<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________
FORM 10-Q
(Mark One)
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________________to_________________
COMMISSION FILE NUMBER 1-9329
__________________________
PULITZER PUBLISHING COMPANY
(Exact name of registrant as specified in its charter)
__________________________
DELAWARE 430496290
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
900 NORTH TUCKER BOULEVARD, ST. LOUIS, MISSOURI 63101
(Address of principal executive offices)
(314) 340-8000
(Registrant's telephone number, including area code)
NO CHANGES
(Former name, former address and former fiscal year, if changed since last
report)
__________________________
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days.
Yes /x/ No / /
__________________________
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
Class Outstanding 7/31/96
-------------------- --------------------
<S> <C>
Common Stock 4,794,573
Class B Common Stock 11,666,632
</TABLE>
<PAGE> 2
Part I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME
(In thousands, except earnings per share data)
<TABLE>
<CAPTION>
Second Quarter Ended Two Quarters Ended
June 30, June 30,
----------------------- -----------------------
OPERATING REVENUES - NET: 1996 1995 1996 1995
-------- --------- -------- --------
<S> <C> <C> <C> <C>
Publishing: (Unaudited) (Unaudited)
Advertising $42,541 $40,357 $82,454 $78,311
Circulation 18,755 18,813 37,794 37,589
Other 7,225 7,687 14,462 14,758
Broadcasting 59,053 53,769 108,570 98,491
-------- -------- -------- ---------
Total operating revenues 127,574 120,626 243,280 229,149
-------- -------- -------- ---------
OPERATING EXPENSES:
Publishing operations 33,093 31,016 66,031 59,592
Broadcasting operations 16,472 15,636 32,743 31,249
Selling, general and administrative 40,724 38,349 80,216 76,220
St. Louis Agency adjustment 2,873 3,402 4,631 6,690
Depreciation and amortization 6,745 6,722 13,486 13,431
-------- -------- -------- ---------
Total operating expenses 99,907 95,125 197,107 187,182
-------- -------- -------- ---------
Operating income 27,667 25,501 46,173 41,967
Interest income 1,347 1,212 2,775 2,471
Interest expense (2,154) (2,493) (4,543) (5,205)
Net other expense (290) (707) (998) (1,164)
-------- -------- -------- ---------
INCOME BEFORE PROVISION FOR
INCOME TAXES 26,570 23,513 43,407 38,069
PROVISION FOR INCOME TAXES 10,385 9,197 16,981 14,900
-------- -------- -------- ---------
NET INCOME $16,185 $14,316 $26,426 $23,169
======== ======== ======== =========
EARNINGS PER SHARE OF STOCK
(COMMON AND CLASS B COMMON) $0.99 $0.88 $1.61 $1.42
======== ======== ======== =========
WEIGHTED AVERAGE NUMBER OF
SHARES (COMMON AND CLASS B
COMMON STOCK) OUTSTANDING 16,434 16,363 16,417 16,322
======== ======== ======== =========
</TABLE>
See notes to consolidated financial statements.
2
<PAGE> 3
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED FINANCIAL POSITION
(In thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $108,354 $100,380
Trade accounts receivable (less allowance for doubtful
accounts of $2,099 and $2,009) 68,455 64,524
Inventory 4,871 6,190
Prepaid expenses and other 8,166 7,041
Program rights 3,538 8,824
-------- --------
Total current assets 193,384 186,959
-------- --------
PROPERTIES:
Land 11,105 11,779
Buildings 67,803 60,794
Machinery and equipment 180,519 173,165
Construction in progress 3,309 8,745
-------- --------
Total 262,736 254,483
-------- --------
Less accumulated depreciation 144,625 135,296
-------- --------
Properties - net 118,111 119,187
-------- --------
INTANGIBLE AND OTHER ASSETS:
Intangible assets - net of applicable amortization 113,638 117,470
Receivable from The Herald Company 42,293 43,696
Other 34,300 27,761
-------- --------
Total intangible and other assets 190,231 188,927
-------- --------
TOTAL $501,726 $495,073
======== ========
</TABLE>
(Continued)
3
<PAGE> 4
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED FINANCIAL POSITION
(In thousands, except share data)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
----------- ------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $16,536 $14,145
Current portion of long-term debt 14,500 14,250
Salaries, wages and commissions 10,601 11,757
Income taxes payable 2,975 2,618
Program contracts payable 3,806 8,664
Interest payable 3,153 3,415
Pension obligations 1,023 1,023
Other 4,687 2,234
-------- ---------
Total current liabilities 57,281 58,106
-------- ---------
LONG-TERM DEBT 100,000 114,500
-------- ---------
PENSION OBLIGATIONS 26,246 24,631
-------- ---------
POSTRETIREMENT AND POSTEMPLOYMENT
BENEFIT OBLIGATIONS 93,816 92,856
-------- ---------
OTHER LONG-TERM LIABILITIES 5,084 6,209
-------- ---------
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value; 25,000,000 shares
authorized; issued and outstanding - none
Common stock, $.01 par value; 100,000,000 shares authorized;
issued - 4,808,345 in 1996 and 4,704,268 in 1995 48 47
Class B common stock, convertible, $.01 par value; 50,000,000
shares authorized; issued - 20,443,550 in 1996 and
20,474,050 in 1995 205 205
Additional paid-in capital 127,028 125,539
Retained earnings 279,854 260,816
-------- ---------
Total 407,135 386,607
Treasury stock - at cost; 16,975 and 16,712 shares of common
stock in 1996 and 1995, respectively, and 8,775,638 shares of
Class B common stock in 1996 and 1995 (187,836) (187,836)
-------- ---------
Total stockholders' equity 219,299 198,771
-------- ---------
TOTAL $501,726 $495,073
======== =========
</TABLE>
(Concluded)
See notes to consolidated financial statements.
4
<PAGE> 5
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Two Quarters Ended
June 30,
-----------------------------
1996 1995
----------- -----------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $26,426 $23,169
Adjustments to reconcile net income to net cash provided by
operating activities:
Non-cash items:
Depreciation 9,558 9,496
Amortization of intangibles 3,928 3,935
Incremental increase in postretirement and postemployment
benefit obligations 960 775
Changes in assets and liabilities which provided (used) cash:
Trade accounts receivable (3,930) (3,475)
Inventory 1,319 2,109
Other assets 2,281 (1,452)
Trade accounts payable and other liabilities 2,280 (408)
Income taxes payable 357 (3,554)
Program rights - net of contracts payable 192 76
-------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 43,371 30,671
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (10,141) (10,692)
Investment in limited partnerships (2,477) (2,512)
(Increase) decrease in notes receivable (5,099) 1,852
-------- ---------
NET CASH USED IN INVESTING ACTIVITIES (17,717) (11,352)
-------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments on long-term debt (14,250) (14,250)
Dividends paid (4,919) (4,407)
Proceeds from exercise of stock options 1,489 2,129
-------- ---------
NET CASH USED IN FINANCING ACTIVITIES (17,680) (16,528)
-------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 7,974 2,791
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 100,380 77,084
-------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $108,354 $79,875
======== =========
</TABLE>
See notes to consolidated financial statements.
5
<PAGE> 6
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. ACCOUNTING POLICIES
Interim Adjustments - In the opinion of management, the accompanying
unaudited consolidated financial statements contain all adjustments,
consisting only of normal recurring adjustments, necessary to present
fairly Pulitzer Publishing Company's financial position as of June 30,
1996 and the results of operations and cash flows for the six-month
periods ended June 30, 1996 and 1995. Results of operations for
interim periods are not necessarily indicative of the results to be
expected for the full year.
Fiscal Year and Fiscal Quarters - The Company's fiscal year and
second fiscal quarter end on the Sunday coincident with or prior to
December 31 and June 30, respectively. For ease of presentation, the
Company has used December 31 as the year end and June 30 as the second
quarter end.
Earnings Per Share of Stock - Earnings per share of stock have been
computed using the weighted average number of common and Class B common
shares outstanding during the applicable period.
2. DIVIDENDS
In the first quarter of 1995, two dividends of $0.135 per share were
declared, payable on February 1, 1995 and May 1, 1995. In the second
quarter of 1995, a dividend of $0.135 per share was declared, payable on
August 1, 1995. In the third quarter of 1995, a dividend of $0.135 per
share was declared, payable on November 1, 1995. In the first quarter
of 1996, two dividends of $0.15 per share were declared, payable on
February 1, 1996 and May 1, 1996. In the second quarter of 1996, a
dividend of $0.15 per share was declared, payable on August 1, 1996.
In addition, a five-for-four stock split (payable in the form of a 25
percent common and Class B common stock dividend) was declared by the
Company's Board of Directors on January 4, 1995. The dividend was
distributed on January 24, 1995 to stockholders of record on January 13,
1995.
6
<PAGE> 7
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3. BUSINESS SEGMENTS
The Company's operations are divided into two business segments,
publishing and broadcasting. The following is a summary of operating data
by segment (in thousands):
<TABLE>
<CAPTION>
Second Quarter Ended Two Quarters Ended
June 30, June 30,
------------------------- -----------------------
1996 1995 1996 1995
-------- --------- --------- ---------
Operating revenues: (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Publishing $68,521 $66,857 $134,710 $130,658
Broadcasting 59,053 53,769 108,570 98,491
-------- -------- -------- --------
Total $127,574 $120,626 $243,280 $229,149
======== ======== ======== ========
Operating income (loss):
Publishing $5,666 $6,814 $10,464 $12,968
Broadcasting 23,391 19,759 38,386 31,131
Corporate (1,390) (1,072) (2,677) (2,132)
-------- -------- -------- --------
Total $27,667 $25,501 $46,173 $41,967
======== ======== ======== ========
Depreciation and amortization:
Publishing $1,125 $1,041 $2,247 $2,058
Broadcasting 5,620 5,681 11,239 11,373
-------- -------- -------- --------
Total $6,745 $6,722 $13,486 $13,431
======== ======== ======== ========
Operating margins
(Operating income to revenues):
Publishing (a) 12.5% 15.3% 11.2% 15.0%
Broadcasting 39.6% 36.7% 35.4% 31.6%
</TABLE>
(a) Operating margins for publishing stated with St. Louis Agency
adjustment added back to publishing operating income.
7
<PAGE> 8
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
4. ACQUISITION OF PROPERTIES
Subsequent to the end of the second quarter, on July 1, 1996, the Company
acquired in a purchase transaction all of the stock of Scripps League
Newspapers, Inc. ( SLN ), a privately owned company that publishes 16
daily newspapers serving smaller cities, primarily in the West and
Midwest, and a number of non-daily publications. The purchase price of
$214 million (excluding acquisition costs) includes all of the
operating assets of the newspapers as well as working capital of
approximately $7 million and intangibles. The purchase price is subject
to certain adjustments based upon final SLN working capital balances at
June 30, 1996. The SLN acquisition was financed by long-term borrowings
of $135 million (see Note 5) and cash of $79 million.
The following supplemental unaudited pro forma information shows the
results of operations of the Company for the six-month periods ended June
30, 1996 and 1995 adjusted for the acquisition of SLN assuming such
transaction and the related debt financing had been consummated at the
beginning of each of the respective years. The unaudited pro forma
financial information is not necessarily indicative either of results
of operations that would have occurred had the transaction occurred
at the beginning of the respective years, or of future results of
operations (in thousands, except per share amounts).
<TABLE>
<CAPTION>
Two Quarters Ended
June 30,
--------------------
1996 1995
-------- -------
(Unaudited)
<S> <C> <C>
Operating revenues - net $276,107 $260,706
======== ========
Operating income $49,142 $44,802
======== ========
Net income $23,093 $19,591
======== ========
Earnings per share of stock
(common and Class B common): $1.41 $1.20
======== ========
Weighted average number of shares
(common and Class B common)
outstanding 16,417 16,322
======== ========
</TABLE>
8
<PAGE> 9
PULITZER PUBLISHING COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
5. FINANCING ARRANGEMENTS
Long-term debt consists of (in thousands):
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
---------- -------------
<S> <C> <C>
Senior notes maturing in equal
annual installments:
8.8% due through 1997 $14,500 $28,750
6.76% due 1998-2001 50,000 50,000
7.22% due 2002-2005 50,000 50,000
-------- ---------
Total 114,500 128,750
Less current portion 14,500 14,250
-------- ---------
Total long-term debt $100,000 $114,500
======== =========
</TABLE>
On July 1, 1996, in connection with the acquisition of SLN (see Note
4), the Company issued to The Prudential Insurance Company of America
$85,000,000 principal amount of 7.86 percent Senior Notes due 2008
("Notes"). In addition, on July 1, 1996, the Company entered into a
credit agreement with The First National Bank of Chicago as Agent for a
group of lenders ("FNBC"), providing for a $50,000,000 five year
variable rate revolving credit facility ("Credit Agreement"). The
Company immediately borrowed the full amount under the Credit Agreement
and used the proceeds along with the proceeds from the Notes to partially
finance the SLN acquisition.
The Notes mature in equal annual installments beginning July 25, 2001.
All borrowings under the Credit Agreement are due on the facility s July
2, 2001 termination date. Prior to the credit facility's termination,
loans may be borrowed, repaid and reborrowed by the Company. In
addition, the Company has the option to repaid any borrowings and
terminate the credit facility prior to its scheduled maturity.
The Credit Agreement allows the Company to elect the interest rate
applicable to a borrowing under the facility between a daily floating
rate or the Eurodollar rate plus 0.225 percent. The initial interest
rate on the Credit Agreement borrowings with FNBC is 5.875 percent.
9
<PAGE> 10
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company's operating revenues are significantly influenced by a
number of factors, including overall advertising expenditures, the appeal of
newspapers, television and radio in comparison to other forms of advertising,
the performance of the Company in comparison to its competitors in specific
markets, the strength of the national economy and general economic conditions
and population growth in the markets served by the Company.
The Company's business tends to be seasonal, with peak revenues and
profits generally occurring in the fourth and, to a lesser extent, second
quarters of each year as a result of increased advertising activity during
the Christmas and spring holiday periods. The first quarter is historically
the weakest quarter for revenues and profits.
RECENT EVENTS
On July 1, 1996, the Company acquired in a purchase transaction all of
the stock of Scripps League Newspapers, Inc. ("SLN"), a privately owned
company that publishes 16 daily newspapers serving smaller cities, primarily in
the West and Midwest, and a number of non-daily publications. The significant
portion of the $214 million purchase price will be allocated to fixed and
intangible assets whose depreciation and amortization is not tax deductible.
Such depreciation, and amortization, as well as increased interest expense and
transition costs resulting from the acquisition, are expected to negatively
impact the Company's net income for at least the next two years. However, the
Company's after tax cash flow may, depending on the financial performance of
the newspapers and other factors, be favorably impacted. After tax cash flow is
defined as net income plus depreciation and amortization. See Note 4 of Notes
to Consolidated Financial Statements for pro forma information regarding the
acquisition.
CONSOLIDATED
Operating revenues for the second quarter and first six months of 1996
increased 5.8 percent and 6.2 percent, respectively, compared to the
corresponding periods in the preceding year. The increases reflected gains
in both broadcasting and publishing revenues.
Operating expenses, excluding the St. Louis Agency adjustment, for the
second quarter and first six months of 1996 increased 5.8 percent and 6.6
percent, respectively, compared to the corresponding periods in the preceding
year. The increases were primarily attributable to increased newsprint costs
($1.5 million - second quarter and $4.6 million - year to date) and higher
overall personnel costs ($1.9 million - second quarter and $4.1 million - year
to date).
Operating income for the second quarter and first six months of 1996
increased to $27.7 million (8.5 percent) and $46.2 million (10 percent),
respectively. The 1996 increases reflected higher operating income in
the broadcasting segment, resulting from increased advertising revenues.
Interest expense decreased $339,000 in the 1996 second quarter and
$662,000 in the first six months due to lower debt levels. The Company's
average debt level for the second quarter and the first six months of 1996
decreased to $117.8 million and $123.3 million from $132.8 million and
$137.9 million in the respective periods of the prior year. The Company's
average interest rate for the second quarter and the first six months of 1996
decreased slightly to 7.3 percent and 7.4 percent, respectively, from 7.5
percent and 7.6 percent in the prior year periods. Interest income for the
second quarter and first six months of 1996 increased $135,000 and
$304,000, respectively, due to slightly higher average balances of invested
funds.
The effective income tax rate for both the second quarter and the
first six months of 1996 was 39.1 percent, unchanged from the corresponding
periods in the prior year. It is expected that the Company's effective tax
rate will increase in the second half of 1996 due to significant
nondeductible goodwill amortization resulting from the acquisition of
SLN on July 1, 1996.
10
<PAGE> 11
Net income in the 1996 second quarter increased 13.1 percent to $16.2
million, or $0.99 per share, compared with $14.3 million, or $0.88 per share,
in the second quarter of 1995. Net income for the first six months of 1996
increased 14.1 percent to $26.4 million, or $1.61 per share, compared with
$23.2 million, or $1.42 per share, a year ago. The gains in net income
reflected increases in the broadcasting segment's operating profits,
primarily as a result of higher advertising revenues.
PUBLISHING
Operating revenues from the Company's publishing segment for the
second quarter and first six months of 1996 increased 2.5 percent and 3.1
percent, respectively, compared to the corresponding periods in the preceding
year. The increases primarily reflected higher advertising revenues at the St.
Louis Post-Dispatch ("Post-Dispatch").
Newspaper advertising revenues increased $2.2 million (5.4
percent) in the 1996 second quarter and $4.1 million (5.3 percent) in the
first six months of 1996. The second quarter increase resulted from higher
overall advertising volume which generated additional revenue of $2.7 million,
partially offset by the effect of lower average rates ($500,000).
Similarly, the year to date increase resulted from higher overall
advertising volume which generated additional revenue of $4.5 million,
partially offset by the effect of lower average rates ($400,000). The
average rates for the 1996 second quarter and six-month period were
affected by significant increases in part run advertising inches which more
than offset declines in full run inches. In the first quarter of 1995, both
the Post-Dispatch and The Arizona Daily Star ("Star") implemented rate
increases for most advertising categories, ranging from 4 percent to 6 percent
and 6 percent to 8 percent, respectively. In November 1995, additional rate
increases, ranging from 7.5 percent to 9.5 percent, were implemented at the
Star. On January 1, 1996, rate increases, averaging 6 percent for most
advertising categories, were implemented at the Post-Dispatch.
Circulation revenues for the second quarter of 1996 were unchanged
from the prior year at $18.8 million and increased $205,000 (0.5 percent) for
the first six months of 1996. The 1996 year to date increase resulted from
an $864,000 revenue increase due to higher average prices, partially offset
by a revenue decline of $659,000 due to average circulation decreases.
Average daily and Sunday circulation of the Post-Dispatch for the second
quarter of 1996 was 324,054 and 543,151 compared to 325,249 and 543,778 for
the corresponding 1995 period, decreases of 0.4 percent and 0.1 percent,
respectively. Effective February 5, 1995, the home-delivered price of the
Sunday Post- Dispatch was increased $1.00 per month. In addition, the
home-delivered price of the daily Star was increased $0.80 per month,
effective March 27, 1995.
11
<PAGE> 12
Operating expenses (including selling, general and administrative
expenses and depreciation and amortization) for the publishing segment,
excluding the St. Louis Agency adjustment, increased 5.9 percent and 7.8
percent, respectively, for the second quarter and first six months of
1996. The higher expenses resulted primarily from increased newsprint cost
($1.5 million - second quarter and $4.6 million - year to date), reflecting
the impact of newsprint price increases, and higher overall personnel costs
($900,000 - second quarter and $2.1 million - year to date).
Operating income from the Company's publishing activities for the
second quarter of 1996 decreased 16.8 percent to $5.7 million from $6.8
million. For the year to date period, operating income declined
19.3 percent to $10.5 million from $13 million. The declines resulted
primarily from the significant increase in newsprint cost.
Since June 1, 1996, the Company has purchased newsprint inventory at
lower prices than the average cost incurred during the first half of 1996. If
the current market situation continues during the second half of the year, the
Company's publishing segment results will be favorably impacted by the lower
cost of newsprint. On a 52-week basis, the Company's 1995 annual newsprint
cost and metric tons consumed, after giving effect to the St. Louis Agency
adjustment, were approximately $31.5 million and 46,700 tons, respectively.
BROADCASTING
Broadcasting operating revenues for the second quarter and first six
months of 1996 increased 9.8 percent and 10.2 percent over the comparable
1995 periods. Local spot advertising increased 11.1 percent and 10.1
percent, respectively, for the second quarter and first six months of
1996, and national spot advertising increased 10.3 percent and 12.6 percent,
respectively, for the second quarter and six-month period. The second quarter
and first six months of 1996 included increased political advertising of
approximately $1.4 million and $2.6 million, respectively.
Broadcasting operating expenses (including selling, general and
administrative expenses and depreciation and amortization) for the second
quarter and first six months of 1996 increased 4.9 percent and 4.2 percent,
respectively, compared to the prior year periods. The increases were
primarily attributable to higher overall personnel costs of $1 million and $2
million for the second quarter and first six months of 1996, respectively.
Operating income from the broadcasting segment in the 1996 second
quarter increased 18.4 percent to $23.4 million from $19.8 million and in
the first six months increased 23.3 percent to $38.4 million from $31.1
million. The increases for both periods resulted from increased advertising
revenues.
LIQUIDITY AND CAPITAL RESOURCES
Outstanding debt, inclusive of the short-term portion of long-term
debt, as of June 30, 1996, was $114.5 million, compared with $128.8
million at December 31, 1995. The decrease since the prior year end
reflects a scheduled repayment of $14.3 million under the Company's Senior Note
Agreement maturing in 1997. As of June 30, 1996, the Company's long-term
borrowings consisted of fixed-rate senior notes with The Prudential
Insurance Company of America ( Prudential).
12
<PAGE> 13
The Company's Senior Note Agreements with Prudential require it to
maintain certain financial ratios, place restrictions on the payment of
dividends and prohibit new borrowings, except as permitted thereunder.
On July 1, 1996, in connection with the acquisition of SLN, the
Company issued $85 million of fixed rate senior notes to Prudential and
entered into a $50 million credit agreement with The First National Bank of
Chicago as Agent for a group of lenders ("FNBC"). The Company immediately
borrowed the full amount under the FNBC Credit Agreement to partially
finance the SLN acquisition. See Notes 4 and 5 of Notes to Consolidated
Financial Statements for additional information regarding the acquisition and
long-term borrowings.
As of June 30, 1996, commitments for capital expenditures were
approximately $4.8 million, relating to normal capital equipment
replacements. Capital expenditures to be made in fiscal 1996 are estimated to
be approximately $22 million. Commitments for film contracts and license fees
as of June 30, 1996 were approximately $27.2 million. In addition, as of
June 30, 1996, the Company had capital contribution commitments of
approximately $3.8 million related to investments in two limited partnerships.
At June 30, 1996, the Company had working capital of $136.1 million
and a current ratio of 3.38 to 1. This compares to working capital of $128.9
million and a current ratio of 3.22 to 1 at December 31, 1995.
The Company generally expects to generate sufficient cash from
operations to cover ordinary capital expenditures, film contract and license
fees, working capital requirements, debt installments and dividend payments.
13
<PAGE> 14
Part II. OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
(a) The Annual Meeting of Stockholders was held on April 24, 1996.
(b) The following directors were reelected at the Annual Meeting
of Stockholders:
Emily Rauh Pulitzer
Alice B. Hayes
James M. Snowden, Jr.
The following directors continued their term of office after
the Annual Meeting of Stockholders:
Michael E. Pulitzer
Ronald H. Ridgway
Peter J. Repetti
David E. Moore
Ken J. Elkins
Nicholas G. Penniman IV
(c) The following nominees for election as director received the
votes indicated:
<TABLE>
<CAPTION>
For Withheld Abstain
--- -------- -------
<S> <C> <C> <C>
Emily Rauh Pulitzer 120,380,822 0 289,922
Alice B. Hayes 120,500,838 0 169,906
James M. Snowden, Jr. 120,217,897 0 452,847
</TABLE>
The amendment to the Pulitzer Publishing Company 1994 Stock
Option Plan was approved by the vote indicated:
For: 119,128,060
Against: 1,525,213
Broker non-votes: 0
Abstain: 17,471
The selection of Deloitte & Touche as the Company's
independent auditors was approved by the vote indicated:
For: 120,661,720
Against: 3,681
Broker non-votes: 0
Abstain: 5,343
14
<PAGE> 15
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed as part of this report:
10.1 Note Agreement with Prudential Insurance Company of America
dated as of July 1, 1996
10.2 Credit Agreement with The First National Bank of Chicago, as
Agent, dated as of July 1, 1996
27 Financial Data Schedule
The following exhibit is incorporated herein by reference to
Exhibit A of the Company's definitive Proxy Statement used in
connection with the 1996 Annual Meeting of Stockholders:
10.3 Amendment to the Pulitzer Publishing Company 1994
Stock Option Plan
(b) Reports on Form 8-K. The Company filed a Current Report on Form
8-K on June 24, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
PULITZER PUBLISHING COMPANY
(Registrant)
Date: August 14, 1996 /s/ Ronald H. Ridgway
-----------------------------------
(Ronald H. Ridgway)
Director; Senior Vice-President-Finance
(on behalf of the Registrant
and as principal financial officer)
15
<PAGE> 16
EXHIBIT INDEX
Exhibit Number Title or Description
10.1 Note Agreement with Prudential Insurance Company of America
dated as of July 1, 1996
10.2 Credit Agreement with The First National Bank of Chicago,
as Agent, dated as of July 1, 1996
27 Financial Data Schedule
16
<PAGE> 1
EXHIBIT 10.1
Execution Copy
PULITZER PUBLISHING COMPANY
$85,000,000
7.86% SENIOR NOTES DUE JULY 25, 2008
______________________________
NOTE AGREEMENT
______________________________
Dated as of July 1, 1996
<PAGE> 2
TABLE OF CONTENTS
(Not Part of Agreement)
Page
----
1. AUTHORIZATION OF ISSUE OF NOTES. - 1 -
2. PURCHASE AND SALE OF NOTES. - 1 -
3. CONDITIONS OF CLOSING. - 2 -
3A. Opinion of Purchaser's Special Counsel. - 2 -
3B. Other Opinions of Counsel. - 2 -
3C. Representations and Warranties; No Default. - 2 -
3D. Purchase Permitted by Applicable Laws. - 2 -
3E. Proceedings. - 2 -
3F. Copies of Credit Agreement and Acquisition Agreement. - 2 -
3G. Scripps Acquisition. - 2 -
3H. Payment of Structuring Fee. - 3 -
3I. Amendment of Existing Agreements. - 3 -
4. PREPAYMENTS. - 3 -
4A. Required Prepayments. - 3 -
4B. Optional Prepayment with Yield-Maintenance Amount. - 3 -
4C. Notice of Optional Prepayment. - 3 -
4D. Prepayment in Whole in Connection with a Merger,
Consolidation or Sale - 4 -
4E. Partial Payments Pro Rata. - 4 -
5. AFFIRMATIVE COVENANTS. - 4 -
5A. Financial Statements. - 4 -
5B. Inspection of Properties. - 6 -
5C. Covenant to Secure Notes Equally. - 6 -
5D. Application of Asset Sale Proceeds. - 6 -
5E. Business. - 7 -
5F. Compliance with Laws and Regulations. - 7 -
5G. Patents, Trade Marks and Trade Names. - 7 -
5H. Information Required by Rule 144A. - 7 -
6. NEGATIVE COVENANTS. - 7 -
6A. Operating Cash Flow and Current Ratio Requirement. - 8 -
6B. Dividend Limitation. - 8 -
6C. Lien, Debt and Other Restrictions. - 8 -
6D. Issuance of Stock by Subsidiaries. - 14 -
<PAGE> 3
6E. Conforming Debt Agreement Changes. - 14 -
7. EVENTS OF DEFAULT. - 15 -
7A. Acceleration. - 15 -
7B. Rescission of Acceleration. - 17 -
7C. Notice of Acceleration or Rescission. - 17 -
7D. Other Remedies. - 18 -
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. - 18 -
8A. Organization and Qualification. - 18 -
8B. Financial Statements. - 18 -
8C. Actions Pending. - 19 -
8D. Outstanding Debt. - 19 -
8E. Title to Properties. - 19 -
8F. Taxes. - 19 -
8G. Conflicting Agreements and Other Matters. - 19 -
8H. Offering of Notes. - 20 -
8I. Regulation G, Etc. - 20 -
8J. ERISA. - 20 -
8K. Governmental Consent. - 21 -
8L. Disclosure. - 21 -
8M. Acquisition of Scripps. - 21 -
9. REPRESENTATIONS OF THE PURCHASER. - 21 -
10. DEFINITIONS. - 22 -
11. MISCELLANEOUS. - 27 -
11A. Note Payments. - 27 -
11B. Expenses. - 27 -
11C. Consent to Amendments. - 28 -
11D. Form Registration; Transfer and Exchange of Notes;
Lost Notes. - 28 -
11E. Notices to Subsequent Holder. - 29 -
11F. Persons Deemed Owners. - 29 -
11G. Survival of Representations and Warranties. - 29 -
11H. Successors and Assigns. - 29 -
11I. Notices. - 29 -
11J. Descriptive Headings. - 30 -
11K. Satisfaction Requirement. - 30 -
11L. Payments Due on Non-Business Days. - 30 -
11M. Governing Law. - 30 -
11N. Counterparts. - 30 -
<PAGE> 4
Purchaser Schedule
Exhibit A -- Form of Senior Note
Exhibit B-1 -- Form of Opinion of Company Counsel (Financing)
Exhibit B-2 -- Form of Opinion of Company Counsel (Acquisition)
Exhibit B-3 -- Form of Opinion of Scripps Counsel
Exhibit C -- Form of Amendment to Existing Agreements
Exhibit D -- Form of Officer's Compliance Certificate
Schedule 6C(1) -- Existing Liens
Schedule 6C(2) -- Existing Debt
Schedule 6C(3) -- Existing Investments
Schedule 6C(8) -- Existing Affiliate Transactions
Schedule 8E -- Exceptions to Good Title
Schedule 8G -- Agreements Restricting Debt
<PAGE> 5
PULITZER PUBLISHING COMPANY
900 North Tucker Boulevard
St. Louis, Missouri 63101
As of July 1, 1996
The Prudential Insurance Company of America
c/o Prudential Capital Group
Gateway Center Four
100 Mulberry Street
Newark, New Jersey 07102
Ladies and Gentlemen:
The undersigned, Pulitzer Publishing Company (the "Company"), hereby
agrees with you as follows:
1. AUTHORIZATION OF ISSUE OF NOTES. The Company will authorize
the issue of its senior promissory notes (the "Notes") in the aggregate
principal amount of $85,000,000, to be dated the date of issue thereof, to
mature July 25, 2008, to bear interest on the unpaid balance thereof from the
date thereof until the principal thereof shall have become due and payable at
the rate of 7.86% per annum (subject to adjustment as provided for in
paragraph 4F) and on overdue principal, Yield Maintenance Amount and interest
at the rate specified therein, and to be substantially in the form of Exhibit A
attached hereto (the "Notes"). The term "Notes" as used herein shall include
each Note of delivered pursuant to any provision of this Agreement and each
Note delivered in substitution or exchange for any such Note pursuant to any
such provision.
2. PURCHASE AND SALE OF NOTES. Subject to the terms and
conditions herein set forth, the Company hereby agrees to sell to you and you
agree to purchase from the Company Notes in the aggregate principal amount of
$85,000,000, at 100% of such aggregate principal amount. The Company will
deliver to you, at the offices of Wilmer, Cutler of Pickering, 2445 M Street,
Washington, D.C., one or more Notes of each series registered in your name,
evidencing the aggregate principal amount of Notes to be purchased by you and
in the denomination or denominations specified in the Purchaser Schedule
attached hereto, against payment of the purchase price thereof by transfer of
immediately available funds for credit to Mellon Bank (ABA No. 043 000 261),
Merrill Lynch Account No. 101-1730 for the account of Betty Scripps, Account
No. 761-54364 on the date of closing, which shall be July 1, 1996 or such
other date upon which the Company and you may mutually agree (the "closing" or
the "date of closing").
<PAGE> 6
3. CONDITIONS OF CLOSING. Your obligation to purchase and pay for
the Notes to be purchased by you hereunder is subject to the satisfaction, on
or before the date of closing, of the following conditions:
3A. Opinion of Purchaser's Special Counsel. You shall have
received from Rex C. Mills, Assistant General Counsel of The Prudential
Insurance Company of America, who is acting as special counsel for you in
connection with this transaction, a favorable opinion satisfactory to you
as to such matters incident to the matters herein contemplated as you may
reasonably request.
3B. Other Opinions of Counsel. You shall have received from (i)
Fulbright & Jaworski L.L.P., counsel for the Company, favorable opinions
satisfactory to you and, with respect this Agreement and the issuance of
the Notes, substantially in the form of Exhibit B-1 attached hereto and,
with respect to the Acquisition and the Acquisition Agreement,
substantially in the form of Exhibit B-2, and (ii) Wilmer, Cutler of
Pickering, counsel for the selling shareholders of Scripps, a favorable
opinion satisfactory to you and substantially in the form of Exhibit B-3.
3C. Representations and Warranties; No Default. The
representations and warranties contained in paragraph 8 shall be true on
and as of the date of closing, except to the extent of changes caused by
the transactions herein contemplated; there shall exist on the date of
closing no Event of Default or Default; and the Company shall have
delivered to you an Officer's Certificate, dated the date of closing, to
both such effects.
3D. Purchase Permitted by Applicable Laws. The purchase of and
payment for the Notes to be purchased by you on the date of closing on the
terms and conditions herein provided (including the use of the proceeds of
such Notes by the Company) shall not violate any applicable law or
governmental regulation (including, without limitation, Regulations G, T
and X of the Board of Governors of the Federal Reserve System) and shall
not subject you to any tax, penalty, liability or other onerous condition
under or pursuant to any applicable law or governmental regulation, and
you shall have received such certificates or other evidence as you may
request to establish compliance with this condition.
3E. Proceedings. All corporate and other proceedings taken or to
be taken in connection with the transactions contemplated hereby and all
documents incident thereto shall be satisfactory in substance and form to
you, and you shall have received all such counterpart originals or
certified or other copies of such documents as you may reasonably request.
3F. Copies of Credit Agreement and Acquisition Agreement. The
Company shall deliver copies of the following agreements, together with
copies of all other agreements, instruments and documents executed or
delivered in connection with such agreements, all
<PAGE> 7
certified by an officer of Company to be true, correct and complete
copies: (i) the Credit Agreement and (ii) the Acquisition Agreement.
3G. Scripps Acquisition. The Company shall have acquired Scripps
in accordance with the Acquisition Agreement, without waiving any material
condition set forth in Section 9.1 or 9.3 of the Acquisition Agreement or
amending any material provision set forth in the Acquisition Agreement,
and shall have delivered to you an officer's certificate, dated the date
of closing to such effect.
3H. Payment of Structuring Fee. The Company shall have paid to you
a structuring fee of $150,000.
3I. Amendment of Existing Agreements. The Company shall have
executed and delivered an amendment to the Existing Agreements in the form
of Exhibit C attached hereto.
4. PREPAYMENTS. The Notes shall be subject to prepayment with
respect to the required prepayments specified in paragraph 4A and also under
the circumstances set forth in paragraph 4B and paragraph 4D.
4A. Required Prepayments. Until the Notes shall be paid in full,
the Company shall apply to the prepayment of the principal amount of such
Notes, without Yield- Maintenance Amount or premium, (a) the sum of
$10,625,000 on July 25 in each of the years 2001, 2002, 2003, 2005, 2006
and 2007 and on July 26, 2004 and such principal amounts of such Notes,
together with interest thereon to the prepayment dates, shall become due
on such prepayment dates, and (b) the remaining outstanding principal
balance of the Notes on July 25, 2008 together with interest thereon to
such date.
4B. Optional Prepayment with Yield-Maintenance Amount. The Notes
shall be subject to prepayment, in whole or in part (in a minimum
principal amount of $1,000,000 and integral multiples of $100,000), at any
time at the option of the Company at 100% of the principal amount so
prepaid plus the Yield-Maintenance Amount, if any, with respect to the
Notes so prepaid. The Yield-Maintenance Amount payable on any optional
prepayment under this paragraph 4B shall be in lieu of any prepayment
premium. Any partial prepayment of the Notes pursuant to this paragraph
4B shall be applied in accordance with paragraph 4E and in satisfaction of
required payments of principal in inverse order of their scheduled due
dates.
4C. Notice of Optional Prepayment. The Company shall give you
irrevocable written notice of any prepayment pursuant to paragraph 4B not
less than 10 Business Days prior to the prepayment date, specifying such
prepayment date and the principal amount of the Notes, and of the Notes
held by you, to be prepaid on such date and stating that such prepayment
is to be made pursuant to paragraph 4B. Notice of prepayment having been
given as aforesaid, the principal amount of the Notes specified in such
notice, together with interest thereon to the prepayment date and together
with the Yield-
<PAGE> 8
Maintenance Amount, if any, herein provided, shall become due and
payable on such prepayment date. The Company shall, on or before the day
on which it gives written notice of any prepayment pursuant to paragraph
4B, give telephonic notice of the principal amount of the Notes to be
prepaid and the repayment date to each holder of a Note which shall have
designated a recipient of such notices in the Purchaser Schedule attached
hereto or by notice in writing to the Company.
4D. Prepayment in Whole in Connection with a Merger, Consolidation
or Sale. In the event that the Company enters into an agreement to merge
or consolidate with pursuant to paragraph 6C(7)(ii), or sell or dispose of
all or substantially all of its assets to, any other corporation, and the
Company is not to be the continuing or surviving corporation, the Company
shall notify you of such agreement no less than 60 days prior to the
closing of the transaction under such agreement (the "Transaction
Closing"). You shall have the right to require mandatory prepayment of
the Notes outstanding at the date of the Transaction Closing on such date
at 100% of the principal amount thereof plus the Yield-Maintenance Amount
with respect to such Notes, subject, however to the actual closing of such
transaction on such date. In the event such closing does not occur on such
date, the Company shall give telephonic notice to the Managing Director in
your Dallas, Texas office (i) no later than the close of business on such
date, of the failure to close on such date and (ii) no later than 48 hours
prior to the rescheduled date, of any rescheduled Transaction Closing.
You shall notify the Company within 30 days of receipt of the first notice
of a Transaction Closing of your determination to exercise or waive your
right to require prepayment. In the event the Company does not receive
your notice within such 30-day period, you shall be deemed to have
determined to exercise the right to require prepayment pursuant to this
paragraph 4D.
4E. Partial Payments Pro Rata. Upon any partial prepayment of the
Notes pursuant to paragraph 4A, 4B or 5D, the principal amount so prepaid
shall be allocated to all Notes at the time outstanding (including for the
purpose of paragraph 4A, 4B or 5D only, all Notes prepaid or otherwise
retired or purchased or otherwise acquired by the Company or any of its
Subsidiaries or Affiliates other than by prepayment pursuant to paragraph
4A, 4B or 5D) in proportion to the respective outstanding principal amounts
thereof, and any such partial prepayment under paragraph 4B shall be
applied to the Notes in anticipation and satisfaction of the prepayments
required to be made by the provisions of paragraph 4A, in inverse order of
the maturity thereof. Any Notes prepaid or otherwise retired or purchased
or otherwise acquired by the Company or any of its Subsidiaries or
Affiliates shall not be deemed to be outstanding for any purpose under this
Agreement, except as provided in the immediately preceding sentence.
5. AFFIRMATIVE COVENANTS. So long as any Note shall remain
unpaid, the Company covenants as follows:
5A. Financial Statements. The Company covenants that, so long as
you shall hold any Note, it will deliver to you in duplicate:
(i) as soon as practicable and in any event within 45 days
after the end of each quarterly period (other than the last quarterly
period) in each fiscal year, a
<PAGE> 9
consolidating and consolidated statement of income and a
consolidated statement of cash flows of the Company and its
Subsidiaries for the period from the beginning of the current fiscal
year to the end of such quarterly period, and a consolidating and
consolidated balance sheet of the Company and its Subsidiaries as at
the end of such quarterly period, setting forth in each case in
comparative form figures for the corresponding period in the
preceding fiscal year, all in reasonable detail and certified by an
authorized financial officer of the Company, subject to changes
resulting from year-end adjustments; to the extent they comply with
the requirements of this clause (i), such unaudited consolidated
financial statements may be in the form incorporated in the Company's
reports on Form 10-Q or in other filings with the Securities and
Exchange Commission;
(ii) as soon as practicable and in any event within 90 days
after the end of each fiscal year, a consolidating and consolidated
statement of income and a consolidating and consolidated balance
sheet of the Company and its Subsidiaries as at the end of such year
and consolidated statements of cash flows and stockholders' equity of
the Company and its Subsidiaries for such year, setting forth in each
case in comparative form corresponding consolidated figures from the
preceding annual audit, all in reasonable detail and satisfactory in
scope to you and, as to the consolidated statements, audited by
independent public accountants of recognized standing selected by the
Company whose opinion shall be in scope and substance satisfactory to
you and, as to the consolidating statements, certified by an
authorized financial officer of the Company; to the extent they comply
with the requirements of this clause (ii), such audited consolidated
financial statements may be in the form incorporated in the Company's
annual report on Form 10-K or in other filings with the Securities
and Exchange Commission;
(iii) promptly upon transmission thereof, copies of all such
financial statements, proxy statements, notices and reports as it
shall send to its stockholders and copies of all registration
statements (without exhibits) and all reports (other than reports as
to which the Company shall receive confidential treatment) which it
or any Subsidiary files with the Securities and Exchange Commission
(or any governmental body or agency succeeding to the functions of
the Securities and Exchange Commission);
(iv) promptly upon receipt thereof, a copy of each other
report submitted to the Company or any Subsidiary by independent
accountants in connection with any annual, interim or special audit
made by them of the books of the Company or any Subsidiary; and
(v) with reasonable promptness, such other financial data
as you may reasonably request.
Together with each delivery of financial statements required by clauses
(i) and (ii) above, the Company will deliver to you an Officer's Certificate in
the form of Exhibit D attached
<PAGE> 10
hereto, demonstrating (with computations in reasonable detail)
compliance by the Company and its Subsidiaries with the provisions of
paragraphs 6A, 6B, 6C(1) -(6), inclusive, and 6C(9), to the extent applicable
for such period, and stating that there exists no Event of Default or Default,
or, if any Event of Default or Default exists, specifying the nature and period
of existence thereof and what action the Company proposes to take with respect
thereto. Together, with each delivery of financial statements required by
clause (ii) above, the Company will deliver to you a report of such accountants
stating that, in making the audit necessary to render an opinion on such
financial statements, they have obtained no knowledge of any Event of Default
or Default, or, if they have obtained knowledge of any Event of Default or
Default, specifying the nature and period of existence thereof. Such
accountants, however, shall not be liable to anyone by reason of their failure
to obtain knowledge of any Event of Default or Default which would not be
disclosed in the course of an audit conducted in accordance with generally
accepted auditing standards. The Company also covenants that forthwith upon
the chief executive officer, general counsel (if any), principal financial
officer or principal accounting officer of the Company obtaining knowledge of
an Event of Default or Default, it will deliver to you an Officer's Certificate
specifying the nature and period of existence thereof and what action the
Company proposes to take with respect thereto. You are hereby authorized to
deliver a copy of any financial statement delivered to you pursuant to this
paragraph 5A to any regulatory body having jurisdiction over you.
5B. Inspection of Properties. The Company covenants that, so long
as you shall hold any Note, it will permit any Person designated by you in
writing, at your expense, to visit and inspect any of the properties of the
Company and its Subsidiaries, to examine the corporate books and financial
records of the Company and its Subsidiaries and make copies thereof or
extracts therefrom and to discuss the affairs, finances and accounts of any
of such corporations with the principal officers of the Company and its
independent public accountants, all at such reasonable times and as often
as you may reasonably request.
5C. Covenant to Secure Notes Equally. The Company covenants that
if it or any Subsidiary shall create or assume any Lien upon any of its
property or assets, whether now owned or hereafter acquired, other than
Liens permitted by the provisions of paragraph 6C(l) (unless prior written
consent to the creation or assumption thereof shall have been obtained
pursuant to paragraph 11C), it will make or cause to be made effective
provision whereby the Notes will be secured by such Lien equally and
ratably with any and all other Debt thereby secured, so long as any such
other Debt shall be so secured.
5D. Application of Asset Sale Proceeds. Subject to the provisions
of paragraph 4D, if the Company or any Subsidiary shall sell or dispose of
capital assets so that the Company shall be required to give written notice
to the holders of the Notes pursuant to paragraph 6C(4), such notice shall
set forth the amount of the net proceeds of such sales or other
dispositions which have not been reinvested as provided in paragraph 6C(4)
and shall state that such unreinvested amount is available for the pro rata
prepayment of the
<PAGE> 11
Senior Indebtedness (based on outstanding principal amounts) to the
extent required under the Existing Agreements, the Credit Agreement and
hereunder. Any prepayment made under this paragraph 5D shall include the
Yield Maintenance Premium with respect to the Existing Notes under the
Existing Agreements and the Yield Maintenance Amount with respect to the
Notes; provided, however, the total amount payable by the Company hereunder
shall not exceed the unreinvested amount allocable to the Notes under the
Existing Agreements and the Notes under the immediately preceding sentence.
Within 30 days after receipt of such notice, any holder of a Note may elect
to have such amount applied to prepayment of the Notes, together with the
Yield Maintenance Amount with respect to such Notes, by giving written
notice to such effect to the Company and specifying a prepayment date not
less than 30 days after receipt of such notice; provided, however, that if
the amount available under this paragraph 5D for prepayment of the Senior
Indebtedness is less than the aggregate amount for which prepayment is
required, or has been elected, by holders of the Senior Indebtedness, the
amount available shall be shared among such holders in proportion to the
principal amount of the Senior Indebtedness as to which is required, or
such holders elected, to be prepaid. The Company shall make such
prepayment on such prepayment date and such principal amount of the Notes
together with the Yield Maintenance Premium or Yield Maintenance Amount (as
the case may be) with respect to such Notes shall become due and payable on
such prepayment date. Any partial prepayment of the Notes pursuant to this
paragraph 5D shall be applied in accordance with paragraph 4E and in
satisfaction of required prepayments of principal in inverse order of their
scheduled due dates.
5E. Business. The Company covenants that the Company and its
Subsidiaries taken as a whole will continue to engage in business in
substantially the same fields of enterprise as conducted on the date
hereof, except as otherwise provided in subparagraphs 6C(3), (4), (5), (7)
and (9).
5F. Compliance with Laws and Regulations. The Company covenants
that it will and will cause each Subsidiary to be in material compliance
with all laws and regulations (including, but not limited to, those
relating to equal employment opportunity and employee health and safety)
which are now in effect or may be legally imposed in the future in any
jurisdiction in which the Company and any Subsidiary is doing business
other than those laws and regulations which the Company or such Subsidiary
is contesting in good faith by appropriate proceedings; provided, however,
(a) the Company or such Subsidiary continues to operate any affected
business free of any requirement to escrow or sequester any material amount
of such business' profits or revenues pending resolution of such
proceedings, or (b) any non-compliance with any law or regulation does not
have a material adverse effect on the business, operations, property or
financial or other condition of the Company and the Subsidiaries, taken as
a whole, or the ability of the Company to perform its obligations
hereunder.
5G. Patents, Trade Marks and Trade Names. The Company covenants
that it will and will cause each Subsidiary to continue to own, or hold
licenses for the use of, all copyrights, franchises, licenses, marketing
rights, patents, service marks, trade marks,
<PAGE> 12
trade names, and rights in any of the foregoing, as in the aggregate are
necessary for the conduct of its business in the manner in which such
business is being conducted as of the date hereof except where failure to
continue to own or hold such licenses would not have a material adverse
affect on the Company and its Subsidiaries taken as a whole.
5H. Information Required by Rule 144A. The Company will, upon the
request of the holder of any Note, provide such holder, and any qualified
institutional buyer designated by such holder, such financial and other
information as such holder may reasonably determine to be necessary in
order to permit compliance with the information requirements of Rule 144A
under the Securities Act in connection with the resale of Notes, except at
such times as the Company is subject to the reporting requirements of
section 13 or 15(d) of the Exchange Act. For the purpose of this paragraph
5B, the term "qualified institutional buyer" shall have the meaning
specified in Rule 144A under the Securities Act.
6. NEGATIVE COVENANTS. So long as any Note shall remain unpaid,
the Company covenants as follows:
6A. Operating Cash Flow and Current Ratio Requirement. The Company
covenants that it will not at any time permit (i) the ratio of Consolidated
Funded Debt as of the last day of each fiscal quarter to Operating Cash
Flow for the 12 months ending on the last day of such fiscal quarter
(including on a pro forma basis Operating Cash Flow of any Subsidiary
acquired during such period) to be greater than 4.00 to 1.00 or (ii)
Consolidated Current Assets to be less than 125% of Consolidated Current
Liabilities.
6B. Dividend Limitation. The Company covenants that it will not pay
or declare any dividend on any class of its stock at any time after the
date hereof or make any other distribution on account of any class of its
stock, or redeem, purchase or otherwise acquire, directly or indirectly,
any shares of its stock, or make, or permit any Subsidiary to make, any
Excess Investments (all of the foregoing being herein called "Restricted
Payments") except out of Consolidated Net Earnings Available for Restricted
Payments. "Consolidated Net Earnings" shall mean consolidated gross
revenues of the Company and its Subsidiaries less all operating and
non-operating expenses of the Company and its Subsidiaries including all
charges of a proper character (including current and deferred taxes on
income, provision for taxes on unremitted foreign earnings which are
included in gross revenues, and current additions to reserves), but not
including in gross revenues any gains (net of expenses and taxes applicable
thereto) in excess of losses resulting from the sale, conversion or other
disposition of capital assets (i.e., assets other than current assets) in
excess of an aggregate amount of $500,000 in any one year, any gains
resulting from the write-up of assets, any equity of the Company or any
Subsidiary in the unremitted earnings of any corporation which is not a
Subsidiary or any earnings of any Person acquired by the Company or any
Subsidiary through purchase, merger or consolidation or otherwise for any
year prior to the year of acquisition, or any deferred credit representing
the excess of equity in any Subsidiary at the date of acquisition over the
cost of investment in such Subsidiary; all determined in accordance
<PAGE> 13
with generally accepted accounting principles. "Consolidated Net
Earnings Available for Restricted Payments" shall mean an amount equal to
(1) the sum of (a) $10,000,000 plus (b) 75% (or minus 100% in case of a
deficit) of Consolidated Net Earnings for the period (taken as one
accounting period) commencing on January 1, 1993, and terminating at the
end of the last fiscal quarter preceding the date of any proposed
Restricted Payment, less (2) the sum of (a) the amount of all dividends
and other distributions paid or declared by the Company on any class of
the Company's stock after December 31, 1992, (b) the excess of the
aggregate amount expended, directly or indirectly, after December 31, 1992,
for the redemption, purchase or other acquisition by the Company or any
Subsidiary of any shares of the Company's stock over the aggregate amount
received after December 31, 1992 as the net cash proceeds of the sale of
any shares of its stock and (c) the aggregate amount of all Excess
Investments. There shall not be included in Restricted Payments or in any
computation of Consolidated Net Earnings Available for Restricted Payments:
(x) dividends paid, or distributions made, in stock of the Company or (y)
exchanges or conversions of stock of one or more classes of the Company,
except to the extent that cash or other value is involved in such exchange
or conversion. The term "stock" as used in this paragraph 6B shall
include warrants or options to purchase stock.
6C. Lien, Debt and Other Restrictions. The Company covenants that
it will not, and will not permit any Subsidiary to:
6C(l). Liens. Create, assume or suffer to exist any Lien upon any of
its property or assets, whether now owned or hereafter acquired (whether or
not provision is made for the equal and ratable securing of the Notes in
accordance with the provisions of paragraph 5C), except:
(i) Liens on property and assets of the Company and its
Subsidiaries set forth on Schedule 6C(1) hereto,
(ii) Liens for taxes or assessments or other governmental
charges or levies not yet due or which are being actively contested in
good faith by appropriate proceedings if adequate reserves with
respect thereto are maintained on the books of the Company or its
Subsidiaries, as the case may be, in accordance with generally
accepted accounting principles,
(iii) other Liens which were not incurred in connection with
the borrowing of money or the obtaining of advances or credit, and
which do not in the aggregate materially impair the use of such
property and assets in the operation of the business of the Company
and its Subsidiaries, or materially detract from the value of such
property or assets for the purpose of the business of the Company and
its Subsidiaries, taken as a whole,
(iv) Liens on property or assets of a Subsidiary to secure
obligations of such Subsidiary to the Company or another Subsidiary,
<PAGE> 14
(v) any Lien existing on any property of any corporation at the
time it becomes a Subsidiary, or existing prior to the time of
acquisition upon any property acquired by the Company or any
Subsidiary through purchase, merger, or consolidation or otherwise,
whether or not assumed by the Company or such Subsidiary, or placed
upon property at the time of acquisition, construction or improvement
by the Company or any Subsidiary to secure all or a portion of (or to
secure Debt incurred to pay all or a portion of) the purchase price or
cost thereof or placed after acquisition upon property acquired,
constructed or improved by the Company or any Subsidiary after the
date of closing, provided that any such Lien shall not encumber any
other property of the Company or such Subsidiary,
(vi) Liens on property owned or leased by the Company or a
Subsidiary in favor of the United States of America or any State
thereof, or any department, agency or instrumentality or political
subdivision of the United States of America or any State thereof, or
any political subdivision thereof, or in favor of holders of
securities issued by any such entity, pursuant to any contract or
statute (including, without limitation, mortgages to secure pollution
control or industrial revenue bonds) to secure any indebtedness
incurred for the purpose of financing all or any part of the purchase
price or the cost of construction of the property subject to such
Liens,
(vii) any Liens renewing, extending or refunding any Lien
permitted by clauses (i), (v) and (vi) above, provided that the
principal amount secured is not increased and the Lien is not extended
to other property, and
(viii) any other Lien which secures any Debt, provided that the
aggregate principal amount of such Debt together with all other Debt
of the Company and its Subsidiaries secured by all Liens which would
be permitted under the foregoing provisions, (including, any such Debt
permitted to be secured under clauses (i) through (vii) above),
together with all other Priority Debt, does not exceed 15% of
Capitalization and does not exceed the limitations imposed in clause
(iii) of paragraph 6C(2).
Notwithstanding the foregoing, the Company will not and will not permit
any Subsidiary to create, assume or suffer to exist at any time any Lien
securing the obligations of the Company under the Credit Agreement upon any of
its property or assets, whether now owned or hereafter acquired (whether or not
provision is made for the equal and ratable securing of the Notes in accordance
with the provisions of paragraph 5C).
6C(2). Debt. Create, incur, assume, guarantee or in any way become
liable for any Funded Debt except:
(i) Funded Debt represented by the Notes,
(ii) Funded Debt set forth on Schedule 6C(2) attached hereto,
<PAGE> 15
(iii) other Funded Debt of the Company, provided that at the
time such Debt is incurred and after giving effect thereto and to the
concurrent retirement of any Funded Debt, the Company would be in
compliance with the provisions of paragraph 6A, and
(iv) Funded Debt of any Subsidiary, provided that the aggregate
principal amount of such Debt of all Subsidiaries under this clause
(iv) together with all other Priority Debt does not exceed 15% of
Capitalization and provided that the principal amount of such Debt
together with all other Debt of the Company does not exceed the
limitations imposed by the provisions of clause (iii) above.
6C(3). Loans, Advances and Investments. Make, or permit to remain
outstanding, any loan or advance to, or own, purchase or acquire any stock,
obligations or securities of, or any interest in, or make any capital
contribution to, any Person; except that the Company or any Subsidiary may:
(i) make or permit to remain outstanding loans, advances or
capital contributions to any Subsidiary,
(ii) permit or permit to remain outstanding any loans, advances
or capital contributions from any Subsidiary to the Company or any
other Subsidiary,
(iii) own, purchase or acquire stock, obligations or securities
of a Subsidiary or a corporation which immediately after such purchase
or acquisition will be a Subsidiary,
(iv) make and permit to remain outstanding investments in notes
receivable which are received pursuant to (X) the sale of all or
substantially all of a business or operations but only to the extent
that such sales proceeds are not required to be applied in payment of
the Notes pursuant to paragraph 5D, or (Y) the sale of used equipment
in the ordinary course of business but only to the extent that the
aggregate uncollected amount thereof does not exceed $500,000,
(v) make and permit to remain outstanding loans, advances and
other investments in any business principally engaged in publishing or
broadcasting (including without limitation cable television and
point-to-point transmission of programming) provided that all such
loans, advances and other investments to or in entities which are not
Subsidiaries do not in the aggregate exceed 10% of Capitalization and
provided that no such loan, advance or investment shall be made unless
immediately thereafter the Company could incur at least one dollar of
Consolidated Funded Debt without violating any of the terms of this
Agreement,
<PAGE> 16
(vi) make and permit to remain outstanding loans, advances and
other investments received in settlement of debts (created in the
ordinary course of business) owing to the Company or any Subsidiary,
(vii) own, purchase or acquire commercial paper issued by any
corporation or bankers' acceptances issued by any member bank of the
Federal Reserve System, in either case, maturing within one year of
the date of purchase and rated, by at least two of Standard and Poor's
Corporation, Moody's Investors Service and Fitch Investors Service,
"A-1", "P-1" and "F-1", respectively, and payable in the United States
in United States dollars,
(viii) own, purchase or acquire certificates of deposit in
member banks of the Federal Reserve System (each having capital
resources in excess of $75,000,000) or certificates of deposit in an
aggregate amount not to exceed $2,000,000 in banks having capital
resources of less than $75,000,000), all due within one year from the
date of original issue thereof and payable in the United States in
United States dollars,
(ix) own, purchase or acquire repurchase agreements of member
banks of the Federal Reserve System (each having capital resources in
excess of $75,000,000) for terms of less than one year in respect of
the foregoing certificates and obligations,
(x) own, purchase or acquire obligations of the United States
Government or any agency thereof,
(xi) own, purchase or acquire obligations guaranteed by the
United States Government or any agency thereof,
(xii) investments in stocks of investment companies registered
under the Investment Company Act of 1940 which invest primarily in
obligations of the type described in clauses (vii), (viii), (ix), (x),
(xi) or (xviii) above, provided that any such investment company shall
have an aggregate net asset value of not less than $500,000,000,
(xiii) make or permit to remain outstanding Excess Investments
to the extent permitted by paragraph 6B,
(xiv) endorse negotiable instruments for collection in the
ordinary course of business,
(xv) make or permit to remain outstanding travel and other like
advances to officers and employees in the ordinary course of business,
<PAGE> 17
(xvi) make or permit to remain outstanding investments in
demand deposit accounts maintained by the Company or any Subsidiary in
the ordinary course of its business,
(xvii) make or permit to remain outstanding investments
consisting of Eurodollar time deposits, maturing within 90 days after
the making thereof, with any branch of a United States commercial bank
having capital and surplus of not less than $1 billion in the
aggregate,
(xviii) make or permit to remain outstanding investments in
municipal obligations having a rating of "MIG-1" by Moody's Investment
Service, Inc., or "SP-1" by Standard & Poor's Corporation,
(xix) permit to remain outstanding investments of the Company
and its Subsidiaries set forth on Schedule 6C(3) and, so long as the
Company maintains an ownership interest therein, additional loans,
advances and capital contributions consistent with past practices of
the Company, and
(xx) make, or permit to remain outstanding, any other loan or
advance to, or own, purchase or acquire any other stock, obligations
or securities of, or any other interest in, or make any other capital
contribution to any Person, provided that the aggregate amount thereof
does not exceed $5,000,000.
6C(4). Sale or Disposition of Capital Assets. Sell or dispose of
capital assets (including capital stock) outside the ordinary course of
business if the aggregate of capital assets so sold or disposed of in any
fiscal year involves assets totaling 10% or more of Consolidated Total
Assets at the beginning of such fiscal year or has contributed 10% or more
of Operating Income for the three fiscal years then most recently ended,
taken as one accounting period (or for such shorter period during which
such assets were owned by the Company or a Subsidiary) unless such sale or
disposition is required to be made by an order issued by the FCC and either
(a) the net proceeds (including the cash value of any securities received
but deducting all expenses of sale and sales and transfer taxes and
applicable Federal and state income taxes) from such sale or disposition are
within 24 months from receipt (or such longer period during which approval
by the FCC is pending and not final) invested in businesses substantially
similar to any line of business in which the Company or any Subsidiary has
been continuously engaged since the date of issuance of the Notes or (b) no
later than 24 months after receipt of such net proceeds the Company gives
written notice to the holders of the Notes in compliance with paragraph 5D.
6C(5). Sale and Lease-Back. Enter into any arrangement with any lender
or investor or under which such lender or investor is a party, providing
for the leasing or other similar arrangement by the Company or any
Subsidiary of real or personal property used by the Company or any
Subsidiary in the operations of the Company or any Subsidiary, which has
been or is sold or transferred by the Company or any Subsidiary to
<PAGE> 18
such lender or investor or to any Person to whom funds have been or are
to be advanced by such lender or investor on the security of such rental
obligations of the Company or such Subsidiary, except that the Company may
enter into sale and lease-back transactions involving newspaper or
television equipment or facilities acquired after the issuance of the Notes
if (a) such arrangement shall be for a period of less than three years by
the end of which the use of such property by the lessee will be
discontinued, (b) the net proceeds of such sale are applied to the
retirement of Funded Debt, (c) the net proceeds of the sale are used to
purchase other property having a value at least equal to such net proceeds,
(d) the property immediately prior to such sale could have been subjected
to a Lien securing Funded Debt in an amount equal to such net proceeds and
which Lien would be permitted by clause (viii) of paragraph 6C(1), or (e)
the transaction represents a sale by a Subsidiary to the Company or another
Subsidiary or by the Company to a Subsidiary.
6C(6). Lease Rentals. Enter into or renew any agreement to rent or
lease (as lessee) any real or personal property (other than office space,
computer or office equipment or vehicles) having an initial term (including
any options to renew or extend any term, whether or not exercised) of more
than three years if net annual payments pursuant to all such leases
(including those made prior to the date of this Agreement) in effect
immediately thereafter would exceed 3% of Capitalization, provided that
there shall be excluded from the foregoing limitations and calculations any
Capitalized Lease Obligation.
6C(7). Merger. Merge or consolidate with any other corporation except
that
(i) any Subsidiary may merge or consolidate with the Company
(provided that the Company shall be the continuing or surviving
corporation) or any one or more other Subsidiaries or, subject to the
provisions of paragraph 6C(9), any other corporation (provided that
upon such merger or consolidation the Company shall be in compliance
with all the terms and provisions of this Agreement), and
(ii) subject to paragraph 4D, the Company may merge or
consolidate with any corporation, provided that upon such merger or
consolidation the continuing or surviving corporation (a) shall be in
compliance with all the terms and provisions of this Agreement, and if
the Company is not the survivor, the continuing or surviving
corporation shall have delivered to each holder of the Notes an
unconditional and irrevocable assumption of all the Notes and of this
Agreement (together with a legal opinion satisfactory in form and
substance to the holders of a majority of the Notes from Fulbright &
Jaworski, L.L.P., or other counsel reasonably satisfactory to such
holders) and (b) immediately after such merger or consolidation would
be permitted to incur at least one dollar of additional Consolidated
Funded Debt without violating clause (iii) of paragraph 6C(2).
6C(8). Transactions With Affiliates. Directly or indirectly enter into
or be a party to any transaction or arrangement, including, without
limitation, the purchase, sale, exchange or use of any property or asset,
or any interest therein, whether real, personal
<PAGE> 19
or mixed, or tangible or intangible, or the rendering of any service,
with any Affiliate, except transactions in the ordinary course of and
pursuant to the reasonable requirements of the Company's and each
Subsidiary's business, as the case may be, and upon fair and reasonable
terms that are no less favorable to the Company and the Subsidiaries, as
the case may be, than those which might be obtained in an arm's length
transaction with a Person not an Affiliate; provided, however, that for
purposes hereof, any payments made pursuant to the agreements set forth on
Schedule 6C(8) shall not be considered transactions subject to this
paragraph 6C(8), copies of such agreements having been previously
delivered to you.
6C(9). Sale of Stock and Debt of Subsidiaries. Sell or otherwise
dispose of, or part with control of, any shares of stock or Funded or
Current Debt of any Subsidiary, except to the Company or another
Subsidiary, and except that all shares of stock and Debt of any Subsidiary
at the time owned by or owed to the Company or any Subsidiary may be sold
as an entirety for a cash consideration which represents the fair value (as
determined in good faith by the Board of Directors of the Company) at the
time of sale of the shares of stock and Debt so sold, provided that the
assets of such Subsidiary do not constitute more than 10% of Consolidated
Total Assets at the beginning of the fiscal year in which such sale or
disposition is to occur and that such Subsidiary shall not have contributed
more than 10% of Operating Income for the three fiscal years then most
recently ended, taken as one accounting period (or for such shorter period
during which such stock was owned by the Company or a Subsidiary), unless
such transaction shall be subject to, and in compliance with, paragraph
6C(4) and further provided that, in any event, at the time of sale, such
Subsidiary shall not own, directly or indirectly, any shares of stock or
Debt of any other Subsidiary (unless all of the shares of stock and Debt of
such other Subsidiary owned, directly or indirectly, by the Company and all
Subsidiaries are simultaneously being sold as permitted by this paragraph
6C(9)).
6C(10). Subsidiary Guarantees. The Company will not permit any
Subsidiary to create, assume or suffer to exist at any time any direct or
indirect guaranty of the obligations of the Company under the Credit
Agreement.
6D. Issuance of Stock by Subsidiaries. The Company covenants that
it will not permit any Subsidiary, the assets of which constitute more than
10% of Consolidated Total Assets at the beginning of the fiscal year in
which such issuance, sale or disposition is to occur or which has
contributed more than 10% of Operating Income for any of the three fiscal
years most recently ended, to issue, sell or dispose of any shares of its
stock of any class except to the Company or another Subsidiary.
6E. Conforming Debt Agreement Changes. The Company will not become
or be a party to any agreement relating to any Debt greater than $5,000,000
entered into after the date of this Agreement, or to any amendment of or
supplement to any agreement relating to any Debt greater than $5,000,000
(which amendment or supplement is entered into after the date of this
Agreement), if, in any such case, the Company is agreeing therein to any
financial covenants of a type specified in this paragraph 6, which are more
<PAGE> 20
restrictive than the covenants set forth herein, or to other financial
covenants expressly requiring the Company to comply with similar computable
standards of financial condition or performance, unless the Company shall
offer to amend this Agreement so as to provide the benefit of similar
covenants for the benefit of the holders of the Notes for so long as such
covenants are in full force under such agreement, amendment or supplement.
Any such offer shall be made in writing to the holders of the Notes prior to
being effected in any such agreement, amendment or supplement and, absent
such offer, shall be deemed to be incorporated herein mutatis mutandis for
the benefit of the holders of the Notes for so long as such covenants are
in full force under such agreement, amendment or supplement unless and
until the holder(s) of 66-2/3% of the Notes shall otherwise consent
thereto.
7. EVENTS OF DEFAULT.
7A. Acceleration. If any of the following events shall occur and be
continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law
or otherwise):
(i) the Company defaults in the payment of any principal of, or
any Yield Maintenance Amount with respect to, any Note when the same
shall become due, either by the terms thereof or otherwise as herein
provided; or
(ii) the Company defaults in the payment of any interest on any
Note for more than 10 days after the date due; or
(iii) the Company or any Subsidiary defaults in any payment of
principal of or interest on any other obligation for money borrowed
(or any Capitalized Lease Obligation, any obligation under a
conditional sale or other title retention agreement, any obligation
issued or assumed as full or partial payment for property whether or
not secured by a purchase money mortgage or any obligation under notes
payable or drafts accepted representing extensions of credit) beyond
any period of grace provided with respect thereto, or the Company or
any Subsidiary fails to perform or observe any other agreement, term
or condition contained in any agreement under which any such
obligation is created (or if any other event thereunder or under any
such agreement shall occur and be continuing) and the effect of such
failure or other event is to cause, or to permit the holder or holders
of such obligation (or a trustee on behalf of such holder or holders)
to cause, such obligation to become due prior to its stated maturity
or any such obligation shall mature and remain unpaid, provided that
the aggregate amount of all obligations as to which such a payment
default shall occur and be continuing or such a failure or other event
causing or permitting acceleration shall occur and be continuing
exceeds $2,000,000; or
<PAGE> 21
(iv) any representation or warranty made by the Company herein
or in any writing furnished in connection with or pursuant to this
Agreement shall be false in any material respect on the date as of
which made; or
(v) the Company fails to perform or observe any agreement
contained in paragraph 6; or
(vi) the Company fails to perform or observe any other
agreement, term or condition contained herein and such failure shall
not be remedied within 30 days after any officer of the Company
obtains actual knowledge thereof; or
(vii) the Company or any Subsidiary makes an assignment for the
benefit of creditors or is generally not able to pay its debts as such
debts become due; or
(viii) any decree, judgment, or order for relief in respect of
the Company or any Subsidiary is entered under any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law, whether now or
hereafter in effect (herein called the "Bankruptcy Law"), of any
jurisdiction; or
(ix) the Company or any Subsidiary petitions or applies to any
tribunal for, or consents to, the appointment of, or taking possession
by, a trustee, receiver, custodian, liquidator or similar official of
the Company or any Subsidiary, or of any substantial part of the
assets of the Company or any Subsidiary, or commences a voluntary case
under the Bankruptcy Law of the United States or any proceedings
(other than proceedings for the voluntary liquidation and dissolution
of a Subsidiary) relating to the Company or any Subsidiary under the
Bankruptcy Law of any other jurisdiction; or
(x) any such petition or application is filed, or any such
proceedings are commenced, against the Company or any Subsidiary and
the Company or such Subsidiary by any act indicates its approval
thereof, consent thereto or acquiescence therein, or an order,
judgment or decree is entered appointing any such trustee, receiver,
custodian, liquidator or similar official, or approving the petition
in any such proceedings, and such order, judgment or decree remains
unstayed and in effect for more than 60 days; or
(xi) any order, judgment or decree is entered in any
proceedings against the Company decreeing the dissolution of the
Company and such order, judgment or decree remains unstayed and in
effect for more than 60 days; or
(xii) any order, judgment or decree is entered in any
proceedings against the Company or any Subsidiary decreeing a split-up
of the Company or such Subsidiary which requires the divestiture of
assets of the Company or the divestiture of assets or the stock of a
Subsidiary constituting more than 10% of
<PAGE> 22
Consolidated Total Assets at the beginning of the fiscal year in
which such divestiture is to occur or more than 10% of Operating
Income for any of the three fiscal years then most recently ended, and
such order, judgment or decree remains unstayed and in effect for more
than 60 days, provided that this clause (xii) shall not include any
transaction complying with an order issued by the FCC as provided in
paragraph 6C(4); or
(xiii) a final judgment in an amount in excess of $500,000 is
rendered against the Company or any Subsidiary and, within 60 days
after entry thereof, such judgment is not discharged or execution
thereof stayed pending appeal, or within 60 days after the expiration
of any such stay, such judgment is not discharged;
then (a) if such event is an Event of Default specified in clause
(viii), (ix) or (x) of this paragraph 7A, all of the Notes at the time
outstanding shall automatically become immediately due and payable at par
together with interest accrued thereon, without presentment, demand,
protest or notice of any kind, all of which are hereby waived by the
Company, and (b) if such event is an Event of Default specified in any
other clause of this paragraph 7A, the holder or holders of at least
66-2/3% of the aggregate principal amount of the Notes at the time
outstanding may at its or their option, by notice in writing to the
Company, declare all of the Notes to be, and all of the Notes shall
thereupon be and become, immediately due and payable together with
interest accrued thereon and together with the Yield-Maintenance Amount,
if any, with respect to each Note, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Company,
provided that the Yield-Maintenance Amount, if any, with respect to each
Note shall be due and payable upon such declaration only if (x) such event
is an Event of Default specified in any of clauses (i) to (vi), inclusive,
of this paragraph 7A, (y) such holder or holders shall have given to the
Company, at least 10 Business Days before such declaration, written notice
stating its or their intention so to declare the Notes to be immediately
due and payable and identifying one or more such Events of Default whose
occurrence on or before the date of such notice permits such declaration
and (z) one or more of the Events of Default so identified shall be
continuing at the time of such declaration.
7B. Rescission of Acceleration. At any time after any or all of the
Notes shall have been declared immediately due and payable pursuant to
paragraph 7A, the holder or holders of at least 66-2/3% of the aggregate
principal amount of the Notes at the time outstanding may, by notice in
writing to the Company, rescind and annul such declaration and its
consequences if (i) the Company shall have paid all overdue interest on the
Notes, the principal of and Yield-Maintenance Amount, if any, payable with
respect to any Notes which have become due otherwise than by reason of such
declaration, and interest on such overdue interest and overdue principal
and Yield-Maintenance Amount at the rate specified in the Notes, (ii) the
Company shall not have paid any amounts which have become due solely by
reason of such declaration, (iii) all Events of Default and Defaults, other
than non-payment of amounts which have become due solely by reason of such
declaration, shall have been cured or waived pursuant to paragraph 11C, and
(iv) no
<PAGE> 23
judgment or decree shall have been entered for the payment of any
amounts due pursuant to the Notes or this Agreement. No such rescission or
annulment shall extend to or affect any subsequent Event of Default or
Default or impair any right arising therefrom.
7C. Notice of Acceleration or Rescission. Whenever any Note shall
be declared immediately due and payable pursuant to paragraph 7A or any
such declaration shall be rescinded and annulled pursuant to paragraph 7B,
the Company shall forthwith give written notice thereof to the holder of
each Note at the time outstanding.
7D. Other Remedies. If any Event of Default or Default shall occur
and be continuing, the holder of any Note may proceed to protect and
enforce its rights under this Agreement and such Note by exercising such
remedies as are available to such holder in respect thereof under
applicable law, either by suit in equity or by action at law, or both,
whether for specific performance of any covenant or other agreement
contained in this Agreement or in aid of the exercise of any power granted
in this Agreement. No remedy conferred in this Agreement upon you or any
other holder of any Note is intended to be exclusive of any other remedy,
and each and every such remedy shall be cumulative and shall be in addition
to every other remedy conferred herein or now or hereafter existing at law
or in equity or by statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company
represents, covenants and warrants:
8A. Organization and Qualification. The Company is a corporation
duly organized and existing in good standing under the laws of the State of
Delaware; each Subsidiary is duly organized and existing in good standing
under the laws of the jurisdiction in which it is incorporated; the Company
has and each Subsidiary has the corporate power to own its respective
property and to carry on its respective business as now being conducted,
and the Company is and each Subsidiary is duly qualified as a foreign
corporation to do business and in good standing in every jurisdiction in
which the nature of the respective business conducted or property owned by
it makes such qualification necessary, except where the failure to so
qualify would not have a material adverse effect on the Company and its
Subsidiaries taken as a whole.
8B. Financial Statements. The Company has furnished you with the
following financial statements, identified by a principal financial officer
of the Company: (a) a consolidated balance sheet of the Company and its
Subsidiaries as at December 31 in each of the years 1993 to 1995,
inclusive, and statements of consolidated income, financial position and
cash flows of the Company and its Subsidiaries for each such year all
audited by Deloitte & Touche L.L.P., (b) a consolidated balance sheet of
the Company and its Subsidiaries as at March 31 in each of the years 1995
and 1996 and consolidated statements of income, financial position and cash
flows for the 3-month period ended on such date, prepared by the Company.
Such financial statements (including any related schedules and/or notes)
are true and correct in all material respects (subject, as to interim
statements, to changes resulting from audits and year-end adjustments), have
been
<PAGE> 24
prepared in accordance with generally accepted accounting principles
consistently followed throughout the periods involved and show all
liabilities, direct and contingent, of the Company and its Subsidiaries
required to be shown in accordance with such principles. The balance
sheets fairly present the condition of the Company and its Subsidiaries as
at the dates thereof, and the statements of income and statements of
financial position and cash flows fairly present the results of the
operations of the Company and its Subsidiaries for the periods indicated.
There has been no material adverse change in the business, condition or
operations (financial or otherwise) of the Company and its Subsidiaries
taken as a whole since December 31, 1995.
8C. Actions Pending. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against
the Company or any of its Subsidiaries, or any properties or rights of the
Company or any of its Subsidiaries, by or before any court, arbitrator or
administrative or governmental body which might result in any material
adverse change in the business, condition or operations of the Company and
its Subsidiaries taken as a whole.
8D. Outstanding Debt. Neither the Company nor any of its
Subsidiaries has outstanding any Debt except as permitted by paragraph
6C(2) and as set forth in the Company's consolidated financial statements
for the year ended December 31, 1995. There exists no default under the
provisions of any instrument evidencing such Debt or of any agreement
relating thereto.
8E. Title to Properties. Except as set forth on Schedule 8E, the
Company has and each of its Subsidiaries has good and marketable title to
its respective real properties (other than properties which it leases) and
good title to all of its other respective properties and assets,
properties and assets reflected in the consolidated balance sheet of the
Company as at December 31, 1995 referred to in paragraph 8B (other than
properties and assets disposed of in the ordinary course of business),
subject to no Lien of any kind except Liens permitted by paragraph 6C(l).
All leases necessary in any material respect for the conduct of the
respective businesses of the Company and its Subsidiaries are valid and
subsisting and are in full force and effect.
8F. Taxes. The Company has and each of its Subsidiaries has filed
all Federal, State and other income tax returns which, to the best
knowledge of the officers of the Company, are required to be filed and each
has paid all taxes as shown on such returns and on all assessments received
by it to the extent that such taxes have become due, except such taxes as
are being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with generally
accepted accounting principles. Federal income tax returns of the Company
and its Subsidiaries have been examined and reported on by the taxing
authorities or closed by applicable statutes and satisfied for all fiscal
years prior to and including the fiscal year ended on December 31, 1992.
<PAGE> 25
8G. Conflicting Agreements and Other Matters. Neither the Company
nor any of its Subsidiaries is a party to any contract or agreement or
subject to any charter or other corporate restriction which materially and
adversely affects its business, property or assets, or financial
condition. Neither the execution nor delivery of this Agreement, the
Notes or the Acquisition Agreement, nor the offering, issuance and sale of
the Notes, nor fulfillment of nor compliance with the terms and provisions
hereof and of the Notes and the Acquisition Agreement will conflict with,
or result in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or result in
the creation of any Lien upon any of the properties or assets of the
Company or any of its Subsidiaries pursuant to, the charter or by-laws of
the Company or any of its Subsidiaries, any award of any arbitrator or any
agreement (including any agreement with stockholders), instrument, order,
judgment, decree, statute, law, rule or regulation to which the Company or
any of its Subsidiaries is subject. Neither the Company nor any of its
Subsidiaries is a party to, or otherwise subject to any provision contained
in, any instrument evidencing indebtedness of the Company or such
Subsidiary, any agreement relating thereto or any other contract or
agreement (including its charter) which limits the amount of, or otherwise
imposes restrictions on the incurring of, Debt of the Company of the type
to be evidenced by the Notes except as set forth in the agreements listed
in Schedule 8G attached hereto.
8H. Offering of Notes. Neither the Company nor any agent acting on
its behalf has, directly or indirectly, offered the Notes or any similar
security of the Company for sale to, or solicited any offers to buy the
Notes or any similar security of the Company from, or otherwise approached
or negotiated with respect thereto with, any Person other than you, and
neither the Company nor any agent acting on its behalf has taken or will
take any action which would subject the issuance or sale of the Notes to the
provisions of Section 5 of the Securities Act of 1933, as amended, or to
the provisions of any securities or Blue Sky law of any applicable
jurisdiction.
8I. Regulation G, Etc. Neither the Company nor any Subsidiary owns
or has any present intention of acquiring any "margin stock" as defined in
Regulation G (12 CFR Part 207) of the Board of Governors of the Federal
Reserve System (herein called "margin stock"). The proceeds of sale of the
Notes will be used to pay a portion of the purchase price under the
Acquisition Agreement. None of such proceeds will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin stock or
for the purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry any margin stock or for any other
purpose which might constitute this transaction a "purpose credit" within
the meaning of such Regulation G. Neither the Company nor any agent acting
on its behalf has taken or will take any action which might cause this
Agreement or the Notes to violate Regulation G, Regulation T or any other
regulation of the Board of Governors of the Federal Reserve System or to
violate the Securities Exchange Act of 1934, as amended, in each case as in
effect now or as the same may hereafter be in effect.
<PAGE> 26
8J. ERISA. No accumulated funding deficiency (as defined in section
302 of ERISA and section 412 of the code), whether or not waived, exists
with respect to any Plan (other than a Multiemployer Plan). No liability
to the Pension Benefit Guaranty Corporation has been or is expected by the
Company to be incurred with respect to any Plan (other than a Multiemployer
Plan) by the Company or any of its Subsidiaries which is or would be
materially adverse to the Company and its Subsidiaries taken as a whole.
Neither the Company nor any of its Subsidiaries has incurred or presently
expects to incur any withdrawal liability under Title IV of ERISA with
respect to any Multiemployer Plan which is or would be materially adverse
to the Company and its Subsidiaries taken as a whole. The execution and
delivery of this Agreement and the issuance and sale of the Notes will not
involve any transaction which is subject to the prohibitions of section 406
of ERISA or in connection with which a tax could be imposed pursuant to
section 4975 of the Code. The representation by the Company in the
preceding sentence is made in reliance upon and subject to the accuracy of
your representation in paragraph 9. For the purpose of this paragraph 8J,
the term "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended; the term "Code" shall mean the Internal Revenue Code of
1986, or successor statute thereto; the term "Plan" shall mean an "employee
pension benefit plan" (as defined in section 3 of ERISA) which is or has
been established or maintained, or to which contributions are or have been
made, by the Company or by any trade or business, whether or not
incorporated, which, together with the Company, is under common control, as
described in section 414(b) or (c) of the Code; and the term "Multiemployer
Plan" shall mean any Plan which is a "multiemployer plan" (as such term is
defined in section 4001(a)(3) of ERISA).
8K. Governmental Consent. Neither the nature of the Company or of
any Subsidiary, nor any of their respective businesses or properties, nor
any relationship between the Company or any Subsidiary and any other
Person, nor any circumstance in connection with the offering, issuance,
sale or delivery of the Notes is such as to require any authorization,
consent, approval, exemption or other action by or notice to or filing with
any court or administrative or governmental body (other than routine filings
after the date of closing with the Securities and Exchange Commission
and/or state Blue Sky authorities) in connection with the execution and
delivery of this Agreement, the offering, issuance, sale or delivery of the
Notes or fulfillment of or compliance with the terms and provisions hereof
or of the Notes.
8L. Disclosure. Neither this Agreement nor any other document,
certificate or statement furnished to you by or on behalf of the Company in
connection herewith contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein and therein not misleading. There is no fact peculiar to
the Company or any of its Subsidiaries which materially adversely affects
or in the future may (so far as the Company can now foresee) materially
adversely affect the business, property or assets, or financial condition
of the Company and its Subsidiaries taken as a whole and which has not been
set forth in this Agreement or in the other documents, certificates and
statements furnished to you by or on behalf of the Company prior to the
date hereof in connection with the transactions contemplated
<PAGE> 27
hereby. The financial projections dated May 31, 1996 are based on the
assumptions stated therein which the Company believes are reasonable and on
the best information reasonably available to the officers of the Company.
However, there will usually be differences between projected and actual
results, because events and circumstances frequently do not occur as
expected, and those differences may be material.
8M. Acquisition of Scripps. The Acquisition Agreement has been
executed and delivered by the parties thereto and constitutes the valid and
binding agreement of the parties thereto, enforceable against each in
accordance with its terms except as enforceability may be limited by
bankruptcy, insolvency, moratorium or other laws relating to or affecting
creditors' rights generally and the exercise of judicial discretion in
accordance with general equitable principals. There exists no material
default by any party under the Acquisition Agreement.
9. REPRESENTATIONS OF THE PURCHASER. You represent and in making
this sale to you it is specifically understood and agreed that you are acquiring
the Notes to be purchased by you hereunder for the purpose of investment and
not with a view to or for sale in connection with any distribution thereof,
provided that the disposition of your property shall at all times be and remain
within your control. No part of the funds used by you to pay the purchase
price of the Notes purchased by hereunder constitutes assets allocated to any
separate account maintained by you in which any employee benefit plan
participates to the extent of 10% or more. For the purpose of this paragraph 9,
the terms "separate account" and "employee benefit plan" shall have the
respective meanings specified in section 3 of ERISA.
10. DEFINITIONS. For the purpose of this Agreement, the terms defined
in any paragraph hereof shall have the respective meanings specified therein,
and the following terms shall have the meanings specified with respect thereto
below:
"Acquired Stations" shall have the meaning ascribed thereto in the
Existing Agreements.
"Acquisition" shall mean the acquisition of Scripps in accordance with
the terms of the Acquisition Agreement.
"Acquisition Agreement" shall mean the Stock Purchase Agreement dated as
of May 4, 1996, among Pulitzer Publishing Company and Edward W. Scripps, Betty
Knight Scripps, and The Edward W. Scripps and Betty Knight Scripps Charitable
Remainder Unitrust, as amended as of June 28, 1996.
"Affiliate" shall mean any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, the Company,
except a Subsidiary. A Person shall be deemed to control a corporation if such
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such corporation, whether, through
the ownership of voting securities, by contract or otherwise.
<PAGE> 28
"Bankruptcy Law" shall have the meaning specified in clause (viii) of
paragraph 7A.
"Business Day" shall mean any day other than a Saturday, a Sunday or any
day on which commercial banks in New York City are required or authorized to be
closed.
"Called Principal" shall mean, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to paragraph 4B, 4D or 5D, or is
declared to be immediately due and payable pursuant to paragraph 7A, as the
context requires.
"Capitalization" shall mean Consolidated Tangible Net Worth plus
Consolidated Funded Debt.
"Capitalized Lease Obligation" shall mean any rental obligation which,
under generally accepted accounting principles, is or will be required to be
capitalized on the books of the Company or any Subsidiary, taken at the amount
thereof accounted for as indebtedness (net of interest expense) in accordance
with such principles.
"Consolidated Current Assets" shall mean the current assets of the
Company and its Subsidiaries, all consolidated in accordance with generally
accepted accounting principles, provided that there shall not be included in
Consolidated Current Assets (i) any loans or advances made by the Company or
any Subsidiary except the current portion of (A) travel and other like advances
to officers and employees in the ordinary course of business and (B) amounts
outstanding under the Subordinated Loan Agreement dated March 21, 1996, between
the Company and Civic Parking, L.L.C., or (ii) any assets located outside
(including any amounts payable by Persons located outside) the United States of
America and Canada.
"Consolidated Current Liabilities" shall mean the current liabilities of
the Company and its Subsidiaries, all consolidated in accordance with generally
accepted accounting principles.
"Consolidated Funded Debt" shall mean the Funded Debt of the Company and
its Subsidiaries all consolidated in accordance with generally accepted
accounting principles.
"Consolidated Net Earnings" shall have the meaning specified in
paragraph 6B.
"Consolidated Tangible Net Worth" shall mean the excess of (a) the sum
of (i) the par value (or value stated on the books of the Company) of the
capital stock of all classes of the Company, plus (or minus in the case of a
surplus deficit) (ii) the amount of consolidated surplus, whether capital or
earned, of the Company and its Subsidiaries, over (b) the sum of (i) treasury
stock and (ii) intangibles (except for (A) goodwill existing as of December 31,
1992, (B) network contracts, (C) FCC licenses, (D) goodwill associated with the
acquisition of the Acquired Stations and (E) goodwill associated with the
<PAGE> 29
Acquisition), writeups of assets after December 31, 1992 (excluding revaluation
of assets pursuant to acquisitions of companies or assets and any revaluation
authorized by then generally accepted accounting principles); all determined on
a consolidated basis for the Company and its Subsidiaries in accordance with
generally accepted accounting principles (including making appropriate
deductions for minority interests, if any, in Subsidiaries) consistent with
those followed in the preparation of the financial statements.
"Consolidated Total Assets" shall mean the total assets of the Company
and its Subsidiaries, all consolidated in accordance with generally accepted
accounting principles.
"Credit Agreement" shall mean the Credit Agreement dated as of July 1,
1996, among the Company, the lending institutions party thereto, and The First
National Bank of Chicago, as Agent, as the same may be amended, restated,
modified and/or supplemented from time to time.
"Current Debt" shall mean any obligation for borrowed money (and any
notes payable and drafts accepted representing extensions of credit whether or
not representing obligations for borrowed money) payable on demand or within a
period of one year from the date of the creation thereof; provided that any
obligation shall be treated as Funded Debt, regardless of its term, if such
obligation is renewable pursuant to the terms thereof or of a revolving credit
or similar agreement effective for more than one year after the date of the
creation of such obligation, or may be payable out of the proceeds of a
similar, obligation pursuant to the terms of such obligation or of any such
agreement. Any obligation secured by a Lien on, or payable out of the
proceeds of production from, property of the Company or any Subsidiary shall
be deemed to be Funded or Current Debt, as the case may be, of the Company or
such Subsidiary even though such obligation shall not be assumed by the
Company or such Subsidiary.
"Debt" shall mean Funded Debt and/or Current Debt, as the case may be.
"Discounted Value" shall mean, with respect to the Called Principal of
any Note, the amount calculated by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due dates
to the Settlement Date with respect to such Called Principal, in accordance
with accepted financial practice and at a discount factor (applied on a
semiannual basis) equal to the Reinvestment Yield with respect to such Called
Principal.
"ERISA" shall have the meaning specified in paragraph 8J.
"Event of Default" shall mean any of the events specified in paragraph
7A, provided that there has been satisfied any requirement in connection with
such event for the giving of notice, or the lapse of time, or the happening of
any further condition, event or act, and "Default" shall mean any of such
events, whether or not any such requirement has been satisfied.
<PAGE> 30
"Excess Investments" shall mean all loans and advances to, and
investments in the stock, obligations and securities of, and capital
contributions to, any Person made by the Company or any Subsidiary, to the
extent such loan, advance, investment or contribution is not, when made,
permitted by paragraph 6C(3) (other than by reason of clause (xiii) thereof).
"Existing Agreements" shall mean (i) the Note Agreement, dated April 22,
1987, between you and the Company, as amended and supplemented from time to
time and (ii) the Note Agreement dated June 30, 1993, between you and the
Company, as amended and supplemented from time to time.
"Existing Notes" shall mean each promissory note issued under an
Existing Agreement.
"FCC" shall mean the Federal Communications Commission.
"Funded Debt" shall mean and include without duplication
(i) all obligations for borrowed money or obligations
represented by notes payable and drafts accepted representing
extensions of credit, all obligations evidenced by bonds, debentures,
notes or other similar instruments and all obligations upon which
interest charges are customarily paid payable more than one year from
the date of the creation thereof or renewable or refundable by the
terms thereof at the option of the obligor with respect thereto for a
period or periods which, together with the original term thereof,
aggregate more than one year and any such obligation, regardless of
its term, if such obligation is renewable (subject to conditions as to
which the borrower is in compliance at the time of such determination)
pursuant to the terms thereof or of a revolving credit or similar
agreement effective for more than one year after the date of creation
of such obligation or of any such agreement,
(ii) Capitalized Lease Obligations,
(iii) indebtedness secured by any Lien existing on property
owned by the Company or any Subsidiary subject to such Lien, whether
or not the indebtedness secured thereby shall have been assumed by the
Company or any Subsidiary,
(iv) guarantees, endorsements (other than endorsements of
negotiable instruments for collection in the ordinary course of
business) and other contingent liabilities (whether direct or
indirect) in connection with the obligations, stock or dividends of
any Person,
(v) obligations under any contract providing for the making of
loans, advances or capital contributions to any Person, or for the
purchase of any property from any Person, in each case in order to
enable such Person primarily to maintain
<PAGE> 31
working capital, net worth or any other balance sheet condition
or to pay debt, dividends or expenses,
(vi) obligations under any contract for the purchase of
materials, supplies or other property from any Person if such contract
(or any related document) requires that payment for such materials,
supplies or other property shall be made regardless of whether or not
delivery of such materials, supplies or other property is ever made or
tendered,
(vii) obligations under any contract to rent or lease (as
lessee) any real or personal property if such contract (or any related
document) provides that the obligation to make payments thereunder is
absolute and unconditional under conditions not customarily found in
commercial leases then in general use or requires that the lessee
purchase or otherwise acquire securities or obligations of the lessor,
(viii) obligations under any contract for the sale or use of
materials, supplies or other property, or the rendering of services,
if such contract (or any related document) requires that payment for
such materials, supplies or other property, or the use thereof, or
payment for such services, shall be subordinated to any indebtedness
(of the purchaser or user of such materials, supplies or other
property or the Person entitled to the benefit of such services) owed
or to be owed to any Person, and
(ix) obligations under any other contract which, in economic
effect, is substantially equivalent to a guarantee;
provided, however, that Funded Debt shall not include loans,
advances and capital contributions by the Company to any Subsidiary or
by any Subsidiary to the Company or another Subsidiary or a guarantee
of the obligations of a Subsidiary under an executory contract to
purchase or sell a business.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement, any
lease in the nature thereof, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code of any jurisdiction).
"Officer's Certificate" shall mean a certificate signed in the name of
the Company by its President, one of its Vice Presidents, its Treasurer or its
Controller.
"Operating Cash Flow" shall mean Consolidated Net Earnings plus
depreciation plus amortization of good will and other intangibles, plus
interest expense, plus provision for income taxes and less interest income.
<PAGE> 32
"Operating Income" shall mean operating income of the Company and its
Subsidiaries, after giving effect to agency adjustments, as set forth on the
Company's consolidated financial statements in accordance with generally
accepted accounting principles.
"Person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
"Priority Debt" shall mean the aggregate amount of all Debt of the
Company secured by a Lien plus all secured and unsecured Debt of Subsidiaries.
"Reinvestment Yield" shall mean, with respect to the Called Principal of
any Note, the yield to maturity implied by (i) the yields reported, as of 10:00
a.m. (New York City time) on the Business Day next preceding the Settlement
Date with respect to such Called Principal, on the display designated as "Page
678" on the Telerate Service (or such other display as may replace Page 678 on
the Telerate Service) for actively traded U.S. Treasury securities having a
maturity equal to the Remaining Average Life of such Called Principal as of
such Settlement Date, or if such yields shall not be reported as of such time
or the yields reported as of such time shall not be ascertainable, (ii) the
Treasury Constant Maturity Series yields reported, for the latest day for which
such yields shall have been so reported as of the Business Day next preceding
the Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date.
Such implied yield shall be determined, if necessary, by (a) converting U.S.
Treasury bill quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between yields reported for
various maturities.
"Remaining Average Life" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the
sum of the products obtained by multiplying (a) each Remaining Scheduled
Payment of such Called Principal (but not of interest thereon) by (b) the
number of years (calculated to the nearest one-twelfth year) which will elapse
between the Settlement Date with respect to such Called Principal and the
scheduled due date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date.
"Scripps" shall mean Scripps League Newspapers, Inc., a Delaware
corporation, together with its Subsidiaries other than Excluded Subsidiaries
(as such term is defined in the Acquisition Agreement).
<PAGE> 33
"Senior Indebtedness" shall mean the outstanding principal amount under
the promissory notes issued under the Existing Agreements, the Credit Agreement
and the Notes.
"Settlement Date" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant to
paragraph 4B, 4D or 5D or is declared to be immediately due and payable
pursuant to paragraph 7A, as the context requires.
"Subsidiary" shall mean any corporation organized under the laws of any
state of the United States of America, Canada, or any province of Canada, which
conducts the major portion of its business in and makes the major portion of
its sales to Persons located in the United States of America or Canada, and all
of the stock of every class of which, except directors' qualifying shares,
shall, at the time as of which any determination is being made, be owned by the
Company either directly or through Subsidiaries.
"Yield-Maintenance Amount" shall mean, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of such Called Principal plus interest
accrued thereon as of (including interest due on) the Settlement Date with
respect to such Called Principal. The Yield- Maintenance Amount shall in no
event be less than zero.
"Yield-Maintenance Premium" shall mean any "yield maintenance amount"
or "yield maintenance premium" under an Existing Agreement.
11. MISCELLANEOUS.
11A. Note Payments. The Company agrees that, so long as you shall
hold any Note, it will make payments of principal thereof and premium, if
any, and interest thereon, which comply with the terms of this Agreement,
by wire transfer of immediately available funds for credit to your account
or accounts as specified in the Purchaser Schedule attached hereto, or such
other account or accounts in the united States as you may designate in
writing, notwithstanding any contrary provision herein or in any Note with
respect to the place of payment. You agree that, before disposing of any
Note, you will make a notation thereon (or on a schedule attached thereto)
of all principal payments previously made thereon and of the date to which
interest thereon has been paid. The Company agrees to afford the benefits
of this paragraph 11A to any institutional investor of recognized standing
which is the direct or indirect transferee of any Note purchased by you
hereunder and which has made the same agreements relating to such Note as
you have made in this paragraph 11A.
11B. Expenses. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save you harmless
against liability for the payment of, all out-of-pocket expenses arising in
connection with such
<PAGE> 34
transactions, including (i) all taxes (together in each case with
interest and penalties, if any, and any income tax payable by you in
respect of any reimbursement therefor but not including any other income
tax) which may be payable in respect of the execution and delivery of this
Agreement or the execution, delivery or acquisition of any Note issued
under or pursuant to this Agreement, (ii) all stenographic and duplication
costs and the fees and expenses of your special counsel in connection with
any subsequent modification of, or consent under, this Agreement, and (iii)
the cost and expenses, including attorneys' fees, incurred by you in
enforcing any of your rights under this Agreement or the Notes or in
complying with any subpoena or other legal process served upon you in
connection with this Agreement or the transactions contemplated hereby or
by reason of your having acquired any Note, including without limitation
costs and expenses incurred in any bankruptcy case. The obligations of the
Company under this paragraph 11B shall survive transfer by you and payment
of any Note.
11C. Consent to Amendments. This Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, if the Company shall obtain the
written consent to such amendment, action or omission to act, of the holder
or holders of at least 66-2/3% of the aggregate principal amount of Notes
at the time outstanding except that, without the written consent of the
holder or holders of all Notes of any series at the time outstanding, no
amendment to this Agreement shall change the maturity of any Note of such
series, or change the principal of, or the rate or time of payment of
interest or any premium payable with respect to any Note of such series, or
affect the time, amount or allocation of any required prepayments, or
reduce the proportion of the principal amount of the Notes of such series
required with respect to any consent. Each holder of any Note at any time
or thereafter outstanding shall be bound by any consent authorized by this
paragraph 11C, whether or not such Note shall have been marked to indicate
such consent, but any Notes issued thereafter may bear a notation referring
to any such consent. No course of dealing between the Company and the
holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of
such Note. As used herein and in the Notes, the term "this Agreement" and
references thereto shall mean this Agreement as it may from time to time be
amended or supplemented.
11D. Form Registration; Transfer and Exchange of Notes; Lost Notes.
The Notes are issuable as registered notes without coupons in the
denominations of $1,000 and any integral multiple of $1,000. The Company
shall keep at its principal office a register in which the Company shall
provide for the registration of Notes and of transfers of Notes. Upon
surrender for registration of transfer of any Note at the principal office
of the Company, the Company shall, at its expense (other than for transfer
taxes or other governmental charges), execute and deliver one or more new
Notes of like tenor and of a like aggregate principal amount, registered in
the name of such transferee or transferees. At the option of the holder of
any Note, such Note may be exchanged for other Notes of like tenor and of
any authorized denominations, of a like aggregate principal amount, upon
surrender of the Note to be exchanged at the principal office of the
Company.
<PAGE> 35
Whenever any Notes are so surrendered for exchange, the Company
shall, at its expense, execute and deliver the Notes which the holder
making the exchange is entitled to receive. Every Note surrendered for
registration of transfer or exchange shall be duly endorsed, or be
accompanied by a written instrument of transfer duly executed, by the
holder of such Note or such holder's attorney duly authorized in writing.
Any Note or Notes issued in exchange for any Note or upon transfer thereof
shall carry the rights to unpaid interest and interest to accrue which were
carried by the Note so exchanged or transferred, so that neither gain nor
loss of interest shall result from any such transfer or exchange. Upon
receipt of written notice from you or other evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
any Note held by you and, in the case of any such loss, theft or
destruction, upon receipt of your unsecured indemnity agreement, or other
indemnity reasonably satisfactory to the Company, or in the case of any
such mutilation upon surrender and cancellation of such Note, the Company
will make and deliver a new Note, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Note.
11E. Notices to Subsequent Holder. If any Note shall have been
transferred to another holder pursuant to paragraph 11D and such holder
shall have designated in writing the address to which communications with
respect to such Note shall be mailed, all notices, certificates, requests,
statements and other documents required or permitted to be delivered to you
by any provision hereof shall also be delivered to each such holder, except
that financial statements and other documents provided for in paragraph 5A
need not be delivered to any such holder holding less than 10% of the
aggregate principal amount of Notes from time to time outstanding.
11F. Persons Deemed Owners. Prior to due presentment for
registration of transfer, the Company may treat the Person in whose name
any Note is registered as the owner and holder of such Note for the purpose
of receiving payment of principal of and Yield Maintenance Amount, if any,
and interest on such Note and for all other purposes whatsoever, whether or
not such Note shall be overdue, and the Company shall not be affected by
notice to the contrary.
11G. Survival of Representations and Warranties. All representations
and warranties contained herein or made in writing by the Company in
connection herewith shall survive the execution and delivery of this
Agreement and the Notes and transfer by you of any Note, regardless of any
investigation made by you or on your behalf.
11H. Successors and Assigns. All covenants and other agreements in
this Agreement contained by or on behalf of either of the parties hereto
shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto (including, without limitation, direct and
indirect transferees of any Note purchased by you hereunder) whether so
expressed or not.
11I. Notices. All communications or other notifications, provided
for hereunder shall, unless otherwise provided herein, be in writing and
sent first class mail, if to you, addressed to you at the address set forth
for such communications in the Purchaser Schedule attached hereto, and if
to the Company, addressed to it at 900 North Tucker
<PAGE> 36
Boulevard, St. Louis, Missouri 63101, Attention: Senior Vice
President-Finance, or to such other address with respect to either party as
such party shall notify the other in writing; provided, however, that any
such communication to the Company may also, at your option, be delivered to
the Company at its address set forth above.
11J. Descriptive Headings. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11K. Satisfaction Requirement. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this
Agreement required to be satisfactory to you, the determination of such
satisfaction shall be made by you in your sole and exclusive judgment
exercised in good faith.
11L. Payments Due on Non-Business Days. Anything in this Agreement
or the Notes to the contrary notwithstanding, any payment of principal of
or Yield Maintenance Amount or interest on any Note that is due on a date
other than a Business Day shall be made on the next succeeding Business Day
without including the additional days elapsed in the computation of the
interest payable on such next succeeding Business Day.
11M. Governing Law. This Agreement shall be construed and enforced
in accordance with, and the rights of the parties shall be governed by, the
law of the State of New York. This Agreement may not be changed orally,
but (subject to the provisions of paragraph 11C) only by an agreement in
writing signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought.
11N. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, and it
shall not be necessary in making proof of this Agreement to produce or
account for more than one such counterpart.
<PAGE> 37
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this letter and return the same to
the Company, whereupon this letter shall become a binding agreement between you
and the Company.
Very truly yours,
PULITZER PUBLISHING COMPANY
By: /s/ Ronald H. Ridgway
-----------------------------------
Title: Senior Vice President-Finance
The foregoing Agreement is hereby
accepted as of the date first above written.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/ Robert G. Gwin
-----------------------------------
Vice President
<PAGE> 38
Schedule 6C(1)
Existing Liens
None.
<PAGE> 39
Schedule 6C(2)
Existing Debt*
<TABLE>
<CAPTION>
BALANCE AT
JUNE 2, 1996
------------
<S> <C>
Notes Payable:
The Prudential Insurance Company of America:
8.8% Senior Notes Due April 22, 1997 $ 14,500,000
The Prudential Insurance Company of America:
6.76% Series A Notes Due August 1, 2001 50,000,000
7.22% Series B Notes Due August 1, 2005 50,000,000
Balance at June 2, 1996 $114,500,000
------------
<CAPTION>
NEW DEBT AS
OF 7/1/96
------------
<S> <C>
The Prudential Insurance Company of America:
7.86% Senior Notes Due at July 25, 2008 $ 85,000,000
The Lending Institutions Party Hereto, as Lenders
and The First National Bank of Chicago, as Agent:
Term Note with Several Interest Rate Options 50,000,000
135,000,000
------------
$249,500,000
============
</TABLE>
*See also Schedule 6C(3)
- -------------------
* See also Schedule 6C(3) for additional commitments.
<PAGE> 40
Schedule 6C(3)
Existing Investments
<TABLE>
<CAPTION>
BALANCE AT
JUNE 2, 1996
---------------
<S> <C>
Pulitzer Carrier Loans $ 4,653
Employee Loans 110,000
Infoseek Corporation 200,000
Southwestern Illinois Development Authority 100,000
Civic Parking L.L.C. (St. Louis Cardinals Baseball)(a) 5,000,000
St. Louis Equity Fund 217,498
21st Century Communications(b) 2,668,143
Interest in TNI Partners(c) *
Interest in St. Louis Newspaper Agency(d) *
Interest in SLH Venture(e) *
Interest in Gateway Consumer Services(f) *
Interest in RXL Pulitzer(g) 3,145,234
Interest in Heuris/Pulitzer, L.L.C.(h) 198,144
Interest in Knowledge Factory Partners(i) 125,044
Interest in AZPB Limited Partnership(j) 1,750,000
</TABLE>
<PAGE> 41
(a) Pulitzer Publishing Company is obligated to lend up to an additional
$750,000 to Civic Parking L.L.C. under certain circumstances.
(b) Pulitzer Publishing Company is obligated to make additional capital
contributions of up to $2,331,857 to 21st Century Communications.
(c) Star Publishing Company, a wholly-owned subsidiary of Pulitzer Publishing
Company, owns a 50% partnership interest in TNI Partners.
(d) An agency operation between Pulitzer Publishing Company and The Herald
Company, Inc. is conducted under the provisions of an agency agreement
(the "Agency Agreement"). Under the Agency Agreement, The Herald Company,
Inc. has the contractual right to receive 50% of the profits of the St.
Louis Post-Dispatch. The St. Louis Post-Dispatch is owned and operated by
Pulitzer Publishing Company.
(e) News Information, Inc., a wholly-owned subsidiary of Pulitzer Publishing
Company, owns a 50% interest in SLH Venture, D/B/A as St. Louis Home
Magazine, currently inactive.
(f) News Information, Inc., a wholly-owned subsidiary of Pulitzer Publishing
Company, owns a 50% interest in Gateway Consumer Services.
(g) Pulitzer Ventures, Inc. a wholly-owned subsidiary of Pulitzer Publishing
Company, owns a one-third interest in RXL Pulitzer (interactive distance
educational programming).
(h) Pulitzer Ventures II, Inc., a wholly-owned subsidiary of Pulitzer
Publishing Company, owns a 50% interest in Heuris/Pulitzer, L.L.C.
(developer of video compression technology).
(i) Pulitzer Ventures III, Inc., a wholly-owned subsidiary of Pulitzer
Publishing Company, owns a 50% interest in Knowledge Factory Partners,
L.L.P. (internet based information services).
(j) Pulitzer Sports, Inc., a wholly-owned subsidiary of Pulitzer Broadcasting
Company, which in turn is a wholly-owned subsidiary of Pulitzer Publishing
Company, owns a minority interest in AZPB Limited Partnership (owns the
Arizona Diamondbacks professional baseball expansion team). Pulitzer
Sports, Inc. made an additional capital contribution of $1,750,000 on June
11, 1996 and is obligated to make an additional capital contribution of
$1,500,000.
<PAGE> 42
Schedule 6C(8)
Existing Affiliate Transactions
-------------------------------
1. Agreement, dated as of May 12, 1986, among The Pulitzer Publishing Company,
Clement C. Moore, II, Gordon C. Weir, William E. Weir, Kenward G. Elmslie,
Stephen E. Nash and Manufacturers Hanover Trust Company, as trustees under
Indenture of Hope Ware Putnam, and Manufacturers Hanover Trust Company,
trustee under trust for the benefit of Clement C. Moore, II.
2. Letter Agreement, dated September 29, 1986, among The Pulitzer Publishing
Company, Trustee under Agreement dated December 24, 1976 made by David E.
Moore, David E. Moore, Frederick D. Pulitzer, Michael E. Pulitzer, Jr.,
Robert S. Pulitzer, Joseph Pulitzer, IV, Joseph Pulitzer, Jr., Michael E.
Pulitzer, Stephen E. Nash and Manufacturers Hanover Trust Company, as
trustees, Kenward G. Elmslie, Gordon C. Weir, William E. Weir, James R.
Weir, Peter W. Quesada, T. Ricardo Quesada, Elinor P. Hempelmann, The Moore
Foundation, Inc., Mariemont Corporation, Z Press, Inc., and Clement C.
Moore, II.
3. Letter Agreement, dated May 12, 1986, among The Pulitzer Publishing
Company, Peter W. Quesada, T. Ricardo Quesada, Kate Davis Pulitzer Quesada
and Elinor P. Hempelmann.
4. Agreement, dated as of September 29, 1986, among The Pulitzer Publishing
Company, Peter W. Quesada, T. Ricardo Quesada, Kate Davis Pulitzer Quesada
and Elinor P. Hempelmann.
5. The Registration Rights Agreement dated as of October 24, 1986 by and among
The Pulitzer Publishing Company, Joseph Pulitzer, Jr., Michael E. Pulitzer,
David E. Moore and A. Rick D'Arcangelo, Trustee under Agreement dated
December 24, 1976 by David E. Moore.
<PAGE> 43
Schedule 8E
Exceptions to Good Title
1. Matters referred to in Special Survey Exception 17(b) and in Schedule B-1,
Items (h) and (i), each contained in the Commitment for Title Insurance
issued to Pulitzer Broadcasting Company by Lawyers Title Insurance
Corporation, effective March 17, 1993, File Number 93-35810-1-1.
2. Claims of the State of New Mexico affecting real property related to the
operation of satellite television station KOCT-TV (formerly called KVIO-TV)
in Carlsbad, New Mexico.
<PAGE> 44
Schedule 8G
Agreements Restricting Debt
1. Note Agreement dated as of April 22, 1987 by and between Pulitzer
Publishing Company and The Prudential Insurance Company of America.
2. Note Agreement dated as of June 30, 1993 by and between Pulitzer
Publishing Company and The Prudential Insurance Company of America.
3. Credit Agreement dated as of July 1, 1996 among Pulitzer Publishing
Company, The Lending Institutions Party Hereto, as Lenders, and The
First National Bank of Chicago, as Agent.
<PAGE> 1
EXHIBIT 10.2
CREDIT AGREEMENT
among
PULITZER PUBLISHING COMPANY,
THE LENDING INSTITUTIONS PARTY HERETO, as Lenders,
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent,
dated as of
July 1, 1996
<PAGE> 2
TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS ............................................ 1
ARTICLE II. THE CREDITS ............................................ 14
2.1. Commitment .......................................... 14
2.2. Required Payments; Termination ...................... 14
2.3. Ratable Loans ....................................... 14
2.4. Types of Advances ................................... 14
2.5. Facility Fee; Reductions in Aggregate Commitment .... 14
2.6. Minimum Amount of Each Advance ...................... 14
2.7. Optional Principal Payments ......................... 15
2.8. Method of Selecting Types and Interest Periods for
New Advances ........................................ 15
2.9. Conversion and Continuation of Outstanding Advances.. 15
2.10. Changes in Interest Rate, etc. ...................... 16
2.11. Rates Applicable After Default ...................... 16
2.12. Method of Payment ................................... 17
2.13. Notes; Telephonic Notices ........................... 17
2.14. Interest Payment Dates; Interest and Fee Basis ...... 17
2.15. Notification of Advances, Interest Rates, Prepayments
and Commitment Reductions .......................... 18
2.16. Lending Installations ............................... 18
2.17. Non-Receipt of Funds by the Agent ................... 18
ARTICLE III. CHANGE IN CIRCUMSTANCES .............................. 19
3.1. Yield Protection .................................... 19
3.2. Changes in Capital Adequacy Regulations ............. 19
3.3. Availability of Types of Advances ................... 20
3.4. Funding Indemnification ............................. 20
3.5. Lender Statements; Survival of Indemnity ............ 20
ARTICLE IV. CONDITIONS PRECEDENT; WITHHOLDING TAX EXEMPTION ....... 21
4.1. Initial Advance ..................................... 21
4.2. Each Advance ........................................ 23
4.3. Withholding Tax Exemption ........................... 23
ARTICLE V. REPRESENTATIONS AND WARRANTIES ......................... 24
5.1. Corporate Existence and Standing .................... 24
<PAGE> 3
5.2. Authorization and Validity ............................ 24
5.3. No Conflict; Government Consent ....................... 24
5.4. Financial Statements .................................. 25
5.5. Material Adverse Change ............................... 25
5.6. Taxes ................................................. 25
5.7. Litigation and Contingent Obligations ................. 25
5.8. Subsidiaries .......................................... 25
5.9. ERISA ................................................. 26
5.10. Accuracy of Information ............................... 26
5.11. Regulation U .......................................... 26
5.12. Material Agreements ................................... 26
5.13. Compliance With Laws .................................. 26
5.14. Ownership of Properties ............................... 26
5.17. Investment Company Act ................................ 27
5.18. Public Utility Holding Company Act .................... 27
5.19. Solvency .............................................. 27
ARTICLE VI. COVENANTS ............................................... 28
6.1. Financial Reporting ................................... 28
6.2. Use of Proceeds ....................................... 30
6.3. Notice of Default ..................................... 30
6.4. Conduct of Business ................................... 30
6.5. Taxes ................................................. 30
6.6. Insurance ............................................. 30
6.7. Maintenance of Properties ............................. 31
6.8. Inspection ............................................ 31
6.9. Equal Security ........................................ 31
6.10. Compliance with Laws .................................. 31
6.11. Patents, Trade Marks and Trade Names .................. 31
6.12. Dividends ............................................. 32
6.13. Liens ................................................. 32
6.14. Indebtedness .......................................... 33
6.15. Loans, Advances and Investments ....................... 34
6.16. Sale of Assets ........................................ 36
6.17. Sale and Leaseback .................................... 37
6.18. Lease Rentals ......................................... 37
6.19. Merger ................................................ 37
6.20. Affiliates ............................................ 37
6.21. Sale of Stock and Indebtedness of Subsidiaries ........ 38
6.22. Subsidiary Guarantees ................................. 38
6.23. Issuance of Stock by Subsidiaries ..................... 38
6.24. Other Indebtedness .................................... 39
6.25. Leverage Ratio ........................................ 39
6.26. Current Ratio ......................................... 39
ARTICLE VII. DEFAULTS ............................................... 39
Page 2
<PAGE> 4
ARTICLE VIII. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES 42
8.1. Acceleration ............................................. 42
8.2. Amendments ............................................... 43
8.3. Preservation of Rights ................................... 43
ARTICLE IX. GENERAL PROVISIONS ......................................... 44
9.1. Survival of Representations .............................. 44
9.2. Governmental Regulation .................................. 44
9.3. Taxes .................................................... 44
9.4. Headings ................................................. 44
9.5. Entire Agreement ......................................... 44
9.6. Several Obligations; Benefits of this Agreement .......... 44
9.7. Expenses; Indemnification ................................ 44
9.8. Numbers of Documents ..................................... 45
9.9. Accounting ............................................... 45
9.10. Severability of Provisions ............................... 45
9.11. Nonliability of Lenders .................................. 45
9.12. Confidentiality .......................................... 46
9.13. Nonreliance .............................................. 46
ARTICLE X. THE AGENT ................................................... 46
10.1. Appointment; Nature of Relationship ...................... 46
10.2. Powers ................................................... 47
10.3. General Immunity ......................................... 47
10.4. No Responsibility for Loans, Recitals, etc. .............. 47
10.5. Action on Instructions of Lenders ........................ 47
10.6. Employment of Agents and Counsel ......................... 48
10.7. Reliance on Documents; Counsel ........................... 48
10.8. Agent's Reimbursement and Indemnification ................ 48
10.9. Notice of Default ........................................ 48
10.10. Rights as a Lender ....................................... 48
10.11. Lender Credit Decision ................................... 49
10.12. Successor Agent .......................................... 49
10.13. Agent's Fee .............................................. 49
ARTICLE XI. SETOFF; RATABLE PAYMENTS ................................... 50
11.1. Setoff ................................................... 50
11.2. Ratable Payments ......................................... 50
Page 3
<PAGE> 5
ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS 50
12.1. Successors and Assigns ................................... 50
12.2. Participations ........................................... 51
12.2.1. Permitted Participants; Effect ................... 51
12.2.2. Voting Rights .................................... 51
12.2.3. Benefit of Setoff ................................ 51
12.3. Assignments .............................................. 52
12.3.1. Permitted Assignments ............................ 52
12.3.2. Effect; Effective Date ........................... 52
12.4. Dissemination of Information ............................. 53
12.5. Tax Treatment ............................................ 53
ARTICLE XIII. NOTICES .................................................. 53
13.1. Notices .................................................. 53
13.2. Change of Address ........................................ 53
ARTICLE XIV. COUNTERPARTS .............................................. 54
ARTICLE XV. CHOICE OF LAW, CONSENT TO JURISDICTION, WAIVER OF
JURY TRIAL ................................................ 54
15.1. Choice of Law ............................................ 54
15.2. Consent to Jurisdiction .................................. 54
15.3. Waiver of Jury Trial ..................................... 55
EXHIBITS
EXHIBIT "A" - Note ............................................. 59
EXHIBIT "B" - Forms of Opinions ................................ 61
EXHIBIT "C" - Compliance Certificate ........................... 62
EXHIBIT "D" - Amendment to 1993 Note Agreement ................. 67
EXHIBIT "E" - Assignment Agreement ............................. 68
EXHIBIT "F" - Loan/Credit Related Money Transfer Instruction ... 77
SCHEDULES
SCHEDULE "1" - Subsidiaries and Other Investments ............... 78
SCHEDULE "2" - Indebtedness and Liens ........................... 79
Page 4
<PAGE> 6
SCHEDULE "3" - Litigation ...................................... 80
SCHEDULE "4" - Transactions with Affiliates .................... 81
Page 5
<PAGE> 7
PULITZER PUBLISHING COMPANY
CREDIT AGREEMENT
This Agreement, dated as of July 1, 1996, is among Pulitzer Publishing
Company, the Lenders and The First National Bank of Chicago, as Agent. The
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding ownership interests of a partnership or
limited liability company.
"Advance" means a borrowing hereunder (or conversion or continuation
thereof) consisting of the aggregate amount of the several Loans made on the
same Borrowing Date (or date of conversion or continuation) by the Lenders to
the Borrower of the same Type and, in the case of Eurodollar Advances, for the
same Interest Period.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10%
or more of any class of voting securities (or other ownership interests) of
the controlled Person or possesses, directly or indirectly, the power to
direct or cause the direction of the management or policies of the controlled
Person, whether through ownership of stock, by contract or otherwise.
"Agent" means The First National Bank of Chicago in its capacity as
agent for the Lenders pursuant to Article X, and not in its individual
capacity as a Lender, and any successor Agent appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders, as reduced from time to time pursuant to the terms hereof.
"Agreement" means this credit agreement, as it may be amended or
modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 5.4.
<PAGE> 8
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Corporate Base Rate for such day and (ii) the
sum of Federal Funds Effective Rate for such day plus 1/2% per annum.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorizations" means all approvals, orders, authorizations, consents,
franchises, licenses, certificates and permits from, the FCC, applicable PUCs,
and other federal, state and local regulatory or governmental bodies and
authorities, including any subdivision thereof.
"Authorized Officer" means any of the President, any Vice President,
Treasurer or Controller of the Borrower, acting singly.
"Borrower" means Pulitzer Publishing Company, a Delaware corporation,
and its successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities and on which dealings
in United States dollars are carried on in the London interbank market and
(ii) for all other purposes, a day (other than a Saturday or Sunday) on which
banks generally are open in Chicago for the conduct of substantially all of
their commercial lending activities.
"Capitalization" means the sum of Consolidated Tangible Net Worth plus
Consolidated Funded Debt.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Change in Control" means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 20% or more of the outstanding shares of voting stock of the
Borrower.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such Lender to
make Loans
Page 2
<PAGE> 9
not exceeding the amount set forth opposite its signature below or
as set forth in any Notice of Assignment relating to any assignment that has
become effective pursuant to Section 12.3.2, as such amount may be modified
from time to time pursuant to the terms hereof.
"Condemnation" is defined in Section 7.8.
"Consolidated Current Assets" means the current assets of the Borrower
and its Subsidiaries, all consolidated in accordance with generally accepted
accounting principles, provided that there shall not be included in
Consolidated Current Assets (i) any loans or advances made by the Borrower or
any Subsidiary except the current portion of (A) travel and other like
advances to officers and employees in the ordinary course of business and (B)
amounts outstanding under the Subordinated Loan Agreement dated March 21, 1996
between the Borrower and Civic Parking, L.L.C., or (ii) any assets located
outside (including any amounts payable by Persons located outside) the United
States of America and Canada.
"Consolidated Current Liabilities" means the current liabilities of the
Borrower and its Subsidiaries, all consolidated in accordance with generally
accepted accounting principles.
"Consolidated Funded Debt" means the Funded Debt of the Borrower and
its Subsidiaries all consolidated in accordance with generally accepted
accounting principles.
"Consolidated Net Earnings" means consolidated gross revenues of the
Borrower and its Subsidiaries less all operating and non-operating expenses of
the Borrower and its Subsidiaries including all charges of a proper character
(including current and deferred taxes on income, provision for taxes on
unremitted foreign earnings which are included in gross revenues, and current
additions to reserves), but not including in gross revenues any gains (net of
expenses and taxes applicable thereto) in excess of losses resulting from the
sale, conversion or other disposition of capital assets (i.e., assets other
than current assets) in excess of an aggregate amount of $500,000 in any one
year, any gains resulting from the write-up of assets, any equity of the
Borrower or any Subsidiary in the unremitted earnings of any corporation which
is not a Subsidiary or any earnings of any Person acquired by the Borrower or
any Subsidiary through purchase, merger or consolidation or otherwise for any
year prior to the year of acquisition, or any deferred credit representing the
excess of equity in any Subsidiary at the date of acquisition over the cost of
investment in such Subsidiary; all determined in accordance with generally
accepted accounting principles.
"Consolidated Net Earnings Available for Restricted Payments" means an
amount equal to (1) the sum of (a) $10,000,000 plus (b) 75% (or minus 100% in
case of a deficit) of Consolidated Net Earnings for the period (taken as one
accounting period) commencing on January 1, 1993, and terminating at the end
of the last fiscal quarter preceding the date of any proposed Restricted
Payment, less (2) the sum of (a) the amount of all dividends and other
distributions paid or declared by the Borrower on any class of the Borrower's
stock after December 31, 1992, (b) the excess of the aggregate amount
expended, directly or indirectly, after December 31, 1992, for the redemption,
purchase or other acquisition by the Borrower or any Subsidiary of any shares
of the Borrower's stock over the aggregate amount received after December 31,
1992 as the net cash proceeds of the sale of any shares of its Stock and (c)
the aggregate amount of all Excess Investments.
"Consolidated Tangible Net Worth" means the excess of (a) the sum of
(i) the par value
Page 3
<PAGE> 10
(or value stated on the books of the Borrower) of the capital stock of
all classes of the Borrower, plus (or minus in the case of a surplus deficit)
(ii) the amount of consolidated surplus, whether capital or earned, of the
Borrower and its Subsidiaries, over (b) the sum of (i) treasury stock and (ii)
intangibles (except for (A) goodwill existing as of December 31, 1992, (B)
network contracts, (C) FCC licenses, (D) goodwill associated with the
acquisition of substantially all of the operating assets of each of WESH in
Daytona Beach, Florida and KCCI- TV in Des Moines, Iowa), writeups of assets
after December 31, 1992, and (E) goodwill associated with the Scripps
Acquisition (excluding revaluation of assets pursuant to acquisitions of
companies or assets and any revaluation authorized by then generally accepted
accounting principles); all determined on a consolidated basis for the
Borrower and its Subsidiaries in accordance with Agreement Accounting
Principles (including making appropriate deductions for minority interests, if
any, in Subsidiaries).
"Consolidated Total Assets" means the total assets of the Borrower and
its Subsidiaries, all consolidated in accordance with generally accepted
accounting principles.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes
or is contingently liable upon, the obligation or liability of any other
Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person, or otherwise assures any creditor of
such other Person against loss, including, without limitation, any comfort
letter, operating agreement or take-or-pay contract.
"Conversion/Continuation Notice" is defined in Section 2.9.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower or any of its Subsidiaries,
are treated as a single employer under Section 414 of the Code.
"Corporate Base Rate" means a rate per annum equal to the corporate
base rate of interest announced by First Chicago from time to time, changing
when and as said corporate base rate changes.
"Current Debt" means any obligation for borrowed money (and any notes
payable and drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money) payable on demand or within a
period of one year from the date of the creation thereof; provided that any
obligation shall be treated as Funded Debt, regardless of its term, if such
obligation is renewable pursuant to the terms thereof or of a revolving credit
or similar agreement effective for more than one year after the date of the
creation of such obligation, or may be payable out of the proceeds of a
similar, obligation pursuant to the terms of such obligation or of any such
agreement. Any obligation secured by a Lien on, or payable out of the
proceeds of production from, property of the Borrower or any Subsidiary shall
be deemed to be Funded or Current Debt, as the case may be, of the Borrower or
such Subsidiary even though such obligation shall not be assumed by the
Borrower or such Subsidiary.
"Default" means an event described in Article VII.
Page 4
<PAGE> 11
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating
to (i) the protection of the environment, (ii) the effect of the environment
on human health, (iii) emissions, discharges or releases of pollutants,
contaminants, hazardous substances or wastes into surface water, ground water
or land, or (iv) the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants,
hazardous substances or wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which bears interest at a
Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the rate determined by the Agent to be the rate
at which First Chicago offers to place deposits in U.S. dollars with
first-class banks in the London interbank market at approximately 11 a.m.
(London time) two Business Days prior to the first day of such Interest
Period, in the approximate amount of First Chicago's relevant Eurodollar Loan
and having a maturity approximately equal to such Interest Period.
"Eurodollar Loan" means a Loan which bears interest at a Eurodollar
Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar
Base Rate applicable to such Interest Period, divided by (b) one minus the
Reserve Requirement (expressed as a decimal) applicable to such Interest
Period, plus (ii) .225% per annum. The Eurodollar Rate shall be rounded to
the next higher multiple of 1/16 of 1% if the rate is not such a multiple.
"Excess Investments" means all loans and advances to, and investments
in the stock, obligations and securities of, and capital contributions to, any
Person made by the Borrower or any Subsidiary, to the extent such loan,
advance, investment or contribution is not, when made, permitted by Section
6.15 (other than by reason of clause (xiii) thereof).
"Facility Termination Date" means July 2, 2001.
"FCC" means the Federal Communications Commission or any other
regulatory body which succeeds to the functions of the Federal Communications
Commission.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations at approximately 10
a.m. (Chicago time) on such day on such transactions received by the Agent
from three Federal funds brokers of recognized standing selected by the Agent
in its sole discretion.
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"First Chicago" means The First National Bank of Chicago in its
individual capacity, and its successors.
"Floating Rate" means, for any day, a rate per annum equal to the
Alternate Base Rate for such day changing when and as the Alternate Base Rate
changes.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan which bears interest at the Floating
Rate.
"Funded Debt" means and includes without duplication:
(i) all obligations for borrowed money or obligations
represented by notes payable and drafts accepted representing
extensions of credit, all obligations evidenced by bonds, debentures,
notes or other similar instruments and all obligations upon which
interest charges are customarily paid payable more than one year from
the date of the creation thereof or renewable or refundable by the
terms thereof at the option of the obligor with respect thereto for a
period or periods which, together with the original term thereof,
aggregate more than one year and any such obligation, regardless of
its term, if such obligation is renewable (subject to conditions as
to which the borrower is in compliance at the time of such
determination) pursuant to the terms thereof or of a revolving credit
or similar agreement effective for more than one year after the date
of creation of such obligation or of any such agreement,
(ii) Capitalized Lease Obligations,
(iii) Indebtedness secured by any Lien existing on property
owned by the Borrower or any Subsidiary subject to such Lien, whether
or not the indebtedness secured thereby shall have been assumed by
the Borrower or any Subsidiary,
(iv) guarantees, endorsements (other than endorsements of
negotiable instruments for collection in the ordinary course of
business) and other contingent liabilities (whether direct or
indirect) in connection with the obligations, stock or dividends of
any Person,
(v) obligations under any contract providing for the making
of loans, advances or capital contributions to any Person, or for the
purchase of any property from any Person, in each case in order to
enable such Person primarily to maintain working capital, net worth
or any other balance sheet condition or to pay debt, dividends or
expenses,
(vi) obligations under any contract for the purchase of
materials, supplies or other Property from any Person if such
contract (or any related document) requires that payment for such
materials, supplies or other property shall be made regardless of
whether or not delivery of such materials, supplies or other property
is ever made or tendered,
(vii) obligations under any contract to rent or lease (as
lessee) any real or personal property if such contract (or any
related document) provides that the obligation
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to make payments thereunder is absolute and unconditional under
conditions not customarily found in commercial leases then in general
use or requires that the lessee purchase or otherwise acquire
securities or obligations of the lessor,
(viii) obligations under any contract for the sale or use of
materials, supplies or other property, or the rendering of services,
if such contract (or any related document) requires that payment for
such materials, supplies or other property, or the use thereof, or
payment for such services, shall be subordinated to any indebtedness
(of the purchaser or user of such materials, supplies or other
property or the Person entitled to the benefit of such services) owed
or to be owed to any Person, and
(ix) obligations under any other contract which, in economic
effect, is substantially equivalent to a guarantee;
provided, however, that Funded Debt shall not include loans, advances
and capital contributions by the Borrower to any Subsidiary or by any
Subsidiary to the Borrower or another Subsidiary or a guarantee of the
obligations of a Subsidiary under an executory contract to purchase or sell a
business.
"Indebtedness" means of any Person at any date, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of Property
or services (other than current trade liabilities incurred in the ordinary
course of business and payable in accordance with customary practices), (b)
any other indebtedness of such Person which is evidenced by a note, bond,
debenture, or similar instrument, (c) all Capitalized Lease Obligations of such
Person, (d) all obligations of such Person in respect of acceptances issued or
created for the account of such Person, and (e) all liabilities secured by any
Lien on any Property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof.
"Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three, or six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on the
day which corresponds numerically to such date one, two, three, or six months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third, or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third,
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in
the trade) or contribution of capital by such Person; stocks, bonds, mutual
funds, partnership interests, notes, debentures or other securities owned by
such Person; any deposit accounts and certificate of deposit owned by such
Person; and structured notes, derivative financial instruments and other
similar instruments or contracts owned by such Person.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
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"Lending Installation" means, with respect to a Lender or the Agent,
any office, branch, subsidiary or affiliate of such Lender or the Agent.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Leverage Ratio" means, as at the last day of any fiscal quarter, the
ratio of (a) Consolidated Funded Debt as at the last day of such fiscal
quarter to (b) Operating Cash Flow for the twelve-month period then ending.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind
or nature whatsoever (including, without limitation, the interest of a vendor
or lessor under any conditional sale, Capitalized Lease or other title
retention agreement).
"Loan" means, with respect to a Lender, such Lender's loan made
pursuant to Article II (or any conversion or continuation thereof).
"Loan Documents" means this Agreement and the Notes.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower to perform its obligations under the Loan Documents,
or (iii) the validity or enforceability of any of the Loan Documents or the
rights or remedies of the Agent or the Lenders thereunder.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"1993 Note Agreement" means that certain Note Agreement by and between
the Borrower and The Prudential Insurance Company of America dated as of June
30, 1993 regarding $50,000,000 6.76% Series A Notes due August 1, 2001 and
$50,000,000 7.22% Series B Notes due August 1, 2005.
"1996 Note Agreement" means that certain Note Agreement by and between
the Borrower and The Prudential Insurance Company of America dated as of
July 1, 1996 regarding $85,000,000 7.86% Senior Notes due July 25, 2008.
"Note" means a promissory note, in substantially the form of Exhibit
"A" hereto, duly executed by the Borrower and payable to the order of a Lender
in the amount of its Commitment, including any amendment, modification,
renewal or replacement of such promissory note.
"Note Agreements" means, collectively, the 1993 Note Agreement and the
1996 Note Agreement.
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"Notice of Assignment" is defined in Section 12.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Notes, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the
Lenders or to any Lender, the Agent or any indemnified party hereunder arising
under the Loan Documents.
"Operating Cash Flow" means, for any period of determination thereof,
the sum of (a) pre-tax income or deficit, as the case may be (excluding
extraordinary gains and losses and interest income), (b) interest expense, and
(c) depreciation and amortization, and all other non-cash charges (to the
extent deducted in determining net income or deficit), all calculated for the
Borrower and its Subsidiaries on a trailing twelve-month basis, after giving
effect to any acquisitions and dispositions of assets of the Borrower and its
Subsidiaries made during such period as if made on the first day of such
period.
"Operating Income" means operating income of the Borrower and its
Subsidiaries, after giving effect to agency adjustments, as set forth on the
Borrower's consolidated financial statements in accordance with generally
accepted accounting principles.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each March, June, September, and
December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Acquisition" means any Acquisition or series of related
Acquisitions of equity or assets which has or have been approved and
recommended by the board of directors or equivalent governing body of the
entity to be acquired or the entity the assets of which are to be acquired.
"Person" means any natural person, corporation, firm, joint venture,
partnership, association, enterprise, trust or other entity or organization,
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of
the Code as to which the Borrower or any member of the Controlled Group may
have any liability.
"Priority Debt" means the aggregate amount of all secured Indebtedness
of the Borrower plus all secured and unsecured Indebtedness of Subsidiaries.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets
owned, leased or operated by such Person.
"PUC" means a state public utility commission or analogous state or
local regulatory or governmental authority.
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"Purchase Agreement" means that certain Stock Purchase Agreement by and
among the Borrower and the Sellers dated as of May 4, 1996 setting forth the
terms and conditions of the Scripps Acquisition, as amended through July 1,
1996.
"Purchasers" is defined in Section 12.3.1.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor
thereto or other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to member banks of the
Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors
relating to the extension of credit by banks for the purpose of purchasing or
carrying margin stocks applicable to member banks of the Federal Reserve
System.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a
Plan, excluding, however, such events as to which the PBGC by regulation
waived the requirement of Section 4043(a) of ERISA that it be notified within
30 days of the occurrence of such event, provided, however, that a failure to
meet the minimum funding standard of Section 412 of the Code and of Section
302 of ERISA shall be a Reportable Event regardless of the issuance of any such
waiver of the notice requirement in accordance with either Section 4043(a) of
ERISA or Section 412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at least
66-2/3% of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding at least 66-2/3% of the aggregate
unpaid principal amount of the outstanding Advances.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on
Eurocurrency liabilities.
"Restricted Payments" is defined in Section 6.12.
"Scripps Acquisition" means the Acquisition by the Borrower of certain
newspaper properties from the Sellers pursuant to the Purchase Agreement.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Sellers" means, collectively, Mr. Edward W. Scripps, Mrs. Betty Knight
Scripps, and The Edward W. Scripps and Betty Knight Scripps Charitable
Remainder Unitrust.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
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"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or
more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, or (ii) any partnership, limited liability company, association,
joint venture or similar business organization more than 50% of the ownership
interests having ordinary voting power of which shall at the time be so owned
or controlled. Unless otherwise expressly provided, all references herein to
a "Subsidiary" shall mean a Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which (i) represents more than 10% of
the consolidated assets of the Borrower and its Subsidiaries as would be shown
in the consolidated financial statements of the Borrower and its Subsidiaries
as at the beginning of the twelve-month period ending with the month in which
such determination is made, or (ii) is responsible for more than 10% of the
consolidated net sales or of the consolidated net income of the Borrower and
its Subsidiaries as reflected in the financial statements referred to in
clause (i) above.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or Eurodollar Advance.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited liability
company, association, joint venture or similar business organization 100% of
the ownership interests having ordinary voting power of which shall at the
time be so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
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ARTICLE II
THE CREDITS
2.1. Commitment. From and including the date of this Agreement and
prior to the Facility Termination Date, each Lender severally agrees, on the
terms and conditions set forth in this Agreement, to make Loans to the
Borrower from time to time in amounts not to exceed in the aggregate at any
one time outstanding the amount of its Commitment. Subject to the terms of
this Agreement, the Borrower may borrow, repay and reborrow at any time prior
to the Facility Termination Date. The Commitments to lend hereunder shall
expire on the Facility Termination Date.
2.2. Required Payments; Termination. Any outstanding Advances and
all other unpaid Obligations shall be paid in full by the Borrower on the
Facility Termination Date.
2.3. Ratable Loans. Each Advance hereunder shall consist of Loans
made from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment.
2.4. Types of Advances. The Advances may be Floating Rate Advances
or Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.8 and 2.9.
2.5. Facility Fee; Reductions in Aggregate Commitment. The Borrower
agrees to pay to the Agent for the account of each Lender a facility fee of
.10% per annum on such Lender's Commitment without regard to usage from the
date hereof to and including the Facility Termination Date, payable on each
Payment Date hereafter and on the Facility Termination Date. The Borrower may
permanently reduce the Aggregate Commitment in whole, or in part ratably among
the Lenders in integral multiples of $1,000,000, upon at least five Business
Days' written notice to the Agent, which notice shall specify the amount of any
such reduction, provided, however, that the amount of the Aggregate Commitment
may not be reduced below the aggregate principal amount of the outstanding
Advances. All accrued facility fees shall be payable on the effective date of
any termination of the obligations of the Lenders to make Loans hereunder.
2.6. Minimum Amount of Each Advance. Each Eurodollar Advance shall
be in the minimum amount of $1,000,000 (and in multiples of $500,000 if in
excess thereof), and each Floating Rate Advance shall be in the minimum amount
of $500,000 (and in multiples of $250,000 if in excess thereof), provided,
however, that any Floating Rate Advance may be in the amount of the unused
Aggregate Commitment.
2.7. Optional Principal Payments. The Borrower may from time to
time pay, without penalty or premium, all outstanding Floating Rate Advances,
or, in a minimum aggregate amount of $500,000 or any integral multiple of
$250,000 in excess thereof, any portion of the outstanding Floating Rate
Advances upon three Business Days' prior notice to the Agent. The Borrower
may, subject to Section 3.4, from time to time pay, without penalty or
premium, any outstanding Eurodollar Advance upon three Business Days' prior
notice to
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the Agent.
2.8. Method of Selecting Types and Interest Periods for New
Advances. The Borrower shall select the Type of Advance and, in the case of
each Eurodollar Advance, the Interest Period applicable to each Advance from
time to time. The Borrower shall give the Agent irrevocable notice (a
"Borrowing Notice") not later than 10:00 a.m. (Chicago time) at least one
Business Day before the Borrowing Date of each Floating Rate Advance and three
Business Days before the Borrowing Date for each Eurodollar Advance,
specifying:
(i) the Borrowing Date, which shall be a Business Day, of
such Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest
Period applicable thereto.
Not later than noon (Chicago time) on each Borrowing Date, each Lender shall
make available its Loan or Loans, in funds immediately available in Chicago to
the Agent at its address specified pursuant to Article XIII. The Agent will
make the funds so received from the Lenders available to the Borrower at the
Agent's aforesaid address.
2.9. Conversion and Continuation of Outstanding Advances. Floating
Rate Advances (unless paid in accordance with Section 2.7 ) shall continue as
Floating Rate Advances unless and until such Floating Rate Advances are
converted into Eurodollar Advances. Each Eurodollar Advance shall (unless
paid in accordance with Section 2.7) continue as a Eurodollar Advance until
the end of the then applicable Interest Period therefor, at which time such
Eurodollar Advance shall be automatically converted into a Floating Rate
Advance unless the Borrower shall have given the Agent a
Conversion/Continuation Notice requesting that, at the end of such Interest
Period, such Eurodollar Advance either continue as a Eurodollar Advance for
the same or another Interest Period or be converted into a Floating Rate
Advance. Subject to the terms of Section 2.6, the Borrower may elect from time
to time to convert all or any part of an Advance of any Type into any other
Type of Advance; provided that any conversion of any Eurodollar Advance shall
be made on, and only on, the last day of the Interest Period applicable
thereto. The Borrower shall give the Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of an Advance or
continuation of a Eurodollar Advance not later than 10:00 a.m. (Chicago time)
at least one Business Day, in the case of a conversion into a Floating Rate
Advance, or three Business Days, in the case of a conversion into or
continuation of a Eurodollar Advance, prior to the date of the requested
conversion or continuation, specifying:
(i) the requested date which shall be a Business Day, of
such conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is
to be converted or continued, and
(iii) the amount and Type(s) of Advance(s) into which such
Advance is to be converted or continued and, in the case of a
conversion into or continuation of
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a Eurodollar Advance, the duration of the Interest Period
applicable thereto.
2.10. Changes in Interest Rate, etc. Each Floating Rate Advance
shall bear interest on the outstanding principal amount thereof, for each day
from and including the date such Advance is made or is converted from a
Eurodollar Advance into a Floating Rate Advance pursuant to Section 2.9 to but
excluding the date it becomes due or is converted into a Eurodollar Advance
pursuant to Section 2.9 hereof, at a rate per annum equal to the Floating Rate
for such day. Changes in the rate of interest on that portion of any Advance
maintained as a Floating Rate Advance will take effect simultaneously with
each change in the Alternate Base Rate. Each Eurodollar Advance shall bear
interest on the outstanding principal amount thereof from and including the
first day of the Interest Period applicable thereto to (but not including) the
last day of such Interest Period at the interest rate determined as applicable
to such Eurodollar Advance. No Interest Period may end after the Facility
Termination Date.
2.11. Rates Applicable After Default. Notwithstanding anything to
the contrary contained in Section 2.8 or 2.9, during the continuance of a
Default or Unmatured Default the Required Lenders may, at their option, by
notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that no
Advance may be made as, converted into or continued as a Eurodollar Advance.
During the continuance of a Default the Required Lenders may, at their option,
by notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that
(i) each Eurodollar Advance shall bear interest for the remainder of the
applicable Interest Period at the rate otherwise applicable to such Interest
Period plus 2% per annum and (ii) each Floating Rate Advance shall bear
interest at a rate per annum equal to the Floating Rate otherwise applicable
to the Floating Rate Advance plus 2% per annum.
2.12. Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by noon (local time) on the date when
due and shall be applied ratably by the Agent among the Lenders. Each payment
delivered to the Agent for the account of any Lender shall be delivered
promptly by the Agent to such Lender in the same type of funds that the Agent
received at its address specified pursuant to Article XIII or at any Lending
Installation specified in a notice received by the Agent from such Lender.
The Agent is hereby authorized to charge the account of the Borrower
maintained with First Chicago for each payment of principal, interest and fees
as it becomes due hereunder.
2.13. Notes; Telephonic Notices. Each Lender is hereby authorized to
record the principal amount of each of its Loans and each repayment on the
schedule attached to its Note, provided, however, that neither the failure to
so record nor any error in such recordation shall affect the Borrower's
obligations under such Note. The Borrower hereby authorizes the Lenders and
the Agent to extend, convert or continue Advances, effect selections of Types
of Advances and to transfer funds based on telephonic notices made by any
person or persons the Agent or any Lender in good faith believes to be acting
on behalf of the Borrower. The Borrower agrees to deliver promptly to the
Agent a written confirmation, if such confirmation is requested by the Agent
or any Lender, of each telephonic notice signed by an Authorized
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Officer. If the written confirmation differs in any material respect
from the action taken by the Agent and the Lenders, the records of the Agent
and the Lenders shall govern absent manifest error.
2.14. Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each Floating Rate Advance shall be payable on each Payment Date,
commencing with the first such date to occur after the date hereof and at
maturity. Interest accrued on each Eurodollar Advance shall be payable on the
last day of its applicable Interest Period, on any date on which the
Eurodollar Advance is prepaid, whether by acceleration or otherwise, and at
maturity. Interest accrued on each Eurodollar Advance having an Interest
Period longer than three months shall also be payable on the last day of each
three-month interval during such Interest Period. Interest on Floating Rate
Advances shall be calculated for actual days elapsed on the basis of a 365-
or, where appropriate, 366-day year. Interest on Eurodollar Advances and
facility fees shall be calculated for actual days elapsed on the basis of a
360-day year. Interest shall be payable for the day an Advance is made but
not for the day of any payment on the amount paid if payment is received prior
to noon (local time) at the place of payment. If any payment of principal of
or interest on an Advance shall become due on a day which is not a Business
Day, such payment shall be made on the next succeeding Business Day and, in the
case of a principal payment, such extension of time shall be included in
computing interest in connection with such payment.
2.15. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Conversion/Continuation Notice, and repayment notice
received by it hereunder. The Agent will notify each Lender of the interest
rate applicable to each Eurodollar Advance promptly upon determination of such
interest rate and will give each Lender prompt notice of each change in the
Alternate Base Rate.
2.16. Lending Installations. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Lender
for the benefit of such Lending Installation. Each Lender may, by written or
telex notice to the Agent and the Borrower, designate a Lending Installation
through which Loans will be made by it and for whose account Loan payments are
to be made.
2.17. Non-Receipt of Funds by the Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it
is scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of
principal, interest or fees to the Agent for the account of the Lenders, that
it does not intend to make such payment, the Agent may assume that such payment
has been made. The Agent may, but shall not be obligated to, make the amount
of such payment available to the intended recipient in reliance upon such
assumption. If such Lender or the Borrower, as the case may be, has not in
fact made such payment to the Agent, the recipient of such payment shall, on
demand by the Agent, repay to the Agent the amount so made available together
with interest thereon in respect of each day during the period commencing on
the date such amount was so made available by the Agent until the date the
Agent recovers such amount at a rate per annum equal to (i) in the case of
payment by a Lender, the Federal Funds Effective Rate for such day or (ii) in
the case of payment by the Borrower, the interest rate
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applicable to the relevant Loan.
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1. Yield Protection. If after the date of this Agreement any law
or any governmental or quasi-governmental rule, regulation, policy, guideline
or directive (whether or not having the force of law), or any interpretation
thereof, or the compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending
Installation to any tax, duty, charge or withholding on or from
payments due from the Borrower (excluding federal or state taxation
of the overall net income of any Lender or applicable Lending
Installation), or changes the basis of taxation of payments to any
Lender in respect of its Loans or other amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation (other
than reserves and assessments taken into account in determining the
interest rate applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending
Installation of making, funding or maintaining loans or reduces any
amount receivable by any Lender or any applicable Lending
Installation in connection with loans, or requires any Lender or any
applicable Lending Installation to make any payment calculated by
reference to the amount of loans held or interest received by it, by
an amount deemed material by such Lender,
then, within 15 days of demand by such Lender, the Borrower shall pay such
Lender that portion of such increased expense incurred or reduction in an
amount received which such Lender determines is attributable to making,
funding and maintaining its Loans and its Commitment.
3.2. Changes in Capital Adequacy Regulations. If a Lender
determines the amount of capital required or expected to be maintained by such
Lender, any Lending Installation of such Lender or any corporation controlling
such Lender is increased as a result of a Change, then, within 15 days of
demand by such Lender, the Borrower shall pay such Lender the amount necessary
to compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender determines is attributable to this
Agreement, its Loans or its obligation to make Loans hereunder (after taking
into account such Lender's policies as to capital adequacy). "Change" means
(i) any change after the date of this Agreement in the Risk-Based Capital
Guidelines or (ii) any adoption of or change in any other law, governmental or
quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether
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or not having the force of law) after the date of this
Agreement which affects the amount of capital required or expected to be
maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "Risk-Based Capital Guidelines" means (i) the
risk-based capital guidelines in effect in the United States on the date of
this Agreement, including transition rules, and (ii) the corresponding capital
regulations promulgated by regulatory authorities outside the United States
implementing the July 1988 report of the Basle Committee on Banking Regulation
and Supervisory Practices Entitled "International Convergence of Capital
Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender determines
that maintenance of any of its Eurodollar Loans at a suitable Lending
Installation would violate any applicable law, rule, regulation or directive,
whether or not having the force of law, the Agent shall suspend the
availability of the affected Type of Advance and require any Eurodollar
Advances of the affected Type to be, at the Borrower's election, either repaid
or converted to an unaffected Type of Advance; or if the Required Lenders
determine that (i) deposits of a type or maturity appropriate to match fund
Eurodollar Advances are not available, the Agent shall suspend the
availability of the affected Type of Advance with respect to any Eurodollar
Advances made after the date of any such determination, or (ii) an interest
rate applicable to a Type of Advance does not accurately reflect the cost of
making a Eurodollar Advance of such Type, then, if for any reason whatsoever
the provisions of Section 3.1 are inapplicable, the Agent shall suspend the
availability of the affected Type of Advance with respect to any Eurodollar
Advances made after the date of any such determination.
3.4. Funding Indemnification. If any payment of a Eurodollar
Advance occurs on a date which is not the last day of the applicable Interest
Period, whether because of acceleration, prepayment or otherwise, or a
Eurodollar Advance is not made on the date specified by the Borrower for any
reason other than default by the Lenders, the Borrower will indemnify each
Lender for any loss or cost incurred by it resulting therefrom, including,
without limitation, any loss or cost in liquidating or employing deposits
acquired to fund or maintain the Eurodollar Advance.
3.5. Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Eurodollar Loans to reduce any liability of
the Borrower to such Lender under Sections 3.1 and 3.2 or to avoid the
unavailability of a Type of Advance under Section 3.3, so long as such
designation is not disadvantageous to such Lender. Each Lender shall deliver
a written statement of such Lender to the Borrower (with a copy to the Agent)
as to the amount due, if any, under Section 3.1, 3.2 or 3.4. Such written
statement shall set forth in reasonable detail the calculations upon which
such Lender determined such amount and shall be final, conclusive and binding
on the Borrower in the absence of manifest error. Determination of amounts
payable under such Sections in connection with a Eurodollar Loan shall be
calculated as though each Lender funded its Eurodollar Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit
used as a reference in determining the Eurodollar applicable to such Loan,
whether in fact that is the case or not. Unless otherwise provided herein, the
amount specified in the written statement of any Lender shall be payable on
demand after receipt by the Borrower of such written statement. The
obligations of the Borrower under Sections 3.1, 3.2 and 3.4 shall survive
payment of the Obligations and termination of this Agreement.
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ARTICLE IV
CONDITIONS PRECEDENT; WITHHOLDING TAX EXEMPTION
4.1. Initial Advance. The Lenders shall not be required to make the
initial Advance hereunder unless the Borrower has furnished to the Agent with
sufficient copies for the Lenders:
(i) Copies of the articles of incorporation of the
Borrower, together with all amendments, and a certificate of good
standing, both certified by the appropriate governmental officer in
its jurisdiction of incorporation.
(ii) Copies, certified by the Secretary or Assistant Secretary of the
Borrower, of its by-laws and of its Board of Directors'
resolutions (and resolutions of other bodies, if any are deemed
necessary by counsel for any Lender) authorizing the execution of the
Loan Documents.
(iii) An incumbency certificate, executed by the Secretary or Assistant
Secretary of the Borrower, which shall identify by name and
title and bear the signature of the officers of the Borrower
authorized to sign the Loan Documents and to make borrowings
hereunder, upon which certificate the Agent and the Lenders shall be
entitled to rely until informed of any change in writing by the
Borrower.
(iv) A certificate, signed by the chief financial officer of the Borrower,
stating that on the initial Borrowing Date no Default or
Unmatured Default has occurred and is continuing.
(v) Written opinions of counsel to the Borrower and counsel to the
Sellers, addressed to the Lenders in substantially the form of
Exhibit "B" hereto.
(vi) Notes payable to the order of each of the Lenders.
(vii) A copy of the Purchase Agreement, in form and substance satisfactory
to the Lenders, certified as true and correct and in full
force and effect as of the initial Borrowing Date by the Secretary or
Assistant Secretary of the Borrower.
(viii) Evidence satisfactory to the Lenders that the Borrower's and the
Seller's respective directors and (if necessary) shareholders
shall have approved the Scripps Acquisition, that all regulatory and
legal approvals for the Scripps Acquisition have been obtained, and
that all conditions to the consummation of the Scripps Acquisition
(other than the making of the initial Advances hereunder and the
application of the proceeds thereof) have been satisfied.
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(ix) Evidence satisfactory to the Lenders that, upon giving effect to the
proceeds of the initial borrowing hereunder, the Scripps
Acquisition shall have been consummated.
(x) A Compliance Certificate setting forth calculations on a pro forma
basis giving effect to the Scripps Acquisition and the initial
borrowing hereunder, together with such other information as the
Agent may request to confirm the assumptions made in such pro forma
Compliance Certificate.
(xi) An amendment to the 1993 Note Agreement in the form of Exhibit "D"
attached hereto duly executed by the parties thereto.
(xii) A copy of the 1996 Note Agreement, in form and substance satisfactory
to the Required Lenders, certified as true and correct and in
full force and effect by the Secretary or Assistant Secretary of the
Borrower.
(xiii) Payment of all fees due and owing to the Agent and the Lenders as at
the effective date of this Agreement.
(xiv) Written money transfer instructions, in substantially the form of
Exhibit "F" hereto, addressed to the Agent and signed by an
Authorized Officer, together with such other related money transfer
authorizations as the Agent may have reasonably requested.
(xv) Such other documents as any Lender or its counsel may have reasonably
requested.
4.2. Each Advance. The Lenders shall not be required to make any
Advance (other than an Advance that, after giving effect thereto and to the
application of the proceeds thereof, does not increase the aggregate amount of
outstanding Advances), unless on the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in
Article V are true and correct as of such Borrowing Date
except to the extent any such representation or warranty is stated to
relate solely to an earlier date, in which case such representation
or warranty shall be true and correct on and as of such earlier date.
(iii) All legal matters incident to the making of such Advance shall be
satisfactory to the Lenders and their counsel.
Each Borrowing Notice with respect to each such Advance shall
constitute a representation and warranty by the Borrower that the conditions
contained in Sections 4.2(i) and (ii) have been satisfied. Any Lender may
require a duly completed compliance certificate in substantially the form of
Exhibit "C" hereto as a condition to making an Advance.
4.3. Withholding Tax Exemption. At least five Business Days prior to
the first date
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on which interest or fees are payable hereunder for the account
of any Lender, each Lender that is not incorporated under the laws of the
United States of America, or a state thereof, agrees that it will deliver to
each of the Borrower and the Agent two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, certifying in either case that such
Lender is entitled to receive payments under this Agreement and the Notes
without deduction or withholding of any United States federal income taxes.
Each Lender which so delivers a Form 1001 or 4224 further undertakes to
deliver to each of the Borrower and the Agent two additional copies of such
form (or a successor form) on or before the date that such form expires
(currently, three successive calendar years for Form 1001 and one calendar year
for Form 4224) or becomes obsolete or after the occurrence of any event
requiring a change in the most recent forms so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Borrower or the Agent, in each case certifying that such
Lender is entitled to receive payments under this Agreement and the Notes
without deduction or withholding of any United States federal income taxes,
unless an event (including without limitation any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such form with
respect to it and such Lender advises the Borrower and the Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income tax.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1. Corporate Existence and Standing. Each of the Borrower and its
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted and where the failure to have such authority could
reasonably be expected to have a Material Adverse Effect.
5.2. Authorization and Validity. The Borrower has the corporate
power and authority and legal right to execute and deliver the Loan Documents
and to perform its obligations thereunder. The execution and delivery by the
Borrower of the Loan Documents and the performance of its obligations
thereunder have been duly authorized by proper corporate proceedings, and the
Loan Documents constitute legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.
5.3. No Conflict; Government Consent. Neither the execution and
delivery by the Borrower of the Loan Documents, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will (a) violate any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on the Borrower or any of its Subsidiaries or the
Borrower's or any Subsidiary's articles of incorporation or by-laws or
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the provisions of any indenture, instrument or agreement to which the
Borrower or any of its Subsidiaries is a party or is subject, or by which it,
or its Property, is bound, or conflict with or constitute a default
thereunder, except, in each of the foregoing cases, such violations as could
not reasonably be expected to have a Material Adverse Effect, or (b) result in
the creation or imposition of any Lien in, of or on the Property of the
Borrower or a Subsidiary pursuant to the terms of any such indenture,
instrument or agreement. No order, consent, approval, license, authorization,
or validation of, or filing, recording or registration with, or exemption by,
or other action in respect of any governmental or public body or authority, or
any subdivision thereof, is required to authorize, or is required in connection
with the execution, delivery and performance of, or the legality, validity,
binding effect or enforceability of, any of the Loan Documents.
5.4. Financial Statements. The December 31, 1995 consolidated
financial statements of the Borrower and its Subsidiaries heretofore delivered
to the Lenders were prepared in accordance with generally accepted accounting
principles in effect on the date such statements were prepared and fairly
present the consolidated financial condition and operations of the Borrower
and its Subsidiaries at such date and the consolidated results of their
operations for the period then ended.
5.5. Material Adverse Change. Since December 31, 1995, there has
been no change in the business, Property, prospects, condition (financial or
otherwise) or results of operations of the Borrower and its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect.
5.6. Taxes. The Borrower and its Subsidiaries have filed all United
States federal tax returns and all other tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Borrower or any of its Subsidiaries, except such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided in accordance with Agreement Accounting Principles
and as to which no Lien exists. The United States income tax returns of the
Borrower and its Subsidiaries have been audited by the Internal Revenue
Service through the fiscal year ended December 31, 1992. No tax liens have
been filed and no claims are being asserted with respect to any such taxes.
The charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of any taxes or other governmental charges are
adequate.
5.7. Litigation and Contingent Obligations. Except as set forth on
Schedule "3" hereto, there is no litigation, arbitration, governmental
investigation, proceeding or inquiry pending or, to the knowledge of any of
their officers, threatened against or affecting the Borrower or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect or which seeks to prevent, enjoin or delay the making of the Loans or
Advances. Other than any liability incident to such litigation, arbitration or
proceedings, the Borrower has no material contingent obligations not provided
for or disclosed in the financial statements referred to in Section 5.4.
5.8. Subsidiaries. Schedule "1" hereto contains an accurate list of
all Subsidiaries of the Borrower as of the date of this Agreement, setting
forth their respective jurisdictions of incorporation and the percentage of
their respective capital stock owned by the Borrower or other Subsidiaries.
All of the issued and outstanding shares of capital stock of such Subsidiaries
have been duly authorized and issued and are fully paid and non-assessable.
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5.9. ERISA. No accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the Code), whether or not waived,
exists with respect to any Plan (other than a Multiemployer Plan). No
liability to the PBGC has been or is expected by the Borrower to be incurred
with respect to any Plan (other than a Multiemployer Plan) by the Borrower or
any of its Subsidiaries which is or would be materially adverse to the
Borrower and its Subsidiaries taken as a whole.
5.10. Accuracy of Information. No information, exhibit or report
furnished by the Borrower or any of its Subsidiaries to the Agent or to any
Lender in connection with the negotiation of, or compliance with, the Loan
Documents contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statements contained therein
not misleading.
5.11. Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of those assets of the Borrower and its Subsidiaries
which are subject to any limitation on sale, pledge, or other restriction
hereunder.
5.12. Material Agreements. Neither the Borrower nor any Subsidiary
is a party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in (i) any agreement to which it is a party, which
default could reasonably be expected to have a Material Adverse Effect or (ii)
any agreement or instrument evidencing or governing material Indebtedness.
5.13. Compliance With Laws. The Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof, having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property if failure to comply
could reasonably be expected to have a Material Adverse Effect.
5.14. Ownership of Properties. Except as set forth on Schedule "2"
hereto, on the date of this Agreement, the Borrower and its Subsidiaries will
have good title, free of all Liens other than those permitted by Section 6.13,
to all of the Property and assets reflected in the financial statements as
owned by it.
5.15. Plan Assets; Prohibited Transactions. The Borrower is not an
entity deemed to hold "plan assets" within the meaning of 29 C.F.R.
Section 2510.3-101 of an employee benefit plan (as defined in Section 3(3)
of ERISA) which is subject to Title I of ERISA or any plan (within the meaning
of Section 4975 of the Code); and neither the execution of this Agreement nor
the making of Loans hereunder gives rise to a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code.
5.16. Environmental Matters. In the ordinary course of its business,
the officers of the Borrower consider the effect of Environmental Laws on the
business of the Borrower and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the Borrower
due to Environmental Laws. On the basis of this consideration, the
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Borrower has reasonably concluded that Environmental Laws cannot
reasonably be expected to have a Material Adverse Effect. Neither the
Borrower nor any Subsidiary has received any notice to the effect that its
operations are not in material compliance with any of the requirements of
applicable Environmental Laws or are the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment,
which non-compliance or remedial action could reasonably be expected to have a
Material Adverse Effect.
5.17. Investment Company Act. Neither the Borrower nor any
Subsidiary thereof is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of
1940, as amended.
5.18. Public Utility Holding Company Act. Neither the Borrower nor
any Subsidiary 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", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
5.19. Solvency. (i) Immediately after the consummation of the
transactions to occur on the date hereof and immediately following the making
of each Loan, if any, made on the date hereof and after giving effect to the
application of the proceeds of such Loans (including, without limitation, the
consummation of the Scripps Acquisition), (a) the fair value of the assets of
the Borrower and the Subsidiaries on a consolidated basis, at a fair valuation,
will exceed the debts and liabilities, subordinated, contingent or otherwise,
of the Borrower and the Subsidiaries on a consolidated basis; (b) the present
fair saleable value of the property of the Borrower and the Subsidiaries on a
consolidated basis will be greater than the amount that will be required to
pay the probable liability of the Borrower and the Subsidiaries on a
consolidated basis on their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute
and matured; (c) the Borrower and the Subsidiaries on a consolidated basis
will be able to pay their debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured; and (d)
the Borrower and the Subsidiaries on a consolidated basis will not have
unreasonably small capital with which to conduct the businesses in which they
are engaged as such businesses are now conducted and are proposed to be
conducted after the date hereof.
(ii) The Borrower does not intend to, or to permit any of its
Subsidiaries to, and does not believe that it or any of its Subsidiaries will,
incur debts beyond its ability to pay such debts as they mature, taking into
account the timing of and amounts of cash to be received by it or any such
Subsidiary and the timing of the amounts of cash to be payable on or in respect
of its Indebtedness or the Indebtedness of any such Subsidiary.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
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6.1. Financial Reporting. The Borrower will maintain, for itself
and each Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, and furnish to the
Lenders:
(i) Within 90 days after the close of each of its fiscal years, an
unqualified (except for qualifications relating to changes in
accounting principles or practices reflecting changes in generally
accepted principles of accounting and required or approved by the
Borrower's independent certified public accountants) audit report by
independent certified public accountants of recognized standing
prepared in accordance with Agreement Accounting Principles on a
consolidated and consolidating basis (consolidating statements need
not be certified by such accountants) for itself and the Subsidiaries,
including balance sheets as of the end of such period, a related
statement of income and statement of stockholders' equity, and a
statement of cash flows, accompanied by (a) any management letter
prepared by said accountants, and (b) a certificate of said
accountants that, in the course of their examination necessary for
their audit of the foregoing, they have obtained no knowledge of any
Default or Unmatured Default, or if, in the opinion of such
accountants, any Default or Unmatured Default shall exist, stating
the nature and status thereof.
(ii) Within 45 days after the close of the first three quarterly periods
of each of its fiscal years, for itself and the Subsidiaries,
consolidated and consolidating unaudited balance sheets as at the
close of each such period and a consolidated and consolidating
statement of income and statement of stockholders' equity and a
statement of cash flows for the period from the beginning of such
fiscal year to the end of such quarter, all certified by a senior
financial officer of the Borrower.
(iii) Together with the financial statements required under Sections 6.1(i)
and (ii), a compliance certificate in substantially the form
of Exhibit "C" hereto signed by a senior financial officer of the
Borrower showing the calculations necessary to determine compliance
with this Agreement and stating that no Default or Unmatured Default
exists, or if any Default or Unmatured Default exists, stating the
nature and status thereof.
(iv) Within 270 days after the close of each fiscal year, a statement of
the Unfunded Liabilities of each Single Employer Plan,
certified as correct by an actuary enrolled under ERISA.
(v) As soon as possible and in any event within 10 days after the Borrower
knows that any Reportable Event has occurred with respect to
any Plan, a statement, signed by a senior financial officer of the
Borrower, describing said Reportable Event and the action which the
Borrower proposes to take with respect thereto.
(vi) As soon as possible and in any event within 10 days after receipt by
the Borrower, a copy of (a) any notice or claim to the effect
that the Borrower or
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any of its Subsidiaries is or may be liable to any Person as a
result of the release by the Borrower, any of its Subsidiaries, or any
other Person of any toxic or hazardous waste or substance into the
environment, and (b) any notice alleging any violation of any federal,
state or local environmental, health or safety law or regulation by the
Borrower or any of its Subsidiaries, which, in either case, could
reasonably be expected to have a Material Adverse Effect.
(vii) Promptly upon the furnishing thereof to the shareholders of the
Borrower, copies of all financial statements, reports and
proxy statements so furnished.
(viii) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular
reports which the Borrower or any of its Subsidiaries files with the
Securities and Exchange Commission, all material reports that the
Borrower or any Subsidiary files with any PUC, and all reports the
Borrower or any Subsidiary files with the FCC pertaining to any of
the following: revocation of a license, denial of an application for
renewal of a license, grant of a license renewal for less than a full
term, proposed imposition of a forfeiture or fine, letter of
admonition or imposition of a special reporting condition,
institution of any order or proceeding against the Borrower or any
Subsidiary, or any matter directly affecting the Borrower's ability
to comply with the terms of this Agreement.
(ix) Such other information (including non-financial information) as the
Agent or any Lender may from time to time reasonably request.
6.2. Use of Proceeds. The Borrower will, and will cause each
Subsidiary to, use the proceeds of the Advances to finance the Scripps
Acquisition, for general corporate purposes (including Permitted Acquisitions
in each case for aggregate consideration not in excess of $10,000,000), and to
repay outstanding Advances. The Borrower will not, nor will it permit any
Subsidiary to, use any of the proceeds of the Advances to purchase or carry any
"margin stock" (as defined in Regulation U), to make any other Acquisition, or
to prepay any Indebtedness under or pursuant to the Note Agreements or the
notes issued thereunder.
6.3. Notice of Default. The Borrower will, and will cause each
Subsidiary to, give prompt notice in writing to the Lenders of the occurrence
of any Default or Unmatured Default.
6.4. Conduct of Business. The Borrower will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted, except as provided in Sections 6.15, 6.16, 6.17, and 6.19, and to
do all things necessary to remain duly incorporated, validly existing and in
good standing as a domestic corporation in its jurisdiction of incorporation
and maintain all requisite authority to conduct its business in each
jurisdiction in which its business is conducted and where the failure to have
such authority could reasonably be expected to have a Material Adverse Effect.
6.5. Taxes. The Borrower will, and will cause each Subsidiary to,
timely file complete and correct United States federal and applicable foreign,
state and local tax returns required by law and pay when due all taxes,
assessments and governmental charges and levies
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upon it or its income, profits or Property, except those which are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves have been set aside in accordance with Agreement
Accounting Principles.
6.6. Insurance. The Borrower will, and will cause each Subsidiary
to, maintain with financially sound and reputable insurance companies
insurance on all their Property in such amounts and covering such risks as is
consistent with sound business practice, and the Borrower will furnish to any
Lender upon request full information as to the insurance carried.
6.7. Maintenance of Properties. The Borrower will, and will cause
each Subsidiary to, do all things necessary to maintain, preserve, protect and
keep its Property in good repair, working order and condition, and make all
necessary and proper repairs, renewals and replacements, that the failure to
do or make could reasonably be expected to have a Material Adverse Effect.
6.8. Inspection. The Borrower will, and will cause each Subsidiary
to, permit the Agent and the Lenders, by their respective representatives and
agents, to inspect any of the Property, corporate books and financial records
of the Borrower and each Subsidiary, to examine and make copies of the books
of accounts and other financial records of the Borrower and each Subsidiary,
and to discuss the affairs, finances and accounts of the Borrower and each
Subsidiary with, and to be advised as to the same by, their respective officers
at such reasonable times and intervals as the Lenders may designate.
6.9. Equal Security. If the Borrower or any Subsidiary shall
create or assume any Lien upon any of its Property, whether now owned or
hereafter acquired, other than Liens permitted by the provisions of Section
6.13, the Borrower will, and will cause each Subsidiary to, make or cause to
be made effective provision whereby the Obligations will be secured by such
Lien equally and ratably with any and all other Indebtedness thereby secured,
so long as any such other Indebtedness shall be so secured.
6.10. Compliance with Laws. The Borrower will and will cause each
Subsidiary to be in material compliance with all laws and regulations
(including, but not limited to, those relating to equal employment opportunity
and employee health and safety) which are now in effect or may be legally
imposed in the future in any jurisdiction in which the Borrower and any
Subsidiary is doing business other than those laws and regulations which the
Borrower or such Subsidiary is contesting in good faith by appropriate
proceedings; provided, however, (a) the Borrower or such Subsidiary continues
to operate any affected business free of any requirement to escrow or
sequester any material amount of such business' profits or revenues pending
resolution of such proceedings, or (b) any non-compliance with any law or
regulation could not reasonably be expected to have a Material Adverse Effect.
6.11. Patents, Trade Marks and Trade Names. The Borrower will and
will cause each Subsidiary to continue to own, or hold licenses for the use
of, all copyrights, franchises, licenses, marketing rights, patents, service
marks, trade marks, trade names, and rights in any of the foregoing, as in the
aggregate are necessary for the conduct of its business in the manner in which
such business is being conducted as of the date hereof except where failure to
continue to own or hold such licenses could not reasonably be expected to have
a Material Adverse Effect.
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6.12. Dividends. The Borrower will not pay or declare any dividend
on any class of its stock at any time after the date hereof or make any other
distribution on account of any class of its stock, or redeem, purchase or
otherwise acquire, directly or indirectly, any shares of its stock, or make,
or permit any Subsidiary to make, any Excess Investments (all of the foregoing
being herein called "Restricted Payments") except out of Consolidated Net
Earnings Available for Restricted Payments. There shall not be included in
Restricted Payments or in any computation of Consolidated Net Earnings
Available for Restricted Payments: (x) dividends paid, or distributions made,
in stock of the Borrower or (y) exchanges or conversions of stock of one or
more classes of the Borrower, except to the extent that cash or other value is
involved in such exchange or conversion. The term "stock" as used in this
Section 6.12 shall include warrants or options to purchase stock.
6.13. Liens. The Borrower will not, nor will it permit any
Subsidiary to, create, assume or suffer to exist any Lien upon any of its
Property, whether now owned or hereafter acquired (whether or not provision is
made for the equal and ratable securing of the Obligations in accordance with
the provisions of Section 6.9), except:
(i) Liens on Property of the Borrower and its Subsidiaries
existing on the date hereof and set forth on Schedule "2" hereto,
(ii) Liens for taxes or assessments or other governmental
charges or levies not yet due or which are being actively contested
in good faith by appropriate proceedings if adequate reserves with
respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in accordance with generally
accepted accounting principles,
(iii) other Liens which were not incurred in connection with
the borrowing of money or the obtaining of advances or credit, and
which do not in the aggregate materially impair the use of such
Property in the operation of the business of the Borrower and its
Subsidiaries, or materially detract from the value of such Property
for the purpose of the business of the Borrower and its Subsidiaries,
taken as a whole,
(iv) Liens on Property of a Subsidiary to secure obligations
of such Subsidiary to the Borrower or another Subsidiary,
(v) any Lien existing on any Property of any Person at the
time it becomes a Subsidiary, or existing prior to the time of
acquisition upon any Property acquired by the Borrower or any
Subsidiary through purchase, merger, or consolidation or otherwise,
whether or not assumed by the Borrower or such Subsidiary, or placed
upon Property at the time of acquisition, construction or improvement
by the Borrower or any Subsidiary to secure all or a portion of (or
to secure Indebtedness incurred to pay all or a portion of) the
purchase price or cost thereof or placed after acquisition upon
Property acquired, constructed or improved by the Borrower or any
Subsidiary after the date of this Agreement, provided that any such
Lien shall not encumber any other Property of the Borrower or such
Subsidiary,
(vi) Liens on Property owned or leased by the Borrower or a
Subsidiary in favor of the United States of America or any State
thereof, or any department, agency or instrumentality or political
subdivision of the United States of America or any State
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thereof, or any political subdivision thereof, or in favor of
holders of securities issued by any such entity, pursuant to any
contract or statute (including, without limitation, mortgages to
secure pollution control or industrial revenue bonds) to secure any
Indebtedness incurred for the purpose of financing all or any part of
the purchase price or the cost of construction of the Property
subject to such Liens,
(vii) any Liens renewing, extending or refunding any Lien
permitted by clauses (i), (v) and (vi) above, provided that the
principal amount secured is not increased and the Lien is not
extended to other Property, and
(viii) any other Lien which secures any Indebtedness, provided
that the aggregate principal amount of such Indebtedness together
with all other Indebtedness of the Borrower and its Subsidiaries
secured by all Liens which would be permitted under the foregoing
provisions, (including, any such Indebtedness permitted to be secured
under clauses (i) through (vii) above), together with all other
Priority Debt, does not exceed 15% of Capitalization and does not
exceed the limitations imposed in clause (iii) of Section 6.14.
Notwithstanding the foregoing, the Borrower will not and will not
permit any Subsidiary to create, assume or suffer to exist at any time any
Lien securing the obligations of the Borrower under the Note Agreements upon
any of its Property, whether now owned or hereafter acquired (whether or not
provision is made for the equal and ratable securing of the Obligations in
accordance with the provisions of Section 6.9).
6.14. Indebtedness. The Borrower will not, nor will it permit any
Subsidiary to, create, incur, assume, guarantee or in any way become liable
for any Funded Debt except:
(i) Funded Debt represented by the Obligations,
(ii) Funded Debt existing and outstanding as of the date of
this Agreement, as set forth on Schedule "2" attached hereto,
(iii) additional Funded Debt of the Borrower if at the time
it is incurred and after giving effect thereto and to the concurrent
retirement of any Funded Debt, the Borrower would be in compliance
with the provisions of Section 6.25, and
(iv) additional Funded Debt of any Subsidiary, provided that
the aggregate principal amount of such Indebtedness of all
Subsidiaries under this clause (iv) together with all other Priority
Debt does not exceed 15% of Capitalization and provided that the
principal amount of such Indebtedness together with all other
Indebtedness of the Borrower does not exceed the limitations imposed
by the provisions of clause (iii) above.
6.15. Loans, Advances and Investments. The Borrower will not, nor
will it permit any Subsidiary to, make, or permit to remain outstanding, any
loan or advance to, or own, purchase or acquire any stock, obligations or
securities of, or any interest in, or make any capital contribution to, any
Person; except that the Borrower or any Subsidiary may:
(i) make or permit to remain outstanding loans, advances or
capital
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contributions to any Subsidiary,
(ii) permit or permit to remain outstanding any loans,
advances or capital contributions from any Subsidiary to the Borrower
or any other Subsidiary,
(iii) own, purchase or acquire stock, obligations or
securities of a Subsidiary or a Person which immediately after such
purchase or acquisition will be a Subsidiary,
(iv) make and permit to remain outstanding investments in
notes receivable which are received pursuant to (x) the sale of all
or substantially all of a business or operations but only to the
extent that such sale proceeds are not required to be applied in
accordance with paragraph 5D of each of the Note Agreements as in
effect on the date of this Agreement, or (y) the sale of used
equipment in the ordinary course of business but only to the extent
that the aggregate uncollected amount thereof does not exceed
$500,000,
(v) make and permit to remain outstanding loans, advances
and other investments in any business principally engaged in
publishing or broadcasting (including without limitation cable
television and point-to-point transmission of programming) provided
that all such loans, advances and other investments to or in entities
which are not Subsidiaries do not in the aggregate exceed 10% of
Capitalization and provided that no such loan, advance or investment
shall be made unless immediately thereafter the Borrower could incur
at least one dollar of Consolidated Funded Debt without violating any
of the terms of this Agreement,
(vi) make and permit to remain outstanding loans, advances
and other investments received in settlement of debts (created in the
ordinary course of business) owing to the Borrower or any Subsidiary,
(vii) own, purchase or acquire commercial paper issued by any
corporation or bankers' acceptances issued by any member bank of the
Federal Reserve System, in either case, maturing within one year of
the date of purchase and rated, by at least two of Standard and
Poor's Ratings Group, Moody's Investors Service, Inc., and Fitch
Investors Service, L.P., "A-1", "P-1" and "F-1", respectively, and
payable in the United States in United States dollars,
(viii) own, purchase or acquire certificates of deposit in
member banks of the Federal Reserve System (each having capital
resources in excess of $75,000,000) or certificates of deposit in an
aggregate amount not to exceed $2,000,000 in banks having capital
resources of less than $75,000,000), all due within one year from the
date of original issue thereof and payable in the United States in
United States dollars,
(ix) own, purchase or acquire repurchase agreements of
member banks of the Federal Reserve System (each having capital
resources in excess of $75,000,000) for terms of less than one year
in respect of the foregoing certificates and obligations,
(x) own, purchase or acquire obligations of the United
States Government or any agency thereof,
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(xi) own, purchase or acquire obligations guaranteed by the
United States Government or any agency thereof,
(xii) investments in stocks of investment companies
registered under the Investment Company Act of 1940 which invest
primarily in obligations of the type described in clauses (vii),
(viii), (ix), (x), (xi) or (xviii) above, provided that any such
investment company shall have an aggregate net asset value of not less
than $500,000,000,
(xiii) make or permit to remain outstanding Excess Investments
to the extent permitted by Section 6.12,
(xiv) endorse negotiable instruments for collection in the
ordinary course of business,
(xv) make or permit to remain outstanding travel and other
like advances to officers and employees in the ordinary course of
business,
(xvi) make or permit to remain outstanding investments in
demand deposit accounts maintained by the Borrower or any Subsidiary
in the ordinary course of its business,
(xvii) make or permit to remain outstanding investments
consisting of Eurodollar time deposits, maturing within 90 days after
the making thereof, with any branch of a United States commercial
bank having capital and surplus of not less than $1 billion in the
aggregate,
(xviii) make or permit to remain outstanding investments in
municipal obligations having a rating of "MIG-1" by Moody's Investors
Service, Inc., or "SP-1" by Standard and Poor's Ratings Group,
(xix) permit to remain outstanding investments of the
Borrower and its Subsidiaries set forth on Schedule "1" and, so long
as the Borrower maintains an ownership interest therein, additional
loans, advances and capital contributions consistent with past
practices of the Borrower, and
(xx) make, or permit to remain outstanding, any other loan
or advance to, or own, purchase or acquire any other stock,
obligations or securities of, or any other interest in, or make any
other capital contribution to any Person, provided that the aggregate
amount thereof does not exceed $5,000,000.
6.16. Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, sell or dispose of capital assets (including capital stock)
outside the ordinary course of business if the aggregate of capital assets so
sold or disposed of in any fiscal year involves assets totaling 10% or more of
Consolidated Total Assets at the beginning of such fiscal year or has
contributed 10% or more of Operating Income for the three fiscal years then
most recently ended, taken as one accounting period (or for such shorter
period during which such assets were owned by the Borrower or a Subsidiary)
unless such sale or disposition is required to be made by an order issued by
the FCC and either (a) the net proceeds (including the cash value
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of any securities received but deducting all expenses of sale and sales
and transfer taxes and applicable Federal and state income taxes) from such
sale or disposition are within 24 months from receipt (or such longer period
during which approval by the FCC is pending and not final) invested in
businesses substantially similar to any line of business in which the Borrower
or any Subsidiary has been continuously engaged since the date of issuance of
the Notes or (b) no later than 24 months after receipt of such net proceeds
the Borrower makes such proceeds available as a prepayment ratably to the
Lenders and the holders of the "Notes" under (and as defined in) the Note
Agreements in accordance with the terms of paragraph 5D of each of the Note
Agreements as in effect on the date of this Agreement.
6.17. Sale and Leaseback. The Borrower will not, nor will it permit
any Subsidiary to, enter into any arrangement with any lender or investor or
under which such lender or investor is a party, providing for the leasing or
other similar arrangement by the Borrower or any Subsidiary of real or
personal property used by the Borrower or any Subsidiary in the operations of
the Borrower or any Subsidiary, which has been or is sold or transferred by the
Borrower or any Subsidiary to such lender or investor or to any Person to whom
funds have been or are to be advanced by such lender or investor on the
security of such rental obligations of the Borrower or such Subsidiary, except
that the Borrower may enter into sale and leaseback transactions involving
newspaper or television equipment or facilities acquired after the initial
Borrowing Date if (a) such arrangement shall be for a period of less than three
years by the end of which the use of such property by the lessee will be
discontinued, (b) the net proceeds of such sale are applied to the retirement
of Funded Debt, (c) the net proceeds of the sale are used to purchase other
property having a value at least equal to such net proceeds, (d) the property
immediately prior to such sale could have been subjected to a Lien securing
Funded Debt in an amount equal to such net proceeds and which Lien would be
permitted by clause (viii) of Section 6.13, or (e) the transaction represents
a sale by a Subsidiary to the Borrower or another Subsidiary or by the
Borrower to a Subsidiary.
6.18. Lease Rentals. The Borrower will not, nor will it permit any
Subsidiary to, enter into or renew any agreement to rent or lease (as lessee)
any real or personal property (other than office space, computer or office
equipment or vehicles) having an initial term (including any options to renew
or extend any term, whether or not exercised) of more than three years if net
annual payments pursuant to all such leases (including those made prior to the
date of this Agreement) in effect immediately thereafter would exceed 3% of
Capitalization, provided that there shall be excluded from the foregoing
limitations and calculations any Capitalized Lease Obligation.
6.19. Merger. The Borrower will not, nor will it permit any
Subsidiary to, merge or consolidate with or into any other Person, except
that:
(i) any Subsidiary may merge or consolidate with the
Borrower (provided that the Borrower shall be the continuing or
surviving corporation) or any one or more other Subsidiaries or,
subject to the provisions of Section 6.21, any other corporation
(provided that upon such merger or consolidation the Borrower shall be
in compliance with all the terms and provisions of this Agreement),
and
(ii) the Borrower may merge or consolidate with any
corporation, provided that such merger or consolidation would not
cause a Change in Control.
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6.20. Affiliates. The Borrower will not, nor will it permit any
Subsidiary to, directly or indirectly enter into or be a party to any
transaction or arrangement, including, without limitation, the purchase, sale,
exchange or use of any Property, or any interest therein, whether real,
personal or mixed, or tangible or intangible, or the rendering of any service,
with any Affiliate, except transactions in the ordinary course of and pursuant
to the reasonable requirements of the Borrower's and each Subsidiary's
business, as the case may be, and upon fair and reasonable terms that are no
less favorable to the Borrower and the Subsidiaries, as the case may be, than
those which might be obtained in an arm's length transaction with a Person not
an Affiliate; provided, however, that for purposes hereof, any payments made
pursuant to the agreements set forth on Schedule "4" shall not be considered
transactions subject to this Section 6.20, copies of such agreements having
been previously delivered to you.
6.21. Sale of Stock and Indebtedness of Subsidiaries. The Borrower
will not, nor will it permit any Subsidiary to, sell or otherwise dispose of,
or part with control of, any shares of stock or Funded or Current Debt of any
Subsidiary, except to the Borrower or another Subsidiary, and except that all
shares of stock and Indebtedness of any Subsidiary at the time owned by or
owed to the Borrower or any Subsidiary may be sold as an entirety for a cash
consideration which represents the fair value (as determined in good faith by
the Board of Directors of the Borrower) at the time of sale of the shares of
stock and Indebtedness so sold, provided that the assets of such Subsidiary do
not constitute more than 10% of Consolidated Total Assets at the beginning of
the fiscal year in which such sale or disposition is to occur and that such
Subsidiary shall not have contributed more than 10% of Operating Income for the
three fiscal years then most recently ended, taken as one accounting period (or
for such shorter period during which such stock was owned by the Borrower or a
Subsidiary), unless such transaction shall be subject to, and in compliance
with, Section 6.16 and further provided that, in any event, at the time of
sale, such Subsidiary shall not own, directly or indirectly, any shares of
stock or Indebtedness of any other Subsidiary (unless all of the shares of
stock and Indebtedness of such other Subsidiary owned, directly or indirectly,
by the Borrower and all Subsidiaries are simultaneously being sold as
permitted by this Section 6.21).
6.22. Subsidiary Guarantees. The Borrower will not permit any
Subsidiary to create, assume or suffer to exist at any time any direct or
indirect guaranty of the obligations of the Borrower under the Note
Agreements.
6.23. Issuance of Stock by Subsidiaries. The Borrower will not
permit any Subsidiary, the assets of which constitute more than 10% of
Consolidated Total Assets at the beginning of the fiscal year in which such
issuance, sale or disposition is to occur or which has contributed more than
10% of Operating Income for any of the three fiscal years most recently ended,
to issue, sell or dispose of any shares of its stock of any class except to the
Borrower or another Subsidiary.
6.24. Other Indebtedness. The Borrower will not, and will not permit
any Subsidiary to, make any amendment or modification to the indenture, note
or other agreement evidencing or governing any other Indebtedness which
amendment or modification would change the date of a required principal
payment (other than to extend such date), increase the interest rate or fees
payable by the Borrower, or materially adversely affect the Borrower's ability
to perform its obligations under the Loan Documents. The Borrower will not,
and will not permit any Subsidiary to, directly or indirectly voluntarily
prepay any Indebtedness under or pursuant to the Note Agreements or the notes
issued thereunder unless the Borrower reduces
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the Aggregate Commitment ratably with the amount applied to such
Indebtedness (determined according to the proportion the Aggregate Commitment
bears to the sum of the Aggregate Commitment and the outstanding principal
balance of Indebtedness under or pursuant to the Note Agreements or the notes
issued thereunder). The Borrower will not, and will not permit any Subsidiary
to, directly or indirectly voluntarily prepay, defease or in substance defease,
purchase, redeem, retire or otherwise acquire, any other Indebtedness;
provided, however, that nothing herein shall be deemed to prohibit the
voluntary prepayment by the Borrower of any loans outstanding under short-term
renewable lines of credit.
6.25. Leverage Ratio. The Borrower will maintain as of the last day
of each fiscal quarter a Leverage Ratio not greater than 4.0 to 1.0.
6.26. Current Ratio. The Borrower will maintain at all times a ratio
of Consolidated Current Assets to Consolidated Current Liabilities not less
than 1.25 to 1.0.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on
behalf of the Borrower or any of its Subsidiaries to the Lenders or the Agent
under or in connection with this Agreement, any Loan, or any certificate or
information delivered in connection with this Agreement or any other Loan
Document shall be materially false on the date as of which made.
7.2. Nonpayment of principal of any Note when due, or nonpayment of
interest upon any Note or of any facility fee or other obligations under any
of the Loan Documents within five days after the same becomes due.
7.3. The breach by the Borrower of any of the terms or provisions of
Section 6.2, 6.9, 6.12, 6.13, 6.14, 6.15, 6.16, 6.17, 6.18, 6.19, 6.20, 6.21,
6.22, 6.23, 6.24, 6.25, or 6.26.
7.4. The breach by the Borrower (other than a breach which
constitutes a Default under Section 7.1, 7.2 or 7.3) of any of the terms or
provisions of this Agreement which is not remedied within five days after the
earlier to occur of (i) the date on which an officer of the Borrower who
either is a member of senior management or has responsibilities in connection
with monitoring compliance with this Agreement first has knowledge of such
breach and (ii) the giving of written notice by the Agent or any Lender.
7.5. Failure of the Borrower or any of its Subsidiaries to pay when
due any Indebtedness aggregating in excess of $2,000,000 ("Material
Indebtedness"); or the default by the Borrower or any of its Subsidiaries in
the performance of any term, provision or condition contained in any agreement
under which any such Material Indebtedness was created or is governed, or any
other event shall occur or condition exist, the effect of which is to cause, or
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to permit the holder or holders of such Material Indebtedness to cause,
such Material Indebtedness to become due prior to its stated maturity;
or any Material Indebtedness of the Borrower or any of its Subsidiaries shall
be declared to be due and payable or required to be prepaid or repurchased
(other than by a regularly scheduled payment) prior to the stated maturity
thereof; or the Borrower or any of its Subsidiaries shall not pay, or admit in
writing its inability to pay, its debts generally as they become due.
7.6. The Borrower or any of its Subsidiaries shall (i) have an order
for relief entered with respect to it under the Federal bankruptcy laws as now
or hereafter in effect, (ii) make an assignment for the benefit of creditors,
(iii) apply for, seek, consent to, or acquiesce in, the appointment of a
receiver, custodian, trustee, examiner, liquidator or similar official for it
or any Substantial Portion of its Property, (iv) institute any proceeding
seeking an order for relief under the Federal bankruptcy laws as now or
hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file
an answer or other pleading denying the material allegations of any such
proceeding filed against it, (v) take any corporate action to authorize or
effect any of the foregoing actions set forth in this Section 7.6 or (vi) fail
to contest in good faith any appointment or proceeding described in Section
7.7.
7.7. Without the application, approval or consent of the Borrower or
any of its Subsidiaries, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Borrower or any of its Subsidiaries or any
Substantial Portion of its Property, or a proceeding described in Section
7.6(iv) shall be instituted against the Borrower or any of its Subsidiaries
and such appointment continues undischarged or such proceeding continues
undismissed or unstayed for a period of 30 consecutive days.
7.8. Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of (each a
"Condemnation"), all or any portion of the Property of the Borrower and its
Subsidiaries which, when taken together with all other Property of the
Borrower and its Subsidiaries so condemned, seized, appropriated, or taken
custody or control of, during the twelve-month period ending with the month in
which any such Condemnation occurs, constitutes a Substantial Portion.
7.9. The Borrower or any of its Subsidiaries shall fail within 60
days to pay, bond or otherwise discharge any judgment or order for the payment
of money in excess of $500,000, which is not stayed on appeal or otherwise
being appropriately contested in good faith.
7.10. An accumulated funding deficiency (as defined in Section 302
of ERISA and Section 412 of the Code), whether or not waived, shall exist with
respect to any Plan (other than a Multiemployer Plan) which could reasonably
be expected to have a Material Adverse Effect.
7.11. The Borrower or any of its Subsidiaries shall incur a
liability to the PBGC with respect to any Plan (other than a Multiemployer
Plan) which could reasonably be expected to have a Material Adverse Effect.
7.12. The Borrower or any of its Subsidiaries shall be the subject of
any proceeding or investigation pertaining to the release by the Borrower or
any of its Subsidiaries, or any
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other Person of any toxic or hazardous waste or substance into the
environment, or any violation of any federal, state or local environmental,
health or safety law or regulation, which, in either case, could reasonably be
expected to have a Material Adverse Effect.
7.13. Any Change in Control shall occur.
7.14. The representations and warranties set forth in "Section 5.15
Plan Assets; Prohibited Transactions" shall at any time not be true and
correct.
7.15. (a) Any Authorization necessary for the ownership or essential
for the operation of any broadcasting operation of the Borrower or any
Subsidiary shall be cancelled, revoked, terminated, rescinded, annulled,
suspended or modified in a materially adverse respect, or shall no longer be
in full force and effect, or the grant or the effectiveness thereof shall have
been stayed, vacated, reversed or set aside, and such action shall be no longer
subject to further administrative or judicial review; or (b) the FCC shall have
issued any hearing designation order in any non-comparative license renewal
proceeding or any license revocation proceeding involving any license
necessary for the ownership or essential for the operation of any broadcasting
operation; or (c) in any comparative (multiple applicant) license renewal
proceeding involving any license necessary for the ownership or essential for
the operation of any broadcasting operation, any administrative law judge of
the FCC (or successor to the functions of an administrative law judge of the
FCC) shall have issued an initial decision to the effect that the Borrower or
any Subsidiary lacks the qualifications to own or operate such broadcasting
operation, and such initial decision shall not have been timely appealed or
shall otherwise have become an order that is final and no longer subject to
further administrative or judicial review, (provided, however, that none of
the foregoing events described in clause (a), (b), or (c) of this Section 7.16
shall constitute a Default if, assuming the final and non-appealable loss by
the Borrower or any Subsidiary of any such Authorization, such loss could not
reasonably be expected to have a Material Adverse Effect; or (d) any
broadcasting operation shall fail for any period of five consecutive calendar
days to operate and such failure is not covered by business interruption
insurance and the loss of revenue attributable to the particular broadcasting
operation failing to so operate is material to the revenue stream of the
Borrower and its Subsidiaries taken as a whole.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration. If any Default described in Section 7.6 or 7.7
occurs with respect to the Borrower, the obligations of the Lenders to make
Loans hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part
of the Agent or any Lender. If any other Default occurs and is continuing,
the Required Lenders (or the Agent with the consent of the Required Lenders)
may terminate or suspend the obligations of the Lenders to make Loans
hereunder, or declare the Obligations to be due and payable, or both,
whereupon the Obligations shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which the Borrower
hereby expressly waives.
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If, within 14 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder as a result of any Default (other than any Default as described in
Section 7.6 or 7.7 with respect to the Borrower) and before any judgment or
decree for the payment of the Obligations due shall have been obtained or
entered, the Required Lenders (in their sole discretion) shall so direct, the
Agent shall, by notice to the Borrower, rescind and annul such acceleration
and/or termination.
8.2. Amendments. Subject to the provisions of this Article VIII,
the Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for
the purpose of adding or modifying any provisions to the Loan Documents or
changing in any manner the rights of the Lenders or the Borrower hereunder or
waiving any Default hereunder; provided, however, that no such supplemental
agreement shall, without the consent of each Lender affected thereby:
(i) Extend the maturity of any Loan or Note or forgive all
or any portion of the principal amount thereof, or reduce the rate or
extend the time of payment of interest or fees thereon.
(ii) Reduce the percentage specified in the definition of Required Lenders.
(iii) Increase the amount of the Commitment of any Lender hereunder, or
permit the Borrower to assign its rights under this Agreement.
(iv) Amend this Section 8.2.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent. The Agent may waive
payment of the fee required under Section 12.3.2 without obtaining the consent
of any other party to this Agreement.
8.3. Preservation of Rights. No delay or omission of the Lenders or
the Agent to exercise any right under the Loan Documents shall impair such
right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Loan notwithstanding the existence of a Default
or the inability of the Borrower to satisfy the conditions precedent to such
Loan shall not constitute any waiver or acquiescence. Any single or partial
exercise of any such right shall not preclude other or further exercise
thereof or the exercise of any other right, and no waiver, amendment or other
variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lenders required
pursuant to Section 8.2, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by
law afforded shall be cumulative and all shall be available to the Agent and
the Lenders until the Obligations have been paid in full.
ARTICLE IX
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GENERAL PROVISIONS
9.1. Survival of Representations. All representations and
warranties of the Borrower contained in this Agreement shall survive delivery
of the Notes and the making of the Loans herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement
to the contrary notwithstanding, no Lender shall be obligated to extend credit
to the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3. Taxes. Any taxes (excluding federal income taxes on the
overall net income of any Lender) or other similar assessments or charges made
by any governmental or revenue authority in respect of the Loan Documents
shall be paid by the Borrower, together with interest and penalties, if any.
9.4. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any
of the provisions of the Loan Documents.
9.5. Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Borrower, the Agent and the Lenders and
supersede all prior agreements and understandings among the Borrower, the
Agent and the Lenders relating to the subject matter thereof other than the
fee letter described in Section 10.13.
9.6. Several Obligations; Benefits of this Agreement. The
respective obligations of the Lenders hereunder are several and not joint and
no Lender shall be the partner or agent of any other (except to the extent to
which the Agent is authorized to act as such). The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender
from any of its obligations hereunder. This Agreement shall not be construed
so as to confer any right or benefit upon any Person other than the parties to
this Agreement and their respective successors and assigns.
9.7. Expenses; Indemnification. The Borrower shall reimburse the
Agent for any costs, internal charges and out-of-pocket expenses (including
reasonable attorneys' fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent) paid or incurred by the Agent in
connection with the preparation, negotiation, execution, delivery, review,
amendment, modification, and administration of the Loan Documents. The
Borrower also agrees to reimburse the Agent and the Lenders for any costs,
internal charges and out-of-pocket expenses (including reasonable attorneys'
fees and time charges of attorneys for the Agent and the Lenders, which
attorneys may be employees of the Agent or the Lenders) paid or incurred by
the Agent or any Lender in connection with the collection and enforcement of
the Loan Documents. The Borrower further agrees to indemnify the Agent and
each Lender, its directors, officers and employees against all losses, claims,
damages, penalties, judgments, liabilities and expenses (including, without
limitation, all expenses of litigation or preparation therefor whether or not
the Agent or any Lender is a party thereto) which any of them may pay or incur
arising out of or relating to this Agreement, the other Loan Documents,
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the transactions contemplated hereby or the direct or indirect
application or proposed application of the proceeds of any Loan hereunder
except to the extent that they are determined by a court of competent
jurisdiction in a final and non-appealable order to have resulted from the
gross negligence or willful misconduct of the party seeking indemnification.
The obligations of the Borrower under this Section shall survive the
termination of this Agreement.
9.8. Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the
Lenders.
9.9. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles, except that any calculation or determination which is to be made
on a consolidated basis shall be made for the Borrower and all its
Subsidiaries, including those Subsidiaries, if any, which are unconsolidated on
the Borrower's audited financial statements.
9.10. Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.11. Nonliability of Lenders. The relationship between the Borrower
and the Lenders and the Agent shall be solely that of borrower and lender.
Neither the Agent nor any Lender shall have any fiduciary responsibilities to
the Borrower. Neither the Agent nor any Lender undertakes any responsibility
to the Borrower to review or inform the Borrower of any matter in connection
with any phase of the Borrower's business or operations. The Borrower agrees
that neither the Agent nor any Lender shall have liability to the Borrower
(whether sounding in tort, contract or otherwise) for losses suffered by the
Borrower in connection with, arising out of, or in any way related to, the
transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless it is determined by a court of competent jurisdiction in a final and
non-appealable order that such losses resulted from the gross negligence or
willful misconduct of the party from which recovery is sought. Neither the
Agent nor any Lender shall have any liability with respect to, and the
Borrower hereby waives, releases and agrees not to sue for, any special,
indirect or consequential damages suffered by the Borrower in connection with,
arising out of, or in any way related to the Loan Documents or the transactions
contemplated thereby.
9.12. Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from the Borrower pursuant to this Agreement
in confidence, except for disclosure (i) to its Affiliates and to other
Lenders and their respective Affiliates, (ii) to legal counsel, accountants,
and other professional advisors to that Lender or to a Transferee, (iii) to
regulatory officials, (iv) to any Person as requested pursuant to or as
required by law, regulation, or legal process, (v) to any Person in connection
with any legal proceeding to which that Lender is a party, and (vi) permitted
by Section 12.4.
9.13. Nonreliance. Each Lender hereby represents that it is not
relying on or
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looking to any margin stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System) for the repayment of the
Loans provided for herein.
ARTICLE X
THE AGENT
10.1. Appointment; Nature of Relationship. The First National Bank
of Chicago is hereby appointed by the Lenders as the Agent hereunder and under
each other Loan Document, and each of the Lenders irrevocably authorizes the
Agent to act as the contractual representative of such Lender with the rights
and duties expressly set forth herein and in the other Loan Documents. The
Agent agrees to act as such contractual representative upon the express
conditions contained in this Article X. Notwithstanding the use of the defined
term "Agent," it is expressly understood and agreed that the Agent shall have
not have any fiduciary responsibilities to any Lender by reason of this
Agreement or any other Loan Document and that the Agent is merely acting as
the representative of the Lenders with only those duties as are expressly set
forth in this Agreement and the other Loan Documents. In its capacity as the
Lenders' contractual representative, the Agent (i) does not hereby assume any
fiduciary duties to any of the Lenders, (ii) is a "representative" of the
Lenders within the meaning of Section 9- 105 of the Uniform Commercial Code and
(iii) is acting as an independent contractor, the rights and duties of which
are limited to those expressly set forth in this Agreement and the other Loan
Documents. Each of the Lenders hereby agrees to assert no claim against the
Agent on any agency theory or any other theory of liability for breach of
fiduciary duty, all of which claims each Lender hereby waives.
10.2. Powers. The Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to the Agent by the
terms of each thereof, together with such powers as are reasonably incidental
thereto. The Agent shall have no implied duties to the Lenders, or any
obligation to the Lenders to take any action thereunder except any action
specifically provided by the Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
for its or their own gross negligence or willful misconduct.
10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent
nor any of its directors, officers, agents or employees shall be responsible
for or have any duty to ascertain, inquire into, or verify (i) any statement,
warranty or representation made in connection with any Loan Document or any
borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information
directly to each Lender; (iii) the satisfaction of any condition specified in
Article IV, except receipt of items required to be delivered to the Agent;
(iv) the validity, enforceability, effectiveness, sufficiency or genuineness
of any Loan Document or any other instrument or writing furnished in connection
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therewith; or (v) the value, sufficiency, creation, perfection or priority of
any interest in any collateral security. The Agent shall have no duty to
disclose to the Lenders information that is not required to be furnished by
the Borrower to the Agent at such time, but is voluntarily furnished by the
Borrower to the Agent (either in its capacity as Agent or in its individual
capacity).
10.5. Action on Instructions of Lenders. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder
and under any other Loan Document in accordance with written instructions
signed by the Required Lenders, and such instructions and any action taken or
failure to act pursuant thereto shall be binding on all of the Lenders and on
all holders of Notes. The Lenders hereby acknowledge that the Agent shall be
under no duty to take any discretionary action permitted to be taken by it
pursuant to the provisions of this Agreement or any other Loan Document unless
it shall be requested in writing to do so by the Required Lenders. The Agent
shall be fully justified in failing or refusing to take any action hereunder
and under any other Loan Document unless it shall first be indemnified to its
satisfaction by the Lenders pro rata against any and all liability, cost and
expense that it may incur by reason of taking or continuing to take any such
action.
10.6. Employment of Agents and Counsel. The Agent may execute any of
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
duties hereunder and under any other Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which
counsel may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree
to reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to
their Commitments immediately prior to such termination) (i) for any amounts
not reimbursed by the Borrower for which the Agent is entitled to
reimbursement by the Borrower under the Loan Documents, (ii) for any other
expenses incurred by the Agent on behalf of the Lenders, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents and (iii) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of the Loan Documents
or any other document delivered in connection therewith or the transactions
contemplated thereby, or the enforcement of any of the terms thereof or of any
such other documents, provided that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the Agent. The obligations of the Lenders under this Section
10.8 shall survive payment of the Obligations and termination of this
Agreement.
10.9. Notice of Default. The Agent shall not be deemed to have
knowledge or
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notice of the occurrence of any Default or Unmatured Default hereunder
unless the Agent has received written notice from a Lender or the Borrower
referring to this Agreement describing such Default or Unmatured Default and
stating that such notice is a "notice of default". In the event that the
Agent receives such a notice, the Agent shall give prompt notice thereof to the
Lenders.
10.10. Rights as a Lender. In the event the Agent is a Lender, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document as any Lender and may exercise the same as though it were not the
Agent, and the term "Lender" or "Lenders" shall, at any time when the Agent is
a Lender, unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Subsidiaries in which the Borrower or such
Subsidiary is not restricted hereby from engaging with any other Person.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and
based on the financial statements prepared by the Borrower and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement and
the other Loan Documents.
10.12. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of
its intention to resign. Upon any such resignation, the Required Lenders
shall have the right to appoint, on behalf of the Borrower and the Lenders, a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders within thirty days after the resigning Agent's giving notice
of its intention to resign, then the resigning Agent may appoint, on behalf of
the Borrower and the Lenders, a successor Agent. If the Agent has resigned
and no successor Agent has been appointed, the Lenders may perform all the
duties of the Agent hereunder and the Borrower shall make all payments in
respect of the Obligations to the applicable Lender and for all other purposes
shall deal directly with the Lenders. No successor Agent shall be deemed to
be appointed hereunder until such successor Agent has accepted the
appointment. Any such successor Agent shall be a commercial bank having
capital and retained earnings of at least $50,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the resigning Agent. Upon the effectiveness of the
resignation of the Agent, the resigning Agent shall be discharged from its
duties and obligations hereunder and under the Loan Documents. After the
effectiveness of the resignation of an Agent, the provisions of this Article X
shall continue in effect for the benefit of such Agent in respect of any
actions taken or omitted to be taken by it while it was acting as the Agent
hereunder and under the other Loan Documents.
10.13. Agent's Fee. The Borrower agrees to pay to the Agent, for its
own account,
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the fees agreed to by the Borrower and the Agent pursuant to that
certain letter agreement dated February 16, 1996, or as otherwise agreed from
time to time.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights
of the Lenders under applicable law, if the Borrower becomes insolvent,
however evidenced, or any Default occurs, any and all deposits (including all
account balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender
to or for the credit or account of the Borrower may be offset and applied
toward the payment of the Obligations owing to such Lender, whether or not the
Obligations, or any part hereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Loans (other than payments received
pursuant to Section 3.1, 3.2 or 3.4) in a greater proportion than that
received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Loans held by the other Lenders so that after such
purchase each Lender will hold its ratable proportion of Loans. If any Lender,
whether in connection with setoff or amounts which might be subject to setoff
or otherwise, receives collateral or other protection for its Obligations or
such amounts which may be subject to setoff, such Lender agrees, promptly upon
demand, to take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their Loans. In case any
such payment is disturbed by legal process, or otherwise, appropriate further
adjustments shall be made.
ARTICLE XII
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BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and
the Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under
the Loan Documents and (ii) any assignment by any Lender must be made in
compliance with Section 12.3. Notwithstanding clause (ii) of this Section, any
Lender may at any time, without the consent of the Borrower or the Agent,
assign all or any portion of its rights under this Agreement and its Notes to
a Federal Reserve Bank; provided, however, that no such assignment to a
Federal Reserve Bank shall release the transferor Lender from its obligations
hereunder. The Agent may treat the payee of any Note as the owner thereof for
all purposes hereof unless and until such payee complies with Section 12.3 in
the case of an assignment thereof or, in the case of any other transfer, a
written notice of the transfer is filed with the Agent. Any assignee or
transferee of a Note agrees by acceptance thereof to be bound by all the terms
and provisions of the Loan Documents. Any request, authority or consent of
any Person, who at the time of making such request or giving such authority or
consent is the holder of any Note, shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any Note or Notes
issued in exchange therefor.
12.2. Participations.
12.2.1. Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with applicable law,
at any time sell to one or more banks or other entities
("Participants") participating interests in any Loan owing to such
Lender, any Note held by such Lender, any Commitment of such Lender or
any other interest of such Lender under the Loan Documents. In the
event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under the Loan Documents shall
remain unchanged, such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, such
Lender shall remain the holder of any such Note for all purposes under
the Loan Documents, all amounts payable by the Borrower under this
Agreement shall be determined as if such Lender had not sold such
participating interests, and the Borrower and the Agent shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under the Loan Documents.
12.2.2. Voting Rights. Each Lender shall retain the sole right
to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other
than any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which forgives
principal, interest or fees or reduces the interest rate or fees
payable with respect to any such Loan or Commitment, postpones any
date fixed for any regularly-scheduled payment of principal of, or
interest or fees on, any such Loan or Commitment, releases any
guarantor of any such Loan or releases any substantial portion of
collateral, if any, securing any such Loan.
12.2.3. Benefit of Setoff. The Borrower agrees that each
Participant shall
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be deemed to have the right of setoff provided in Section 11.1 in
respect of its participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under the Loan
Documents, provided that each Lender shall retain the right of setoff
provided in Section 11.1 with respect to the amount of participating
interests sold to each Participant. The Lenders agree to share with
each Participant, and each Participant, by exercising the right of
setoff provided in Section 11.1, agrees to share with each Lender, any
amount received pursuant to the exercise of its right of setoff, such
amounts to be shared in accordance with Section 11.2 as if each
Participant were a Lender.
12.3. Assignments.
12.3.1. Permitted Assignments. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any
time assign to one or more banks or other entities ("Purchasers") all
or any part of its rights and obligations under the Loan Documents.
Such assignment shall be substantially in the form of Exhibit "E"
hereto or in such other form as may be agreed to by the parties
thereto. The consent of the Borrower and the Agent shall be required
prior to an assignment becoming effective with respect to a Purchaser
which is not a Lender or an Affiliate thereof; provided, however, that
if a Default has occurred and is continuing, the consent of the
Borrower shall not be required. Such consent shall not be unreasonably
withheld or delayed. Each such assignment shall be in an amount not
less than the lesser of (i) $5,000,000 or (ii) the remaining amount of
the assigning Lender's Commitment (calculated as at the date of such
assignment).
12.3.2. Effect; Effective Date. Upon (i) delivery to the Agent
of a notice of assignment, substantially in the form attached as
Exhibit "I" to Exhibit "E" hereto (a "Notice of Assignment"), together
with any consents required by Section 12.3.1, and (ii) payment of a
$4,000 fee to the Agent for processing such assignment, such
assignment shall become effective on the effective date specified in
such Notice of Assignment. The Notice of Assignment shall contain a
representation by the Purchaser to the effect that none of the
consideration used to make the purchase of the Commitment and Loans
under the applicable assignment agreement are "plan assets" as defined
under ERISA and that the rights and interests of the Purchaser in and
under the Loan Documents will not be "plan assets" under ERISA. On
and after the effective date of such assignment, such Purchaser shall
for all purposes be a Lender party to this Agreement and any other
Loan Document executed by the Lenders and shall have all the rights
and obligations of a Lender under the Loan Documents, to the same
extent as if it were an original party hereto, and no further consent
or action by the Borrower, the Lenders or the Agent shall be required
to release the transferor Lender with respect to the percentage of the
Aggregate Commitment and Loans assigned to such Purchaser. Upon the
consummation of any assignment to a Purchaser pursuant to this Section
12.3.2, the transferor Lender, the Agent and the Borrower shall make
appropriate arrangements so that replacement Notes are issued to such
transferor Lender and new Notes or, as appropriate, replacement Notes,
are issued to such Purchaser, in each case in principal amounts
reflecting their Commitment, as adjusted pursuant to such assignment.
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12.4. Dissemination of Information. The Borrower authorizes each
Lender to disclose to any Participant or Purchaser or any other Person
acquiring an interest in the Loan Documents by operation of law (each a
"Transferee") and any prospective Transferee any and all information in such
Lender's possession concerning the creditworthiness of the Borrower and its
Subsidiaries; provided that each Transferee and prospective Transferee agrees
to be bound by Section 9.12 of this Agreement.
12.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of
such transfer, to comply with the provisions of Section 4.3.
ARTICLE XIII
NOTICES
13.1. Notices. Except as otherwise permitted by Section 2.13 with
respect to borrowing notices, all notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, facsimile
transmission or similar writing) and shall be given to such party at its
address or facsimile number set forth on the signature pages hereof, or such
other address or facsimile number as such party may hereafter specify for the
purpose by notice to the Agent and the Borrower. Each such notice, request or
other communication shall be effective (i) if given by facsimile transmission,
when transmitted to the facsimile number specified in this Section and
confirmation of receipt is received, (ii) if given by mail, five days after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means, when delivered at
the address specified in this Section; provided that notices to the Agent
under Article II shall not be effective until received.
13.2. Change of Address. The Borrower, the Agent and any Lender may
each change the address for service of notice upon it by a notice in writing
to the other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Agent and the Lenders and each party has notified the Agent by telex or
telephone, that it has taken such action.
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ARTICLE XV
CHOICE OF LAW, CONSENT TO JURISDICTION, WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
15.2. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY
NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING
HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS
AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL
PROCEEDING BY THE BORROWER AGAINST THE AGENT OR ANY LENDER OR ANY AFFILIATE OF
THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE
BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH LENDER
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
Page 46
<PAGE> 53
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have
executed this Agreement as of the date first above written.
PULITZER PUBLISHING COMPANY
By: /s/ Ronald H. Ridgway
------------------------------------
Ronald H. Ridgway
Senior Vice President - Finance
900 North Tucker Boulevard
St. Louis, Missouri 63101
Attention: Senior Vice President - Finance
-------------------------------
Telecopier: (314) 340-3133
Commitments
$14,000,000 THE FIRST NATIONAL BANK OF
CHICAGO, Individually and as Agent
By: /s/ Jeffrey A. Bakalar
------------------------------------
Jeffrey A. Bakalar
Vice President
One First National Plaza
Mail Suite 0629
Chicago, Illinois 60670
Attention: Communications Division
Telecopier: (312) 732-8587
Page 47
<PAGE> 54
$12,000,000 THE BOATMEN'S NATIONAL BANK OF
ST. LOUIS
By: /s/ Thomas C. Guyton
------------------------------------
Thomas C. Guyton
Vice President
One Boatmen's Plaza
800 Market Street
St. Louis, Missouri 63166-0236
Attention:
Telecopier: (314) 466-7783
$12,000,000 COMMERCE BANK, N.A.
By: /s/ John Thiebauth
------------------------------------
John Thiebauth
Executive Vice President
8000 Forsyth
Clayton, Missouri 63105
Attention: John Thiebauth
Telecopier: (314) 746-3650
$12,000,000 MERCANTILE BANK OF ST. LOUIS
NATIONAL ASSOCIATION
By: /s/ Gregory D. Knudsen
------------------------------------
Greg Knudsen
Vice President
One Mercantile Tower, 12th Floor
TRAM 12-3
St. Louis, Missouri 63101
Attention:
Telecopier: (314) 425-3859
===========
$50,000,000
Page 48
<PAGE> 55
SCHEDULE "1"
SUBSIDIARIES AND OTHER INVESTMENTS
(See Sections 5.8 and 6.15)
<TABLE>
<CAPTION>
Investment Owned Amount of Percent Jurisdiction of
In By Investment Ownership Organization
---------- ----- ---------- --------- ---------------
<S> <C> <C> <C> <C>
SUBSIDIARIES/DIVISIONS:
St. Louis Post-Dispatch(1) Pulitzer Publishing Co. 100% St. Louis, MO
Star Publishing Co Pulitzer Publishing Co. 100% Tucson, AZ
TNI Partners Star Publishing Co. 50% Tucson, AZ
Lerner Newspapers, Inc. Pulitzer Publishing Co. 100% St. Louis, MO
News Information, Inc. Pulitzer Publishing Co. 100% St. Louis, MO
Gateway Consumer Services News Information, Inc. 50% St. Louis, MO
SLH Venture News Information, Inc. 50% St. Louis, MO
W.E.J. Investment Co. Pulitzer Publishing Co. 100% St. Louis, MO
Frank Popper Productions, Inc. Pulitzer Publishing Co. 100% St. Louis, MO
Pulitzer Technologies, Inc. Pulitzer Publishing Co. 100% St. Louis, MO
Sports Stats Pulitzer Technologies, Inc. 100% St. Louis, MO
PostNet Pulitzer Technologies, Inc. 100% St. Louis, MO
Pulitzer Broadcasting Co. Pulitzer Publishing Co. 100% St. Louis, MO
KETV-TV Pulitzer Broadcasting Co. 100% Omaha, NE
KOAT-TV Pulitzer Broadcasting Co. 100% Albuquerque, NM
WLKY-TV Pulitzer Broadcasting Co. 100% Louisville, KY
WGAL-TV Pulitzer Broadcasting Co. 100% Lancaster, PA
WYFF-TV Pulitzer Broadcasting Co. 100% Greenville, SC
WXII-TV Pulitzer Broadcasting Co. 100% Winston-Salem, NC
Phoenix Broadcasting Co. Pulitzer Broadcasting Co. 100% Phoenix, AZ
KTAR-AM Phoenix Broadcasting Co. 100% Phoenix, AZ
KKLT-FM Phoenix Broadcasting Co. 100% Phoenix, AZ
WESH-TV, Inc. Pulitzer Broadcasting Co. 100% Orlando, FL
KCCI-TV, Inc. Pulitzer Broadcasting Co. 100% Des Moines, IA
WDSU-TV, Inc. Pulitzer Broadcasting Co. 100% New Orleans, LA
Pulitzer Ventures, Inc. Pulitzer Publishing Co. 100% St. Louis, MO
Pulitzer Ventures II, Inc. Pulitzer Publishing Co. 100% St. Louis, MO
Pulitzer Ventures, III, Inc. Pulitzer Publishing Co. 100% St. Louis, MO
Pulitzer Sports, Inc. Pulitzer Broadcasting Co. 100% St. Louis, MO
Pulitzer Sports II, Inc. Pulitzer Publishing Co. 100% St. Louis, MO
</TABLE>
(1) Under an Agency Agreement, The Herald Company, Inc. has the contractual
right to receive 50% of the profits of the St. Louis Post-Dispatch.
INVESTMENTS: (BALANCE AT JUNE 2, 1996)
<TABLE>
<S> <C> <C> <C> <C>
Pulitzer Carrier Loans St. Louis Post-Dispatch $4,653.00 100% St. Louis, MO
Employee Loans St. Louis Post-Dispatch $110,000.00 100% St. Louis, MO
Infoseek Corporation Pulitzer Publishing Co. $200,000.00 N/A St. Louis, MO
Southwestern Illinois
Development Authority Pulitzer Publishing Co. $100,000.00 N/A St. Louis, MO
Civic Parking L.L.C.(2) Pulitzer Publishing Co. $5,000,000.00 N/A St. Louis, MO
St. Louis Equity Fund Pulitzer Publishing Co. $217,498.00 N/A St. Louis, MO
21st Century Communications(3) Pulitzer Publishing Co. $2,688,143.00 less than 5% St. Louis, MO
RXL Pulitzer Pulitzer Ventures, Inc. $3,145,234.00 33 1/3% Seattle, WA
Heuris/Pulitzer Pulitzer Ventures II, Inc. $198,144.00 50% St. Louis, MO
Knowledge Factory Partners Pulitzer Ventures, III, Inc. $125,044.00 50% Cambridge, MA
AZPB Limited Partnership(4) Pulitzer Sports, Inc. $1,750,000.00 less than 5% St. Louis, MO
</TABLE>
(2) Pulitzer Publishing Co. is obligated to lend up to an additional $750,000
to Civic Parking L.L.C. under certain circumstances.
(3) Pulitzer Publishing Co. is obligated to make additional capital
contributions of up to $2,331,857 to 21st Century Communications.
(4) Pulitzer Sports, Inc. made an additional capital contribution of $1,750,000
on June 11, 1996 and is obligated to make an additional capital
contribution of $1,500,000.
Page 49
<PAGE> 56
SCHEDULE "2"
INDEBTEDNESS AND LIENS
(See Sections 5.14, 6.13 and 6.14)
Liens
- -----
None.
Existing Debt*
- -------------
<TABLE>
<CAPTION>
BALANCE AT
JUNE 2, 1996
------------
<S> <C>
Notes Payable:
The Prudential Insurance Company of America:
8.8% Senior Notes Due April 22, 1997 $ 14,500,000
The Prudential Insurance Company of America:
6.76% Series A Notes Due August 1, 2001 50,000,000
7.22% Series B Notes Due August 1, 2005 50,000,000
Balance at June 2, 1996 $114,500,000
------------
<CAPTION>
NEW DEBT AS
OF 7/1/96
-----------
<S> <C>
The Prudential Insurance Company of America:
7.86% Senior Notes Due July 25, 2008 $ 85,000,000
The Lending Institutions Party Hereto, as Lenders
and The First National Bank of Chicago, as Agent:
Term Note with Several Interest Rate Options 50,000,000
135,000,000
------------
$249,500,000
============
</TABLE>
- ------------------
* See also Schedule I for additional commitments
Page 50
<PAGE> 57
SCHEDULE "3"
LITIGATION
(See Section 5.7)
None.
Page 51
<PAGE> 58
SCHEDULE "4"
TRANSACTIONS WITH AFFILIATES
(See Section 6.20)
1. Agreement, dated as of May 12, 1986, among The Pulitzer Publishing Company,
Clement C. Moore, II, Gordon C. Weir, William E. Weir, Kenward G. Elmslie,
Stephen E. Nash and Manufacturers Hanover Trust Company, as trustees under
Indenture of Hope Ware Putnam, and Manufacturers Hanover Trust Company,
trustee under trust for the benefit of Clement C. Moore, II.
2. Letter Agreement, dated September 29, 1986, among The Pulitzer Publishing
Company, Trustee under Agreement dated December 24, 1976 made by David E.
Moore, David E. Moore, Frederick D. Pulitzer, Michael E. Pulitzer, Jr.,
Robert S. Pulitzer, Joseph Pulitzer, IV, Joseph Pulitzer, Jr., Michael E.
Pulitzer, Stephen E. Nash and Manufacturers Hanover Trust Company, as
trustees, Kenward G. Elmslie, Gordon C. Weir, William E. Weir, James R.
Weir, Peter W. Quesada, T. Ricardo Quesada, Elinor P. Hempelmann, The Moore
Foundation, Inc., Mariemont Corporation, Z Press, Inc., and Clement C.
Moore, II.
3. Letter Agreement, dated May 12, 1986, among The Pulitzer Publishing
Company, Peter W. Quesada, T. Ricardo Quesada, Kate Davis Pulitzer Quesada
and Elinor P. Hempelmann.
4. Agreement, dated as of September 29, 1986, among The Pulitzer Publishing
Company, Peter W. Quesada, T. Ricardo Quesada, Kate Davis Pulitzer Quesada
and Elinor P. Hempelmann.
5. The Registration Rights Agreement dated as of October 24, 1986, by and
among The Pulitzer Publishing Company, Joseph Pulitzer, Jr., Michael E.
Pulitzer, David E. Moore and A. Rick D'Arcangelo, Trustee under Agreement
dated December 24, 1976 by David E. Moore.
Page 52
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 108,354
<SECURITIES> 0
<RECEIVABLES> 70,554
<ALLOWANCES> 2,099
<INVENTORY> 4,871
<CURRENT-ASSETS> 193,384
<PP&E> 262,736
<DEPRECIATION> 144,625
<TOTAL-ASSETS> 501,726
<CURRENT-LIABILITIES> 57,281
<BONDS> 100,000
0
0
<COMMON> 253
<OTHER-SE> 406,882
<TOTAL-LIABILITY-AND-EQUITY> 501,726
<SALES> 243,280
<TOTAL-REVENUES> 243,280
<CGS> 98,774
<TOTAL-COSTS> 98,774
<OTHER-EXPENSES> 13,486
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,543
<INCOME-PRETAX> 43,407
<INCOME-TAX> 16,981
<INCOME-CONTINUING> 26,426
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 26,426
<EPS-PRIMARY> 1.61
<EPS-DILUTED> 0
</TABLE>
