SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM 10-Q
--------------------------
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED COMMISSION FILE NUMBER:
MARCH 31, 1996 333-02302
ALLBRITTON COMMUNICATIONS COMPANY
[Exact name of registrant as specified in its charter]
DELAWARE 78-180-3105
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
808 SEVENTEENTH STREET, N.W.
SUITE 300
WASHINGTON, DC 20006-3903
(Address of principal executive offices)
Registrant's telephone number, including area code: 202-789-2130
--------------------------
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 / / No /X/
Number of shares of Common Stock outstanding as of March 31, 1996:
20,000 shares.
- -------------------------------------------------------------------------
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ALLBRITTON COMMUNICATIONS COMPANY
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31,1996
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION PAGE
Item 1. Financial Statements:
Consolidated Statements of Operations and Retained
Earnings for the Three and Six Months Ended March
31, 1995 and 1996 . . . . . . . . . . . . . . . . . 1
Consolidated Balance Sheets as of September 30, 1995
and March 31, 1996. . . . . . . . . . . . . . . . . 2
Consolidated Statements of Cash Flows for the Six
Months Ended March 31, 1995 and 1996 . . . . . . . . 3
Notes to Interim Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition . . . . . . . . . 8
PART II OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . 17
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . 17
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . 20
Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . 21
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PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ALLBRITTON COMMUNICATIONS COMPANY
(AN INDIRECTLY WHOLLY-OWNED SUBSIDIARY OF PERPETUAL CORPORATION)
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31, MARCH 31,
------------------ ----------------
1995 1996 1995 1996
<S> <C> <C> <C> <C>
Operating revenues, net $30,415 $33,812 $70,185 $72,194
Television operating expenses, excluding
depreciation and amortization 17,928 21,263 36,632 42,455
Depreciation and amortization 1,412 2,293 2,731 3,567
Corporate expenses 963 1,358 1,757 2,187
------- ------- ------- ------
20,303 24,914 41,120 48,209
------- ------- ------- ------
Operating Income 10,112 8,898 29,065 23,985
Nonoperating income (expense)
Interest income
Related party 541 553 1,100 1,106
Other 34 673 61 705
Interest expense (5,677) (8,674) (10,716) (14,341)
Other, net (106) (161) (203) (252)
Income before income taxes and
extraordinary item 4,904 1,289 19,307 11,203
Provision for income taxes 2,069 681 8,092 4,495
Income before extraordinary item 2,835 608 11,215 6,708
Extraordinary loss on early repayment of debt,
net of related income tax benefit of $5,387 (7,750) (7,750)
------- ------- ------- ------
Net income (loss) 2,835 (7,142) 11,215 (1,042)
Retained earnings, beginning of period 51,457 69,040 43,077 62,940
Dividend from WSET and WCIV to Westfield (18,371) (18,371)
Tax benefit distributed (10) (10)
------- ------- ------- ------
Retained earnings, end of period $54,292 $43,517 $54,292 $43,517
======= ======= ======= =======
</TABLE>
See accompanying notes to interim consolidated financial statements.
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ALLBRITTON COMMUNICATIONS COMPANY
(AN INDIRECTLY WHOLLY-OWNED SUBSIDIARY OF PERPETUAL CORPORATION)
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31
SEPTEMBER 30, 1996
ASSETS 1995 (UNAUDITED)
------------- -----------
<S> <C> <C>
Current assets
Cash and cash equivalents $ 3,816 $ 25,990
Accounts receivable, net 26,552 29,069
Program rights 13,594 7,384
Deferred income taxes 1,222 1,208
State income taxes receivable 1,264
Other 2,308 4,006
-------- --------
Total current assets 47,492 68,921
Property, plant and equipment, net 21,911 35,501
Intangible assets, net 20,598 151,845
Deferred financing costs and other 4,296 10,628
Deferred income taxes 1,061 1,073
Cash surrender value of life insurance 3,333 3,237
Program rights 914 823
-------- --------
$ 99,605 $ 272,028
======== ========
LIABILITIES, REDEEMABLE PREFERRED STOCK AND
STOCKHOLDER'S INVESTMENT
Current liabilities
Notes payable $ 7,972
Accounts payable 2,608 $ 2,318
Accrued interest payable 4,475 5,969
Program rights payable 16,565 10,366
Accrued employee benefit expenses 2,157 2,059
Other accrued expenses 3,667 5,272
-------- --------
Total current liabilities 37,444 25,984
Long-term debt 189,820 398,352
Program rights payable 975 1,613
Deferred rent and other 2,483 2,689
Capital lease obligations 931 939
Accrued employee benefit expenses 1,663 1,676
-------- --------
233,316 431,253
-------- --------
Minority interest 1,285
-------- --------
Series A redeemable preferred stock, $1.00 par value,
200 shares authorized, 105 shares issued and out-
standing; redemption value $168,000 ($1,600 per share) 168 168
-------- --------
Stockholder's investment
Preferred stock, $1 par value, 800 shares authorized,
none issued
Common stock 1 1
Capital in excess of par 6,955 6,955
Retained earnings 62,940 43,517
Distributions to owners, net (203,775) (211,151)
-------- --------
Total stockholder's investment (133,879) (160,678)
-------- --------
$ 99,605 $ 272,028
======== ========
</TABLE>
See accompanying notes to interim consolidated financial statements
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ALLBRITTON COMMUNICATIONS COMPANY
(AN INDIRECTLY WHOLLY-OWNED SUBSIDIARY OF PERPETUAL CORPORATION)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MARCH 31,
----------------
1995 1996
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $11,215 $(1,042)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 2,731 3,567
Other noncash charges 213 377
Extraordinary loss on early repayment of debt 7,750
Provision for doubtful accounts 209 231
Gain on disposal of assets (33) (93)
Changes in assets and liabilities:
(Increase) decrease in assets:
Accounts receivable (1,774) (445)
Program rights 6,301 7,358
State income taxes receivable (1,264)
Other current assets 292 (1,684)
Other noncurrent assets (418) 259
Increase (decrease) in liabilities:
Accounts payable (627) (290)
Accrued interest payable (569) 1,494
Program rights payable (6,039) (8,086)
Accrued employee benefit expenses 93 (85)
Other accrued expenses (387) 1,207
Deferred rent and other liabilities 121 206
-------- --------
Total adjustments 113 10,502
-------- --------
Net cash provided by operating activities 11,328 9,460
-------- --------
Cash flows form investing activities:
Capital expenditures (1,532) (3,023)
Purchase of option (10,000)
Proceeds from disposal of assets 61 194
Acquisitions, net of cash acquired (134,303)
-------- --------
Net cash used in investing activities (1,471) (147,132)
-------- --------
Cash flows from financing activities:
Proceeds from issuance of debt 283,625
Deferred financing costs (7,016)
Extraordinary loss on early repayment of debt (7,750)
Draws (repayments) under lines of credit, net 1,500 (5,000)
Principal payments on long-term debt and capital lease obligations (1,151) (78,256)
Distributions to owners, net of certain charges (12,162) (34,032)
Repayments of distribution to owners 1,146 8,280
Other 685 (5)
-------- --------
Net cash (used in) provided by financing activities
(9,982) 159,846
-------- --------
Net (decrease) increase in cash and cash equivalents (125) 22,174
Cash and cash equivalents, beginning of period 2,763 3,816
-------- --------
Cash and cash equivalents, end of period $2,638 $25,990
======== ========
</TABLE>
See accompanying notes to interim consolidated financial statements
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ALLBRITTON COMMUNICATIONS COMPANY
(AN INDIRECTLY WHOLLY-OWNED SUBSIDIARY OF PERPETUAL CORPORATION)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements of
Allbritton Communications Company (an indirectly wholly-owned subsidiary of
Perpetual Corporation) and its subsidiaries (collectively, the Company),
included herein have been prepared pursuant to instructions for Form 10-Q and
Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote
disclosures normally included in financial statements prepared in conformity
with generally accepted accounting principles have been omitted or condensed
where permitted by regulation. In management's opinion, the accompanying
financial statements reflect all adjustments, which were of a normal recurring
nature, and disclosures necessary for a fair presentation of the consolidated
financial statements for the interim periods presented. The results of
operations for the three and six months ended March 31, 1996 are not
necessarily indicative of the results that can be expected for the entire
fiscal year ending September 30, 1996. The interim consolidated financial
statements should be read in conjunction with the audited consolidated
financial statements and notes thereto for the year ended September 30, 1995
which are contained in the Company's Registration Statement on Form S-4.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosures on
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reported period.
Actual results could differ from those estimates.
NOTE 2 - CONTRIBUTION OF WSET AND WCIV
The common stock of WSET, Incorporated (WSET) and First Charleston Corp.
(WCIV), which was formerly held by Westfield News Advertiser, Inc. (Westfield),
which is wholly-owned by Mr. Joe L. Allbritton, was contributed to the Company
on March 1, 1996 (the Contribution). Since the Contribution represents a
transfer of assets between entities under common control, the amounts
transferred were recorded at historical cost. Further, as the Company, WSET
and WCIV were indirectly owned by Mr. Joe L. Allbritton for all periods in
which the consolidated financial statements are presented, the Company's
consolidated financial statements have been retroactively restated to reflect
the Contribution.
In connection with the Contribution, WSET and WCIV declared non-cash dividends
to Westfield in the amount of $18,371, which represented the
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cumulative net advances made by WSET and WCIV as of the date of the
Contribution.
NOTE 3 - LONG-TERM DEBT
On February 6, 1996, the Company completed a $275,000 offering of 9.75% Senior
Subordinated Debentures due 2007 (Debentures) at a discount of $1,375. A
portion of the proceeds of the offering were used to finance the acquisitions
of the assets and certain liabilities of WHTM-TV, Inc. (WHTM) and the assets
and certain liabilities of WCFT-TV (WCFT) (collectively, the Acquisitions), to
repay amounts borrowed to purchase an option to purchase the assets of RKZ,
Inc., and, in connection with the transactions by which WSET and WCIV became
wholly-owned subsidiaries of the Company, to make a cash advance of $6,600 to
Westfield which enabled Westfield to repay certain indebtedness as to which
WSET was a guarantor. In addition, the Company used a portion of the proceeds
from the sale of the Debentures to repay approximately $63,500 of long-term
debt which was outstanding under Secured Promissory Notes with two
institutional investors, and to repay approximately $3,204 and $8,000 which was
outstanding under a term loan and a revolving line of credit, respectively.
A prepayment penalty on the early repayment of the Secured Promissory Notes and
the accelerated amortization of the related unamortized deferred financing
costs totaled $13,137, before applicable income tax benefit of $5,387. This
loss is reflected as an extraordinary loss of $7,750 in the interim
consolidated statements of operations for the three and six months ended March
31, 1996.
On April 16, 1996, the Company executed a new working capital facility (Senior
Credit Facility) which permits borrowings up to $40,000 and matures in 2001.
The Senior Credit Facility replaces a $10,000 revolving line of credit that
expired on March 31, 1996.
NOTE 4 - ACQUISITIONS
On March 1, 1996, the Company, through its 80%-owned subsidiary, Harrisburg
Television, Inc., completed its acquisition of the assets and certain
liabilities of WHTM, a television station serving the
Harrisburg-York-Lancaster-Lebanon, Pennsylvania television market, for
$115,303 plus expenses. On March 15, 1996, the Company, through its 80%-owned
subsidiary, TV Alabama, Inc., completed its acquisition of the assets and
certain liabilities of WCFT, a television station serving the Tuscaloosa,
Alabama television market, for $20,000 plus expenses. The RLA Revocable Trust,
created for the benefit of Robert Lewis Allbritton, owns 20% of Harrisburg
Television, Inc. and TV Alabama, Inc., respectively. Robert Allbritton is a
director and officer of the Company and is the son of Joe L. Allbritton,
Chairman of the Board of Directors of the Company. The Acquisitions were
accounted for as purchases and accordingly, the cost of the acquired entities
was assigned to the identifiable tangible and intangible assets acquired and
liabilities assumed based on their fair values at the respective dates of the
purchases. Accordingly, the results of operations of WHTM are included in the
Company's interim consolidated financial statements since March 1, 1996, and
the results of operations of WCFT are included in the Company's interim
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consolidated financial statements since March 15, 1996. Amounts recorded as
intangible assets relating to these acquisitions principally represent amounts
for broadcast licenses and network affiliations. Such amounts are being
amortized over forty years.
The following pro forma summary presents the consolidated results of operations
of the Company for the six months ended March 31, 1995 and 1996 as if the
offering of the Debentures and the application of the net proceeds thereof,
(including the Acquisitions) had occurred at the beginning of
the respective periods.
<TABLE>
<CAPTION>
SIX MONTHS ENDED MARCH 31,
--------------------------
1995 1996
-------- --------
<S> <C> <C>
Operating revenues, net $82,108 $81,554
Income before extraordinary item 5,612 3,944
Net loss (2,138) (3,806)
</TABLE>
NOTE 5 - LOCAL MARKETING AGREEMENT AND ASSOCIATED OPTION
On December 29, 1995, the Company entered into a ten-year local marketing
agreement (LMA) with RKZ, Inc., which owns WJSU-TV (WJSU), a television station
currently operating in Anniston, Alabama. The LMA provides for the Company to
supply program services to WJSU, to operate the station and to retain all
revenues from all advertising sales. In exchange, the Company pays all station
operating expenses and certain management fees to RKZ, Inc. The operating
revenues and expenses of WJSU are therefore included in the Company's interim
consolidated financial statements since December 29, 1995. In connection with
the LMA, the Company also entered into an option (Option) to purchase the
assets of WJSU. The Option was provided to the Company in exchange for $10,000
and is exercisable over a ten-year period for an additional $2,000 upon a
change in current regulations or a waiver permitting common ownership of WCFT
and WJSU. The Option also requires additional consideration of up to $7,000
in the event of specified events. The Company paid for the Option using the
proceeds of a $10,000 loan made in December 1995 from an unrelated financial
institution. The Company subsequently assigned the LMA and the Option to its
80%-owned subsidiary, TV Alabama, Inc. This loan was repaid using a portion
of the proceeds from the sale of the Debentures. The cost of the Option is
included in intangible assets in the Company's balance sheet at March 31, 1996,
and is being amortized over ten years, the term of the Option and the LMA.
NOTE 6 - TRANSACTIONS WITH OWNERS
In the ordinary course of business, the Company makes cash advances in the form
of distributions to Perpetual. Prior to the Contribution, WSET and WCIV made
cash advances to Westfield, and Westfield repaid certain of such advances.
Because at present, the primary source of repayment of the net advances from
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the Company is through the ability of the Company to pay dividends or make
other distributions to Perpetual, and there is no immediate intent for these
amounts to be repaid, such amounts have been treated as a reduction of
Stockholder's investment and described as "distributions" in the Company's
consolidated balance sheets. The following summarizes these and certain other
transactions:
<TABLE>
<CAPTION>
SIX MONTHS ENDED MARCH 31,
--------------------------
1995 1996
-------- --------
<S> <C> <C>
Distributions to owners, beginning of period $186,995 $203,775
Cash advances 18,771 34,042
Repayment of cash advances (1,146) (8,280)
Charge for income taxes (6,609)
Other, net (685) (15)
Dividends declared by WSET and WCIV (18,371)
-------- --------
Distributions to owners, end of period $197,326 $211,151
======== ========
Weighted average amount of non-interest bearing
advances outstanding during the period $175,870 $192,318
======== ========
In connection with the transactions by which the Contribution was consummated,
WSET and WCIV declared non-cash dividends to Westfield in the amount of
$18,371, which represent the cumulative net advances made from WSET and WCIV
to Westfield as of the date of the Contribution. The dividend has, therefore,
been reflected as a reduction to retained earnings and distributions to owners
during the six months ended March 31, 1996.
7
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
Allbritton Communications Company (the Company) owns and operates seven
network-affiliated television stations: WJLA in Washington, D.C.; WHTM in
Harrisburg, Pennsylvania; KATV in Little Rock, Arkansas; KTUL in Tulsa,
Oklahoma; WSET in Lynchburg, Virginia; WCIV in Charleston, South Carolina; and
WCFT in Tuscaloosa, Alabama. The consolidated financial statements and
consolidated financial data included herein include the amounts for the
television stations listed above, with amounts for WHTM and WCFT included only
since March 1, 1996 and March 15, 1996, respectively, the dates in which the
acquisitions of the assets of those entities were completed. The Company also
operates WJSU, a network affiliated television station in Anniston, Alabama,
pursuant to a local marketing agreement (LMA) with its owner which was entered
into on December 29, 1995. The consolidated financial statements and
consolidated financial data include only operating revenues and certain
operating expenses for WJSU since December 29, 1995, pursuant to the terms of
the LMA.
The common stock of WSET and WCIV, which was formerly held by Westfield News
Advertiser ("Westfield"), which is wholly-owned by Mr. Joe L. Allbritton, was
contributed to the Company on March 1, 1996 (the "Contribution"). Since the
Contribution represents a transfer of assets between entities under common
control, the amounts transferred were recorded at historical cost. Further,
as the Company, WSET and WCIV were indirectly owned by Mr. Joe L. Allbritton
for all periods in which the consolidated financial statements are presented,
the Company's consolidated financial statements and consolidated financial data
have been retroactively restated to reflect the Contribution.
The operating revenues of the Company are derived from local and national
advertisers and, to a much lesser extent, from the networks and program
syndicators for the broadcast of programming and from commercial production and
tower rental activities. The primary operating expenses involved in operating
television stations are employee compensation, programming, news gathering,
production, promotion and the solicitation of advertising.
Television stations receive revenues for advertising sold for placement within
and adjoining locally originated programming and adjoining their network
programming. Advertising is sold in time increments and is priced primarily
on the basis of a program's popularity among the specific audience an
advertiser desires to reach, as measured principally by quarterly audience
surveys. In addition, advertising rates are affected by the number of
advertisers competing for the available time, the size and demographic makeup
of the markets served and the availability of alternative advertising media in
the market areas. Rates are highest during the most desirable viewing hours
(generally during local news programming and prime time), with corresponding
reductions during other hours.
The Company's advertising revenues are generally highest during the first and
third quarters of each fiscal year, due in part to increases in retail
advertising leading up to and including the holiday season and active
advertising in the spring. In addition, advertising revenues are generally
higher during election years due to spending by political candidates, which
is typically heaviest during the Company's first fiscal quarter.
NEW STATIONS
In March 1996, the Company, through its 80%-owned subsidiaries Harrisburg
Television, Inc. and TV Alabama, Inc., acquired the assets and assumed certain
liabilities of WHTM and WCFT, respectively. The Company paid approximately
$115,303,000 in connection with the March 1, 1996 acquisition of WHTM,
including $2,303,000 paid pursuant to an option to purchase certain outstanding
accounts receivable of WHTM, and $20,000,000 in connection with the March 15,
1996 acquisition of WCFT. The Company's consolidated results of operations
include the results for WHTM since March 1, 1996 and the results of operations
for WCFT since March 15, 1996. The purchase method was used to account for the
acquisitions.
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On December 29, 1995, the Company entered into a ten-year LMA with RKZ, Inc.,
which owns WJSU-TV ("WJSU"), a television station currently operating in
Anniston, Alabama. The LMA provides for the Company to supply program services
to WJSU, to operate the station and to retain all revenues from all advertising
sales. In exchange, the Company pays certain station operating expenses and
certain management fees to RKZ, Inc. The operating revenues and expenses of
WJSU are therefore included in the Company's interim consolidated financial
statements since December 29, 1995.
In connection with the LMA, the Company also entered into an option (the
"Option") to purchase the assets of WJSU. The Option was provided to the
Company in exchange for $10,000,000 and is exercisable over a ten-year period
for an additional $2,000,000 upon a change in current regulations or a waiver
of rules of the Federal Communications Commission prohibiting common ownership
of WCFT and WJSU. The Option also provides for additional consideration of up
to $7,000,000 in the event of specified events.
WHTM, WCFT and WJSU, collectively, are referred to throughout as "New
Stations."
RESULTS OF OPERATIONS
Set forth below are selected consolidated financial data for the three and six
months ended March 31, 1996 and 1995 in actual dollars and as a percentage of
net operating revenues:
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, SIX MONTHS ENDED MARCH 31,
------------------------------ ------------------------------
1995 % 1996 % 1995 % 1996 %
------ ------ ------ ------ ------ ------ ------ ------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operating Revenues, net $30,415 100.0 $33,812 100.0 $70,185 100.0 $72,194 100.0
Television Operating Expenses,
Excluding Depreciation and
Amortization 17,928 59.0 21,263 62.9 36,632 52.2 42,455 58.8
Depreciation and Amortization 1,412 4.6 2,293 6.8 2,731 3.9 3,567 4.9
Corporate Expenses 963 3.2 1,358 4.0 1,757 2.5 2,187 3.1
------ ----- ------ ----- ------ ----- ------ -----
Operating Income $10,112 33.2 $8,898 26.3 $29,065 41.4 $23,985 33.2
====== ===== ====== ===== ====== ===== ====== =====
</TABLE>
NET OPERATING REVENUES
The following table depicts the principal types of operating revenues, net of
agency commissions, earned by the Company for each of the three and six months
ended March 31, 1995 and 1996, and the percentage contribution of each to the
total broadcast revenues earned by the Company, before fees:
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<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, SIX MONTHS ENDED MARCH 31,
-------------------------------- ---------------------------------
1995 % 1996 % 1995 % 1996 %
------ ------ ------ ------ ------ ------ ------ ------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Local/Regional (1) $14,834 47.4 $16,279 46.6 $33,041 45.8 $35,323 47.4
National (2) 13,577 43.4 13,797 39.5 29,314 40.6 30,200 40.5
Network Compensation (3) 667 2.1 1,979 5.7 1,291 1.8 2,572 3.5
Political (4) 41 .1 316 .9 3,172 4.4 720 1.0
Trade & Barter (5) 1,433 4.6 1,691 4.8 3,036 4.2 3,310 4.4
Other Revenue (6) 753 2.4 898 2.5 2,311 3.2 2,400 3.2
------ ----- ------ ----- ------ ----- ------ -----
Broadcast Revenues 31,305 100.0 34,960 100.0 72,165 100.0 74,525 100.0
Fees (7) (1,141) ===== (1,244) ===== (2,394) ===== (2,561) =====
Broadcast Revenue
Net of Fees (8) 30,164 33,716 69,771 71,964
Non-Broadcast Revenue 251 96 414 230
------ ------ ------ ------
Total Operating Revenue $30,415 $33,812 $70,185 $72,194
====== ====== ====== ======
<FN>
<F1> (1) Represents sale of advertising time to local and regional advertisers or agencies representing such
advertisers.
<F2> (2) Represents sale of advertising time to agencies representing national advertisers.
<F3> (3) Represents payment by networks for broadcasting or promoting network programming.
<F4> (4) Represents sale of advertising time to political advertisers.
<F5> (5) Represents value of commercial time exchanged for goods and services (trade) or syndicated programs
(barter).
<F6> (6) Represents miscellaneous revenue, principally receipts from tower rental, production of commercials
and revenue from the sales of University of Arkansas sports programming to advertisers and radio
stations.
<F7> (7) Represents fees paid to national sales representatives and fees paid for music licenses.
<F8> (8) Represents revenues from program syndication sales and other miscellaneous non-broadcast revenues.
</FN>
</TABLE>
Net operating revenues for the three months ended March 31, 1996 totaled
$33,812,000, an increase of $3,397,000, or 11.2%, when compared to net
operating revenues of $30,415,000 for the three months ended March 31, 1995.
This increase is attributable to a $1,445,000 increase in local/regional
advertising and $1,312,000 increase in network compensation.
Local/regional and national advertising constitute the Company's largest
categories of operating revenues, collectively representing close to 90% of the
Company's total broadcast revenues in the periods presented. Although the
total percentage contribution of local/regional and national advertising has
been relatively constant, the growth rate of local/regional and national
advertising revenues varies based upon the demand and rates for local/regional
advertising time versus national advertising time in each of the Company's
markets.
Local/regional advertising revenues increased 9.7% and 6.9% during the three
and six months ended March 31, 1996, respectively, versus the comparable
periods in fiscal 1995, while national advertising revenues increased 1.6% and
3.0% during the same respective periods. The increase in local/regional
advertising revenues for the three months ended March 31, 1996 versus the three
months ended March 31, 1995 is largely attributable to $1,402,000 of
local/regional advertising revenue generated by the New Stations. The
local/regional advertising revenues for the six months ended March 31, 1996
increased by $2,282,000 over the six months ended March 31, 1995 due to the
$1,402,000 generated by the New Stations as discussed above, coupled with
increased local/regional advertising revenue in the Tulsa and Little Rock
markets which management attributes to certain changes in the competitive
environment
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and an increase in total market revenues. Local/regional
advertising revenue in the Company's remaining markets remained relatively
consistent with prior period amounts.
National advertising revenue increased $220,000 and $886,000 for the three and
six months ended March 31, 1996 over comparable periods in the prior year. The
quarterly increase is a result of additional national advertising revenue of
approximately $872,000 for the New Stations, offset by a weakening of the
Washington, DC market for national advertisers.
Political revenue, which comprised 4.4% of the Company's total operating
revenues during the six months ended March 31, 1995, decreased by $2,452,000,
or 77.3%, during the six months ended March 31, 1996 versus the six months
ended March 31, 1995 due primarily to various high-profile political races in
the Washington, DC metropolitan area as well as in Little Rock and Tulsa in
November 1994 with no comparable political elections occurring in November
1995.
The increase in network compensation is primarily attributable to a retroactive
provision in certain of the new affiliation agreements with the ABC network,
which were executed in March 1996.
The net operating revenue increase of $2,009,000, or 2.9%, to $72,194,000 for
the six months ended March 31, 1996 as compared to $70,185,000 for the same
period in the prior year is attributable to $2,452,000 in net operating revenue
contributed by the New Stations, other factors discussed above in the second
fiscal quarter, offset by a decrease in political advertising revenue of
$2,452,000 compared to the political revenue during the same period in the
prior year.
No individual advertiser accounted for more than 5% of the Company's broadcast
revenues during the three or six months ended March 31, 1996 or 1995.
TOTAL OPERATING EXPENSES
Total operating expenses for the three months ended March 31, 1996 totaled
$24,914,000, an increase of $4,611,000, or 22.7%, compared to total operating
expenses of $20,303,000 for the three month period ended March 31, 1995.
Television operating expenses (before depreciation, amortization, and corporate
expenses) totaled $21,263,000 for the three months ended March 31, 1996, an
increase of $3,335,000, or 18.6%, compared to $17,928,000 for the three months
ended March 31, 1995. Television operating expenses of the New Stations
accounted for approximately 50% of the increase. The remaining increase in
television operating expenses was due to general increases in sales,
programming and news expenses. The increase in sales expense was primarily
associated with the increased compensation expense, rights fees and production
expenses associated with the sale of University of Arkansas sport programming
to local radio stations by KATV, referred to by the Company as the Arkansas
Razorback Sports Network. The increase in programming expense relates to an
increase in programming costs under certain long-term program contracts
primarily at
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WJLA, KATV and WSET. The increase in news expense was primarily
due to increased staffing which resulted in higher compensation expense.
Total operating expenses for the six months ended March 31, 1996 totaled
$48,209,000, an increase of $7,089,000, or 17.2%, compared to the $41,120,000
for the six months ended March 31, 1995. Television operating expenses (before
depreciation, amortization and corporate expenses) totaled $42,455,000 for the
six months ended March 31, 1996, an increase of $5,823,000, or 15.9%, compared
to $36,632,000 for the six months ended March 31, 1995. The increase in
television operating expenses is due to the aforementioned reasons plus
increased promotion expense, primarily attributable to WJLA.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization expense of $2,293,000 for the three months ended
March 31, 1996 increased $881,000, or 62.4%, due principally to the increased
amount of depreciable assets and intangible assets primarily attributable to
the acquisitions of WHTM and WCFT. Depreciation and amortization expense of
$3,567,000 for the six months ended March 31, 1996 increased $836,000, or
30.6%, compared to $2,731,000 for the six months ended March 31, 1995
principally for the same reasons.
CORPORATE EXPENSES
Corporate expenses of $1,358,000 for the three months ended
March 31, 1996 increased $395,000, or 41.0%, compared to
$963,000 for the three months ended March 31, 1995. The
increase was due to increases in various expenses including
legal, consulting, and compensation. The increase in legal and
consulting expenses is attributable to acquisition initiatives
subsequently not pursued. Corporate expenses of $2,187,000
for the six months ended March 31, 1996 increased $430,000,
or 24.5%, over the same period in the prior year primarily for
the same reasons.
OPERATING INCOME
For the three months ended March 31, 1996, operating income of $8,898,000
decreased $1,214,000, or 12.0%, when compared to operating income of
$10,112,000 for the three months ended March 31, 1995. The decrease was due
primarily to increased revenue offset by increased operating, depreciation and
amortization expense, and corporate expenses as discussed above.
Operating income of $23,985,000 for the six months ended March 31, 1996
decreased $5,080,000, or 17.5%, when compared to operating income of
$29,065,000 for the six months ended March 31, 1995. The decrease in operating
income was due to increased revenue offset by increased operating, depreciation
and amortization expense, and corporate expenses as discussed above. The New
Stations had no significant impact on operating income as increased revenue was
offset by operating expenses.
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OTHER NON-OPERATING EXPENSES
Interest expense of $8,674,000 for three months ended March 31, 1996 increased
$2,997,000, or 52.8%, as compared to $5,677,000 for the three month period
ended March 31, 1995. Approximately $2,756,000 of this increase is due to the
incremental interest expense associated with the issuance of the Company's
$275,000,000 9.75% Senior Subordinated Debentures due 2007 (the "Debentures")
on February 6, 1996. The Company used the proceeds from the sale of the
Debentures to finance the acquisitions of WHTM and WCFT and the cost of the
Option, as well as to repay approximately $75,000,000 of existing indebtedness.
The early repayment of certain of this debt required a prepayment penalty of
$12,934,000, which resulted in the Company incurring a loss, net of the related
income tax benefit, of $7,750,000 which is included as an extraordinary item
in the Company's interim financial statements. Interest income of $1,226,000
for the three months ended March 31, 1996 increased $651,000, or 113.2%, as
compared to interest income of $575,000 for the three months ended March 31,
1995. The increase is primarily due to approximately $492,000 in investment
interest earned from investing excess proceeds from the sale of the Debentures
during the months of February and March of 1996.
Interest expense for the six months ended March 31, 1996 was $14,341,000, an
increase of $3,625,000, or 33.8%, as compared to $10,716,000 for the six month
period ended March 31, 1995. The increase is attributable to increased
interest expense from the issuance of the Debentures as discussed above,
together with higher average debt balances and interest rates in the first
quarter of fiscal 1996 compared to the same period in the prior year. The
weighted average balances of debt were $197,845,000 and $260,316,000 for the
six months ended March 31, 1995 and 1996, respectively, and the weighted
average interest rate on debt was 11.2% and 10.8% for the six months ended
March 31, 1995 and 1996, respectively.
INCOME TAXES
The provision for income taxes for the three months ended March 31, 1996
totaled $681,000, a decrease of $1,388,000, or 67.1%, when compared to the
provision for income taxes of $2,069,000 for the three months ended March 31,
1995. The decrease is directly attributable to the $3,615,000, or 73.7%,
decrease in income before income taxes and extraordinary item which declined
for reasons previously discussed.
For the six months ended March 31, 1996, the provision for income taxes
decreased $3,597,000, or 44.5%, due to a $8,104,000, or 42.0%, decrease in
income before income taxes and extraordinary item, the factors for which have
been described above.
NET LOSS
The net loss for the three months ended March 31, 1996 was $7,142,000 compared
to net income of $2,835,000 for the three months ended March 31,
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1995, a decrease of $9,977,000, or 351.9%. The decrease results from a decrease
in income from operations of $1,214,000, increase in interest expense of
$2,997,000, increase in interest income of $651,000, decrease in income taxes
of $1,388,000, and the extraordinary charge for early repayment of debt, net
of tax benefit, of $7,750,000.
For the six months ended March 31, 1996, the Company recorded a net loss of
$1,042,000 compared to net income of $11,215,000 for the six month period ended
March 31, 1995, a decrease of $12,257,000, or 109.3%. This decrease in net
income is attributed primarily to a decrease in income from operations of
$5,080,000, increase in interest expense of $3,625,000, increase in interest
income of $650,000, decrease in income taxes of $3,597,000, and the
extraordinary charge for early repayment of debt, net of tax benefit, of
$7,750,000.
BALANCE SHEET
Significant balance sheet fluctuations from September 30, 1995 to March 31,
1996 consist of increased cash and cash equivalents, accounts receivable,
property, plant and equipment, intangible assets, deferred financing costs and
long-term debt, offset by decreases in notes payable, program rights and
program rights payable. The increase in cash and cash equivalents of
$22,174,000, or 581.1%, is due to the cash remaining for capital expenditures
and working capital purposes from the proceeds of the Debenture offering. The
increase in accounts receivable of $2,517,000, or 9.5%, is a result of seasonal
fluctuations in local/regional and national advertising revenue and the
purchase of the outstanding accounts receivable of WHTM at March 1, 1996. The
increase in property, plant and equipment, net of $13,590,000 and intangible
assets of $131,247,000 are a result of the acquisitions of WHTM and WCFT. The
increase in deferred financing costs of $6,332,000 and long-term debt of
$208,532,000 as well as the decrease in notes payable of $7,972,000 result
from the $275,000,000 offering of Debentures. The decrease in program rights
and program rights payable of $6,301,000 and $5,561,000, respectively, are a
result of program contracts assumed in the acquisitions of WHTM and WCFT,
offset by six months of amortization of program rights and six months of
payments of program contracts payable.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1996, the Company's cash and cash equivalents aggregated
$25,990,000, and the Company had an excess of current assets over current
liabilities of $42,937,000.
CASH PROVIDED BY OPERATIONS. The Company's principal source of working
capital is internally generated cash flow from operations. As reported in its
consolidated statements of cash flows, the Company generated net cash from
operations of $11,328,000 and $9,460,000 during the six months ended March 31,
1995 and 1996, respectively.
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SALE OF DEBENTURES AND USE OF PROCEEDS. On February 6, 1996, the Company
completed the $275,000,000 offering of the Debentures at a discount of
$1,375,000. Principal is payable at maturity.
The proceeds from the offering of the Debentures were used to finance the
acquisitions of WHTM, $115,303,000, and WCFT, $20,000,000, and the cost of the
Option, $10,000,000, as well as to repay certain other indebtedness.
Additionally, in connection with the Contribution on March 1, 1996, the Company
made a cash advance of $6,600,000 to Westfield News Advertiser, Inc., an
affiliate, to repay certain indebtedness of which WSET was a guarantor. The
Company repaid approximately $63,500,000 of debt which was outstanding under
Secured Promissory Notes with two institutional investors, plus paid a related
prepayment penalty of $12,934,000, incurring a related loss, net of income tax
benefit, of $7,750,000 on the early repayment. The Company also repaid
$3,204,000 outstanding under a term loan and $8,000,000 outstanding under a
revolving line of credit. The remaining net proceeds were retained by the
Company for working capital and general corporate purposes.
As a result of these transactions, the Company's total debt, including the
current portion of long-term debt, increased from $195,518,000 at September 30,
1995 to $399,485,000 at March 31, 1996. This debt, net of applicable
discounts, consists of $124,727,000 of 11.5% Senior Subordinated Debentures due
2004, $273,625,000 of the 9.75% Debentures, and $1,133,000 of capital lease
obligations.
SENIOR CREDIT FACILITY. On April 16, 1996, the Company executed a new
$40,000,000 working capital facility (the "Senior Credit Facility") with a
group of three banks. The Senior Credit Facility matures on April 16, 2001 and
is secured by the stock of the Company and its subsidiaries. This Senior
Credit Facility replaces a $10,000,000 working capital facility which expired
on March 31, 1996.
TRANSACTIONS WITH OWNERS. For the six months ended March 31, 1995 and 1996,
the Company made cash advances to owners net of repayments and certain charges
totaling $10,331,000 and $25,747,000, respectively. The Company periodically
makes advances in the form of distributions to Perpetual. At present, the
primary source of repayment of the net advances is through the ability of the
Company to pay dividends or make other distributions to Perpetual, and there
is no immediate intent for the amounts to be repaid. Accordingly, these
advances have been treated as a reduction of Stockholder's investment and
described as "distributions" in the Company's consolidated financial
statements.
In conjunction with the contribution of the common stock of WSET and WCIV to
the Company on March 1, 1996, WSET and WCIV declared non-cash dividends to
Westfield totaling $18,371,000. Such dividends represented the cumulative net
advances made to Westfield by WSET and WCIV as of the date of the Contribution.
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Stockholder's deficit amounted to $160,678,000 at March 31, 1996, a decrease
of $26,799,000, or 20%, from the September 30, 1995 deficit of $133,879,000.
The decrease is primarily due to a net loss for the period of $1,042,000, a net
increase in distributions to owners of $25,747,000, and the tax benefit
distributed of $10,000.
OTHER USES OF CASH. Management estimates that capital expenditures for fiscal
year 1996 will approximate $21,900,000. Such amounts include $18,500,000
relating to the completion of facilities for TV Alabama, Inc. During the six
months ended March 31, 1995 and 1996, capital expenditures totaled $1,532,000
and $3,023,000, respectively. The increase in capital expenditures during the
six months ended March 31, 1996 is principally attributable to facility
construction-in-process and fixed asset additions in Alabama to begin
consolidation of the operations of WCFT and WJSU.
The Company regularly enters into program contracts for the right to broadcast
television programs produced by others and program commitments for the right
to broadcast programs in the future. For the six months ended March 31, 1996,
the Company made cash payments of $5,286,000 for the rights to television
programs.
The Company anticipates that its existing cash position, together with cash
flows generated by operating activities and amounts available under the credit
facility will be sufficient to finance the operating cash flow requirements of
its stations, debt service requirements and anticipated capital expenditures.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is from time to time a defendant
in various lawsuits which arise in the ordinary
course of business. The management of the
Company does not believe that any such
currently pending or threatened litigation is
likely to have a material adverse effect on the
business or financial condition of the Company.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS
3.1 Certificate of Incorporation of ACC.
(Incorporated by reference to Exhibit 3.1
of Registrant's Registration Statement on
Form S-4, No. 333-02302, dated March
12, 1996.)
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3.2 Bylaws of ACC. (Incorporated by
reference to Exhibit 3.2 of Registrant's
Registration Statement on Form S-4, No.
333-02302, dated March 12, 1996.)
4.1 Indenture dated as of February 6, 1996
between ACC and State Street Bank and
Trust Company, as Trustee, relating to
the Debentures. (Incorporated by
reference to Exhibit 4.1 of Registrant's
Registration Statement on Form S-4, No.
333-02302, dated March 12, 1996.)
4.2 Indenture dated as of August 26, 1992
between ACC and the First National
Bank of Boston, as Trustee, relating to
11 1/2% Senior Subordinated Debentures
due 2004. (Incorporated by reference to
Exhibit 4.2 of Registrant's Registration
Statement on Form S-4, No. 333-02302,
dated March 12, 1996.)
4.3 Form of 9 3/4% Series B Senior
Subordinated Debentures due 2007.
(Incorporated by reference to Exhibit 4.4
of Registrant's Registration Statement on
Form S-4, No. 333-02302, dated March
12, 1996.)
4.4 Revolving Credit Agreement dated as of
April 16, 1995 by and among Allbritton
Communications Company certain Banks,
and The First National Bank of Boston,
as agent.
10.1 Registration Rights Agreement by and
among ACC, Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith
Incorporated and Salomon Brothers, Inc.,
dated February 6, 1996. (Incorporated by
reference to Exhibit 10.1 of Registrant's
Registration Statement on Form S-4, No.
333-02302, dated March 12, 1996.)
10.2 Network Affiliation Agreement (WHTM-
TV, Inc.). (Incorporated by reference to
Exhibit 10.3 of Registrant's Pre-effective
Amendment No. 2 to Registration
Statement on Form S-4, dated May 2,
1996.)
10.3 Network Affiliation Agreement (WCIV).
(Incorporated by reference to Exhibit 10.4
of Registrant's Pre-effective Amendment
No. 1 to Registration Statement on Form
S-4, dated April 22, 1996.)
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10.4 Network Affiliation Agreement (WSET-
TV). (Incorporated by reference to
Exhibit 10.5 of Registrant's Pre-effective
Amendment No. 1 to Registration
Statement on Form S-4, dated April 22,
1996.)
10.5 Network Affiliation Agreement (WJLA-
TV). (Incorporated by reference to
Exhibit 10.6 of Registrant's Pre-effective
Amendment No. 1 to Registration
Statement on Form S-4, dated April 22,
1996.)
10.6 Network Affiliation Agreement (KATV
Television, Inc.). (Incorporated by
reference to Exhibit 10.7 of Registrant's
Pre-effective Amendment No. 1 to
Registration Statement on Form S-4,
dated April 22, 1996.)
10.7 Network Affiliation Agreement (KTUL
Television, Inc.). (Incorporated by
reference to Exhibit 10.8 of Registrant's
Pre-effective Amendment No. 1 to
Registration Statement on Form S-4,
dated April 22, 1996.)
10.8 Network Affiliation Agreement (WCFT-
TV and WJSU-TV). (Incorporated by
reference to Exhibit 10.9 of Registrant's
Pre-effective Amendment No. 1 to
Registration Statement on Form S-4,
dated April 22, 1996.)
10.9 Tax Sharing Agreement effective as of
September 30, 1991 by and among
Perpetual Corporation, Inc., ACC and
Allnewsco, Inc., as amended.
(Incorporated by reference to Exhibit
10.9 of Registrant's Registration
Statement on Form S-4, No. 333-02302,
dated March 12, 1996.)
10.10 Time Brokerage Agreement dated as of
December 21, 1995 by and between RKZ
Television, Inc. and ACC. (Incorporated
by reference to Exhibit 10.11 of
Registrant's Registration Statement on
Form S-4, No. 333-02302, dated March
12, 1996.)
10.11 Option Agreement dated December 21,
1995 by and between ACC and RKZ
Television, Inc. (Incorporated by
reference to Exhibit 10.12 of, Registrant's
Statement on Form S-4, No. 333-02302,
dated March 12, 1996.)
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10.12 Assignment and Assumption Agreement
dated as of February 1, 1996 by and
between ACC, Allfinco, Inc. and TV
Alabama Inc. (Incorporated by reference
to Exhibit 10.13 of Registrant's
Registration Statement on Form S-4, No.
333-02302, dated March 12, 1996.)
10.13 Master Lease Finance Agreement dated
as of August 10, 1994 between
BancBoston Leasing, Inc. and ACC, as
amended. (Incorporated by reference to
Exhibit 10.16 of Registrant's Registration
Statement on Form S-4, No. 333-02302,
dated March 12, 1996.)
10.14 Representation Agreement dated as of
July 1, 1995 by and between 78 inc. and
WJLA-TV. (Incorporated by reference to
Exhibit 10.17 of Registrant's Registration
Statement on Form S-4, No. 333-02302,
dated March 12, 1996.)
27. Financial Data Schedule
b. Reports on Form 8-K
No reports on Form 8-K were filed during
the quarter.
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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.
ALLBRITTON COMMUNICATIONS COMPANY
(Registrant)
MAY 13, 1996 /S/LAWRENCE I. HEBERT
Date Name: Lawrence I. Hebert
Title: President
/S/ HENRY D. MORNEAULT
MAY 13, 1996 NAME: HENRY D. MORNEAULT
Date Title: Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT PAGE NO.
3.1 Certificate of Incorporation of ACC. (Incorporated
by reference to Exhibit 3.1 of Registrant's
Registration Statement on Form S-4, No. 333-02302,
dated March 12, 1996.) *
3.2 Bylaws of ACC. (Incorporated by reference to
Exhibit 3.2 of Registrant's Registration Statement
on Form S-4, No. 333-02302, dated March 12, 1996.) *
4.1 Indenture dated as of February 6, 1996 between
ACC and State Street Bank and Trust Company, as
Trustee, relating to the Debentures. (Incorporated
by reference to Exhibit 4.1 of Registrant's
Registration Statement on Form S-4, No. 333-02302,
dated March 12, 1996.) *
4.2 Indenture dated as of August 26, 1992 between ACC
and the First National Bank of Boston, as Trustee,
relating to 11 1/2% Senior Subordinated Debentures
due 2004. (Incorporated by reference to Exhibit 4.2
of Registrant's Registration Statement on Form S-4,
No. 333-02302, dated March 12, 1996.) *
4.3 Form of 9.75% Series B Senior Subordinated
Debentures due 2007. (Incorporated by reference to
Exhibit 4.4 of Registrant's Registration Statement
on Form S-4, No. 333-02302, dated March 12, 1996.) *
4.4 Revolving Credit Agreement dated as of April 16,
1995 by and among Allbritton Communications
Company certain Banks, and The First National
Bank of Boston, as agent.
10.1 Registration Rights Agreement by and among ACC,
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated and Salomon Brothers, Inc.,
dated February 6, 1996. (Incorporated by reference
to Exhibit 10.1 of Registrant's Registration
Statement on Form S-4, No. 333-02302, dated
March 12, 1996.) *
10.2 Network Affiliation Agreement (WHTM-TV, Inc.).
(Incorporated by reference to Exhibit 10.3 of
Registrant's Pre-effective Amendment No. 2 to
Registration Statement on Form S-4, dated May 2,
1996.) *
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10.3 Network Affiliation Agreement (WCIV).
(Incorporated by reference to Exhibit 10.4 of
Registrant's Pre-effective Amendment No. 1 to
Registration Statement on Form S-4, dated April 22,
1996.) *
10.4 Network Affiliation Agreement (WSET-TV).
(Incorporated by reference to Exhibit 10.5 of
Registrant's Pre-effective Amendment No. 1 to
Registration Statement on Form S-4, dated April 22,
1996.) *
10.5 Network Affiliation Agreement (WJLA-TV).
(Incorporated by reference to Exhibit 10.6 of
Registrant's Pre-effective Amendment No. 1 to
Registration Statement on Form S-4, dated April 22,
1996.) *
10.6 Network Affiliation Agreement (KATV Television,
Inc.). (Incorporated by reference to Exhibit 10.7 of
Registrant's Pre-effective Amendment No. 1 to
Registration Statement on Form S-4, dated April 22,
1996.) *
10.7 Network Affiliation Agreement (KTUL Television,
Inc.). (Incorporated by reference to Exhibit 10.8 of
Registrant's Pre-effective Amendment No. 1 to
Registration Statement on Form S-4, dated April 22,
1996.) *
10.8 Network Affiliation Agreement (WCFT-TV and
WJSU-TV). (Incorporated by reference to Exhibit
10.9 of Registrant's Pre-effective Amendment No. 1
to Registration Statement on Form S-4, dated April
22, 1996.) *
10.9 Tax Sharing Agreement effective as of September
30, 1991 by and among Perpetual Corporation, Inc.,
ACC and Allnewsco, Inc., as amended.
(Incorporated by reference to Exhibit 10.9 of
Registrant's Registration Statement on Form S-4,
No. 333-02302, dated March 12, 1996.) *
10.10 Time Brokerage Agreement dated as of December
21, 1995 by and between RKZ Television, Inc. and
ACC. (Incorporated by reference to Exhibit 10.11 of
Registrant's Registration Statement on Form S-4,
No. 333-02302, dated March 12, 1996.) *
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10.11 Option Agreement dated December 21, 1995 by and
between ACC and RKZ Television, Inc.
(Incorporated by reference to Exhibit 10.12 of
Registrant's Registration Statement on Form S-4,
No. 333-02302, dated March 12, 1996.) *
10.12 Assignment and Assumption Agreement dated as of
February 1, 1996 by and between ACC, Allfinco, Inc.
and TV Alabama Inc. (Incorporated by reference to
Exhibit 10.13 of Registrant's Registration Statement
on Form S-4, No. 333-02302, dated March 12, 1996.) *
10.13 Master Lease Finance Agreement dated as of
August 10, 1994 between BancBoston Leasing, Inc.
and ACC, as amended. (Incorporated by reference to
Exhibit 10.16 of Registrant's Registration Statement
on Form S-4, No. 333-02302, dated March 12, 1996.) *
10.14 Representation Agreement dated as of July 1, 1995
by and between 78 inc. and WJLA-TV.
(Incorporated by reference to Exhibit 10.17 of
Registrant's Registration Statement on Form S-4,
No. 333-02302, dated March 12, 1996.) *
27. Financial Data Schedule
*Previously filed
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REVOLVING CREDIT AGREEMENT
DATED AS OF APRIL 16, 1996
BY AND AMONG
ALLBRITTON COMMUNICATIONS COMPANY
AS THE BORROWER
THE FINANCIAL INSTITUTIONS PARTY HERETO AS THE BANKS
AND
THE FIRST NATIONAL BANK OF BOSTON,
AS AGENT
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TABLE OF CONTENTS
PAGE
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REVOLVING CREDIT AGREEMENT
--------------------------
This REVOLVING CREDIT AGREEMENT is made as of the 16th day of April,
1996, by and among ALLBRITTON COMMUNICATIONS COMPANY a Delaware corporation
having its principal place of business at 800 17th Street, N.W., Suite 301,
Washington, D.C. 20006 (the "Borrower"), the financial institutions listed on
Schedule 1.1 hereto (the "Banks"), and THE FIRST NATIONAL BANK OF BOSTON, as
agent for the Banks (the "Agent").
1. DEFINITIONS AND RULES OF INTERPRETATION.
----------- --- ----- -- --------------
1.1 Definitions.
The following terms shall have the meanings set forth in this 1 or
elsewhere in the provisions of this Credit Agreement referred to below:
ACC 11 1/2% SENIOR SUBORDINATED DEBENTURES. The 11 1/2% Senior
Subordinated Debentures due August 15, 2004 of the Borrower issued pursuant to
the ACC 11 1/2% Senior Subordinated Indenture.
ACC 11 1/2% SENIOR SUBORDINATED INDENTURE. The Indenture, dated August
26, 1992, by and among the Borrower and State Street Bank and Trust Company,
as Trustee, governing the ACC 11 1/2% Senior Subordinated Debentures.
ACC 9 3/4% SUBORDINATED DEBENTURES. The 9 3/4% Subordinated Debentures
due November 30, 2007 of the Borrower issued pursuant to the ACC 9 3/4%
Subordinated Indenture.
ACC 9 3/4% SUBORDINATED INDENTURE. The Indenture, dated February 6,
1996, by and among the Borrower and State Street Bank and Trust Company, as
Trustee, governing the ACC 9 3/4% Subordinated Debentures.
AFFILIATE. Any Person that would be considered to be an affiliate of the
Borrower under Rule 144(a) of the Rules and Regulations of the Securities and
Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
AGENT. The First National Bank of Boston acting as agent for the Banks.
AGENT'S SPECIAL COUNSEL. Bingham, Dana & Gould of Boston, Massachusetts,
or such other counsel as may be approved by the Agent.
APPLICABLE LAW. Means and includes statutes and rules and regulations
thereunder and interpretations thereof by any Governmental Authority charged
with the administration or the interpretation thereof, and orders, requests,
directives, instructions and notices of any Governmental Authority.
PAGE
<PAGE>
-2-
APPLICABLE MARGIN. With respect to any fiscal quarter of the Borrower,
the applicable percentage set forth below opposite the Leverage Ratio
determined for the most recently ended fiscal quarter for which the Borrower
has delivered financial statements pursuant to 6.4(a) or (b):
<TABLE>
<CAPTION>
Eurodollar
Rate Base Rate
Applicable Applicable
Leverage Ratio Margin Margin
- -------------- ---------- ----------
<S> <C> <C>
Greater than or 2.00% 0.75%
equal to 5.5:1.0
Less than 5.5:1.0 1.75% 0.50%
but greater than
or equal to 5.0:1.0
Less than 5.0:1.0 1.50% 0.25%
but greater than
or equal to 4.5:1.0
Less than 4.5:1.0 1.25% 0.00%
but greater than
or equal to 4.0:1.0
Less than 4.0:1.0 1.00% 0.00%
provided, that if the Borrower's financial statements are not furnished to the
Banks pursuant to 6.4(a) or (b) hereof within five (5) Business Days after the
relevant period of time specified in 6.4, the Applicable Margin with respect
to all Loans shall be 2.00% (or .75%, for Base Rate Loans) during the period
commencing on the date such statements are due and (provided that such
financial statements are subsequently furnished to the Banks) ending on the
date two (2) days following the delivery to the Agent of the financial
statements to be furnished pursuant to 6.4(a) or (b) for the appropriate
period.
Approval. Relative to the Borrower and its Subsidiaries, each approval,
consent, filing or registration by or with any Governmental Authority or any
creditor or shareholder of the Borrower or any of its Subsidiaries necessary
to authorize or permit the execution, delivery or performance by the Borrower
or any
PAGE
<PAGE>
-3-
such Subsidiary of this Credit Agreement or any Security Document to which the
Borrower or such Subsidiary is a party or the validity or enforceability of the
Credit Agreement or any such Security Document against the Borrower or any such
Subsidiary.
Assignment and Acceptance. See 17.1.
Balance Sheet Date. September 30, 1995.
Bank of Boston. The First National Bank of Boston, in its individual
capacity.
Banks. The financial institutions listed on Schedule 1.1, and any of
their successors and assigns.
Base Rate. The greater of (a) the annual rate of interest announced from
time to time by the Agent at its head office in Boston, Massachusetts as its
"base rate" and (b) the Federal Funds Rate plus one-half of one percent (.5%).
Base Rate Loans. All Loans interest in respect of which is determined
with reference to the Base Rate.
Borrower. Allbritton Communications Company, a Delaware corporation.
Business Day. Any day on which banking institutions in Boston,
Massachusetts are open for the transaction of banking business and which is
also a Eurodollar Business Day.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises, licenses and good will); provided that Capital Assets
shall not include any item customarily charged directly to expense or
depreciated over a useful life of twelve (12) months or less in accordance with
Generally Accepted Accounting Principles.
Capital Expenditures. Amounts paid or indebtedness incurred by the
Borrower or any of its Subsidiaries in connection with the purchase or lease
by the Borrower or any of its Subsidiaries of Capital Assets that would be
required to be capitalized and shown on the balance sheet of such Person in
accordance with Generally Accepted Accounting Principles.
Capitalized Leases. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with Generally Accepted Accounting
Principles.
CERCLA. See 5.16.
PAGE
<PAGE>
-4-
Closing Date. April 16, 1996.
Closing Fee. See 9.9.
Code. The Internal Revenue Code of 1986, as amended and in effect from
time to time.
Commitment. With respect to each Bank, the amount set forth in the
column labeled Commitment opposite such Bank's name on Schedule 1.1 hereto, as
the same may be reduced from time to time.
Commitment Fee. See 2.2.
Commitment Percentage. With respect to each Bank, the percentage set
forth opposite such Bank's name on Schedule 1.1 thereto, as the same may be
amended.
Communications Act. The Federal Communications Act of 1934, as amended,
and the rules and regulations of the FCC thereunder as in effect from time to
time.
Communications Regulatory Authority. Any communications regulatory
commission, agency, department, board or authority (including, without
limitation, the FCC).
Compliance Certificate. See 6.4 (c)
Consolidated or Certificate. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with Generally Accepted Accounting
Principles.
Consolidated EBITDA. For any period, an amount equal to (a) the sum of
(i) Consolidated Net Income for such period, plus (ii) depreciation,
amortization and all other non-cash charges for such period, plus (iii) to the
extent deducted in the calculation of Consolidated Net Income, Consolidated
Total Interest Expense and taxes paid or payable for such period, plus (iv) the
amount of Net Securities Proceeds received by the Borrower from Investments in
the equity of the Borrower during such period (provided that the aggregate
amount of Net Equity Proceeds included in Consolidated EBITDA from the Closing
Date shall not exceed $5,000,000) less (b) Corporate Overhead for such period
to the extent not deducted in the calculation of Consolidated Net Income.
For purposes of determining the Consolidated EBITDA of the Borrower and
its Subsidiaries for any period, (A) there shall be excluded from Consolidated
EBITDA all EBITDA attributable to any Station or other property sold or
disposed of by the Borrower and its Subsidiaries other than in the ordinary
course of business during such period as if such Station or other property were
not owned at any time by the Borrower and its Subsidiaries during such period,
and (B) there
PAGE
<PAGE>
-5-
shall be included in such Consolidated EBITDA all EBITDA attributable to any
Station or other property acquired by the Borrower and its Subsidiaries other
than in the ordinary course of business during such period as if the property
were owned by the Borrower and its Subsidiaries at all times during such
period.
For all purposes of this Credit Agreement, the "EBITDA" of the Borrower
or attributable to any Station or other property for any period shall be
determined in a manner consistent in all relevant respects with the method used
to determine Consolidated EBITDA, but on a non-consolidated basis. The
determination of the "EBITDA" of any Station shall account for only those items
included in the definition of Consolidated EBITDA that are directly
attributable to such Station and the operation thereof and shall not include,
for any period prior to the acquisition by the Borrower or any Subsidiary of
any Station, any corporate overhead or similar charges of the prior owner of
such Station.
For purposes of calculating Consolidated EBITDA for any period prior to
the Closing Date, interest income of the Borrower for such period shall be
determined assuming that the Borrower held cash equivalents throughout such
period in amounts equal to the amount of cash equivalent held by the Borrower
on the Closing Date, and that interest income from such cash equivalents shall
have accrued throughout such period at a rate equal to the rate at which
interest income accrued on the cash equivalents of the Borrower for the 30-day
period prior to the Closing Date.
CONSOLIDATED EXCESS CASH FLOW. With respect to the Borrower and its
Subsidiaries and any particular fiscal period, an amount equal to (a)
Consolidated EBITDA (without taking account of any adjustments required by the
second paragraph of the definition thereof) for such period, less (b) the sum
of (i) Consolidated Total Interest Expense for such period, plus (ii) any
mandatory repayments (whether scheduled or otherwise) of principal on any
Indebtedness (other than Indebtedness in respect of the Loans) of the Borrower
or any of its Subsidiaries paid or due and payable during such period, other
than (A) any repayment of principal of any Indebtedness from the proceeds of
Indebtedness permitted hereby, and (B) any repayments of principal of
Indebtedness from the proceeds of any sale of assets to the extent that the
gain from any such sale is not included in Consolidated Net Income pursuant to
clause (a) of the definition thereof, plus (iii) any repayments of principal
of the Loans during such period, but only to the extent that such repayments
were (A) required to reduce the outstanding principal of the Loans to the
amount of the Total Commitment, or (B) accompanied by corresponding permanent
reductions in the Total Commitment, plus (iv) cash payments made during such
period on account of Capital Expenditures (excluding Capital Expenditures
financed from the proceeds of permitted Indebtedness or insurance or through
Capitalized Leases), plus (v) federal and state income taxes paid during such
period.
CONSOLIDATED NET INCOME. For any period, the net income of the Borrower
and its Subsidiaries for such period, after deduction of all expenses, taxes,
and other
PAGE
<PAGE>
-6-
proper charges for such period, determined on a consolidated basis in
accordance with Generally Accepted Accounting Principles, after eliminating
therefrom (a) all extraordinary nonrecurring gains or losses, including,
without limitation, any gains (or losses) from any Sale of any Station or other
assets, and (b) non-cash dividends or non-cash distributions from Investments,
but without any reduction on account of any minority interest in a
Majority-Owned Subsidiary.
CONSOLIDATED TOTAL INTEREST EXPENSE. For any period, the aggregate
amount of interest required to be paid or payable in cash by the Borrower or
any of its Subsidiaries during such period on all Funded Debt of the Borrower
or any of its Subsidiaries outstanding during all or any part of such period,
whether such interest was or is required to be reflected as an item of expense
or capitalized, including payments consisting of interest in respect of
Capitalized Leases and including Commitment Fees payable pursuant to 2.2.
For purposes of determining the Consolidated Total Interest Expense for
any period (a) a portion of which falls prior to and includes the Closing Date,
the Consolidated Total Interest Expense for the portion of such period prior
to and including the Closing Date (the "Pro-Forma Period") shall be determined
as if (i) the Consolidated Funded Debt (other than Loans) of the Borrower and
its Subsidiaries outstanding as of the Closing Date was outstanding throughout
the Pro-Forma Period, (ii) the interest rate payable with respect to any
particular item of Consolidated Funded Debt of the Borrower and its
Subsidiaries during the Pro-Forma Period was at all times during the Pro-Forma
Period equal to the interest rate payable on such item of Consolidated Funded
Debt on and as of the Closing Date, and (iii) all such interest was payable on
a periodic basis throughout the Pro-Forma Period in a manner consistent with
the terms of the instruments governing such Consolidated Funded Debt as of the
Closing Date; and (b) any acquisition or Sale of any Station or other property
of the Borrower or any of its Subsidiaries which occurred during such period
as permitted pursuant to 7.5 shall be deemed to have occurred immediately prior
to such period and Consolidated Total Interest Expense shall be determined as
if (i) any Indebtedness incurred in connection with such acquisition or repaid
in connection with such Sale (other than any such repayment of Loans if such
repayment was not accompanied by a simultaneous reduction in like amount of the
Total Commitment) was incurred or repaid, as the case may be, immediately prior
to such period and (ii) the interest rate payable with respect to any increase
in Indebtedness in connection with such acquisition which was outstanding
during all or any part of such period was at all times equal to the rate of
interest payable with respect to such Indebtedness on the last day of the
period for which Consolidated Total Interest Expense is to be determined or,
if earlier, the last day on which such Indebtedness was outstanding.
CONTINUATION OR CONVERSION NOTICE. A notice given by the Borrower to the
Agent in accordance with 3.2 pursuant to which the Borrower notifies the Agent
of its election to continue a Eurodollar Rate Loan for a particular Interest
Period, or to convert any Base Rate Loans to Eurodollar Rate Loans for a
particular Interest Period.
PAGE
<PAGE>
-7-
CORPORATE OVERHEAD. For any period, that portion of the overhead
expenses of the Borrower and its Subsidiaries, on a consolidated basis, for
such period which are not directly allocable to the operations of any of the
Stations and other operating assets of the Borrower and its Subsidiaries,
calculated on a basis consistent with historical financial statements of the
Borrower. Corporate Overhead shall include without duplication the amount of
salaries and bonuses paid to the management of the Borrower, except to the
extent directly allocable to the operation of any Stations in accordance with
the Borrower's historic accounting practices.
CREDIT AGREEMENT. This Revolving Credit Agreement, including the
Schedules and Exhibits hereto.
DEFAULT. See 11.
DOLLARS. Dollars in lawful currency of the United States of America.
DRAWDOWN DATE. The date on which any Loan is made or is to be made in
accordance with 2.1.
ELIGIBLE ASSIGNEE. Any bank, insurance company, commercial finance
company or other financial institution approved, in each case, by the Borrower
and the Agent, such approval not to be unreasonably withheld.
ENVIRONMENTAL LAWS. See 5.16.
ERISA. The Employee Retirement Income Security Act of 1974, as amended.
ERISA AFFILIATE. Any Person which is treated as a single employer with
the Borrower under 414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
ESCROW PROCEEDS. Proceeds released from escrow under the Pledge and
Escrow Agreement.
EUROCURRENCY RESERVE RATE. For any day with respect to a Eurodollar Rate
Loan, the maximum rate (expressed as a decimal) at which any Bank subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
PAGE
<PAGE>
-8-
EURODOLLAR BUSINESS DAY. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or
such other eurodollar interbank market as may be selected by the Agent in its
sole discretion acting in good faith.
EURODOLLAR LENDING OFFICE. Initially, the office of each Bank designated
as such on Schedule 1.1 hereto and, thereafter, such other office of such Bank,
if any, that shall be making or maintaining Loans.
EURODOLLAR RATE. For any Interest Period with respect to a Eurodollar
Rate Loan, the rate of interest equal to (a) the arithmetic average (rounded
upwards to the nearest 1/16 of one percent) of the rates per annum at which
each Reference Bank's Eurodollar Lending Office is offered Dollar deposits two
Eurodollar Business Days prior to the beginning of such Interest Period in the
interbank eurodollar market where the eurodollar and foreign currency and
exchange operations of such Eurodollar Lending Office are customarily conducted
at or about 10:00 a.m., New York time, for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Rate Loan of such Reference Bank to
which such Interest Period applies, divided by (b) a number equal to 1.00 minus
the Eurocurrency Reserve Rate, if applicable.
EURODOLLAR RATE LOANS. All Loans interest in respect of which is
determined with reference to the Eurodollar Rate.
EVENT OF DEFAULT. See 11.
FCC. The United States Federal Communications Commission (or any
successor agency, commission, bureau, department or other political subdivision
of the United States).
FCC LICENSE. Any radio, television or other license, permit, certificate
of compliance, franchise, approval or authorization granted or issued by the
FCC.
FEDERAL FUNDS RATE. For any day, the 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, as
published for such day (or if such day is not a Business Day, of the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
funds brokers of recognized standing selected by the Agent.
FUNDED DEBT. In relation to any Person at any time, all Indebtedness for
borrowed money (including all notes payable and drafts accepted representing
extensions of credit and all obligations evidenced by bonds, debentures, notes
or other similar instruments on which interest charges are customarily paid)
of such
PAGE
<PAGE>
-9-
Person, all guaranty or other contingent obligations of such Person in respect
of any such Indebtedness of any other Person, the liquidation value of all
preferred stock at such time (other than any preferred stock which is not
redeemable at the option of the holder), all obligations of such Person
constituting Capitalized Lease Obligations and all obligations of such Person
for the deferred purchase price of property or services (except, in any event,
trade payables, payment obligations in respect of film license contracts of any
Station, in each case arising in the ordinary course of business, and
obligations under leases which do not constitute Capitalized Lease
Obligations).
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Principles that are consistent
with the principles promulgated or adopted by the Financial Accounting
Standards Board and its predecessors in effect for the fiscal year ended on the
Balance Sheet Date, and to the extent consistent with such principles, the
accounting practice of the Borrower reflected in its financial statements for
the year ended on the Balance Sheet Date.
GOVERNMENTAL AUTHORITY. Any foreign, federal, state, regional, local,
municipal or other government, or any department, commission, board, bureau,
agency, public authority or instrumentality thereof, or any court or
arbitrator. Guaranteed Pension Plan. Any pension plan maintained by the
Borrower or any of its Subsidiaries, or to which the Borrower or any of its
Subsidiaries contributes, that is required to pay plan termination insurance
premiums to the Pension Benefit Guaranty Corporation.
HAZARDOUS SUBSTANCES. See 5.16.
INDEBTEDNESS. All obligations, contingent and otherwise, that in
accordance with Generally Accepted Accounting Principles would be classified
upon the obligor's balance sheet as liabilities, including in any event and
whether or not so classified: (a) all debt and similar monetary obligations,
whether direct or indirect; (b) all liabilities secured by any mortgage,
pledge, security interest, lien, charge, or other encumbrance existing on
property owned or acquired subject thereto, whether or not the liability
secured thereby shall have been assumed; (c) all redemption obligations in
respect of any redeemable preferred stock (calculated at the liquidation value
thereof); and (d) all guarantees, endorsements and other contingent obligations
whether direct or indirect in respect of indebtedness of others, including any
obligation to supply funds to or in any manner to invest in, directly or
indirectly, the debtor, to purchase indebtedness, or to assure the owner of
indebtedness against loss, through an agreement to purchase goods, supplies,
or services for the purpose of enabling the debtor to make payment of the
indebtedness held by such owner or otherwise, and the obligations to reimburse
the issuer in respect of any letters of credit.
INTEREST PAYMENT DATE. As to any Loan in respect of which the Interest
Period is (i) three (3) months or less, the last day of such Interest Period
and (ii)
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more than three (3) months, the date that is three (3) months from the Drawdown
Date thereof and the last day of such Interest Period.
INTEREST PERIOD. With respect to each Eurodollar Rate Loan, (a)
initially, the period commencing on the date such Loan is made and ending on
the last day of a period of either seven (7) days or one (1), two (2), three
(3) or six (6) months as selected by the Borrower in a Loan Request for any
Eurodollar Rate Loan, and (b) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such Eurodollar Rate
Loan and ending on the last day of one of the periods set forth above, as
selected by the Borrower in a Continuation Notice; provided that all of the
foregoing provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period with respect to a Eurodollar Rate
Loan would otherwise end on a day that is not a Eurodollar Business Day,
that Interest Period shall be extended to the next succeeding Eurodollar
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Eurodollar Business Day;
(ii) any Interest Period that begins on the last Eurodollar
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall (except for any seven (7) day Interest Period)
end on the last Eurodollar Business Day of a calendar month; and
(iii)the Borrower may not select an Interest Period for any
Eurodollar Rate Loan that would extend beyond the scheduled Maturity
Date.
INVESTMENTS. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of,
or for loans, advances, capital contributions or transfers of property to, or
in respect of any guaranties (or other commitments as described under
Indebtedness) or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be deducted in respect of each such Investment any cash amount received
as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (c) there shall
not be deducted in respect of any Investment any amounts received as earnings
on such Investment, whether as dividends, interest or otherwise; and (d) there
shall not be deducted from the aggregate amount of Investments any decrease in
the value thereof.
LEVERAGE RATIO. As of any date of determination, the ratio of (i)
Consolidated Funded Debt of the Borrower and its Subsidiaries as at such date
to (ii) Consolidated EBITDA for the period of four consecutive fiscal quarters
ending on
PAGE
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such date. For purposes of determining the Leverage Ratio as of any date on
or prior to September 30, 1996, Consolidated Funded Debt of the Borrower and
its Subsidiaries as at such date shall be reduced by the lesser of (A)
$20,000,000 or (B) the amount of cash and cash equivalents held by the Borrower
at such date.
LOAN DOCUMENTS. This Credit Agreement, the Notes and the Security
Documents.
LOAN REQUEST. See 2.5.
LOANS. Collectively, the loans advanced to the Borrower by the Banks
pursuant to this Credit Agreement.
MAJORITY BANKS. As of any date, the Banks holding at least fifty-one
percent (51%) of the outstanding principal amount of the Notes on such date,
and if no such principal is outstanding, the Banks whose aggregate Commitments
constitute at least fifty-one percent (51%) of the Total Commitment.
MAJORITY-OWNED SUBSIDIARIES. Collectively, (i) Harrisburg Television,
Inc. and (ii) TV Alabama Inc.
MATURITY DATE. April 16, 2001, or such earlier date on which the
outstanding Loans hereunder are declared due and payable pursuant to the terms
of this Credit Agreement or on which the Total Commitment is terminated.
MOODY'S. Moody's Investors Service, Inc.
MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of 3(37)
of ERISA maintained or contributed to by any of the Borrowers or any ERISA
Affiliate.
NET DEBT PROCEEDS. With respect to the issuance of any instruments or
other securities evidencing Indebtedness of the Borrower or any of its
Subsidiaries that is not permitted by this Agreement, the gross amount of cash
proceeds received by the Borrower or any of its Subsidiaries in respect of such
issuance, less (to the extent applicable and without duplication) reasonable
sales and underwriting commissions, investment banking, accounting and legal
fees and disbursements, and printing expenses and governmental fees incurred
in connection with such issuance and payable by the issuer of such instruments
or other securities.
NET DISPOSITION PROCEEDS. One hundred percent (100%) of the cash
proceeds from any Sale of assets or other property other than any Sale of
assets or other property permitted by 7.5(b), less to the extent applicable and
without duplication (a) customary and reasonable amounts paid or payable in
respect of brokerage fees incurred by the Borrower or any of its Subsidiaries
in connection with such Sale, (b) other reasonable transaction costs incurred
by the Borrower or any of its Subsidiaries in connection with such Sale, and
(c) sales or other gross receipts,
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-12-
income, or property transfer taxes, payable in cash by the Borrower or any of
its Subsidiaries relating to such Sale; provided, that Net Disposition Proceeds
shall not include the first $500,000 of such proceeds received by the Borrower
and its Subsidiaries in any calendar year. If the Borrower or any of its
Subsidiaries receives any promissory notes or other instruments as part of the
consideration for such Sale or if payment in cash of any portion of the
consideration for such Sale is otherwise deferred, Net Disposition Proceeds
shall (to the extent such cash payments would constitute Net Disposition
Proceeds hereunder) be deemed to include any cash payments in respect of such
notes or instruments or otherwise deferred portion of such consideration when
and to the extent received by such Person. If the Borrower or any of its
Subsidiaries receives any property (other than cash) as part of the
consideration for any Sale, Net Disposition Proceeds from such Sale shall (to
the extent such cash payments would constitute Net Disposition Proceeds
hereunder) be deemed to include any cash payments in respect of such property
when and to the extent received by such Person.
NET INSURANCE PROCEEDS. The aggregate amount of proceeds received by the
Borrower or any of its Subsidiaries in excess of $500,000 from any claim under
a property or casualty insurance policy in connection with any property or
casualty damage or loss that is not used within twelve (12) months after
receipt of such proceeds to repair or replace the property damaged or otherwise
to acquire assets useful in the business of the Borrower or any of its
Subsidiaries.
NET SECURITIES PROCEEDS. With respect to the issuance by the Borrower
or any of its Subsidiaries of any capital stock (other than the issuance and
sale by the Borrower of capital stock of the Borrower to Joe L. Allbritton or
any Person of which Joe L. Allbritton owns, directly or indirectly, 100% of the
outstanding capital stock, and the issuance and sale by any Subsidiary of the
Borrower of capital stock of such Subsidiary to the Borrower or to any other
Subsidiary of the Borrower), the gross amount of cash consideration payable to
or receivable by the Borrower or any of its Subsidiaries in respect of such
issuance, less (to the extent applicable and without duplication) reasonable
sales and underwriting commissions, investment banking, accounting and legal
fees and disbursements, printing expenses, rating agency, stock exchange,
trustee fees and similar reasonable and customary fees, and any governmental
fees incurred in connection with such issuance and payable by the issuer of
such capital stock. If the Borrower or any of its Subsidiaries receives any
property (other than cash) as part of the consideration for any such issuance,
Net Securities Proceeds shall be deemed to include any cash payments in respect
of such property when and to the extent received by the Borrower or any of its
Subsidiaries.
NOTE RECORD. The grid attached to a Note, or the continuation of such
grid, or any other similar record maintained by the Bank holding such Note with
respect to any Loan.
NOTES. The promissory notes issued pursuant to 2.4 of this Credit
Agreement evidencing the Loans.
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OBLIGATIONS. All indebtedness, obligations and liabilities of the
Borrower and its Subsidiaries to the Agent and/or the Banks, individually or
collectively, existing on the date of this Credit Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, arising or incurred under this
Credit Agreement or any of the other Loan Documents or in respect of the Loans.
OUTSTANDING OR OUTSTANDING. With respect to the Loans, the aggregate
unpaid principal thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by 4002 of ERISA
and any successor entity or entities having similar responsibilities.
PERMITTED ACQUISITION. Any acquisition of a Station by the Borrower or
any of its Subsidiaries so long as, in each case:
(a) on or prior to the closing date of such acquisition, the Borrower
shall have delivered to the Agent and the Banks a certificate of the President
or Chief Financial Officer stating that, based on, among other things,
operating and financial projections and pro-forma financial statements
delivered to the Agent and the Banks and certified by the President or Chief
Financial Officer of the Borrower as being consistent with historical results
and results which can reasonably be expected for the future, immediately after
giving effect to the Permitted Acquisition (including the making of any Loans
and the incurrence or assumption of any Indebtedness in connection with such
Permitted Acquisition) all covenants contained herein are reasonably expected
to be satisfied on a pro forma basis through the period ending twenty-four
months after the date of the Permitted Acquisition;
(b) no Default or Event of Default is continuing immediately prior to
such Permitted Acquisition, and no Default or Event of Default would result
therefrom; and
(c) if such Permitted Acquisition will be made through a new Subsidiary
of the Borrower, the Borrower shall have pledged the capital stock of such
Subsidiary to the Agent pursuant to the Pledge Agreement.
PERMITTED LIENS. Liens, security interests and other encumbrances
permitted by 7.2.
PERSON. Any individual, corporation, partnership, limited liability
company, trust, unincorporated association, business, or other legal entity,
and any government or any governmental agency or political subdivision thereof.
PLEDGE AGREEMENT. The Pledge Agreement, substantially in the form of
Exhibit D attached hereto, to be executed and delivered to the Agent by
Allbritton Group, Inc., the Borrower and its Subsidiaries on the Closing Date.
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PRO FORMA DEBT SERVICE. With respect to any date of determination, the
sum of all principal, interest and fees scheduled to be paid by the Borrower
or any of its Subsidiaries with respect to Funded Debt of the Borrower and its
Subsidiaries during the period of four consecutive fiscal quarters commencing
on the date following such date of determination. For purposes of the
foregoing calculation, (i) interest payable hereunder for the entire period
shall be the interest rate which would be calculated hereunder on the date of
determination for a three (3) month Interest Period commencing on such date for
a Eurodollar Rate Loan in the aggregate principal amount equal to the aggregate
principal amount of Loans outstanding on such date, (ii) the interest rate on
any other Funded Debt during such period shall be the interest rate on such
Funded Debt on the date of determination and (iii) the aggregate principal
amount of Loans outstanding during each day of such period shall be deemed to
be equal to the average daily principal amount of the Loans outstanding during
the period of two fiscal quarters ending on such date of determination.
PRO FORMA FIXED CHARGES. With respect to any date of determination, the
sum of (i) Pro Forma Debt Service, plus (ii) Capital Expenditures (excluding
Capital Expenditures financed from the proceeds of permitted Indebtedness or
insurance or through Capitalized Leases) made by the Borrower and its
Subsidiaries during the period of four consecutive fiscal quarters immediately
preceding such date of determination, plus (iii) the aggregate amount of cash
income taxes paid by the Borrower and its Subsidiaries during the period of
four fiscal quarters ended on such date of determination, after excluding
therefrom cash taxes paid during such period with respect to the gain from any
Sale of one or more Stations during such period or any prior period.
PROCEEDS. Collectively, Net Debt Proceeds, Net Sale Proceeds, Net
Insurance Proceeds, and Net Securities Proceeds.
PROJECTIONS. See 5.4.2.
PROPRIETARY RIGHTS. See 5.6.
REAL ESTATE. All real property at any time owned or leased by the
Borrower or any of its Subsidiaries.
REFERENCE BANKS. Collectively, for purposes of determining the
Eurodollar Rate and in connection with other matters pertaining to the
Eurodollar Rate Loans, Bank of Boston and all other Banks designated in a
notice to the Borrower and all Banks by the Agent (after consultation with the
Borrower and with the prior approval of the Majority Banks) to be Reference
Banks.
REGISTER. See 17.3.
RESTRICTED PAYMENTS. In relation to the Borrower or any of its
Subsidiaries,
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(a) the declaration or payment of any dividend on or in respect of any
shares of any class of capital stock of such Person, other than dividends
payable solely in shares of common stock of such Person; the purchase,
redemption, or other retirement of any shares of any class of capital stock of
such Person, directly or indirectly through a Subsidiary or otherwise; the
return of capital by such Person to its shareholders or other equity holders
as such; or any other distribution on or in respect of any shares of any class
of capital stock of such Person;
(b) any payment or prepayment by such Person (whether of principal,
premium, interest or other sum) of or on account of, any payment or other
distribution on account of the redemption, repurchase, defeasance, retirement
or other acquisition for value of, or any sinking fund payment in respect of
Indebtedness of such Person which is subordinated to the Obligations; and
(c) any loan or advance by such Person to, or any other Investment by
such Person in, any Affiliate of such Person (other than the Borrower or any
of its Subsidiaries); and
(d) any other payment or distribution (whether by cash, obligations,
securities or other property) to any Affiliate of such Person (other than the
Borrower or any of its Subsidiaries).
For purposes of this Credit Agreement and the other Loan Documents, the term
"Restricted Payments" shall not include any salaries, bonuses, advances or
other compensation to employees made by the Borrower or any of its Subsidiaries
in the ordinary course of its business, any payments in respect of transactions
described in any of clauses (1) through (6) of the last sentence of Section
4.11 of the ACC 9 3/4% Subordinated Indenture as in effect on the date hereof
or any Investment permitted by Section 7.3(k).
S&P. Standard & Poor's Corporation.
SALE. Any sale, transfer or other disposition of assets or other
property, including by means of simultaneous exchange of Stations.
SECURITY DOCUMENTS. The Pledge Agreement, and all other instruments that
shall from time to time be identified by the Agent and the borrower as Security
Documents.
STATION. All licenses, franchises and permits (including all FCC
Licenses) issued under federal, state or local laws from time to time which
authorize a Person to receive or distribute, or both, over the airwaves, audio
and visual, radio or microwave signals within a geographic area for the purpose
of providing commercial broadcasting of television or radio entertainment,
together with all property owned or used in connection with the entertainment
provided pursuant to, and all interests of such Person to receive revenues from
any other Person which derives revenues from or pursuant to, said licenses,
franchises and permits.
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SUBORDINATED DEBT DOCUMENTS. Collectively, the ACC 9 3/4% Subordinated
Indenture, the ACC 9 3/4% Subordinated Debentures, the Pledge and Escrow
Agreement, the ACC 11 1/2% Subordinated Indenture and the ACC 11 1/2%
Subordinated Debentures.
SUBSIDIARY. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
TOTAL COMMITMENT. The sum of the Commitments of the Banks, as in effect
from time to time.
VOTING STOCK. Stock or similar interests of any class or classes
(however designated) the holders of which are at the time entitled, as such
holders, to vote for the election of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency.
1.2 RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include such document
or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by Generally Accepted Accounting Principles applied on a
consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by Generally Accepted
Accounting Principles, which terms are defined in the Uniform Commercial Code
as in effect in Massachusetts, have the meanings assigned to them therein.
(h) Reference to a particular "" refers to that section of the agreement
in which such reference appears unless otherwise indicated.
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(i) The words "herein", "hereof", "hereunder" and words of like import
shall refer to the agreement in which they appear as a whole and not to any
particular section or subdivision of that agreement unless otherwise
specifically indicated.
(j) The Section references and defined terms set forth in parentheticals
at the end of certain definitions in 1.1 are intended for convenience of
reference only to cite to other sections of this Credit Agreement where such
terms are used and shall not define or limit the defined terms set forth in
1.1.
2. THE REVOLVING CREDIT FACILITY.
2.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth
in this Credit Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time
between the date of this Credit Agreement and the Maturity Date such sums as
requested by the Borrower up to a maximum aggregate principal amount
outstanding (after giving effect to all amounts then being requested) at any
one time equal to such Bank's Commitment, provided that the sum of the
outstanding amount of the Loans (after giving effect to all amounts then being
requested) shall not at any time exceed the Total Commitment, upon notice by
the Borrower to the Agent given in accordance with 2.5. The Loans shall be
made pro rata in accordance with each Bank's Commitment Percentage. Each
request for a Loan shall constitute a representation by the Borrower that the
conditions set forth in 9 and 10, in the case of the initial Loans to be made
on the Closing Date, and 10, in the case of all other Loans, have been
satisfied on the date of such request.
2.2. COMMITMENT FEE. The Borrower agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment
Percentages, a Commitment Fee calculated at the rate of three-eighths of
one-percent (3/8%) per annum on the average daily amount during each calendar
quarter or portion thereof from the Closing Date to the Maturity Date by which
the Total Commitment exceeds the outstanding amount of Loans during such
calendar quarter. The Commitment Fee shall be payable quarterly in arrears on
March 31, June 30, September 30 and December 31 in each calendar year,
commencing on the first such date following the date hereof, with a final
payment on the Maturity Date or any earlier date on which the Commitments shall
terminate.
2.3. Reduction of Commitments.
(a) Optional Reduction of Commitments. The Borrower shall have the
right at any time and from time to time upon two (2) Business Days' written
notice to the Agent to reduce by $500,000 or an integral multiple thereof or
terminate entirely the unborrowed portion of the Total Commitment, whereupon
the Commitments of the Banks shall be reduced pro rata in accordance with their
respective Commitment Percentages of the amount specified in such notice or,
as the case may be, terminated. Promptly after receiving any notice of the
Borrower
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delivered pursuant to this 2.3, the Agent will notify the Banks of the
substance thereof. No reduction of the Commitments of the Banks may be
reinstated.
(B) MANDATORY REDUCTION OF COMMITMENT. Simultaneously with any receipt
by the Borrower or any of its Subsidiaries of any Proceeds, the Total
Commitment shall be reduced by the amount of such Proceeds.
2.4. THE NOTES. The Loans shall be evidenced by separate promissory
notes of the Borrower in substantially the form of Exhibit A hereto (each a
"Note"), dated the Closing Date and completed with appropriate insertions. One
Note shall be payable to the order of each Bank in a face amount equal to such
Bank's Commitment. The Borrower irrevocably authorizes each Bank to make or
cause to be made, at or about the time of receipt of any payment of principal
on such Bank's Note, an appropriate notation reflecting such payment on the
Note Record attached to such Bank's Note. The outstanding amount of the Loans
set forth on such Note Record shall be prima facie evidence of the principal
amount thereof owing and unpaid to such Bank, but the failure to record, or any
error in so recording, any such amount on such Note Record shall not limit or
otherwise affect the obligations of the Borrower hereunder or under any Note
to make payments of principal of or interest on any Note when due.
2.5 REQUESTS FOR LOANS. The Borrower shall give to the Agent written
notice in the form of Exhibit B hereto (or telephonic notice confirmed in a
writing in the form of Exhibit B hereto) of each Loan requested hereunder (a
"Loan Request") no later than 11:00 a.m. (Boston time) at least two (2)
Eurodollar Business Days prior to the proposed Drawdown Date of any Loan. Each
such notice shall specify (i) the principal amount of the Loan requested, (ii)
the proposed Drawdown Date of such Loan, (iii) whether such Loan shall
initially be a Base Rate Loan or a Eurodollar Rate Loan and (iv) the Interest
Period for such Loan (if such Loan shall be a Eurodollar Rate Loan). Promptly
upon receipt of any such Loan Request, the Agent shall notify each of the Banks
of the substance thereof. Each Loan Request shall be irrevocable and binding
on the Borrower and shall obligate the Borrower to accept the Loan requested
from the Banks on the proposed Drawdown Date. Each Loan Request shall be in
a minimum amount of $1,000,000 or an integral multiple of $100,000 in excess
thereof.
2.6. FUNDS FOR LOANS.
(a) Not later than 11:00 a.m. (Boston time) on the proposed Drawdown
Date of any Loan, each of the Banks, severally, will make available to the
Agent, at its head office, in immediately available funds, the amount of such
Bank's Commitment Percentage of the amount of the requested Loan. Upon receipt
from each Bank of such amount, and upon receipt of the documents required by
9 and 10 and the satisfaction of the other conditions set forth therein, to the
extent applicable, the Agent will make the aggregate amount of such Loan
available to the Borrower. The failure or refusal of any Bank to make
available to the Agent at the aforesaid time on any Drawdown Date the amount
of its Commitment Percentage
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of the requested Loans shall not relieve any other Bank from its several
obligation hereunder to make available to the Agent the amount of its
Commitment Percentage of any requested Loan.
(b) The Agent may (unless notified to the contrary by any Bank prior to
a Drawdown Date) assume that each Bank has made available to the Agent on such
Drawdown Date the amount of such Bank's Commitment Percentage of the Loan to
be made on such Drawdown Date, and the Agent may (but it shall not be required
to), in reliance upon such assumption, make available to the Borrower a
corresponding amount. If any Bank makes available to the Agent such amount
advanced by the Agent on a date after such Drawdown Date, such Bank shall pay
to the Agent on demand an amount equal to the product of (i) the average,
computed for the period referred to in clause (iii) below, of the weighted
average interest rate paid by the Agent for federal funds acquired by the Agent
during each day included in such period, times (ii) the amount equal to such
Bank's Commitment Percentage of such Loan, times (iii) a fraction, the
numerator of which is the number of days that elapse from and including such
Drawdown Date to the date on which the amount of such Bank's Commitment
Percentage of such Loan shall become immediately available to the Agent, and
the denominator of which is three hundred and sixty-five (365). A statement
of the Agent submitted to any Bank with respect to any amounts owing under this
paragraph shall be prima facie evidence of the amount due and owing to the
Agent by such Bank. If the amount of such Bank's Commitment Percentage of such
Loan is not made available to the Agent by such Bank within three (3) Business
Days of such Drawdown Date, the Agent shall be entitled to recover such amount
from the Borrower on demand, with interest thereon at the rate per annum
applicable to the Loan made on such Drawdown Date.
2.7 MANDATORY REPAYMENTS AND PREPAYMENTS OF LOANS.
2.7.1 The Borrower promises to pay the outstanding amount of all Loans
on the Maturity Date.
2.7.2. If at any time the sum of the outstanding amount of the Loans
exceeds the Total Commitment, then the Borrower shall immediately repay
principal of the Loans in an amount equal to the amount of such excess.
2.7.3. Concurrently with the receipt by the Borrower or any of its
Subsidiaries of any Net Disposition Proceeds, Net Securities Proceeds, Net Debt
Proceeds, or Net Insurance Proceeds at any time while any Default or Event of
Default shall be continuing, the Borrower shall prepay principal of the Loans
in an amount equal to the amount of such Proceeds.
2.7.4. Each prepayment of the Loans pursuant to this 2.7 shall be
accompanied by the payment of accrued interest on principal of the Loans
prepaid, together with any amounts required by 3.3 in respect of such
prepayment. Each such prepayment shall be allocated among the Banks, in
proportion, as nearly as
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practicable, to the respective unpaid principal amount of each Bank's Note,
with adjustments to the extent practicable to equalize any prior repayments or
prepayments not exactly in proportion.
2.8 OPTIONAL REPAYMENTS OF LOANS. The Borrower shall have the right,
at its election, to repay the outstanding amount of any Loans, as a whole or
in part, at any time without penalty or premium; provided that in the case of
any full or partial prepayment of the outstanding amount of any Eurodollar Rate
Loans prior to the end of the Interest Period applicable thereto, the Borrower
shall be obligated to reimburse the Banks in respect thereof pursuant to 3.3.
The Borrower shall give the Agent at least two (2) Eurodollar Business Days'
notice of any proposed repayment of Loans, in each case specifying the proposed
date of repayment and the principal amount to be paid, which notice, if not in
writing, shall be promptly confirmed in writing. Each such partial payment of
Loans shall be in a minimum amount of $500,000 or an integral multiple of
$100,000 in excess thereof. Each repayment pursuant to this 2.8 shall be
accompanied by the payment of accrued interest on the principal repaid to the
date of payment. Each such partial repayment shall be allocated among the
Banks, in proportion, as nearly as practicable, to the respective unpaid
principal amount of each Bank's Note, with adjustments to the extent
practicable to equalize any prior repayments or prepayments not exactly in
proportion.
3. INTEREST; CERTAIN GENERAL PROVISIONS.
3.1. INTEREST ON LOANS; PAYMENT.
(A) EURODOLLAR RATE LOANS. Except as otherwise increased pursuant to
3.11 hereof, the outstanding amount of each Eurodollar Rate Loan shall bear
interest during each Interest Period relating thereto at a rate per annum equal
to the Eurodollar Rate determined for such Interest Period plus the Applicable
Margin in effect for such Interest Period. The Borrower absolutely and
unconditionally promises to pay interest on each Eurodollar Rate Loan in
arrears on each Interest Payment Date with respect thereto.
(B) BASE RATE LOANS. Except as otherwise increased pursuant to 3.11
hereof, the outstanding amount of each Base Rate Loan shall bear interest at
a rate per annum equal to the Base Rate in effect from time to time, plus the
Applicable Margin in effect from time to time. The Borrower absolutely and
unconditionally promises to pay interest on each Base Rate Loan in arrears on
each March 31, June 30, September 30 and December 31, and on the Maturity Date.
3.2. INTEREST PERIOD OPTIONS. Upon notice (a "Continuation or
Conversion Notice") given to the Agent no later than 11:00 a.m. (Boston time)
at least two (2) Eurodollar Business Days' prior to the expiration of an
Interest Period applicable to any Eurodollar Rate Loan, or the commencement of
any Interest Period for any Base Rate Loan to be converted to a Eurodollar Rate
Loan, the Borrower may elect to continue such Loan as a Eurodollar Rate Loan
upon the expiration of the then
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applicable Interest Period for another Interest Period of the duration
specified in such notice, or convert a Base Rate Loan to a Eurodollar Rate Loan
for the Interest Period specified in such notice; provided that no Eurodollar
Rate Loan may be continued, and no Base Rate Loan may be converted to a
Eurodollar Rate Loan, for an Interest Period in excess of seven (7) days when
any Default or Event of Default has occurred and is continuing; provided
further that the Eurodollar Rate Loan to which any particular Interest Period
applies shall be in an aggregate principal amount of at least $500,000 or an
integral multiple of $100,000 in excess thereof. Each continuation of a
Eurodollar Rate Loan hereunder, and each conversion of a Base Rate Loan to a
Eurodollar Rate Loan, shall be allocated between the Banks in proportion, as
nearly as practicable, to such Bank's Commitment Percentage, with adjustments
to the extent practicable to equalize any prior continuations not exactly in
proportion.
Any portion of the Loans for which the Borrower shall not have delivered
a timely Continuation or Conversion Notice in accordance with the terms hereof
shall be a Base Rate Loan upon the expiration of the current Interest Period
for such Loan, until such time as such Base Rate Loan is converted to a
Eurodollar Rate Loan in accordance with the terms hereof.
3.3. INDEMNITY. The Borrower agrees to indemnify each Bank and to hold
each Bank harmless from any loss or expense that such Bank may sustain or incur
as a consequence of (a) default by the Borrower in payment of the principal
amount of or interest on any Eurodollar Rate Loans, including any such loss or
expense arising from interest or fees payable by such Bank to lenders of funds
obtained by it in order to maintain Eurodollar Rate Loans, (b) default by the
Borrower in making a borrowing as a Eurodollar Rate Loan after the Borrower has
given (or is deemed to have given) a Loan Request or a Continuation or
Conversion Request in accordance with 2.5 or 3.2 other than as a result of a
default by any Bank, (c) the making of any payment of principal of any
Eurodollar Rate Loan on a day that is not the last day of the applicable
Interest Period with respect thereto, including interest or fees payable by any
Bank to lenders of funds obtained by it in order to maintain any such Loan, to
the extent not off-set by income derived from the redeployment of such funds
or (d) default by the Borrower in making any repayment of a Eurodollar Rate
Loan after the Borrower has given a notice in accordance with 2.8. This
covenant shall survive the termination of this Credit Agreement and payment in
full of the Obligations.
3.4. FUNDS FOR PAYMENTS. All payments of principal, interest, fees and
any other amounts due hereunder or under any of the other Loan Documents shall
be made by the Borrower to the Agent at the Agent's head office at 100 Federal
Street, Boston, Massachusetts 02110 or at such other location that the Agent
may from time to time designate, in each case in immediately available funds.
3.5. COMPUTATIONS. All computations of interest on the Loans and of
Commitment Fees shall be based on a 360 day year and twelve 30 day months and
paid for the actual number of days elapsed. Except as otherwise specifically
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provided herein, whenever a payment hereunder or under any of the other Loan
Documents becomes due on a day that is not a Business Day, the due date for
such payment shall be extended to the next succeeding Business Day, and
interest shall accrue during such extension. The outstanding amount of the
Loans as reflected on the Note Records from time to time shall be considered
conclusive and binding on the Borrower absent manifest error.
3.6. INABILITY TO DETERMINE EURODOLLAR RATE. In the event the Agent
shall determine that adequate and reasonable methods do not exist for
ascertaining the Eurodollar Rate that would otherwise determine the rate of
interest to be applicable during any Interest Period for any Eurodollar Rate
Loan, the Agent shall forthwith give notice by telecopier of such determination
(which shall be conclusive and binding on the Borrower) to the Borrower at
least one (1) Business Day before the first day of such Interest Period. In
such event, (a) any Loan Request for a Eurodollar Rate Loan or Continuation or
Conversion Request with respect to Eurodollar Rate Loans shall be automatically
withdrawn, (b) each Eurodollar Rate Loan will as of the last day of the then
current Interest Period be converted to a Base Rate Loan and (c) the
obligations of the Banks to make additional Eurodollar Rate Loans shall be
suspended until the Agent determines that the circumstances giving rise to such
suspension no longer exist, whereupon the Agent shall so notify the Borrower
and the Banks.
3.7. ILLEGALITY. Notwithstanding any other provisions herein, if any
introduction of or change in any law, regulation, treaty or directive or in the
interpretation or application thereof shall make it unlawful, or any central
bank or other governmental authority having jurisdiction over any Bank or its
Eurodollar Lending Office shall assert that it is unlawful, for such Bank or
its Eurodollar Lending Office to make or maintain Eurodollar Rate Loans, (a)
such Bank shall forthwith give notice by telecopier to the Borrower of such
circumstances, confirmed in writing (which notice shall be withdrawn by such
Bank when such Bank shall reasonably determine that it shall no longer be
illegal for such Bank or its Eurodollar Lending Office to make or maintain such
Loans), (b) the commitment of such Bank to make or maintain Eurodollar Rate
Loans shall forthwith be canceled and (c) such Bank's Loans then outstanding,
if any, shall be converted automatically on the next succeeding last day of
each Interest Period applicable to such Loans or within such earlier period as
may be required by law to Base Rate Loans. The Borrower agrees promptly to pay
the Agent for the account of each Bank, upon demand by the Agent, any
additional amounts necessary to compensate the Banks for any costs incurred by
the Banks in making any conversion in accordance with this 3.7, including any
interest or fees payable by the Banks to lenders of funds obtained by them in
order to make or maintain their Eurodollar Rate Loans (the Agent's written
notice of such costs, as certified to the Borrower, to be conclusive absent
manifest error).
3.8 ADDITIONAL COSTS, ETC. If any present or future applicable law, or
any change in any present or future applicable law, which expression, as used
herein, includes statutes, rules and regulations thereunder and interpretations
thereof by
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any competent court or by any governmental or other regulatory body or official
charged with the administration or the interpretation thereof and requests,
directives, instructions and notices at any time or from time to time hereafter
made upon or otherwise issued to any Bank by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall:
(a) subject any Bank to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature with respect to this Credit Agreement,
the other Loan Documents, such Bank's Commitment or the Loans advanced by such
Bank (other than taxes based upon or measured by the income or profits of such
Bank), or
(b) materially change the basis of taxation (except for changes in taxes
on income or profits) of payments to any Bank of the principal of or the
interest on any Loans or any other amounts payable to such Bank under this
Credit Agreement or the other Loan Documents, or
(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Credit Agreement) any special
deposit, reserve, assessment, liquidity, or other similar requirements against
assets held by, or deposits in or for the account of, or loans by, or
commitments of, or letters of credit issued by, an office of any Bank, or
(d) impose on any Bank any other conditions or requirements with respect
to this Credit Agreement, the other Loan Documents, the Loans, such Bank's
Commitment, or any class of loans or commitments of which any of the Loans or
such Bank's Commitment forms a part; and the result of any of the foregoing
is
(i) to increase the cost to any Bank of making, funding, issuing,
renewing, extending or maintaining the Loans or such Bank's Commitment,
or
(ii) to reduce the amount of principal, interest or other amounts
payable to such Bank hereunder on account of such Bank's Commitment or
the Loans, or
(iii) to require such Bank to make any payment or to forego any
interest or other sum payable hereunder, the amount of which payment or
foregone interest or other sum is calculated by reference to the gross
amount of any sum receivable or deemed received by such Bank from the
Borrower hereunder,
then, and in each such case, the Borrower will, upon written demand made by
such Bank at any time and from time to time and as often as the occasion
therefor may arise, pay to such Bank such additional amounts as will be
sufficient to compensate such Bank for such additional cost, reduction, payment
or foregone interest or other
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sum (after such Bank shall have allocated the
same fairly and equitably among all customers of any class generally affected
thereby); provided that in the event that such additional cost, reduction,
payment, or foregone interest or other sum which was incurred by such Bank is
subsequently returned or reimbursed to such Bank, such Bank shall return or
reimburse to the Borrower any additional amount paid pursuant to this 3.8 by
the Borrower to such Bank with respect thereto. In the event that any of the
foregoing events occur, each Bank will use its best efforts to take such
actions as are reasonably feasible and available to such Bank to decrease the
additional costs payable hereunder; provided that no Bank shall be required to
transfer any activities related to this Agreement to any jurisdiction in which
such Bank does not at such time regularly conduct ordinary banking operations.
Such Bank shall give the Borrower written notice of any event causing such
additional cost, reduction, payment or foregone interest or other sum within
ninety (90) days of the occurrence thereof and the Borrower shall not be liable
for any such costs incurred prior to the date which is ninety (90) days prior
to the date of such notice.
3.9. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to 3.8 and the changes as a result of which such amounts are
due and the computations in reasonable detail pursuant to which such amounts
were calculated, submitted by any Bank to the Borrower, shall be conclusive
absent manifest error. Upon delivery of a notice to such Bank no more than
thirty Business Days after receipt of such certificate, the Borrower shall have
reasonable opportunity to review and discuss such computations with a
responsible officer at such Bank.
3.10. CAPITAL ADEQUACY. If any present or future, or any change in any
present or future, law, governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law) or the interpretation
thereof by a court or governmental authority with appropriate jurisdiction
affects the amount of capital required or expected to be maintained by any Bank
or any corporation controlling such Bank and such Bank determines that the
amount of capital required to be maintained by it or such corporation is
increased by or based upon the existence of its Commitment or the Loans made
pursuant hereto, then such Bank may notify the Borrower of such fact. To the
extent that the costs of such increased capital requirements are not reflected
in the rates of interest payable hereunder, the Borrower and such Bank shall
thereafter attempt to negotiate in good faith, within thirty (30) days of the
day on which the Borrower receives such notice, an adjustment payable hereunder
that will adequately compensate such Bank in light of these circumstances. If
the Borrower and such Bank are unable to agree to such adjustment within thirty
(30) days of the date on which the Borrower receives such notice, then
commencing on the date of such notice (but not earlier than the effective date
of any such increased capital requirement), the fees payable hereunder shall
increase by an amount that will, in such Bank's reasonable determination,
provide adequate compensation to such Bank, such amount to be conclusive and
binding on the Borrower, absent manifest error. Each Bank shall allocate such
cost increases among its customers in good faith and on an equitable basis.
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3.11. INTEREST ON OVERDUE AMOUNTS. Overdue principal and (to the extent
permitted by applicable law) interest on the Loans and all other overdue
amounts payable hereunder or under any of the other Loan Documents shall bear
interest compounded daily and payable on demand at a rate per annum which is
two percent (2%) above the highest per annum interest rate otherwise applicable
to the Loans, until such amount shall be paid in full (after as well as before
judgment).
4. SECURITY. The Obligations shall be secured by a perfected first
priority security interest in all of the outstanding capital stock of the
Borrower and its Subsidiaries, whether now owned or hereafter acquired,
pursuant to the terms of the Pledge Agreement, or, with respect to the
Majority-Owned Subsidiaries, all of the outstanding capital stock of such
Subsidiary owned by the Borrower or any of its Subsidiaries.
5. REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants
to the Banks as follows:
5.1. CORPORATE AUTHORITY.
(A) INCORPORATION; GOOD STANDING. Each of the Borrower and its
Subsidiaries (i) is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation, (ii) has all requisite
corporate power and authority and legal right to own and operate its property,
to lease the property it operates as lessee and to conduct its business as now
conducted and as presently contemplated, and (iii) is in good standing as a
foreign corporation and is duly authorized to do business in each jurisdiction
where such qualification is necessary except where (x) a failure to be so
qualified would not have a materially adverse effect on the business, assets
or financial condition of the Borrower or the Borrower and its Subsidiaries,
taken as a whole or the Borrower's ability to perform the Obligations or (y)
the Borrower or such Subsidiary has applied for qualification to do business
in such jurisdiction and such application is pending.
(B) AUTHORIZATION. The execution, delivery and performance of this
Credit Agreement and the other Loan Documents to which the Borrower or any of
its Subsidiaries is or is to become a party and the transactions contemplated
hereby and thereby (i) are within the corporate authority and legal right of
the Borrower and its Subsidiaries, (ii) have been duly authorized by all
necessary corporate proceedings, (iii) do not conflict with or result in any
breach or contravention of any provision of law, statute, rule or regulation
to which the Borrower or any of its Subsidiaries is subject or any judgment,
order, writ, injunction, license or permit applicable to the Borrower or any
of its Subsidiaries which would have a materially adverse effect on the
business, assets or financial condition of the Borrower or the Borrower and its
Subsidiaries, taken as a whole and (iv) do not conflict with any provision of
the corporate charter or bylaws of, or any agreement or other instrument
binding upon, the Borrower or any of its Subsidiaries.
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(C) ENFORCEABILITY. The execution and delivery of this Credit Agreement
and the other Loan Documents to which the Borrower or any of its Subsidiaries
is or is to become a party will result in valid and legally binding obligations
of the Borrower and each such Subsidiary enforceable in accordance with the
respective terms and provisions hereof and thereof, except as enforceability
is limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors' rights and
except to the extent that availability of the remedy of specific performance
or injunctive relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
5.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance
by the Borrower and its Subsidiaries of this Credit Agreement and the other
Loan Documents to which the Borrower or any such Subsidiary is or is to become
a party and the transactions contemplated hereby and thereby do not require the
Borrower or any of its Subsidiaries to obtain the approval or consent of, to
make a filing with, or to perform or obtain the performance of any other act
by or in respect of any governmental agency or authority other than those
already obtained or performed, and except that the exercise of certain rights
under the Loan Documents may require the consent of the FCC.
5.3. TITLE TO PROPERTIES; LEASES. Other than as noted on the audited
consolidated financial statements of the Borrower and its Subsidiaries as at
the Balance Sheet Date, the Borrower and its Subsidiaries own all of the assets
reflected in the consolidated balance sheet of the Borrower and its
Subsidiaries as at the Balance Sheet Date or acquired since that date (except
property and assets sold or otherwise disposed of in the ordinary course of
business since that date and except for defects of title to certain real
property which do not materially impair the value or usefulness thereof),
subject to no rights of others, including any mortgages, leases, conditional
sales agreements, title retention agreements, liens or other encumbrances,
except for liens which do not in the aggregate have a material adverse effect
on the assets, financial condition or business of the Borrower and its
Subsidiaries, taken as a whole. The Borrower and its Subsidiaries enjoy
peaceful and undisturbed possession under all leases under which they are
operating, and all said leases are valid and subsisting and in full force and
effect except to the extent that the failure to enjoy peaceful and undisturbed
possession of such lease or the failure of such lease to be valid, subsisting
and in full force and effect does not have a material adverse effect on the
assets, financial condition or business of the Borrower and its Subsidiaries,
taken as a whole.
5.4. FINANCIAL STATEMENTS AND PROJECTIONS.
5.4.1. FINANCIAL STATEMENTS. There has been furnished to each of the
Banks a consolidated balance sheet of the Borrower and its Subsidiaries as at
the Balance Sheet Date, and related consolidated statements of income, retained
earnings and cash flow for the fiscal year then ended, certified by Price
Waterhouse LLP, the Borrower's independent certified public accountants. Such
balance sheet and statements of income, retained earnings and cash flow have
been prepared in
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accordance with Generally Accepted Accounting Principles consistently applied
and are correct and complete and fairly present the financial condition of the
Borrower and its Subsidiaries (to the extent owned on the date thereof) as at
the close of business on the date thereof and the consolidated results of
operations for the fiscal year then ended. There are no contingent liabilities
of the Borrower or any of its Subsidiaries as of such date involving material
amounts, known to the officers of the Borrower and not disclosed in said
balance sheet and the related notes thereto.
5.4.2. PROJECTIONS. The projections delivered to the Banks, dated
September 30, 1995, of the annual operating budgets and operating cash flow of
the Borrower and its Subsidiaries on a consolidated and consolidating basis,
for the 1996 to 2001 fiscal years (the "Projections"), disclose all assumptions
made with respect to general economic, financial and market conditions used in
formulating the Projections. To the knowledge of the Borrower or any of its
Subsidiaries, no facts exist that (individually or in the aggregate) would
result in any material change in any of the Projections. The Projections are
based upon reasonable estimates and assumptions, have been prepared on the
basis of the assumptions stated therein and reflect the reasonable estimates
of the Borrower and its Subsidiaries of the results of operations and other
information projected therein.
5.5. NO MATERIAL CHANGES, ETC. Since the Balance Sheet Date there has
occurred no materially adverse change in the financial condition or business
of the Borrower and its Subsidiaries as shown on or reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries as at the
Balance Sheet Date, or the related consolidated statements of income, retained
earnings or cash flow for the fiscal year then ended, other than changes in the
ordinary course of business that have not had any materially adverse effect
either individually or in the aggregate on the business or financial condition
of the Borrower and its Subsidiaries, taken as a whole.
5.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of the Borrower and its
Subsidiaries, respectively, possesses or has a valid right to use all material
franchises, patents, copyrights, inventions, technology, trademark
registrations, trademarks, trade names, trade secrets, service marks, FCC
Licenses, other licenses and permits, and rights in respect of the foregoing
and, to the best of its knowledge, patent and trademark applications and rights
in respect thereto (collectively, the "Proprietary Rights"), adequate for the
conduct of its business substantially as now conducted without known conflict
with any rights of others which could affect or impair in a material manner the
business or assets of the Borrower and its Subsidiaries, taken as a whole.
Except as disclosed in the financial statements referred to in 4.4 hereof, the
Borrower is not aware of any existing or threatened infringement or
misappropriation of (a) any Proprietary Rights of others by the Borrower or any
of its Subsidiaries or (b) any Proprietary Rights of the Borrower or any of its
Subsidiaries by others, in any way which might materially adversely affect the
business, assets or condition, financial or otherwise, of the Borrower and its
Subsidiaries, taken as a whole.
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5.7. NO LITIGATION. Except as set forth on Schedule 5.7, as of the date
hereof, there are no actions, suits, proceedings or investigations of any kind
pending or, to the Borrower's knowledge, threatened against the Borrower or any
of its Subsidiaries before any court, tribunal or administrative agency or
board that, if adversely determined are reasonably likely to in the aggregate,
materially adversely affect the properties, assets, financial condition or
business of the Borrower and its Subsidiaries, taken as a whole or materially
impair the right of the Borrower and its Subsidiaries, taken as a whole, to
carry on business substantially as now conducted by them, or result in any
substantial liability not adequately covered by insurance, or for which
adequate reserves are not maintained on the consolidated balance sheet of the
Borrower, or which question the validity of this Credit Agreement or any of the
other Loan Documents, or any action taken or to be taken pursuant hereto or
thereto. As of the date hereof, there are no final judgments against the
Borrower or any of its Subsidiaries that, with other outstanding final
judgments, undischarged and not covered by insurance, exceeds in the aggregate
$500,000.
5.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Borrower nor
any of its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has or,
to the Borrower's knowledge, is expected in the future to have a materially
adverse effect on the business, assets or financial condition of the Borrower
and its Subsidiaries, taken as a whole. Neither the Borrower nor any of its
Subsidiaries is a party to any contract or agreement that has or, to the best
of the Borrower's knowledge, is expected, in the judgment of the Borrower's
officers, to have any materially adverse effect on the business of the Borrower
and its Subsidiaries, taken as a whole.
5.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither the Borrower
nor any of its Subsidiaries is in violation of any provision of its charter
documents, bylaws, or any agreement or instrument to which it is subject or by
which it or any of its properties are bound or any decree, order, judgment,
statute, license, rule or regulation, in any of the foregoing cases in a manner
that are reasonably likely to result in the imposition of substantial penalties
or materially and adversely affect the financial condition, properties or
business of the Borrower and its Subsidiaries, taken as a whole or the
Borrower's ability to perform the Obligations.
5.10. TAX STATUS. The Borrower and, to the best of the Borrower's
knowledge, its Subsidiaries have (a) made or filed all federal and state income
and all other material tax returns, reports and declarations required by any
jurisdiction to which any of them is subject or properly filed for and received
extensions with respect thereto which are still in full force and effect and
which have been fully complied with in all material respects, (b) paid all
taxes and other governmental assessments and charges shown or determined to be
due on such returns, reports and declarations, except those being contested in
good faith by appropriate proceedings and for which adequate reserves, to the
extent required by Generally Accepted Accounting Principles, have been
established and (c) set aside on their books provisions reasonably adequate for
the payment of all estimated taxes for
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periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of the
Borrower know of no basis for any such claim.
5.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred
and is continuing.
5.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the Borrower
nor any of its Subsidiaries is a "holding company", or a "subsidiary company"
of a "holding company", or an affiliate" of a "holding company", as such terms
are defined in the Public Utility Holding Company Act of 1935; nor is it a
"registered investment company", or an "affiliated company" or a "principal
underwriter" of a "registered investment company", as such terms are defined
in the Investment Company Act of 1940.
5.13. CERTAIN TRANSACTIONS. Except for arm's length transactions
pursuant to which the Borrower makes payments in the ordinary course of
business upon terms no less favorable than the Borrower could obtain from third
parties and transactions described in any of clauses (1) through (6) of the
last sentence of Section 4.11 of the ACC 9 3/4% Subordinated Indenture as in
effect on the date hereof, none of the officers, directors or other key
employees of the Borrower or any of its Subsidiaries is presently a party to
any transaction with the Borrower or any of its Subsidiaries (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such key employee or,
to the knowledge of the Borrower, any corporation, partnership, trust or other
entity in which any officer, director, or any such key employee has a
substantial interest or is an officer, director, trustee or partner.
5.14. ERISA COMPLIANCE.
(A) IN GENERAL. To the best of the Borrower's knowledge, the Borrower
and its Subsidiaries have complied in all material respects with provisions of
the Code, to the extent applicable, and of ERISA relevant to the Borrower's
Pension Plans (as defined in 3(2) of ERISA), including the provisions thereof
respecting funding requirements for, and the termination of, such plans and
respecting prohibited transactions thereunder, and the funding of any
Guaranteed Pension Plan complies with the minimum funding standards of 412 of
the Internal Revenue Code.
(B) GUARANTEED PENSION PLANS. Each contribution required to be made to
a Guaranteed Pension Plan, whether required to be made to avoid the incurrence
of an accumulated funding deficiency, the notice or lien provisions of 302(f)
of ERISA, or otherwise, has been timely made. No waiver of an accumulated
funding deficiency or extension of amortization periods has been received with
respect to any
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Guaranteed Pension Plan. No liability to the PBGC (other than required
insurance premiums, all of which have been paid) has been incurred by the
Borrowers or any ERISA Affiliate with respect to any Guaranteed Pension Plan
and there has not been any ERISA Reportable Event, or any other event or
condition which presents a material risk of termination of any Guaranteed
Pension Plan by the PBGC. Based on the latest valuation of each Guaranteed
Pension Plan (which in each case occurred within twelve months of the date of
this representation), and except as disclosed on Schedule 5.14 attached hereto,
the current value of all accrued benefits under each of such plans did not, as
of the latest valuation date, exceed the then current value of the assets of
such plans allocable to such accrued benefits based upon the actuarial methods
and assumptions used for such plans.
(C) MULTIEMPLOYER PLANS. Neither the Borrower nor any ERISA Affiliate
has incurred any material liability (including secondary liability) to any
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan under 4201 of ERISA or as a result of a sale of assets
described in 4204 of ERISA. Neither the Borrower nor any ERISA Affiliate has
been notified that any Multiemployer Plan is in reorganization or insolvent
under and within the meaning of 4241 or 4245 of ERISA or that any Multiemployer
Plan intends to terminate or has been terminated under 4041A of ERISA.
5.15. PURPOSE CREDIT.
(a) The Borrower has not engaged principally or as one of its important
activities in the business of extending credit for the purpose of "purchasing"
or "carrying" any "margin stock" within the respective meanings of each of the
quoted terms under Regulation U of the Board of Governors of the Federal
Reserve System.
(b) The Borrower shall not, directly or indirectly, apply any part of
the proceeds of the Notes for the purpose of or in connection with the
Borrower's broker-dealer activities, if any, within the meaning of Regulation
T of the Federal Reserve Board (Title 12, Part 220, Code of Federal
Regulations, as amended) or any published regulations, interpretations or
rulings thereunder.
(c) The issuance of the Notes and the application of the proceeds
thereof by the Borrower will not contravene Regulation X of the Federal Reserve
Board (Title 12, Part 224, Code of Federal Regulations, as amended) or any
published regulations, interpretations or rulings thereunder.
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5.16 ENVIRONMENTAL COMPLIANCE. Except as set forth on Schedule 5.16,
(a) The Borrower has no actual knowledge that any operator of the Real
Estate, has violated, or is alleged to have violated, any judgment, decree,
order, law, license, rule or regulation pertaining to environmental matters
(hereinafter "Environmental Laws"), which violation would have a material
adverse effect on the environment or the business, assets or financial
condition of the Borrower or any of its Subsidiaries, taken as a whole.
(b) Neither the Borrower nor any of its Subsidiaries has received notice
from any third party including, without limitation, any federal, state or local
governmental authority, (i) that any one of them has been identified by the
United States Environmental Protection Agency ("EPA") as a potentially
responsible party under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 ("CERCLA") with respect to a site listed on the
National Priorities List, 40 C.F.R. Part 300 Appendix B; (ii) that any
hazardous waste, as defined by 42 U.S.C. 6903(5), any hazardous substances as
defined by 42 U.S.C. 9601(14), any pollutant or contaminant as defined by 42
U.S.C. 9601(33) and any toxic substances, oil or hazardous materials or other
chemicals or substances regulated by any Environmental Laws (hereinafter
"Hazardous Substances") which any one of them has generated, transported or
disposed of has been found at any site at which a federal, state or local
agency or other third party has conducted or has ordered that the Borrower or
any of its Subsidiaries conduct a remedial investigation, removal or other
response action pursuant to any Environmental Law; or (iii) that it is or shall
be a named party to any claim, action, cause of action, complaint, or legal or
administrative proceeding (in each case, contingent or otherwise) arising out
of any third party's incurrence of costs, expenses, losses or damages of any
kind whatsoever in connection with the release of Hazardous Substances.
(c) Neither the Borrower nor any of its Subsidiaries are subject to any
applicable environmental law requiring the performance of Hazardous Substances
site assessments, or the removal or remediation of Hazardous Substances, or the
giving of notice to any governmental agency or the recording or delivery to
other Persons of an environmental disclosure document or statement by virtue
of the transactions set forth herein and contemplated hereby or to the
effectiveness of any other transactions contemplated hereby.
5.17. COMPLIANCE WITH FAIR LABOR STANDARDS ACT. To the best of the
Borrower's knowledge, the Borrower has at all times operated its business in
compliance with all applicable provisions of the Fair Labor Standards Act of
1938 (29 U.S.C. 106 and 207) except to the extent that the Borrower's failure
to comply therewith would not have a material adverse affect on the business,
assets or condition, financial or otherwise, of the Borrower and its
Subsidiaries, taken as a whole. To the best of the Borrower's knowledge, none
of the Borrower's inventory has been produced by employees who are or were
employed in violation of the
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minimum wage or maximum hour provisions of such Act or any regulations
thereunder.
5.18. CAPITAL STRUCTURE. Attached hereto as Schedule 5.18 is a schedule
showing with respect to the Borrower and each Subsidiary of the Borrower (i)
the jurisdiction in which it is organized, and (ii) the classes and number of
authorized and outstanding shares of capital stock of the Borrower and each
such Subsidiary, and the owner of such outstanding shares of capital stock.
All of the outstanding capital stock of the Borrower and each Subsidiary of the
Borrower has been duly authorized and issued and is fully-paid and
non-assessable; and, except as indicated in Schedule 5.18, free and clear of
any pledge, charge, lien, security interest or other encumbrance or restriction
on transfer.
5.19. DISCLOSURE. No representation or warranty made by the Borrower
in any of the Loan Documents or in any other document furnished from time to
time in connection herewith or therewith, contains any misrepresentation of a
material fact or omits to state any material fact necessary to make the
statements herein or therein not misleading. There is no fact known to the
Borrower that materially adversely affects, or that might reasonably be
expected to materially adversely affect, the business, property or financial
condition of the Borrower and its Subsidiaries on a consolidated basis.
5.20. LICENSES AND APPROVALS.
(a) Except as set forth on Schedule 5.20, each of the Borrower and its
Subsidiaries has all requisite power and authority and necessary licenses,
permits and approvals, including all FCC Licenses, to hold the FCC Licenses and
to own and operate its Stations and to carry on its businesses as now
conducted.
(b) Set forth in Schedule 5.20 is a complete list and brief description
of all FCC Licenses of the Borrower and its Subsidiaries and the dates on which
such FCC Licenses expire. Each such FCC License which is necessary to the
operation of the business of the Borrower or any of its Subsidiaries is validly
issued and in full force and effect. The Borrower and each of its Subsidiaries
has fulfilled and performed all of its obligations with respect to each such
FCC License. No event has occurred which: (i) has resulted in, or after notice
or lapse of time or both would result in, revocation or termination of any FCC
License, or (ii) materially and adversely affects or in the future may
materially adversely affect any of the rights of the Borrower or any of its
Subsidiaries thereunder. No license or franchise, other than the FCC Licenses
described in Schedule 5.20, is necessary, as of the date hereof, for the
operation of the business (including the Stations) of the Borrower or any of
its Subsidiaries as now conducted.
(c) As of the date hereof, none of the Borrower or any of its
Subsidiaries is a party to or has knowledge of any investigation, notice of
violation, order or complaint issued by or before any governmental authority,
including the FCC, or of any other proceedings (other than proceedings relating
to the radio broadcasting
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industry generally) which could in any manner threaten or adversely affect the
validity or continued effectiveness of the FCC Licenses of the Borrower or any
of its Subsidiaries or the business of the Borrower or any of its Subsidiaries.
None of the Borrower or any of its Subsidiaries has reason to believe that any
of the FCC Licenses described in Schedule 5.20 will not be renewed in the
ordinary course. As of the date hereof, each of the Borrower and its
Subsidiaries has filed all material reports, applications, documents,
instruments and information required to be filed by it pursuant to applicable
rules and regulations or requests of every regulatory body having jurisdiction
over any of its FCC Licenses or the activities of such Person with respect
thereto.
5.21. SENIOR DEBT. The Obligations constitute "Senior Debt", as such
term is defined under the ACC 9 3/4% Subordinated Indenture and the ACC 11 1/2%
Subordinated Indenture.
6. AFFIRMATIVE COVENANTS OF THE BORROWER. The Borrower covenants and
agrees that, so long as any Loan or Note is outstanding or any Bank has any
obligation to make any Loans hereunder:
6.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or
cause to be paid the principal and interest on the Loans and the Commitment
Fee, all in accordance with the terms of this Credit Agreement and the Notes.
6.2. Maintenance of Office. The Borrower will maintain its chief
executive office in Washington, D.C. or at such other place in the United
States of America as the Borrower shall designate upon written notice to the
Agent, where notices, presentations and demands to or upon the Borrower in
respect of the Loan Documents may be given or made.
6.3. RECORDS AND ACCOUNTS. The Borrower will (a) keep, and cause each
of its Subsidiaries to keep, true and accurate records and books of account in
which full, true and correct entries will be made in accordance with Generally
Accepted Accounting Principles and (b) maintain adequate accounts and reserves
for all taxes (including income taxes), depreciation, depletion, obsolescence
and amortization of its properties and the properties of its Subsidiaries,
contingencies, and other reserves, in accordance with Generally Accepted
Accounting Principals.
6.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrower
will deliver to the Agent and each of the Banks:
(a) as soon as practicable, but in any event not later than ninety-five
(95) days after the end of each fiscal year of the Borrower, the consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such year,
and the related consolidated statements of income, retained earnings and cash
flows for such year, each setting forth in comparative form the figures for the
previous fiscal year and all such consolidated statements to be in reasonable
detail, prepared in accordance with Generally Accepted Accounting Principles,
and certified without material
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qualification as to any circumstance with could reasonably be expected to have
a material adverse effect on the Borrower and its Subsidiaries, taken as a
whole, by independent public accountants of nationally recognized standing
selected by the Borrower, together with a written statement from such
accountants to the effect that they have read a copy of this Credit Agreement,
and that, in making the examination necessary to said certification, they have
obtained no knowledge of any Default or Event of Default, or, if such
accountants shall have obtained knowledge of any then existing Default or Event
of Default they shall disclose in such statement any such Default or Event of
Default; provided that such accountants shall not be liable to the Banks for
failure to obtain knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than fifty (50)
days after the end of each of the first three fiscal quarters in each of the
Borrower's fiscal years, copies of the unaudited consolidated balance sheet of
the Borrower and its Subsidiaries as at the end of such quarter, and the
related consolidated statements of income and cash flows for such quarter and
the portion of the Borrower's fiscal year then elapsed, together with
comparative consolidated figures for the same periods of the preceding year,
all in reasonable detail and prepared in accordance with Generally Accepted
Accounting Principles and accompanied by a certificate of the principal
financial officer of the Borrower stating that the information contained in
such financial statements is correct and complete and fairly presents the
financial position of the Borrower and its Subsidiaries on the date thereof and
the results of their operations for the periods covered thereby (subject to the
absence of footnotes and any year-end adjustments);
(c) within 120 days after the end of each fiscal year of the Borrower,
and within 60 days after the end of each of the first three fiscal quarters in
each fiscal year of the Borrower, a statement certified by the principal
financial officer of the Borrower in substantially the form of Exhibit C hereto
and setting forth in reasonable detail computations evidencing compliance with
the covenants contained in 8.1, 8.2 and 8.3 as at the end of the period covered
by the financial statements referred to in subsections (a) and (b) above, for
such fiscal year or fiscal quarter, as applicable, or during such period as may
be required, and (if applicable) reconciliations to reflect changes in
Generally Accepted Accounting Principles since the Balance Sheet Date (each a
"Compliance Certificate");
(d) contemporaneously with the filing or mailing thereof, copies of all
material of a financial nature filed with the Securities and Exchange
Commission or sent to the stockholders of the Borrower or any holder of the
Borrower's Funded Debt;
(e) no later than thirty (30) days after the beginning of each fiscal
year of the Borrower, the Borrower's consolidated financial projections for
each such fiscal year prepared on a quarterly basis, including projections of
revenues, expenses and operating cash flow, together with a statement of
reasonable assumptions made by the Borrower in preparing such projections and
explanations attached thereto;
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(f) from time to time upon request of the Agent, projections of the
Borrower and its Subsidiaries updating the Projections or, if applicable,
updating any later such projections delivered in response to a request pursuant
to this 6.4(f);
(g) promptly upon the request of the Agent, all quarterly Arbitron
audience surveys and other ratings reports prepared by Arbitron Rating Company
with respect to the Stations owned or operated by the Borrower or any of its
Subsidiaries that relate to the most recent "twelve plus" Arbitron ratings for
each such Station and the most recent ratings for each such Station's target
demographics;
(h) promptly upon request by the Agent or any Bank, all detailed audits
or reports submitted to the Borrower or any of its Subsidiaries by independent
public accountants in connection with any annual or interim audits of the books
of the Borrower or any Subsidiary; and
(i) from time to time upon request by the Agent or any Bank, such other
financial data, information or other documents (including, without limitation,
accountants management letters and such other information regarding the
business and affairs and condition, financial and other, of the Borrower, its
Subsidiaries and their respective properties) as the Agent or any Bank may
reasonably request, subject to the confidentiality provisions set forth in 27
hereof.
6.5. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. The Borrower will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence, material rights, franchises and Proprietary
Rights and those of its Subsidiaries except to the extent that the Borrower's
failure to do so will not have a materially adverse effect on the assets,
financial condition or business of the Borrower and its Subsidiaries, taken as
a whole. It (a) will cause all of its material properties and those of its
Subsidiaries used or useful in the conduct of its business or the business of
its Subsidiaries to be maintained and kept in good condition, repair and
working order and supplied with all reasonably necessary equipment, (b) will
cause to be made all reasonably necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Borrower
may be necessary so that the business carried on in connection therewith may
be properly and advantageously conducted at all times, and (c) will, and will
cause each of its Subsidiaries to, continue to engage primarily in the
businesses now conducted by them and in related businesses; provided that
nothing in this 6.5 shall prevent the Borrower from discontinuing the operation
and maintenance of any of its properties or those of its Subsidiaries if such
discontinuance is, in the sole judgment of the Borrower, desirable in the
conduct of its or their business and that do not in the aggregate materially
adversely affect the business of the Borrower and its Subsidiaries on a
consolidated basis.
6.6. INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its insurable properties and business against such
casualties and contingencies
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as shall be in accordance with the general practices of businesses engaged in
similar activities in similar geographic areas and in amounts, containing such
terms, in such forms and for such periods as may be reasonably satisfactory to
the Agent; provided, however, that the Borrower and any Subsidiary may
self-insure for physical damage to automobiles, welfare benefits and against
liability to workers in any state or jurisdiction, or may effect worker's
compensation insurance therein through an insurance fund operated by such state
or jurisdiction; and provided, further, that notwithstanding anything to the
contrary contained herein, the Borrower or such Subsidiary will keep its assets
which are of an insurable character insured by financially sound and reputable
insurers against loss or damage by fire or explosion in amounts sufficient to
prevent the Borrower or such Subsidiary from becoming a co-insurer and not in
any event less than eighty percent (80%) of the full insurable value of the
property insured.
6.7. TAXES; ETC. The Borrower will, and will cause each of its
Subsidiaries to, (a) duly pay and discharge, or cause to be paid and
discharged, before the same shall become overdue or (b) properly file for and
receive extensions for such payment and duly pay and discharge, or cause to be
paid and discharged, within such extension period, all taxes, assessments and
other governmental charges (other than taxes, assessments and other
governmental charges that in the aggregate are not material to the business or
assets of the Borrower on an individual basis or of the Borrower and its
Subsidiaries on a consolidated basis) imposed upon it and its real properties,
sales and activities, or any part thereof, or upon the income or profits
therefrom, as well as all claims for labor, materials, or supplies that if
unpaid might by law become a lien or charge upon any of its property; provided
that any such tax, assessment, charge, levy or claim need not be paid if the
validity or amount thereof shall currently be contested in good faith by
appropriate proceedings and if the Borrower or such Subsidiary shall have set
aside on its books adequate reserves with respect thereto; and provided further
that the Borrower and each Subsidiary of the Borrower will pay all such taxes,
assessments, charges, levies or claims forthwith upon the commencement of
proceedings to foreclose any lien that may have attached as security therefor.
6.8. INSPECTION OF PROPERTIES AND BOOKS. The Borrower shall permit the
Agent to visit and inspect any of the properties of the Borrower or any of its
Subsidiaries, to examine the books of account of the Borrower and its
Subsidiaries (and to make copies thereof and extracts therefrom), and to
discuss the affairs, finances and accounts of the Borrower and its Subsidiaries
with, and to be advised as to the same by, its and their officers, employees
and independent public accountants (such accountants being hereby authorized
by the Borrower to so discuss and advise) all at such reasonable times and
intervals as the Agent may reasonably request; provided, that (i) the Agent
shall give the Borrower reasonable notice prior to any such visit, inspection,
examination or discussion, and (ii) if the Borrower requests, all such
discussions with the Borrower's independent public accountants shall be in the
presence of one or more officers of the Borrower. In connection with any such
inspections or discussions, the Agent and each Bank will treat all non-public
information as confidential information, and take all reasonable
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precautions to prevent such confidential information from being exposed to
third parties and to those of its employees and representatives who do not need
to know such confidential information; provided that this 6.8 shall not affect
the disclosure by the Agent or any Bank of information required to be disclosed
to its auditors, regulatory agencies or pursuant to subpoena or other legal
process or by virtue of any other law, regulation, order or interpretation.
6.9. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. The
Borrower will, and will cause each of its Subsidiaries to,
(a) Comply with (i) all Applicable Laws, including all Environmental
Laws, which may be in effect from time to time, (ii) the provisions of its
charter documents and by-laws, (iii) all agreements and instruments by which
it or any of its properties or business may be bound and (iv) all applicable
decrees, orders, and judgments; if in each such case failure to comply would
have a materially adverse effect on the Borrower and its Subsidiaries, taken
as a whole. If at any time any authorization, consent, approval, permit or
license from any Governmental Authority shall become necessary or required in
order that the Borrower may fulfill any of the Obligations, the Borrower will
promptly take or cause to be taken all reasonable steps within the power of the
Borrower to obtain such authorization, consent, approval, permit or license and
furnish the Agent with evidence thereof;
(b) Obtain all such Approvals and take all such other action with
respect to any Governmental Authority as may be required for the execution,
delivery or performance of this Credit Agreement and the other Loan Documents,
and duly perform and comply with all of the terms and conditions of all
Approvals so obtained;
(c) Operate its Stations in accordance and in compliance in all material
respects with the Communications Act, file in a timely manner all necessary
applications for renewal of all FCC Licenses that are material to the operation
of its Stations, and use its best efforts to defend any proceedings which could
result in the termination, forfeiture or non-renewal of any such FCC License;
and
(d) Promptly furnish or cause to be furnished to the Agent:
(i) a copy of any order or notice of any Communications Regulatory
Authority which designates any of its FCC Licenses for a hearing or which
refuses renewal or extension thereof, or revokes or suspends its
authority to operate a Station;
(ii) a copy of any competing application filed with respect to any
of its franchises, licenses (including FCC Licenses), rights, permits,
consents or other authorizations pursuant to which it operates any
Station;
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(iii)a copy of any citation, notice of violation or order to show
cause issued by any Communications Regulatory Authority in relation to
any of its Stations; and
(iv) a copy of any notice or application by it requesting authority
to cease broadcasting on any Station or to cease operating any Station
for any period in excess of five (5) days.
6.10. PENSION PLANS. The Borrower and any ERISA Affiliate shall:
(a) promptly after the Borrower or any ERISA Affiliate knows or has
reason to know that any ERISA Reportable Event has occurred, notify the Agent
that such ERISA Reportable Event has occurred.
(b) promptly upon request make available to each Bank at the Borrower's
principal place of business a copy of (i) any actuarial statement related to
any pension plan required to be submitted under 103(d) of ERISA or (ii) any
notice, report or demand sent or received by a pension plan under 4065 of
ERISA;
(c) furnish to each Bank forthwith, a copy of (i) any notice of a
pension plan termination sent to the PBGC under 4041(a) of ERISA and (ii) any
notice, report or demand sent or received by a pension plan under 4041, 4042,
4043, 4063, 4066 or 4068 of ERISA; and
(d) furnish to each Bank a copy of any request for waiver from the
funding standards or extension of the amortization periods required by 412 of
the Code no later than the date on which the request is submitted to the
Department of Labor or the Internal Revenue Service, as the case may be.
6.11. FURTHER ASSURANCES. The Borrower will cooperate with the Banks
and the Agent and execute such further instruments and documents as the Banks
or the Agent shall reasonably request to carry out to their satisfaction the
transactions contemplated by this Credit Agreement and the other Loan
Documents.
6.12. NOTICES.
(a) The Borrower will promptly notify the Agent and each of the Banks
in writing of the occurrence of any Default or Event of Default. If any Person
shall give any notice or take any other action in respect of a claimed default
(whether or not constituting an Event of Default) under this Credit Agreement
or any other note, evidence of indebtedness, indenture or other obligation to
which or with respect to which the Borrower or any of its Subsidiaries is a
party or obligor, whether as principal or surety, the Borrower shall forthwith
give written notice thereof to each of the Banks, describing the notice or
action and the nature of the claimed default.
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(b) The Borrower will deliver to the Agent copies of all notices,
elections, offers, requests or other information delivered by or on behalf of
the Borrower to any holder or any representative, trustee or agent for any
holder of any Indebtedness under the Subordinated Debt Documents, and copies
of all notices, elections, demands and other information received by the
Borrower or any of its Subsidiaries, agents or representatives from any holder
or any representative, trustee or agent for any holder of Indebtedness under
the Subordinated Debt Documents.
6.13. FAIR LABOR STANDARDS ACT. The Borrower will, and will cause each
of its Subsidiaries to, at all times operate its business in compliance with
all applicable provisions of the Fair Labor Standards Act of 1938 (29 U.S.C.
206 and 207) if the failure to comply with such provisions might reasonably be
expected to have a materially adverse affect on the Borrower and its
Subsidiaries, taken as a whole.
6.14. ENVIRONMENTAL EVENTS. The Borrower will promptly give notice
to the Agent (a) of any violation of any Environmental Law that the Borrower
or any of its Subsidiaries reports in writing or is reportable by such Person
in writing (or for which any written report supplemental to any oral report is
made) to any federal, state or local environmental agency and (b) upon becoming
aware thereof, of any inquiry, proceeding, investigation, or other action,
including a notice from any agency of potential environmental liability, or any
federal, state or local environmental agency or board, that might reasonably
be expected to materially adversely affect the assets, liabilities, financial
conditions or operations of the Borrower and its Subsidiaries on a consolidated
basis.
6.15. NOTIFICATION OF CLAIMS. The Borrower will, immediately upon
becoming aware thereof, notify the Agent in writing of any uninsured set-off,
claims (including, with respect to the Real Estate, environmental claims),
withholdings or other defenses which might reasonably be expected to have a
materially adverse affect on the assets, liabilities, financial conditions or
operations of the Borrower and its Subsidiaries on a consolidated basis.
6.16. USE OF PROCEEDS. The Borrower will use the proceeds of the Loans
for general corporate purposes not prohibited by this Credit Agreement,
including without limitation the financing of capital expenditures and for
working capital purposes.
6.17. NOTICE OF LITIGATION, JUDGMENT AND MATERIAL EVENTS. The Borrower
will give notice to the Agent in writing within fifteen (15) days of becoming
aware of any litigation or proceedings threatened in writing or any pending
litigation and proceedings affecting the Borrower or any of its Subsidiaries
or to which the Borrower or any of its Subsidiaries is or becomes a party
involving an uninsured claim against the Borrower individually or the Borrower
and its Subsidiaries on a consolidated basis that could reasonably be expected
to have a materially adverse effect on the Borrower and its Subsidiaries on a
consolidated basis and stating the nature and status of such litigation or
proceedings. The Borrower will, and will
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cause each of its Subsidiaries to, give notice to the Agent, in writing, in
form and detail satisfactory to the Agent, (a) within ten (10) days of any
judgment not covered by insurance or reserves, final or otherwise, against the
Borrower or any of its Subsidiaries in an amount which in aggregate with other
such judgments against the Borrower or any of its Subsidiaries exceeds
$5,000,000 and (b) promptly after becoming aware thereof, of the occurrence of
any event that it is reasonable to expect will be required to be reported to
the Securities and Exchange Commission.
6.18. IDENTIFICATION OF SUBSIDIARIES; PROVISION OF COLLATERAL. If and
whenever any Subsidiary of the Borrower shall be created or acquired by the
Borrower or any of its Subsidiaries at any time after the date hereof, the
Borrower will:
(a) furnish promptly to the Agent a written notice identifying such
Subsidiary and setting forth with respect to such Subsidiary information of the
kind required by 5.18 with respect to Subsidiaries as of the date hereof; and
(b) promptly pledge or cause to be pledged to the Agent, upon the terms
contained in the Pledge Agreement or a pledge agreement in or substantially in
the form of the Pledge Agreement, all of the issued and outstanding shares of
the capital stock of such Subsidiary.
7. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. The Borrower covenants
and agrees that, so long as any Obligations are outstanding or
any Bank has any Commitment hereunder:
7.1. RESTRICTIONS ON INDEBTEDNESS. The Borrower will not, and will not
permit any of its Subsidiaries to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness
other than:
(a) Indebtedness in respect of the Loans and the other Obligations;
(b) Indebtedness of the Borrower under the ACC 9 3/4% Subordinated
Debentures in the maxim aggregate principal amount of $275,000,000, less any
repayments, prepayments, redemptions, repurchases, defeasances or cancellations
of such Indebtedness, plus all accrued unpaid interest on such Indebtedness at
a rate not to exceed nine and three-quarters percent (9 3/4%) per annum;
(c) Indebtedness of the Borrower under the ACC 11 1/2% Subordinated
Debentures in the maximum aggregate principal amount of $125,000,000, less any
repayments, prepayments, redemptions, repurchases, defeasances or cancellations
of such Indebtedness, plus all accrued unpaid interest on such Indebtedness at
a rate not to exceed eleven and one-half percent (11.5%) per annum;
(d) current liabilities of the Borrower or any of its Subsidiaries
(including under any operating leases and studio and tower leases) incurred in
the ordinary course of business not incurred through (i) the borrowing of
money, or (ii) the
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obtaining of credit except for credit on an open account
basis customarily extended and in fact extended in connection with normal
purchases of goods and services;
(e) Indebtedness in respect of taxes, assessments, governmental charges
or levies and claims for labor, materials and supplies to the extent that
payment therefor shall not at the time be required to be made in accordance
with the provisions of 6.7;
(f) Indebtedness in respect of (i) judgments or awards that have been
in force for less than the applicable period for taking an appeal so long as
execution is not levied thereunder or in respect of which the Borrower or any
of its Subsidiaries shall at the time in good faith be prosecuting an appeal
or proceedings for review and in respect of which a stay of execution shall
have been obtained pending such appeal or review, (ii) final judgments against
the Borrower or any of its Subsidiaries that in the aggregate do not exceed
$5,000,000 and (iii) claims which are currently being contested in good faith
by appropriate proceedings and if adequate reserves shall have been set aside
with respect thereto;
(g) endorsements for collection, deposit or negotiation and warranties
of products or services, in each case incurred in the ordinary course of
business;
(h) obligations under Capitalized Leases not exceeding $5,000,000 in
aggregate amount at any time outstanding;
(i) Indebtedness incurred in connection with the acquisition after the
date hereof of any real or personal property by the Borrower or any Subsidiary
of the Borrower, provided that (i) the aggregate principal amount of such
Indebtedness of the Borrower and its Subsidiaries shall not exceed $40,000,000
at any one time and (ii) any such Indebtedness incurred shall not exceed the
lesser of the purchase price for the property being acquired with the proceeds
of such Indebtedness or the fair market value of such property at the time of
acquisition;
(j) Indebtedness existing on the date of this Credit Agreement and
listed and described on Schedule 7.1 hereto;
(k) Indebtedness of the Borrower or any of its Subsidiaries incurred at
any time after the Closing Date that is not otherwise permitted by any of the
other paragraphs of this 7.1, provided that the Agent and Majority Banks are
satisfied on the date of incurrence of such Indebtedness and at all times
thereafter that (i) all such Indebtedness is expressly subordinated, upon
written terms and conditions completely satisfactory in form and substance to
the Agent and the Majority Banks, in right of payment and exercise of remedies
to the prior payment in full of all the Obligations (and any obligations
refinancing or refunding the Obligations), (ii) the aggregate amount of all
such Indebtedness does not at any time exceed $20,000,000, (iii) none of such
Indebtedness is secured by any lien on any property (including any capital
stock) of the Borrower or any of its Subsidiaries, and no Subsidiary of the
Borrower has any contingent Obligation in respect of such Indebtedness, (iv)
no
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Default or Event of Default is continuing on the date of incurrence of such
Indebtedness or would result therefrom, (v) all mandatory payment, prepayment,
redemption, repurchase, defeasance, sinking fund and similar obligations, all
interest rates and payment dates, and all covenants, conditions, events of
default and other provisions in respect of such Indebtedness are satisfactory
in form and substance to the Agent and the Majority Banks, and (vi) the
proceeds of all such Indebtedness are used by the Borrower for general working
capital purposes; and
(l) intercompany Indebtedness of any Subsidiary of the Borrower to the
Borrower in respect of Investments permitted by 7.3.
7.2. RESTRICTIONS ON LIENS. The Borrower will not, and will not permit
any of its Subsidiaries to (a) create or incur or suffer to be created or
incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (b) transfer any of such property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (c) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; (d) suffer to
exist for a period of more than thirty (30) days after the same shall have been
incurred any Indebtedness or claim or demand against it that if unpaid might
by law or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over its general creditors; or (e) sell, assign, pledge or otherwise
transfer any accounts, contract rights, general intangibles, chattel paper or
instruments, with or without recourse; provided that the Borrower and any
Subsidiary of the Borrower may create or incur or suffer to be created or
incurred or to exist:
(i) liens to secure taxes, assessments and other government
charges in respect of obligations or liens on properties to secure
claims for labor, material or supplies in respect of obligations, in
either case which are not overdue or are being contested in good faith;
(ii) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(iii) liens on properties in respect of judgments or awards, the
Indebtedness with respect to which is permitted by 7.1(d);
(iv) liens of carriers, warehousemen, mechanics and materialmen,
and other like liens on properties (A) in existence less than one hundred
and twenty (120) days from the date of creation thereof in respect of
obligations not overdue and (B) if such liens are being contested in good
faith and by appropriate proceedings;
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(v) encumbrances consisting of easements, rights of way, zoning
restrictions, restrictions on the use of real property and defects and
irregularities in the title thereto, landlord's or lessor's liens under
leases to which the Borrower or a Subsidiary of the Borrower is a party,
and other minor liens or encumbrances none of which in the opinion of the
Borrower interferes materially with the use of the property affected in
the ordinary conduct of the business of the Borrower and its
Subsidiaries, which defects do not individually or in the aggregate have
a materially adverse effect on the business of the Borrower individually
or of the Borrower and its Subsidiaries on a consolidated basis;
(vi) purchase money liens securing Indebtedness permitted by
7.1(i), and liens under Capitalized Leases permitted by 7.1(h);
(vii) liens under the Pledge and Escrow Agreement securing
Obligations in respect of the ACC 9 3/4% Subordinated Debentures;
(viii) liens under the Pledge Agreement securing the Obligations;
and
(ix) presently outstanding liens listed on Schedule 7.2 hereto.
7.3. RESTRICTIONS ON INVESTMENTS. The Borrower will not, and will not
permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United States of
America that mature within one (1) year from the date of purchase by the
Borrower;
(b) demand deposits, certificates of deposit, bankers acceptances and
time deposits of United States banks having total assets in excess of
$1,000,000,000, and investments in investment accounts held by the Borrower at
Riggs National Bank, provided that such investments are maintained in a manner
consistent with the historical cash management practices of the Borrower;
(c) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any state thereof that at the time of purchase have been rated and
the ratings for which are not less than "P 1" if rated by Moody's Investors
Services, Inc., and not less than "A 1" if rated by Standard and Poor's;
(d) Investments existing on the date hereof and listed on Schedule 7.3
hereto;
(e) Investments consisting of intercompany loans and advances by (i) any
Subsidiary of the Borrower in any other Subsidiary of the Borrower or (ii) the
Borrower in any Subsidiary of the Borrower;
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(f) Investments by the Borrower in the common stock of any Subsidiary
of the Borrower, and by any Subsidiary of the Borrower in the common stock of
any other Subsidiary of the Borrower;
(g) Investments consisting of seller notes received as proceeds of asset
dispositions permitted by 7.5;
(h) Investments consisting of loans and advances to officers and
employees for moving, entertainment, travel and other similar expenses in the
ordinary course of business not to exceed $1,500,000 in the aggregate at any
time outstanding;
(i) Permitted Acquisitions;
(j) Investments constituting Restricted Payments permitted by 7.4(f);
and
(k) other Investments in an amount not to exceed $6,000,000 in the
aggregate after the Closing Date.
7.4. RESTRICTED PAYMENTS. The Borrower will not, and will not permit
any Subsidiary to, make any Restricted Payments other than:
(a) the declaration and payment by any Subsidiary of the Borrower of
cash dividends to the Borrower;
(b) payments by the Borrower of accrued unpaid interest on ACC 9 3/4%
Subordinated Debentures at the annual rate of nine and three-quarters percent
(9 3/4%) per annum, provided that such payments are required by the interest
payment provisions, and are not prohibited by the applicable subordination
provisions, contained in the ACC 9 3/4% Subordinated Indenture as in effect on
the date hereof or as amended from time to time in compliance with this Credit
Agreement;
(c) mandatory redemptions by the Borrower of ACC 9 3/4% Subordinated
Debentures in amounts required by the ACC 9 3/4% Subordinated Indenture as in
effect on the date hereof or as amended from time to time in compliance with
this Credit Agreement, provided that such mandatory redemptions are not
prohibited by the applicable subordination provisions of the ACC 9 3/4%
Subordinated Indenture;
(d) payments by the Borrower of accrued unpaid interest on ACC 11 1/2%
Subordinated Debentures at the annual rate of eleven and one-half percent (11
1/2%) per annum, provided that such payments are required by the interest
payment provisions, and are not prohibited by the applicable subordination
provisions, contained in the ACC 11 1/2% Subordinated Indenture as in effect
on the date hereof or as amended from time to time in compliance with this
Credit Agreement;
(e) mandatory redemptions by the Borrower of ACC 11 1/2% Subordinated
Debentures in amounts required by the ACC 11 1/2% Subordinated Indenture as in
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effect on the date hereof or as amended from time to time in compliance with
this Credit Agreement, provided that such mandatory redemptions are not
prohibited by the applicable subordination provisions of the ACC 11 1/2%
Subordinated Indenture;
(f) payments by the Borrower of cash dividends on outstanding shares of
its capital stock or loans or advances to Affiliates (other than Subsidiaries
of the Borrower), and payments by any Majority-Owned Subsidiary of cash
dividends on outstanding shares of its capital stock to any Person other than
the Borrower or a wholly-owned Subsidiary of the Borrower, provided that (i)
no Default or Event of Default is continuing on the date of any such payment
or would result therefrom, and (ii) the aggregate amount of such payments by
the Borrower and the Majority-Owned Subsidiaries during any fiscal quarter of
the Borrower shall not exceed the excess of (A) Consolidated Excess Cash Flow
for the period from October 1, 1995 through the end of the most recently
completed fiscal quarter of the Borrower, over (B) the aggregate amount of such
payments made by the Borrower and the Majority-Owned Subsidiaries during the
period from October 1, 1995 through the end of the most recently completed
fiscal quarter.
7.5. MERGERS, ACQUISITIONS, DISPOSITIONS OF ASSETS. The Borrower will
not, and will not permit any of its Subsidiaries to, become a party to any
merger or consolidation, or agree to or effect any acquisition or Sale of any
assets or other property except:
(a) the merger or consolidation of two or more Subsidiaries of the
Borrower;
(b) the acquisition of assets (other than Stations), the disposition of
assets (other than Stations or Subsidiaries), the disposition of items of
obsolete equipment which are not material to the operation of the business of
the Borrower or its Subsidiaries, and the sale of programming time, in each
case in the ordinary course of business consistent with past practices;
(c) the disposition of any Station, provided that (i) at least 75% of
the consideration for such disposition is in the form of cash, (ii) the Net
Disposition Proceeds from such disposition shall be applied to prepay the Loans
pursuant to 2.7.3, (iii) the total value of all consideration received by the
Borrower or any of its Subsidiaries in connection with all such dispositions
(including the fair market value of any property other than cash received by
the Borrower or any of its Subsidiaries in connection with any such
disposition) after the Closing Date shall not exceed $75,000,000, and (iii) no
Default or Event of Default is continuing on the date of such disposition or
would result therefrom; and
(d) Permitted Acquisitions.
7.6. SALE AND LEASEBACK. The Borrower will not, and will not permit any
of its Subsidiaries to, enter into any arrangement, directly or indirectly,
whereby the Borrower or any Subsidiary of the Borrower shall sell or transfer
any property
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owned by it in order then or thereafter to lease such property or lease other
property that the Borrower or any Subsidiary of the Borrower intends to use for
substantially the same purpose as the property being sold or transferred.
7.7. FEDERAL REGULATIONS. The Borrower will not, and will not permit
any of its Subsidiaries to, engage, principally or as one of its important
activities, in the business of extending credit for the purpose of "purchasing"
or "carrying" any "margin stock" within the respective meanings of each of the
quoted terms under Regulation U of the Board of Governors of the Federal
Reserve System. The Borrower will not, directly or indirectly, use any part
of the proceeds of any Loans for "purchasing" or "carrying" any "margin stock"
within the respective meanings of each of the quoted terms under Regulation U
of the Board of Governors of the Federal Reserve System or for any purpose that
violates, or that would be inconsistent with, the provisions of the Regulations
of such Board of Governors.
7.8. RESTRICTIONS ON ABILITY TO REPAY LOANS. The Borrower will not, and
will not permit any of its Subsidiaries to, become or remain subject to any
restriction which could reasonably be expected to impair the Borrower's ability
to repay in full its Obligations hereunder, including, without limitation, any
restriction which would prohibit the distribution by any Material Subsidiary
to the Borrower of proceeds from asset sales.
7.9. EMPLOYEE BENEFIT PLANS. Neither the Borrowers nor any ERISA
Affiliate will:
(a) engage in any "prohibited transaction" within the meaning of 406 of
ERISA or 4975 of the Code which could result in a material liability for the
Borrower or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated funding
deficiency", as such term is defined in 302 of ERISA, in excess of $500,000,
whether or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could result
in the imposition of a lien or encumbrance on the assets of the Borrower or any
of its Subsidiaries pursuant to 302(f) or 4068 of ERISA; or
(d) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of 4001 of ERISA) of all Guaranteed
Pension Plans exceeding the value of the aggregate assets of such Plans by more
than $500,000, disregarding for this purpose the benefit liabilities and assets
of any such Plan with assets in excess of benefit liabilities.
7.10. COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as permitted by any
applicable Environmental Laws, the Borrower will not, and will not permit any
of its Subsidiaries to, (a) use any of the Real Estate or any portion thereof
for the
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handling, processing, storage or disposal of Hazardous Substances, (b) cause
or permit to be located on any of the Real Estate any underground tank or other
underground storage receptacle for Hazardous Substances, (c) generate any
Hazardous Substances on any of the Real Estate, (d) conduct any activity at any
Real Estate or use any Real Estate in any manner which is likely to cause a
release (i.e. releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, disposing or dumping) of
Hazardous Substances on, upon or into the Real Estate or (e) otherwise conduct
any activity at any Real Estate or use any Real Estate in any manner that might
reasonably be expected to violate any Environmental Law or bring such Real
Estate in violation of any Environmental Law if any of the foregoing would be
reasonably likely to have a material adverse effect on the Borrower and its
Subsidiaries, taken as a whole.
7.11. NO AMENDMENTS, ETC. The Borrower will not, and will not permit
any of its Subsidiaries to, enter into or permit any amendment, supplement or
other modification of any charter document or by-laws of the Borrower or any
of its Subsidiaries or any Subordinated Debt Document that, in any such case,
would adversely affect the Lenders.
8. FINANCIAL COVENANTS OF THE BORROWER.
8.1. CONSOLIDATED EBITDA TO CONSOLIDATED TOTAL INTEREST EXPENSE. The
Borrower will not permit, as at the end of any fiscal quarter ending during any
period set forth in the table below, the ratio of (a) Consolidated EBITDA for
the period of four fiscal quarters ending at such date, to (b) Consolidated
Total Interest Expense for such period of four fiscal quarters, to be less than
the ratio set forth opposite such period:
Period Ratio
------- ------
Closing Date to 12/31/97 1.60:1
1/1/98 and thereafter 1.75:1
8.2. LEVERAGE RATIO. The Borrower will not permit the Leverage Ratio
as at the end of any fiscal quarter ending during any period set forth in the
table below to exceed the ratio set forth opposite such period in the table
below:
Period Ratio
------- ------
Closing Date to 12/31/96 6.00:1
1/1/97 to 9/30/97 5.75:1
10/1/97 to 9/30/98 5.50:1
10/1/98 to 9/30/99 5.00:1
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10/1/99 to 9/30/00 4.75:1
10/1/00 and thereafter 4.50:1
8.3. PRO FORMA FIXED CHARGE COVERAGE. The Borrower will not permit, as
at the end of any fiscal quarter ending during any period set forth in the
table below, the ratio of (a) Consolidated EBITDA for the period of four
consecutive fiscal quarters then ended, to (b) Pro Forma Fixed Charges for the
period of four fiscal quarters after such date, to be less than the ratio set
forth opposite such period in the table below:
Period Ratio
------- ------
Closing Date through 12/31/97 1.05:1
1/1/98 and thereafter 1.15:1
9. CLOSING CONDITIONS. The effectiveness of this Credit Agreement and
the obligation of any Bank to make Loans on the Closing Date shall be subject
to the satisfaction of the following conditions precedent:
9.1. CORPORATE ACTION. All corporate action necessary for the valid
execution, delivery and performance by the Borrower of this Credit Agreement
and the other Loan Documents to which it is or is to become a party shall have
been duly and effectively taken, and evidence thereof satisfactory to the Banks
shall have been provided to each of the Banks.
9.2. LOAN DOCUMENTS. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full
force and effect and shall be in form and substance satisfactory to each of the
Banks. Each Bank shall have received a fully executed copy of each such
document.
9.3. OPINION OF BORROWER'S LEGAL COUNSEL. Each of the Banks and the
Agent shall have received (a) from Fulbright & Jaworski, LLP, legal counsel to
the Borrower, a favorable opinion addressed to the Banks and the Agent dated
the Closing Date, in substantially the form of Exhibit E hereto, and (b) from
Gerald Fritz, FCC counsel to the Borrower, a favorable opinion addressed to the
Banks and the Agent, dated the Closing Date, in substantially the form of
Exhibit F hereto.
9.4. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each of the Banks shall
have received from the Borrower a copy of the Borrower's charter or other
incorporation documents and by-laws certified by the Secretary of the Borrower
to be true and complete as of the Closing Date.
9.5. INCUMBENCY CERTIFICATE. Each of the Banks shall have received from
the Borrower an incumbency certificate, dated the Closing Date, signed by a
duly
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authorized officer of the Borrower, and giving the name and bearing a specimen
signature of each individual who shall be authorized: (a) to sign, in the name
and on behalf of the Borrower, each of the Loan Documents to which it is or is
to become a party; (b) to make application for the Loans; and (c) to give
notices and to take other action on its behalf under the Loan Documents.
9.6. GOOD STANDING CERTIFICATES. The Agent shall have received, with
a copy for each Bank, a certificate from the Secretary of State, or other
appropriate authority of such jurisdiction, evidencing the good standing of the
Borrower in the jurisdiction of its incorporation and each jurisdiction in
which a failure to so qualify could have a materially adverse effect on the
business, operations, property or financial or other condition of the Borrower.
9.7 UCC SEARCH RESULTS. The Agent shall have received from the Borrower
the results of UCC searches authorized by the Borrower, indicating no
outstanding liens, other than Permitted Liens, against the Borrower, any of its
Subsidiaries, or Allbritton Group, Inc., and otherwise in form and substance
satisfactory to the Agent.
9.8 PLEDGED STOCK. The Agent shall have received in pledge original
stock certificates evidencing all the outstanding capital stock of the Borrower
and its Subsidiaries (or, in the case of the Majority-Owned Subsidiaries, 80%
of the outstanding capital stock thereof), together with two stock powers for
each such certificate duly endorsed in blank.
9.9. CLOSING FEE. The Borrower shall pay to the Agent, for the accounts
of the Bank, in accordance with their respective Commitment Percentages, a
one-time closing fee in the amount of $235,000.
10. CONDITIONS TO ALL BORROWINGS. The obligation of any Bank to make
any Loan, including the initial Loan to be made on the Closing Date shall be
subject to the satisfaction of the following conditions precedent:
10.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of the Borrower contained in this Credit
Agreement or in any document or instrument delivered pursuant to or in
connection with this Credit Agreement shall be true as of the date as of which
they were made and shall also be true at and as of the time of the making of
the Loan, with the same effect as if made at and as of that time (except to the
extent of changes resulting from transactions contemplated or permitted by this
Credit Agreement and changes occurring in the ordinary course of business that
singly or in the aggregate are not materially adverse, and to the extent that
such representations and warranties relate expressly to an earlier date) and
no Default or Event of Default shall have occurred and be continuing. The
Agent shall have received a certificate of the Borrower signed by an authorized
officer of the Borrower to such effect.
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10.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable
opinion of any Bank would make it illegal for such Bank to make the Loans.
10.3. GOVERNMENTAL REGULATION. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of Governors of the
Federal Reserve System.
10.4. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Credit Agreement and all documents incident
thereto shall be satisfactory in substance and in form to the Banks and to the
Agent's Special Counsel, and the Banks and such counsel shall have received all
information and such counterpart originals or certified or other copies of such
documents as the Banks may reasonably request.
11. EVENTS OF DEFAULT; ACCELERATION. If any of the following events
("Events of Default" or, if the giving of notice or the lapse of time or both
is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
(a) the Borrower shall fail to pay any principal of the Loans when the
same shall become due and payable, whether at the stated date of maturity or
any accelerated date of maturity or at any other date fixed for payment;
(b) the Borrower shall fail to pay any interest, fees, or other sums due
hereunder or under any of the other Loan Documents, on or prior to the fifth
day immediately succeeding the day on which the same shall become due and
payable, whether at the stated date of maturity or any accelerated date of
maturity or at any other date fixed for payment;
(c) the Borrower or any Subsidiary of the Borrower shall fail to (i)
comply with any covenants contained in this Credit Agreement or any of the
other Loan Documents other than payment covenants described in paragraphs (a)
and (b) above for twenty (20) days after written notice of such failure has
been given to the Borrower by the Agent or (ii) comply with any covenant or
agreement set forth in any Subordinated Debt Document after the period of grace
applicable thereto;
(d) any representation or warranty of the Borrower or any of its
Subsidiaries in this Credit Agreement or any of the other Loan Documents or in
any other document or instrument delivered pursuant to or in connection with
this Credit Agreement shall prove to have been false in any material respect
upon the date when made;
(e) the Borrower or any of its Subsidiaries shall fail to pay at
maturity, or within any applicable period of grace, any obligation for borrowed
money in an amount equal to $4,000,000;
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(f) the Borrower or any of its Subsidiaries shall make an assignment for
the benefit of creditors, or admit in writing its inability to pay or generally
fail to pay its debts as they mature or become due, or shall petition or apply
for the appointment of a trustee or other custodian, liquidator or receiver of
the Borrower or any of its Subsidiaries or of any substantial part of the
assets of the Borrower or any of its Subsidiaries or shall commence any case
or other proceeding relating to the Borrower or any of its Subsidiaries under
any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or hereafter
in effect, or shall take any action to authorize or in furtherance of any of
the foregoing, or if any such petition or application shall be filed or any
such case or other proceeding shall be commenced against the Borrower or any
of its Subsidiaries and the Borrower or any of its Subsidiaries shall indicate
its approval thereof, consent thereto or acquiescence therein;
(g) a decree or order is entered appointing any such trustee, custodian,
liquidator or receiver or adjudicating the Borrower or any of its Subsidiaries
bankrupt or insolvent, or approving a petition in any such case or other
proceeding, or a decree or order for relief is entered in respect of the
Borrower or any Subsidiary of the Borrower in an involuntary case under federal
bankruptcy laws as now or hereafter constituted;
(h) there shall remain in force, undischarged, unsatisfied and unstayed,
for more than thirty (30) days, whether or not consecutive, any final judgment
against the Borrower or any of its Subsidiaries that, with other outstanding
final judgments, undischarged and not covered by insurance, against such
Person(s) exceeds $4,000,000;
(i) any of the Loan Documents shall be canceled, terminated, revoked or
rescinded otherwise than in accordance with the terms thereof or with the
express prior written agreement, consent or approval of the Banks, or any
action at law, suit or in equity or other legal proceeding to cancel, revoke
or rescind any of the Loan Documents shall be commenced by or on behalf of the
Borrower or any of its Subsidiaries party thereto or any of their respective
stockholders, or any court or any other governmental or regulatory authority
or agency of competent jurisdiction shall make a determination that, or issue
a judgment, order, decree or ruling to the effect that, any one or more of the
Loan Documents is illegal, invalid or unenforceable in accordance with the
terms thereof;
(j) with respect to any Guaranteed Pension Plan, an ERISA Reportable
Event shall have occurred and the Majority Banks shall have determined in their
reasonable discretion that such event reasonably could be expected to result
in liability of the Borrower or any of its Subsidiaries to the PBGC or such
Guaranteed Pension Plan in an aggregate amount exceeding $4,000,000 and such
event in the circumstances occurring reasonably could constitute grounds for
the termination of such Guaranteed Pension Plan by the PBGC or for the
appointment by the appropriate United States District Court of a trustee to
administer such Guaranteed Pension Plan; or a trustee shall have been appointed
by the United States District Court to administer such Guaranteed Pension
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Plan; or the PBGC shall have instituted proceedings to terminate such
Guaranteed Pension Plan;
(k) the Borrower or any of its Subsidiaries shall be enjoined,
restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting any material part of its
business and such order shall continue in effect for more than thirty (30)
days;
(l) there shall occur the loss, suspension or revocation of, or failure
to renew, any license or permit (including any FCC License) now held or
hereafter acquired by the Borrower or any of its Subsidiaries if such loss,
suspension, revocation or failure to renew would have a material adverse effect
on the business or financial condition of the Borrower or such Subsidiary;
(m) the Borrower or any of its Subsidiaries shall be indicted for a
federal crime, a punishment for which could include the forfeiture of any
assets of the Borrower or such Subsidiary having a fair market value in excess
of $9,000,000;
(n) Joe L. Allbritton, any member of his immediate family, any trust of
which he and/or any such family members are the sole beneficiaries and any
charitable trust formed and controlled by Joe L. Allbritton shall, at any time
and in the aggregate, legally or beneficially own, directly or indirectly
through one or more wholly-owned corporation, less than one hundred percent
(100%) of the outstanding shares of capital stock of the Borrower (other than
the Borrower's Series A Redeemable Preferred Stock outstanding on the date
hereof);
(o) the Borrower shall, at any time, legally or beneficially own,
directly or indirectly through one or more other Subsidiaries, less than one
hundred percent (100%) of the outstanding shares of capital stock of each of
its Subsidiaries (or, with respect to the Majority-Owned Subsidiaries, at least
80% of the outstanding shares of capital stock of each Majority-Owned
Subsidiary);
(p) the on-the-air broadcasting operations of any Station or Stations
owned by the Borrower or any of its Subsidiaries accounting for, in the
aggregate, ten percent (10%) or more of the consolidated net operating revenues
of the Borrower and its Subsidiaries are interrupted at any time for more than
one hundred and twenty (120) hours during any period of twenty (20) consecutive
days;
(q) the commencement of proceedings to suspend, revoke, terminate or
substantially and adversely modify any material FCC License if such proceeding
shall continue uncontested for forty-five (45) days, or the designation of an
application for renewal of any such material FCC License for an evidentiary
hearing if it is reasonably likely that the result thereof shall be the
termination, revocation or suspension of such FCC License; then, and in any
such event, so long as the same may be continuing, the Agent may, and upon the
request of the Majority Banks shall, by notice in writing to the Borrower
declare all amounts owing with respect to this Credit Agreement and the Notes
to be, and they shall thereupon forthwith become, immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower; provided that in the event of any
Event of Default specified in 11(g) or 11(h), all such amounts shall become
immediately due and payable automatically and without any requirement of notice
from the Agent or any Bank.
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If any one or more of the Events of Default specified in 11(g) or 11(h)
shall occur, any unused portion of the credit hereunder shall forthwith
terminate and each of the Banks shall be relieved of all obligations to make
Loans hereunder. If any other Event of Default shall have occurred and be
continuing, the Agent, upon the request of the Majority Banks, shall, by notice
to the Borrower, terminate the unused portion of the credit hereunder, and upon
such notice being given such unused portion of the credit hereunder shall
terminate immediately and each of the Banks shall be relieved of all further
obligations to make Loans. If any such notice is given to the Borrower the
Agent will forthwith furnish a copy thereof to each of the Banks. No
termination of the credit hereunder shall relieve the Borrower of any of the
Obligations or any of its existing obligations to the Banks arising under
other agreements or instruments.
11.1 REMEDIES. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Loans pursuant to 11.1, each Bank, if owed any
amount with respect to the Loans, may, with the consent of the Majority Banks
but not otherwise, proceed to protect and enforce its rights by suit in equity,
action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Credit Agreement and
the other Loan Documents or any instrument pursuant to which the Obligations
to such Bank are evidenced, including as permitted by applicable law the
obtaining of the ex parte appointment of a receiver, and, if such amount shall
have become due, by declaration or otherwise, proceed to enforce the payment
thereof or any other legal or equitable right of such Bank. No remedy herein
conferred upon any Bank or any Agent or the holder of any Note is intended to
be exclusive of any other remedy and each and every remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute or any other provision of
law.
11.2 DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that following
the occurrence or during the continuance of any Default or Event of Default,
any Agent or any Bank, as the case may be, receives any monies in connection
with the enforcement of any of the Security Documents, or otherwise with
respect to the realization upon any of the Collateral, such monies shall be
distributed for application as follows:
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(a) First, to the payment of, or (as the case may be) the reimbursement
of the Agents for or in respect of all reasonable costs, expenses,
disbursements and losses which shall have been incurred or sustained by the
Agents in connection with the collection of such monies by the Agents, for the
exercise, protection or enforcement by the Agents of all or any of the rights,
remedies, powers and privileges of the Agents under this Credit Agreement or
any of the other Loan Documents or in respect of the Collateral and to support
the provision of adequate indemnity to the Agents against all taxes or liens
which by law shall have, or may have, priority over the rights of the Agents
to such monies;
(b) Second, to all other Obligations in such order or preference as the
Majority Banks may determine; provided, however, that distributions in respect
of such Obligations owing to the Banks with respect to each type of Obligation
such as interest, principal, fees and expenses, and Obligations under any
interest rate protection agreement, shall be made among the Banks pro rata in
relation to their share of such type of Obligation; and provided, further, that
the Agents may in their discretion make proper allowance to take into account
any Obligations not then due and payable (for purposes of this 11.2(b),
Obligations arising under any interest rate protection agreement and principal
with respect to the Loans shall be treated as the same type of Obligation);
(c) Third, upon payment and satisfaction in full or other provisions for
payment in full satisfactory to the Banks and the Agents of all of the
Obligations, to the payment of any obligations required to be paid pursuant to
9- 504(1)(c) of the Uniform Commercial Code of the Commonwealth of
Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the Borrower or to
such other Persons as are entitled thereto.
12. SETOFF. Regardless of the adequacy of any collateral, during the
continuance of any Event of Default, any deposits or other sums credited by or
due from any of the Banks to the Borrower and any securities or other property
of the Borrower in the possession of such Bank may be applied to or set off by
such Bank against the payment of Obligations and any and all other liabilities,
direct, or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, of the Borrower to such Bank. Each of the Banks agrees
with each other Bank that (a) if an amount to be set off is to be applied to
Indebtedness of the Borrower to such Bank, other than Indebtedness included in
the Obligations and owing to such Bank, such amount shall be applied ratably
to such other Indebtedness and to the Indebtedness included in the Obligations
and owing to such Bank, and (b) if such Bank shall receive from the Borrower,
whether by voluntary payment, exercise of the right of setoff, counterclaim,
cross action, enforcement of the claim in respect of the Obligations owing to
such Bank by proceedings against the Borrower at law or in equity or by proof
thereof in bankruptcy, reorganization, liquidation, receivership or similar
proceedings, or otherwise, and shall retain and apply to the payment of
Obligations owing to such Bank any amount in excess of its ratable portion of
the payments received by all of the Banks with respect
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to the Obligations owing to all of the Banks, such Bank will make such
disposition and arrangements with the other Banks with respect to such excess,
either by way of distribution, pro tanto assignment of claims, subrogation or
otherwise as shall result in each Bank receiving in respect of the Obligations
owing to it its proportionate payment as contemplated by this Credit Agreement;
provided that if all or any part of such excess payment is thereafter recovered
from such Bank, such disposition and arrangements shall be rescinded and the
amount restored to the extent of such recovery, but without interest.
13. THE AGENT.
13.1. AUTHORIZATION. The Agent is authorized to take such action on
behalf of each of the Banks and to exercise all such powers as are hereunder
and in related documents delegated to the Agent, together with such powers as
are reasonably incident thereto.
13.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to
its rights and duties under this Credit Agreement and the other Loan Documents.
The Agent may utilize the services of such Persons as the Agent in its sole
discretion may reasonably determine, and upon the occurrence and during the
continuation of a Default or an Event of Default, all reasonable fees and
expenses of any such Persons shall be paid by the Borrower.
13.3. NO LIABILITY. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
13.4. NO REPRESENTATIONS. The Agent shall not be responsible for the
execution or validity or enforceability of this Credit Agreement or the Notes
or any instrument at any time constituting, or intended to constitute,
collateral security for the Notes, or for the value of any such collateral
security or for the validity, enforceability or collectability of any such
amounts owing with respect to the Notes, or for any recitals or statements,
warranties or representations made herein or in any of the other Loan Documents
or in any certificate or instrument hereafter furnished to it by or on behalf
of the Borrower, or be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein or
in any instrument at any time constituting, or intended to constitute,
collateral security for the Notes. The Agent shall not be bound to ascertain
whether any notice, consent, waiver or request delivered to it by the Borrower
or any holder of any of the Notes shall have been duly authorized or is
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true, accurate and complete. The Agent has not made nor does it now make any
representations or warranties, express or implied, nor does it assume any
liability to the Banks, with respect to the credit worthiness or financial
conditions of the Borrower or any of its Subsidiaries. Each Bank acknowledges
that it has, independently and without reliance upon the Agent or the other
Banks, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Credit Agreement.
13.5. PAYMENTS. If in the opinion of the Agent the distribution of any
amount received by it in such capacity hereunder or under the Notes might
involve it in liability, it may refrain from making distribution until its
right to make distribution shall have been adjudicated by a court of competent
jurisdiction. If a court of competent jurisdiction shall adjudge that any
amount received and distributed by the Agent is to be repaid, each Person to
whom any such distribution shall have been made shall either repay to the Agent
its proportionate share of the amount so adjudged to be repaid or shall pay
over the same in such manner and to such Persons as shall be determined by such
court. With respect to Obligations, a payment to the Agent shall be deemed to
be a payment to each Bank of its pro rata share of such payment.
13.6. HOLDERS OF NOTES. The Agent may deem and treat the payee of any
Note as the absolute owner thereof for all purposes hereof until it shall have
been furnished in writing with a different name by such payee or by a
subsequent holder.
13.7. INDEMNITY. The Banks jointly and severally agree hereby to
indemnify and hold harmless the Agent from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Agent has not been reimbursed
by the Borrower as required by 14 or 15), and liabilities of every nature and
character arising out of or related to this Credit Agreement or the Notes or
the transactions contemplated or evidenced hereby or thereby, or the Agent's
actions taken hereunder or thereunder, except to the extent that any of the
same shall be directly caused by the Agent's willful misconduct or gross
negligence.
13.8. AGENT AS BANK. In its individual capacity, Bank of Boston shall
have the same obligations and the same rights, powers and privileges in respect
to its Commitment and the Loans made by it, and as the holder of any of the
Notes, as it would have were it not also the Agent.
13.9. RESIGNATION. The Agent may resign at any time by giving ninety
(90) days' prior written notice thereof to the Banks and the Borrower. Upon
any such resignation, the Majority Banks shall have the right to appoint
another Bank or any other financial institution as the successor Agent. Unless
a Default or Event of Default shall have occurred and be continuing, such
successor, if other than a Bank, shall be reasonably acceptable to the
Borrower. If no successor Agent shall have been so appointed by the Majority
Banks and shall have accepted such appointment within thirty (30) days after
the retiring Agent's giving of notice of resignation, then
PAGE
<PAGE>
-57-
the retiring Agent may, on behalf of the Banks, appoint a successor Agent.
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 retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation, the provisions of this Credit Agreement shall
continue in effect for its benefit in respect of any actions taken or omitted
to be taken by it while it was acting as Agent.
14. EXPENSES. The Borrower agrees to pay (a) the reasonable cost of
producing and reproducing this Credit Agreement, the other Loan Documents and
the other agreements and instruments mentioned herein, (b) any taxes (including
any interest and penalties in respect thereto) payable by the Agent or the
Banks (other than taxes based upon the Agent's or any Bank's net income) on or
with respect to the transactions contemplated by this Credit Agreement (the
Borrower hereby agreeing to indemnify the Banks with respect thereto), (c) the
reasonable fees, expenses and disbursements of the Agent's Special Counsel or
any local counsel to the Agent incurred in connection with the preparation, or
interpretation of the Loan Documents and other instruments mentioned herein,
each closing hereunder, and amendments, modifications, approvals, consents or
waivers hereto or hereunder regardless of whether any such transaction is
consummated, (d) the fees, expenses and disbursements of the Agent incurred by
the Agent in connection with the preparation, or interpretation of the Loan
Documents and other instruments mentioned herein, each closing hereunder and
amendments, modifications, approvals, consents or waivers hereto or hereunder
regardless of whether any such transaction is consummated, and (e) all
reasonable out-of-pocket expenses (including reasonable attorneys' (which
attorneys may be employees of any Bank or the Agent) fees and costs) incurred
by any Bank or the Agent in connection with (i) the enforcement of any of the
Loan Documents against the Borrower or any of its Subsidiaries or the
administration thereof after the occurrence of a Default or Event of Default,
(ii) any so-called "work- out" of the Obligations and (iii) any litigation,
proceeding or dispute whether arising hereunder or otherwise, in any way
related to any Bank's or the Agent's relationship with the Borrower or any of
its Subsidiaries. The covenants of this 14 shall survive payment or
satisfaction of payment of amounts owing under or with respect to the Loan
Documents.
15. INDEMNIFICATION. The Borrower agrees to indemnify and hold harmless
the Agent and the Banks from and against any and all claims, actions and suits
whether groundless or otherwise, and from and against any and all liabilities,
losses, damages and expenses of every nature and character arising out of this
Credit Agreement or any of the other Loan Documents or the transactions
evidenced hereby unless any such claims, actions or suits arise out of the
Agent's or the Banks' intentional misconduct or gross negligence. In
litigation, or the preparation therefor, the Banks and the Agent shall be
entitled to select their own counsel and, in addition to the foregoing
indemnity, the Borrower agrees to pay promptly the reasonable fees and expenses
of such counsel. If, and to the extent that the obligations of the Borrower
under this 13 are unenforceable for any reason, the
PAGE
<PAGE>
-58-
Borrower hereby agrees to make the maximum contribution to the payment in
satisfaction of such obligations which is permissible under applicable law.
16. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein, in any of the other Loan Documents
or in any documents or other papers delivered by or on behalf of the Borrower
pursuant hereto shall be deemed to have been relied upon by the Banks and the
Agent, notwithstanding any investigation heretofore or hereafter made by any
of them, and shall survive the making by the Banks of the Loans, as herein
contemplated, and shall continue in full force and effect so long as any
Obligation remains outstanding or any Bank has any obligation to make any
Loans. All statements contained in any certificate or other paper delivered
to any Bank or the Agent at any time by or on behalf of the Borrower pursuant
hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by the Borrower hereunder.
17. ASSIGNMENT AND PARTICIPATION.
17.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein,
each Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all
or a portion of its Commitment Percentage and Commitment and the same portion
of the Loans at the time owing to it) and the Notes held by it; provided that
(a) the Agent and the Borrower (unless such assignment is (i) to any Federal
Reserve Bank or (ii) from the Agent to an affiliate of an Agent) shall have
given its prior written consent to such assignment, which consent will not be
unreasonably withheld, (b) each such assignment shall be of a constant, and not
a varying, percentage of all the assigning Bank's rights and obligations under
this Credit Agreement, (c) each assignment shall be in an amount that is not
less than $5,000,000 and (d) the parties to such assignment shall execute and
deliver to the Agent, for recording in the Register (as hereinafter defined),
an Assignment and Acceptance, substantially in the form of Exhibit G hereto (an
"Assignment and Acceptance"), together with any Notes subject to such
assignment. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five (5) Business Days after the execution
thereof, (i) the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and obligations of
a Bank hereunder, (ii) the assigning Bank shall, to the extent provided in such
assignment and upon payment to the Agent of the registration fee referred to
in 17.3, be released from its obligations under this Credit Agreement and (iii)
Schedule 1.1(a) shall be deemed to be automatically amended to reflect the
change in the Banks and each Bank's Commitment and Commitment Percentage
resulting from such Assignment and Acceptance.
17.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS.
By executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other
parties
PAGE
<PAGE>
-59-
hereto as follows: (a) other than the representation and warranty that it is
the legal and beneficial owner of the interest being assigned thereby free and
clear of any adverse claim, the assigning Bank makes no representation or
warranty, express or implied, and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or the
attachment, perfection or priority of any security interest or mortgage; (b)
the assigning Bank makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower and its
Subsidiaries or any other Person primarily or secondarily liable in respect of
any of the Obligations, or the performance or observance by the Borrower and
its Subsidiaries or any other Person primarily or secondarily liable in respect
of any of the Obligations of any of their obligations under this Credit
Agreement or any of the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; (c) such assignee confirms that
it has received a copy of this Credit Agreement, together with copies of the
most recent financial statements referred to in 5.4 and 6.4 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (d) such
assignee will, independently and without reliance upon the assigning Bank, the
Agent or any other Bank 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 Credit Agreement; (e) such assignee
represents and warrants that it is an Eligible Assignee; (f) such assignee
appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under this Credit Agreement and the other Loan
Documents as are delegated to the Agent by the terms hereof or thereof,
together with such powers as are reasonably incidental thereto; (g) such
assignee agrees that it will perform in accordance with their terms all of the
obligations that by the terms of this Credit Agreement are required to be
performed by it as a Bank; and (h) such assignee represents and warrants that
it is legally authorized to enter into such Assignment and Acceptance.
17.3. REGISTER. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Loans owing to the Banks from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the Banks may treat each Person
whose name is recorded in the Register as a Bank hereunder for all purposes of
this Credit Agreement. The Register shall be available for inspection by the
Borrower and the Banks at any reasonable time and from time to time upon
reasonable prior notice. Upon each such recordation, the assigning Bank agrees
to pay to the Agent a registration fee in the sum of $2,500.
17.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such
PAGE
<PAGE>
-60-
assignment, the Agent shall (a) record the information contained therein in the
Register, and (b) give prompt notice thereof to the Borrower and the Banks
(other than the assigning Bank). Within five (5) Business Days after receipt
of such notice, the Borrower, at its own expense, shall execute and deliver to
the Agent, in exchange for each surrendered Note, a new Note to the order of
such Eligible Assignee in an amount equal to the amount assumed by such
Eligible Assignee pursuant to such Assignment and Acceptance and, if the
assigning Bank has retained some portion of its obligations hereunder, a new
Note to the order of the assigning Bank in an amount equal to the amount
retained by it hereunder. Such new Notes shall provide that they are
replacements for the surrendered Notes, shall be in an aggregate principal
amount equal to the aggregate principal amount of the surrendered Notes, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of the assigned Notes. Upon the request
of any Bank, the Borrower shall within five (5) days of the issuance of any new
Notes pursuant to this 16.4, at the requesting Bank's expense, deliver an
opinion of counsel, addressed to the Banks and the Agents, relating to the due
authorization, execution and delivery of such new Notes and the legality,
validity and binding effect thereof, in form and substance reasonably
satisfactory to the Majority Banks. The surrendered Notes shall be canceled
and returned to the Borrower.
17.5. PARTICIPATIONS. Each Bank may sell participations to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
that (a) each such participation shall be in an amount of not less than
$5,000,000, (b) any such sale or participation shall not affect the rights and
duties of the selling Bank hereunder to the Borrower and (c) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would reduce
the principal of or the interest rate on any Loans, extend the term or increase
the amount of the Commitment of such Bank as it relates to such participant,
reduce the amount of any commitment fees to which such participant is entitled
or extend any regularly scheduled payment date for principal or interest.
17.6. DISCLOSURE. The Borrower agrees that in addition to disclosures
made in accordance with standard and customary banking practices, any Bank may
in accordance with the terms of 27 hereof disclose information obtained by such
Bank pursuant to this Credit Agreement to assignees or participants and
potential assignees or participants hereunder; provided that such assignees or
participants or potential assignees or participants shall agree (a) to treat
in confidence such information unless such information otherwise becomes public
knowledge, (b) not to disclose such information to a third party, except as
required by law or legal process and (c) not to make use of such information
for purposes of transactions unrelated to such contemplated assignment or
participation.
PAGE
<PAGE>
-61-
17.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If any
assignee Bank is an Affiliate of the Borrower, then any such assignee Bank
shall have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agent pursuant to 11, and the
determination of the Majority Banks shall for all purposes of this Agreement
and the other Loan Documents be made without regard to such assignee Bank's
interest in any of the Loans. If any Bank sells a participating interest in
any of the Loans to a participant, and such participant is the Borrower or an
Affiliate of the Borrower, then such transferor Bank shall promptly notify the
Agent of the sale of such participation. A transferor Bank shall have no right
to vote as a Bank hereunder or under any of the other Loan Documents for
purposes of granting consents or waivers or for purposes of agreeing to
amendments or modifications to any of the Loan Documents or for purposes of
making requests to the Agent pursuant to 11 to the extent that such
participation is beneficially owned by the Borrower or any Affiliate of the
Borrower, and the determination of the Majority Banks shall for all purposes
of this Agreement and the other Loan Documents be made without regard to the
interest of such transferor Bank in the Loans to the extent of such
participation.
17.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall
retain its rights to be indemnified pursuant to 14 and 15 with respect to any
claims or actions arising prior to the date of such assignment. If any
assignee Bank is not incorporated under the laws of the United States of
America or any state thereof, it shall, prior to the date on which any interest
or fees are payable hereunder or under any of the other Loan Documents for its
account, deliver to the Borrower and the Agent certification as to its
exemption from deduction or withholding of any United States federal income
taxes. Anything contained in this 17 to the contrary notwithstanding, any Bank
may at any time pledge all or any portion of its interest and rights under this
Credit Agreement (including all or any portion of its Notes) to any of the
twelve Federal Reserve Banks organized under 4 of the Federal Reserve Act, 12
U.S.C. 341. No such pledge or the enforcement thereof shall release the
pledgor Bank from its obligations hereunder or under any of the other Loan
Documents.
17.9. ASSIGNMENT BY BORROWER. The Borrower shall not assign or transfer
any of its rights or obligations under any of the Loan Documents without the
prior written consent of the Agent and each of the Banks.
18. NOTICES, ETC. Except as otherwise expressly provided in this Credit
Agreement, all notices and other communications made or required to be given
pursuant to this Credit Agreement or the Notes shall be in writing and shall
be delivered in hand, mailed by United States registered or certified first
class mail, postage prepaid, or sent by telegraph, telecopy, telefax or telex
and confirmed by delivery via courier or postal service, addressed as follows:
PAGE
<PAGE>
-62-
(a) if to the Borrower, at 808 17th Street, N.W., Suite 300, Washington,
D.C. 20006, Attention: Henry Morneault (with a copy to Fulbright & Jaworski,
801 Pennsylvania Avenue, N.W., Washington, D.C. 20004-2604, Attention: Michael
Conlon, Esq. ) or at such other address for notice as the Borrower shall last
have furnished in writing to the Person giving the notice;
(b) if to the Agent or Bank of Boston, at the address set forth for Bank
of Boston on Schedule 1.1(a) hereto or such other address for notice as Bank
of Boston shall last have furnished in writing to the Person giving the notice;
(c) if to any other Bank, at the address set forth for such Bank in
Schedule 1.1(a) hereto or such other address for notice as such Bank shall have
last furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if telecopied, or delivered by hand to a
responsible officer of the party to which it is directed, at the time of the
receipt thereof by such officer and (ii) if sent by registered or certified
first-class mail, postage prepaid, three days after the date mailed.
19. GOVERNING LAW. THIS CREDIT AGREEMENT AND EACH OF THE OTHER LOAN
DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND
SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF SAID COMMONWEALTH (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF
LAW). THE BORROWER, THE AGENT AND THE BANKS CONSENT TO THE JURISDICTION IN ANY
OF THE FEDERAL OR STATE COURTS LOCATED IN THE COMMONWEALTH OF MASSACHUSETTS IN
CONNECTION WITH ANY MATTER RELATING TO THIS CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS.
20. HEADINGS. The captions in this Credit Agreement are for convenience
of reference only and shall not define or limit the provisions hereof.
21. COUNTERPARTS. This Credit Agreement and any amendment hereof may
be executed in several counterparts and by each party on a separate
counterpart, each of which when so executed and delivered shall be an original,
and all of which together shall constitute one instrument. In proving this
Credit Agreement it shall not be necessary to produce or account for more than
one such counterpart signed by the party against whom enforcement is sought.
22. ENTIRE AGREEMENT, ETC. The Loan Documents and any other documents
executed in connection herewith or therewith express the entire understanding
of the parties with respect to the transactions contemplated hereby. Neither
this Credit Agreement nor any term hereof may be changed, waived, discharged
or terminated, except as provided in 24.
PAGE
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-63-
23. WAIVER OF JURY TRIAL. Each of the Borrower, the Agent and the Banks
hereby waives its right to a jury trial with respect to any action or claim
arising out of any dispute in connection with this Credit Agreement or any of
the other Loan Documents, any rights or obligations hereunder or thereunder or
the performance of such rights and obligations. The Borrower (a) certifies
that no representative, agent or attorney of any Bank or the Agent has
represented, expressly or otherwise, that such Bank or the Agent would not, in
the event of litigation seek to enforce the foregoing waivers and (b)
acknowledges that it has been induced to enter into this Credit Agreement and
the other Loan Documents by, among other things, the mutual waivers and
certifications contained herein.
24. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise expressly
provided in this Credit Agreement, any consent or approval required or
permitted by this Credit Agreement to be given by the Banks may be given, and
any term of this Credit Agreement or of any other instrument related hereto or
mentioned herein may be amended, and the performance or observance by the
Borrower of any terms of this Credit Agreement or such other instrument or the
continuance of any Default or Event of Default may be waived (either generally
or in a particular instance and either retroactively or prospectively) with,
but only with, the written consent of the Borrower and the written consent of
the Majority Banks. Notwithstanding the foregoing, (i) the Maturity Date and
the amount of the Commitments of the Banks may not be changed, (ii) the rate
of interest on the Loans and the amount of the Commitment Fee hereunder may not
be decreased, (iii) all or substantially all of the collateral security for the
loans may not be released, and (iv) the terms of this 24 may not be changed
without the written consent of the Borrower and the written consent of each of
the Banks; the definition of Majority Banks may not be amended without the
written consent of each of the Banks; and 13 may not be amended without the
written consent of the Agent. No waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent thereon. No
course of dealing or delay or omission on the part of any Bank or the Agent in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto. No notice to or demand upon the Borrower shall entitle
the Borrower to other or further notice or demand in similar or other
circumstances.
25. FCC APPROVAL. Notwithstanding anything to the contrary contained
in this Credit Agreement or in the other Loan Documents, neither the Agent nor
any Bank will take any action pursuant to this Agreement or any of the other
Loan Documents, which would constitute or result in a change in control of the
Borrower or any of its Subsidiaries requiring the prior approval of the FCC
without first obtaining such prior approval of the FCC. After the occurrence
of an Event of Default, the Borrower shall take or cause to be taken any action
which the Agents may reasonably request in order to obtain from the FCC such
approval as may be necessary to enable the Agents to exercise and enjoy the
full rights and benefits granted to the Agent, for the benefit of the Banks by
this Credit Agreement or any of the other Loan Documents, including, at the
Borrower's cost and expense, the use of the Borrower's best efforts to assist
in obtaining such approval for any action or
PAGE
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-64-
transaction contemplated by this Credit Agreement or any of the other Loan
Documents for which such approval is required by law.
26. SEVERABILITY. The provisions of this Credit Agreement are severable
and if any one clause or provision hereof shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof,
in such jurisdiction, and shall not in any manner affect such clause or
provision in any other jurisdiction, or any other clause or provision of this
Credit Agreement in any jurisdiction.
27. CONFIDENTIALITY. Each of the Banks and the Agent agrees to keep any
non-public information delivered or made available to it pursuant to this
Credit Agreement or any other Loan Document confidential from any Person other
than officers, employees, agents, designees or representatives of such Bank or
the Agent who are or are expected to become engaged in evaluating, approving,
structuring or administering this Credit Agreement or any of the other Loan
Documents; provided, that, nothing herein shall prevent the Agent or any Bank
from disclosing such information (i) to any assignee or participant that has
agreed in writing to comply with the confidentiality provision of this 27 in
connection with the contemplated assignment or participation, (ii) to any of
its Affiliates to the extent any such Affiliates require such information in
the ordinary course of the Agent's or such Bank's credit committee or asset
management procedures, or (iii) as required or requested by any governmental
authority or representative thereof or pursuant to legal process or as required
in connection with the exercise or any remedy under this Credit Agreement or
any of the other Loan Documents.
PAGE
<PAGE>
-65-
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement under seal as of the date first set forth above.
ALLBRITTON COMMUNICATIONS
COMPANY
By /S/ Henry D. Morneault
________________________________________________
Name: Henry D. Morneault
Title: Vice President
THE FIRST NATIONAL BANK
OF BOSTON, individually and
as Agent
By: /S/ Lisa C. Gallagher
___________________________________________
Name: Lisa C. Gallagher
Title: Managing Director
MELLON BANK
By: /S/ John T. Kranefuss
___________________________________________
Name: John T. Kranefuss
Title: Assistant Vice President
BANK OF MONTREAL
By: /S/ Rene Encarnacion
___________________________________________
Name: Rene Encarnacion
Title: Director
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
ALLBRITTON COMMUNICATIONS COMPANY
FINANCIAL DATA SCHEDULE
IN ACCORDANCE WITH ITEM 601(C)
OR REGULATIONS S-K AND S-B
(In thousands)
This schedule contains summary financial information extracted from the
Consolidated Statement of Operations and Retained Earnings for the six months
ended March 31, 1996 and the Consolidated Balance Sheets as of March 31,
1996 and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> MAR-31-1996
<CASH> 25,990
<SECURITIES> 0
<RECEIVABLES> 30,517
<ALLOWANCES> 1,448
<INVENTORY> 0
<CURRENT-ASSETS> 68,921
<PP&E> 96,425
<DEPRECIATION> 60,924
<TOTAL-ASSETS> 272,028
<CURRENT-LIABILITIES> 25,984
<BONDS> 398,352
<COMMON> 1
0
168
<OTHER-SE> (160,679)
<TOTAL-LIABILITY-AND-EQUITY> 272,028
<SALES> 0
<TOTAL-REVENUES> 72,194
<CGS> 0
<TOTAL-COSTS> 48,209
<OTHER-EXPENSES> 252
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,341
<INCOME-PRETAX> 11,203
<INCOME-TAX> 4,495
<INCOME-CONTINUING> 6,708
<DISCONTINUED> 0
<EXTRAORDINARY> 7,750
<CHANGES> 0
<NET-INCOME> (1,042)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
