.10, 2.12 or 8.04 of the
Credit Agreement. After giving effect to such sale and
assignment, the Assignee's Commitments and the amount of the
Advances owing to the Assignee will be as set forth on Schedule
I.
2. The Assignor (i) represents and warrants that it
is the legal and beneficial owner of the interest being assigned
by it hereunder and that such interest is free and clear of any
adverse claim; (ii) makes no representation or warranty and
assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant
thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition
of the Borrower, any Subsidiary of the Borrower or any Principal
Cellular Partnership or the performance or observance by the
Borrower of any of its obligations under the Credit Agreement or
any other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a
copy of the Credit Agreement, together with copies of the
financial statements referred to in Section 4.01 thereof and such
other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon the Agents, the Assignor
or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the
Credit Agreement; (iii) confirms that it is an Eligible Assignee;
(iv) appoints and authorizes each of the Agents to take such
action as agent on its behalf and to exercise such powers and
discretion under the Credit Agreement as are delegated to such
Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; (v) agrees that
it will perform in accordance with their terms all of the
obligations that by the terms of the Credit Agreement are
required to be performed by it as a Lender; (vi) specifies as its
Domestic Lending Office (and address for notices), CD Lending
Office, and LIBO Lending Office the offices set forth beneath its
name on Schedule I hereto and (vii) if the Assignee is organized
under the laws of a jurisdiction outside the United States and
such forms are required under Section 2.12(e) of the Credit
Agreement, attaches the forms or documents required by such
Section 2.12.
4. Following the execution of this Assignment and
Acceptance, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent. The
effective date for this Assignment and Acceptance (the "Effective
Date") shall be the date of acceptance hereof by the
Administrative Agent, unless otherwise specified on Schedule I.
5. Upon such acceptance and recording by the
Administrative Agent, as of the Effective Date, (i) the Assignee
shall be a party to the Credit Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall,
to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under
the Credit Agreement.
6. Upon such acceptance and recording by the
Administrative Agent, from and after the Effective Date, the
Administrative Agent shall make all payments under the Credit
Agreement in respect of the interest assigned hereby (including,
without limitation, all payments of principal, interest and
commitment fees with respect thereto) to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments in
payments under the Credit Agreement for periods prior to the
Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed
by, and construed in accordance with, the laws of the State of
New York.
8. This Assignment and Acceptance may be executed in
any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed
counterpart of Schedule I to this Assignment and Acceptance by
telecopier shall be effective as delivery of a manually executed
counterpart of this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have
caused Schedule I to this Assignment and Acceptance to be
executed by their officers thereunto duly authorized as of the
date specified thereon.
<PAGE>
Schedule I
to
Assignment and Acceptance
[As to each Facility in respect of which
an interest is being assigned:]
Percentage interest assigned: %
Assignee's Commitment: $
Aggregate outstanding principal amount
of Advances assigned: $
Effective Date (if other than date of
acceptance by Administrative Agent): , 19
[NAME OF ASSIGNOR], as Assignor
By
Title:
Dated: , 19
[NAME OF ASSIGNEE], as Assignee
By
Title:
Domestic Lending Office:
CD Lending Office:
LIBO Lending Office:
Accepted this day
of , 19
[NAME OF ADMINISTRATIVE AGENT]
By _________________________
Title:<PAGE>
EXHIBIT C
NOTICE OF BORROWING
Toronto Dominion (Texas), Inc.,
as Administrative Agent
for the Lenders party
to the Credit Agreement
referred to below
909 Fannin
Suite 1700
Houston, Texas 77010 June 20, 1994
Attention: Manager, Agency
Gentlemen/Women:
The undersigned, LIN Cellular Network, Inc., refers to
the Credit Agreement dated as of June 15, 1994 (the "Credit
Agreement", the terms defined therein being used herein as therein
defined), among the undersigned, the Lenders party thereto (the
"Lenders"), Toronto Dominion (Texas), Inc., as administrative
agent for the Lenders, and The Bank of Nova Scotia and The
Toronto-Dominion Bank, as managing agents for the Lenders, and
hereby gives you notice, irrevocably, pursuant to Section 2.02 of
the Credit Agreement that the undersigned hereby requests a
Borrowing under the Credit Agreement, and in that connection sets
forth below the information relating to such Borrowing (the
"Proposed Borrowing") as required by Section 2.02(a) of the Credit
Agreement:
(i) The Business Day of the Proposed Borrowing is June
23, 1994.
(ii) The Facility under which the Proposed Borrowing is
requested is the Facility.
(iii) The Type of Advances comprising the Proposed
Borrowing is LIBO Rate Advances.
(iv) The aggregate amount of the Proposed Borrowing is
$ .
(v) The Interest Period for each Advance made
as part of the Proposed Borrowing is .
(vi) The proceeds of the Proposed Borrowing will be used
to [or to refinance a
Borrowing].
The undersigned hereby certifies that the following
statements are true on the date hereof, and will be true on the
date of the Proposed Borrowing:
(A) the representations and warranties contained in the
Credit Agreement are correct on and as of the date of the Proposed
Borrowing, before and after giving effect to the Proposed
Borrowing and to the application of the proceeds therefrom, as
though made on and as of such date (except to the extent that any
such representation or warranty by its terms relates to a
specified prior date); and
(B) no event has occurred and is continuing, or would
result from such Proposed Borrowing or from the application of the
proceeds therefrom, that constitutes a Default.
Very truly yours,
LIN CELLULAR NETWORK, INC.
By ____________________________
Title:
<PAGE>
EXHIBIT E
SOLVENCY CERTIFICATE
I, , [Specify Office] of LIN Cellular
Network, Inc. (the "Borrower"), hereby certify, for and on behalf
of the Borrower and in my capacity as an officer, that I am the
chief financial officer of the Borrower, that I am familiar with
its properties, businesses, assets, finances and operations and
that I am duly authorized to execute this Certificate on behalf of
the Borrower, which is being delivered pursuant to Section
3.01(h)(ix) of the Credit Agreement, dated as of June 15, 1994
(the "Credit Agreement") among the Borrower, the Lenders named
therein (the "Lenders"), Toronto Dominion (Texas) Inc., as
Administrative Agent, and The Bank of Nova Scotia and The
Toronto-Dominion Bank, as Managing Agents. Terms defined in the Credit
Agreement are used herein as therein defined unless otherwise
defined herein.
I further certify, for and on behalf of the Borrower and
in my capacity as an officer, that I have reviewed the Credit
Agreement and the contents of this Certificate and, in connection
herewith, have made such investigation and inquiries as I deem
necessary and appropriate therefor.
I hereby further certify, for and on behalf of the
Borrower and in my capacity as an officer, that:
1. On the date hereof, after giving effect to the
Acquisitions and the consummation of the other transactions
contemplated by the Credit Agreement, the fair value of any and
all property of the Borrower is greater than the total amount of
liabilities, including contingent liabilities, of the Borrower.
2. On the date hereof, after giving effect to the
Acquisitions and the consummation of the other transactions
contemplated by the Credit Agreement, the present fair saleable
value of the assets of the Borrower exceeds the amount that will
be required to pay the probable liability of the Borrower on its
debts as they become absolute and matured.
3. In reaching the conclusions set forth in paragraphs
1 and 2 above, I have considered, among other things:
(a) all contingent liabilities of the Borrower
including, without limitation, claims arising out of pending
or, to the best of my knowledge, threatened litigation
against it, which liabilities have been computed at the
amount that, in light of all the facts and circumstances
existing on the date hereof, can reasonably be expected to
become an actual or matured liability;
(b) the experience of the Affiliates of the
Borrower in acquiring and disposing of properties forming
part of the Borrower's business;
(c) the valuations accorded Franchise Interests in
recent acquisition transactions;
(d) the terms of the Existing Partnership
Agreements; and
(e) the distribution practices of each of the
Principal Cellular Partnerships including the amounts
received or receivable by the Borrower or its Subsidiaries.
4. On the date hereof, after giving effect to the
Acquisitions and the other transactions contemplated by the Credit
Agreement, the Borrower is not engaged in business or a
transaction, and is not about to be engaged in business or a
transaction, for which its property would constitute an
unreasonably small capital.
5. The Borrower does not intend to or believe that it
will incur debts and liabilities that will be beyond its ability
to pay as such debts and liabilities mature.
6. In reaching the conclusions set forth in paragraphs
4 and 5 above, I have considered, among other things:
(a) the experience of the Affiliates of the
Borrower in acquiring and disposing of properties forming
part of the Borrower's business;
(b) the amortization requirements of the 1990
Credit Agreement and anticipated interest payable on the
Advances under the Credit Agreement and on advances under the
1990 Credit Agreement;
(c) the level of capital customarily maintained by
the Borrower and other entities engaged in the same or
similar business as the businesses of the Borrower;
(d) the terms of the Existing Partnership
Agreements;
(e) the distribution practices of each of the
Principal Cellular Partnerships including the amount of such
distributions received or receivable by the Borrower or its
Subsidiaries; and
(f) any mandatory payment or prepayment under the
Credit Agreement or the 1990 Credit Agreement.
7. The Borrower does not intend, in consummating the
transactions contemplated by the Credit Agreement, to hinder,
delay or defraud either present or future creditors.
IN WITNESS WHEREOF, the undersigned has caused its
[Specify Office] to execute this Certificate on its behalf this
day of June, 1994.
LIN CELLULAR NETWORK, INC.
By
Title: [Specify Office]
EXHIBIT 11
Statement re Computation of Per Share Earnings
(Amounts in thousands except per share amounts)
Year ended December 31,
1991 1992 1993
------------------------------
Primary
Average shares outstanding 51,565 51,445 51,417
Net effect of dilutive
stock options based on
the treasury stock
method using the
average market price 475 -- --
------- ------- -------
Total 52,040 51,445 51,417
======== ======== ========
Net Income (Loss) $564,150 $(60,727) $(68,952)
======== ======== ========
Per Share Amounts $10.94 $(1.18) $(1.34)
======== ======== ========
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
Cellular Long Distance Company (California Corporation)
Cellular Long Distance Company (Texas Corporation)
Cellular Systems, Inc. (New York Corporation)
Cellular Telephone Company (New York General
Partnership)
Cellular Telephone Company
Equipment Sales, Inc. (New Jersey Corporation)
LC Acquisition Corporation (Delaware Corporation)
LCH Holdings, Inc. (Delaware Corporation)
LCH Communications, Inc. (Delaware Corporation)
LCN Holdings, Inc. (Delaware Corporation)
LIN Cellular Communications
Corporation (California Corporation)
LIN Cellular Communications
Corporation (Delaware Corporation)
LIN Cellular Communications
Corporation (New York Corporation)
LIN Cellular Communications
Corporation (Texas Corporation)
LIN Cellular Holdings, Inc. (New York Corporation)
LIN Cellular of Houston, Inc. (Texas Corporation)
LIN Cellular Network, Inc. (Delaware Corporation)
LIN Holdings, Inc. (Delaware Corporation)
LIN Long Distance (Texas), Inc. (Texas Corporation)
LIN Michigan Broadcasting Corporation (Michigan Corporation
MDS Holdings, Inc. (Washington Corporation)
Satellite Communications Investments
Corporation (Delaware Corporation)
Litchfield Acquisition Corporation (Delaware Corporation)
Metrocel Long Distance Company (Texas General
Partnership)
Metroplex Telephone Company (Texas General
Partnership)
Satellite Mobile Telephone Company (Limited Partnership)
Southern California Cellular
Consulting, Inc. (California Corporation)
Transit Communications, Inc. (California Corporation)
EXHIBIT 23.1
Consent of Ernst & Young, Independent Auditors
We consent to the incorporation by reference in the Registration
Statements (Form S-8 Nos. 33-39282 and 2-82944) of LIN
Broadcasting Corporation and in the related Prospectus of our
report dated January 20, 1995, with respect to the consolidated
financial statements and schedules of LIN Broadcasting
Corporation, and our report dated January 20, 1995, with respect
to the combined financial statements and schedule of LIN
Broadcasting Corporation's Unconsolidated Affiliates, included in
the Annual Report (Form 10-K) for the year ended December 31,
1994.
ERNST & YOUNG LLP
Seattle, Washington
March 28, 1995
EXHIBIT 23.2
INDEPENDENT AUDITORS' REPORT
We consent to the incorporation by reference in Registration
Statement No. 33-39282 of Lin Broadcasting Corporation on Form
S-8 of our report dated February 18, 1994 (relating to the
consolidated financial statements of AWACS, Inc. and subsidiaries
as of December 31, 1993 and for the two years ended December 31,
1993 and 1992, not presented separately herein) appearing as an
Exhibit to this Annual Report on Form 10-K of Lin Broadcasting
Corporation for the year ended December 31, 1994.
DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
March 28, 1995
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To LIN Broadcasting Corporation:
As independent public accountants, we hereby consent to the
inclusion of our report dated February 23, 1994 on Garden State
Cablevision L.P. in LIN Broadcasting Corporation's Form 10-K for
the year ended December 31, 1994 into LIN Broadcasting
Corporation's previously filed Registration Statement File No.
33-39282.
ARTHUR ANDERSEN LLP
Philadelphia, PA
March 27, 1995
EXHIBIT 24
POWER OF ATTORNEY FOR FORM 10-K
The person whose signature appears below hereby constitutes
and appoints Tom A. Alberg, Roberta R. Katz and Donald Guthrie,
or any of them, his/her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for
him/her and in his/her name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K for the year
ending December 31, 1994 for LIN Broadcasting Corporation, and to
sign any and all amendments to such Form 10-K, and other
documents in connection therewith, and to file the same, with all
exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto each
said attorney-in-fact and agent, full power and authority to do
and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and
purposes as he/she might or could do in person, hereby ratifying
and confirming all that each of said attorneys-in-fact and agents
or his substitutes, may lawfully do or cause to be done by virtue
thereof.
Name: WILLIAM G. HERBSTER
-------------------------
William G. Herbster
Dated: 3/28/95<PAGE>
POWER OF ATTORNEY FOR FORM 10-K
The person whose signature appears below hereby constitutes
and appoints Tom A. Alberg, Roberta R. Katz and Donald Guthrie,
or any of them, his/her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for
him/her and in his/her name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K for the year
ending December 31, 1994 for LIN Broadcasting Corporation, and to
sign any and all amendments to such Form 10-K, and other
documents in connection therewith, and to file the same, with all
exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto each
said attorney-in-fact and agent, full power and authority to do
and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and
purposes as he/she might or could do in person, hereby ratifying
and confirming all that each of said attorneys-in-fact and agents
or his substitutes, may lawfully do or cause to be done by virtue
thereof.
Name: WILMA H. JORDAN
-------------------------
Wilma H. Jordan
Dated: 3/27/95<PAGE>
POWER OF ATTORNEY FOR FORM 10-K
The person whose signature appears below hereby constitutes
and appoints Tom A. Alberg, Roberta R. Katz and Donald Guthrie,
or any of them, his/her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for
him/her and in his/her name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K for the year
ending December 31, 1994 for LIN Broadcasting Corporation, and to
sign any and all amendments to such Form 10-K, and other
documents in connection therewith, and to file the same, with all
exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto each
said attorney-in-fact and agent, full power and authority to do
and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and
purposes as he/she might or could do in person, hereby ratifying
and confirming all that each of said attorneys-in-fact and agents
or his substitutes, may lawfully do or cause to be done by virtue
thereof.
Name: RICHARD W. KISLIK
-------------------------
Richard W. Kislik
Dated: 3/26/95<PAGE>
POWER OF ATTORNEY FOR FORM 10-K
The person whose signature appears below hereby constitutes
and appoints Tom A. Alberg, Roberta R. Katz and Donald Guthrie,
or any of them, his/her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for
him/her and in his/her name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K for the year
ending December 31, 1994 for LIN Broadcasting Corporation, and to
sign any and all amendments to such Form 10-K, and other
documents in connection therewith, and to file the same, with all
exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto each
said attorney-in-fact and agent, full power and authority to do
and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and
purposes as he/she might or could do in person, hereby ratifying
and confirming all that each of said attorneys-in-fact and agents
or his substitutes, may lawfully do or cause to be done by virtue
thereof.
Name: HAROLD S. EASTMAN
-------------------------
Harold S. Eastman
Dated: 3/27/95<PAGE>
POWER OF ATTORNEY FOR FORM 10-K
The person whose signature appears below hereby constitutes
and appoints Tom A. Alberg, Roberta R. Katz and Donald Guthrie,
or any of them, his/her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for
him/her and in his/her name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K for the year
ending December 31, 1994 for LIN Broadcasting Corporation, and to
sign any and all amendments to such Form 10-K, and other
documents in connection therewith, and to file the same, with all
exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto each
said attorney-in-fact and agent, full power and authority to do
and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and
purposes as he/she might or could do in person, hereby ratifying
and confirming all that each of said attorneys-in-fact and agents
or his substitutes, may lawfully do or cause to be done by virtue
thereof.
Name: STEVEN W. HOOPER
-------------------------
Steven W. Hooper
Dated: 3/27/95<PAGE>
POWER OF ATTORNEY FOR FORM 10-K
The person whose signature appears below hereby constitutes
and appoints Tom A. Alberg, Roberta R. Katz and Donald Guthrie,
or any of them, his/her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for
him/her and in his/her name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K for the year
ending December 31, 1994 for LIN Broadcasting Corporation, and to
file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission.
Name: W. PRESTON GRANBERY
-------------------------
W. Preston Granbery
Dated: 3/30/95<PAGE>
POWER OF ATTORNEY FOR FORM 10-K
The person whose signature appears below hereby constitutes
and appoints Tom A. Alberg, Roberta R. Katz and Donald Guthrie,
or any of them, his/her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for
him/her and in his/her name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K for the year
ending December 31, 1994 for LIN Broadcasting Corporation, and to
file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission.
Name: LEWIS M. CHAKRIN
-------------------------
Lewis M. Chakrin
Dated: 3/29/95<PAGE>
POWER OF ATTORNEY FOR FORM 10-K
The person whose signature appears below hereby constitutes
and appoints Tom A. Alberg, Roberta R. Katz and Donald Guthrie,
or any of them, his/her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for
him/her and in his/her name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K for the year
ending December 31, 1994 for LIN Broadcasting Corporation, and to
file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission.
Name: ROLLA P. HUFF
-------------------------
Rolla P. Huff
Dated: 3/30/95<PAGE>
POWER OF ATTORNEY FOR FORM 10-K
The person whose signature appears below hereby constitutes
and appoints Tom A. Alberg, Roberta R. Katz and Donald Guthrie,
or any of them, his/her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for
him/her and in his/her name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K for the year
ending December 31, 1994 for LIN Broadcasting Corporation, and to
file the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange
Commission.
Name: DENNIS J. CAREY
-------------------------
Dennis J. Carey
Dated: 3/31/95
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