SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
[Mark One] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
[ ] SECURITIES EXCHANGE ACT OF 1934
for the Quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _________.
Commission File Number: 000-26071
SINCLAIR BROADCAST GROUP, INC.
(Exact name of Registrant as specified in its charter)
Maryland
(State or other jurisdiction
of incorporation or organization)
2000 W. 41st Street
Baltimore, Maryland 21211
(Address of principal executive offices)
52-1494660
(I.R.S. Employer
Identification No.)
21211
(Zip Code)
(410) 467-5005
(Registrant's telephone number including area code)
None
(Former name, former address and former fiscal year-if changed since last
report)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
As of August 01, 1996, there were 6,371,000 shares of Class A common
stock, $5.01 par value, 28,378,981 shares of Class B common stock, $.01 par
value, and 1,150,000 shares of preferred stock, $.01 par value, of the
Registrant issued and outstanding.
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Item 6. Exhibits and Reports on Form 8-K (a) The following exhibits are
filed herewith:
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Number Description
<S> <C>
3.1 Amended and Restated Charter
10.1 Second Amended and Restated Credit Agreement dated as of May 31,1996 by and among
Sinclair Broadcast Group, Inc., Subsidiary Guarantors and The Chase Manhattan Bank
(National Association) as Agent
10.2 Employment Agreement dated as of April 10, 1996 with Barry Baker
10.3 Indemnification Agreement dated as of April 10, 1996 with Barry Baker
10.4++ Time Brokerage Agreement dated as of May 31, 1996 by and among Sinclair Communications,
Inc., River City Broadcasting, L.P. and River City License Partnership and Sinclair Broadcast
Group, Inc.
10.5 Registration Rights Agreement dated as of May 31, 1996 by and between Sinclair Broadcast
Group, Inc. and River City Broadcasting, L.P.
10.6++ Time Brokerage Agreement dated as of August 3, 1995 by and between River City
Broadcasting, L.P. and KRRT, Inc. and Assignment and Assumption Agreement dated as of
May 31, 1996 by and among KRRT, Inc., River City Broadcasting, L.P. and KABB, Inc. (as
Assignee of Sinclair Broadcast Group, Inc.)
10.7 Loan Agreement dated as of July 7, 1995 between River City Broadcasting, L.P. and Keymarket
by and between Keymarket of South Carolina, Inc. and River City Broadcasting, L.P. and First
Amendment to Loan Agreement dated as of May 24, 1996
10.8 Option Agreement dated as of July 7, 1995 by and among Keymarket of South Carolina, Kerby
E. Confer and River City Broadcasting, L.P.
10.9 Option Agreement dated as of May 24, 1994 between Kansas City TV 62 Limited Partnership
and the Individuals Named Herein, on Behalf of an Entity To Be Formed
10.10 Option Agreement dated as of May 24, 1994 between Cincinnati 64 Limited Partnership and the
Individuals Named Herein, on Behalf of an Entity To Be Formed
10.11 Stock Purchase Agreement dated as of March 1, 1996 by and between Sinclair Broadcast
Group, Inc. and The Stockholders of Superior Communications Group, Inc.
10.12 Asset Purchase Agreement dated as of January 16, 1996 by and between Bloomington Comco,
Inc. And WYZZ, Inc.
10.13 Asset Purchase Agreement dated as of June 10, 1996 by and between WTTE, Channel 28, Inc. and WTTE, Channel 28
Licensee, Inc. and Glencairn, Ltd.
27* Financial Data Schedule
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++ Confidential Treatment has been requested. The copy filed as an exhibit
omits the information subject to the confidentiality request
* Previously filed
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this amended report to be signed on its
behalf by the undersigned thereunto duly authorized.
SINCLAIR BROADCAST GROUP, INC.
By: /S/ David B. Amy
---------------------------
David B. Amy
Chief Financial Officer (Principal
Accounting Officer)
SINCLAIR BROADCAST GROUP, INC.
ARTICLES OF AMENDMENT AND RESTATEMENT
(as amended through July 9, 1996)
FIRST: Name. The name of the Corporation is:
SINCLAIR BROADCAST GROUP, INC.
SECOND: Purpose. The purpose for which the Corporation is formed and the
business or object to be carried on and promoted by it are as follows:
(a) to own, operate, acquire, sell, and transfer television stations and
television programming;
(b) to do anything permitted by Section 2-103 of the Corporations and
Associations Article of the Annotated Code of Maryland, as amended from time to
time; and
(c) to engage in any other lawful purpose and business.
THIRD: Capital Structure. The total number of shares of all classes of
stock which the Corporation has authority to issue is one hundred forty-five
million (145,000,000) shares, having an aggregate par value of one million four
hundred fifty thousand dollars ($1,450,000), consisting of one hundred million
(100,000,000) shares of Class A Common Stock with a par value of one cent ($.01)
per share (the "Class A Common Stock"), thirty-five million (35,000,000) shares
of Class B Common Stock with a par value of one cent ($.01) per share (the
"Class B Common Stock"), and ten million (10,000,000) shares of Preferred Stock
with a par value of one cent ($.01) per share (the "Preferred Stock"). Class A
Common Stock and Class B Common Stock are hereinafter collectively referred to
as "Common Shares."
FOURTH: Voting Rights. (a) Holders of Class A Common Stock are entitled to
one (1) vote per share of such stock held and, except as provided below, holders
of Class B Common Stock are entitled to ten (10) votes per share of such stock
held with respect to matters properly submitted for the vote of holders of
Common Shares at any duly constituted meeting of stockholders. The holders of
Common Shares will vote together as a single class on all matters properly
presented to the stockholders for their vote unless otherwise required by law.
The holders of the Common Shares are not entitled to cumulate votes in the
election of any directors.
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(b) Notwithstanding the foregoing, holders of Class B Common Stock shall be
entitled to one (1) vote per share with respect to: (i) any proposed "Rule 13e-3
transaction," as that term is defined in Rule 13e-3 promulgated under the
Securities Exchange Act of 1934, as amended, between the Corporation and any
person who held stock in the Corporation as of January 1, 1995 (the "Controlling
Stockholders"), any Affiliate (as such term is defined below) of the Controlling
Stockholders, or any group which the Controlling Stockholders are an Affiliate
or which the Controlling Stockholders are a member; (ii) any disposition of all
or substantially all of the Corporation's assets; (iii) any sale or transfer or
other disposition of assets which would cause a fundamental change in the nature
of the Corporation's business; and (iv) a merger or a consolidation of the
Corporation subsequent to which the holders of the Common Shares will own less
than 50% of the common stock of the Corporation following such transaction.
For the purpose of paragraph (b) above, an "Affiliate" is defined as: (i)
any individual or entity that, directly or indirectly, controls, is controlled
by, or is under the common control of the Controlling Stockholders; (ii) any
corporation or organization (other than the Corporation or a majority owned
subsidiary of the Corporation) of which any of the Controlling Stockholders is
an owner or partner or is, directly or indirectly, the beneficial owner of ten
percent (10%) or more of any class of voting securities or in which any of the
Controlling Stockholders has a substantial beneficial interest; (iii) a voting
trust or similar arrangement pursuant to which any of the Controlling
Stockholders serves as a trustee or in a similar fiduciary capacity; or (v) any
relative or spouse of the Controlling Stockholders or any relative of such
spouse provided such spouse has the same residence as the Controlling
Stockholder.
FIFTH: Conversion of Class B Common Stock.
(a) In the event that the number of shares of the Corporation's Common
Shares held in the aggregate by Controlling Stockholders falls to below ten
percent (10%) of the total number of Common Shares outstanding, each share of
Class B Common Stock shall at that time be automatically converted to one (1)
fully paid and non-assessable share of Class A Common Stock.
(b) Upon the sale or other transfer by a holder of Class B Common Stock to
a person or entity other than a Permitted Transferee (as such term is defined
below), such shares of Class B Common Stock shall be automatically converted
into an equal number of shares of Class A Common Stock. Promptly upon such sale
or other transfer, the holder of Class B Common Stock therefor, duly endorsed in
blank or accompanied by proper instruments of transfer, at the office of the
Corporation or of any transfer agent for the Class A Common Stock, and shall
give written notice to the Corporation at such office: (i) stating that the
shares are being converted pursuant to this paragraph, (ii) identifying the
number of shares of Class B Common Stock being converted, and (iii)
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setting out the name or names (with addresses) and denominations in which the
certificate or certificates for Class A Common Stock shall be issued and shall
include instructions for delivery thereof. Delivery of such notice together with
the certificates representing the Class B Common Stock shall obligate the
Corporation or its transfer agent to issue and deliver at such stated address to
such stated transferee a certificate or certificates for the number of Class A
Common Stock to which such transferee is entitled, registered in the name of
such transferee. In the event of a sale or other transfer of less than all of
the Class B Common Stock evidenced by a certificate surrendered to the
Corporation in the accordance with the above procedures, the Corporation shall
execute and deliver to the transferor, without charge, a new certificate
evidencing the number of shares of Class B Common Stock not sold or otherwise
transferred.
For the purpose of paragraph (b) above, a "Permitted Transferee" is defined
as:
(i) (A) any Controlling Stockholder; (B) the estate of a Controlling
Stockholder; (C) the spouse or former spouse of a Controlling Stockholder; (D)
any lineal descendent of a Controlling Stockholder, any spouse of such lineal
descendent, a Controlling Stockholder's grandparent, parent, brother or sister
or a Controlling Stockholder's spouse's brother or sister; (E) any guardian or
custodian (including a custodian for purposes of the Uniform Gift to Minors Act
or Uniform Transfers to Minors Act) for, or any conservator or other legal
representative of, one or more Permitted Transferees; or (F) any trust or
savings or retirement account, including an individual retirement account for
purposes of federal income tax laws, whether or not involving a trust,
principally for the benefit of one or more Permitted Transferees, including any
trust in respect of which a Permitted Transferee has any general or special
testamentary power of appointment or general or special non-testamentary power
of appointment which is limited to any other Permitted Transferee;
(ii) the Corporation;
(iii) any employee benefit plan or trust thereunder sponsored by the
Corporation or any of its subsidiaries;
(iv) any trust principally for the benefit of one or more of the
individuals, persons, firms or entities ("Persons") referred to in (i) through
(iii) above;
(v) any corporation, partnership, or other entity if all of the beneficial
ownership is held by one or more of the Persons referred to in (i) through (iv)
above;
(vi) any voting trust for the benefit of one or more of the Persons
referred to in (i) through (iv) above; and
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(vii) any broker or dealer in securities, clearing house, bank, trust
company, savings and loan association or other financial institution which holds
the Class B Common Stock for the benefit of a Controlling Stockholder or
Permitted Transferee thereof.
(c) Notwithstanding anything to the contrary set forth herein, any holder
of Class B Common Stock may pledge his shares of Class B Common Stock to a
pledgee pursuant to a bona fide pledge of such shares as collateral security for
indebtedness due to the pledgee without causing an automatic conversion of such
shares into Class A Common Stock, provided that such shares may not be
transferred to or registered in the name of the pledgee unless such pledgee is a
Permitted Transferee. In the event of foreclosure or other similar action by a
pledgee who is not a Permitted Transferee, such pledged shares of Class B Common
Stock shall be converted automatically, without any act or deed on the part of
the Corporation or any other person, into shares of Class A Common Stock as
provided above.
(d) Each share of Class B Common Stock shall be convertible, at the option
of its holder, into one fully paid and non-assessable share of Class A Common
Stock at any time. In the event of such voluntary conversion, the procedures set
forth in paragraph (a) above shall be followed.
(e) Shares of Class B Common Stock that are converted into shares of Class
A Common Stock due to a sale, transfer, or voluntary conversion shall continue
to be authorized shares of Class B Common Stock and available for reissue by the
Corporation as determined by the Board of Directors.
(f) The Corporation hereby reserves and shall at all times reserve and keep
available, out of its authorized and unissued Class A Common Stock, for the
purpose of effecting the conversions provided for herein, a sufficient number of
shares of Class A Common stock to effect the conversion of all Class B Common
Stock. All of the Common Stock so issuable shall, when issued be duly and
validly issued, fully paid and non-assessable, and free from liens and charges
with respect to the issue. The Corporation will take such action as may be
necessary to ensure that all such Common Stock may be so issued without
violation of any applicable law or regulation, or of any requirements of any
stock exchange or market on which any of the Common Shares are listed or quoted.
(g) In any merger, consolidation, or business combination, the
consideration to be received per share by the holders of Class A Common Stock
and Class B Common Stock must be identical for each class of stock, except that
in any such transaction in which shares of common stock are to be distributed,
such shares may differ as to voting rights to the extent that voting rights
differ among Class A Common Stock and Class B Common Stock as provided herein.
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SIXTH: Preferred Stock. The Board of Directors shall have authority to
classify and reclassify any of the unissued shares of Preferred Stock from time
to time by setting or changing in any one or more respects the liquidation or
dividend preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications or terms or conditions of redemption
of the Preferred Stock; provided, however, that the Board of Directors shall not
classify or reclassify any such shares into Common Shares, or into any class or
series of stock which has the same or lower liquidation priority as the Common
Shares; provided further, that nothing herein shall prevent the Board of
Directors from classifying or reclassifying any such shares as Preferred Stock
convertible into Common Shares that have already been authorized pursuant to
Article Third hereof. Any and all shares issued and for which full consideration
has been paid or delivered shall be deemed fully paid stock, and the holder
thereof shall not be liable for any further payment thereon. Notwithstanding
anything in these Articles to the contrary, as long as any of the Common Shares
shall be listed and quoted on the NASDAQ National Market System, no Preferred
Stock may be issued pursuant to the provisions of this ARTICLE SIXTH which would
violate the applicable Voting Rights Policy of the NASDAQ National Market
System, as the same may be amended from time to time.
SEVENTH: Other Stock Rights.
(a) Except as provided hereinabove, each of the Common Shares issued and
outstanding shall be identical in all respects, and no dividends shall be paid
on any of the common Shares unless the same dividend is paid on all of the
Common Shares at the time of such payment. Except for and subject to those
special voting rights expressly granted herein to the holders of the Class B
Common Stock, the holders of the Common Stock shall have exclusively all other
rights of stockholders including, but not limited to, (i) the right to receive
dividends, when and as declared by the Board of Directors out of assets lawfully
available therefor, and (ii) in the event of any distribution of assets upon
liquidation, dissolution or winding up of the Corporation or otherwise, the
right to receive ratably all of the assets and funds of the Corporation
remaining after the payment to the creditors of the Corporation.
(b) Stock Splits and Combinations. If the Corporation shall in any manner
subdivide (by stock split, reclassification, stock dividend, recapitalization,
or otherwise) or combine (by reverse stock split or otherwise) the outstanding
shares of Class A Common Stock or Class B Common Stock, then the outstanding
shares of each other class of Common Shares shall be subdivided or combined, as
the case may be, to the same extent, share and share alike.
(c) As long as any of the Common Shares shall be listed and quoted on the
NASDAQ National Market, the Board of Directors of the Corporation shall ensure,
and shall have all powers necessary to ensure, that the membership of the Board
of Directors
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shall at all times include such number of "Independent Directors" (as such term
is defined in Part III, Section 6(c) of Schedule D to the By-Laws of the
National Association of Securities Dealers, Inc. ("NASD"), as the same may be
amended from time to time as shall be required by the By-Laws of the NASD for
the Common Shares to be eligible for listing and quotation of the NASDAQ
National Market. In the event that the Common Shares shall cease to be listed
and quoted on the NASDAQ National Market, and subsequently are listed and quoted
on an exchange or other trading system, the Board of Directors of the
Corporation shall ensure, and shall have all powers necessary to ensure, that
the membership of the Board of Directors shall at all times be consistent with
the applicable rules and regulations, if any, for the Common Shares to be
eligible for listing and quotation on such exchange or other trading system.
(d) No holder of Common Shares or Preferred Shares shall be entitled to
preemptive or subscription rights.
EIGHTH: Principal Office & Registered Agent. The post office address of the
principal office of the Corporation in this State is 2000 W. 41st Street,
Baltimore, Maryland 21211. The name and post office address of the resident
agent of the Corporation in this State is Steven A. Thomas, Esquire, Thomas &
Libowitz, P.A., 100 Light Street, Suite 1100 Baltimore, Maryland 21202.
NINTH: Participation of Non-Citizens. The following provisions are included
for the purpose of ensuring that control and management of the Corporation
remains with citizens of the United States and/or corporations formed under the
laws of the United States or any of the states of the United States, as required
by the Communications Act of 1934, as the same may be amended from time to time:
(a) The Corporation shall not issue to (i) a person who is a citizen of a
country other than the United States; (ii) any entity organized under the laws
of a government other than the government of the United States or any state,
territory, or possession of the United States; (iii) a government other than the
government of the United States or of any state, territory, or possession of the
United States; (iii) a government other than the government of the United States
or of any state, territory, or possession of the United States; or (iv) a
representative of, or an individual or entity controlled by, any of the
foregoing (individually, an "Alien"; collectively, "Aliens") any shares of
capital stock of the Corporation if such issuance would result in the total
number of shares of such capital stock held or voted by Aliens exceeding 25% of
(i) the total number of all shares of such capital stock outstanding at any time
and from time to time, or (ii) the total voting power of all shares of such
capital stock outstanding and entitled to vote at any time and from time to time
and shall not permit the transfer on the books of the Corporation of any capital
stock to any Alien that would result in the total number of shares of such
capital stock held or voted by Aliens exceeding such 25% limits
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as such limits greater or lesser than 25% may subsequently be imposed by statute
or regulation.
(b) No Alien or Aliens, individually or collectively, shall be entitled to
vote or direct or control the vote of more than 25% of (i) the total number of
all shares of capital stock of the Corporation outstanding at any time and from
time to time, or (ii) the total voting power of all shares of capital stock of
the Corporation outstanding and entitled to vote at any time and from time to
time as such limits greater or lesser than 25% may subsequently be imposed by
statute or regulation.
(c) No Alien shall be qualified to act as an officer of the Corporation and
no more than one-fourth of the total number of directors of the Corporation at
any time may be Aliens except as may be permitted by law or regulation.
(d) The Board of Directors shall have all powers necessary to implement the
provisions of this ARTICLE NINTH and to ensure compliance with the alien
ownership restrictions (the "Alien Ownership Restrictions") of the
Communications Act of 1934, as amended, and the rules and regulations
promulgated thereunder, as the same may be amended from time to time
(collectively, the "Communications Act"), including, without limitation, the
power to prohibit the transfer of any shares of capital stock of the Corporation
to any Alien and to take or cause to be taken such action as it deems
appropriate to implement such prohibition.
(e) Without limiting the generality of the foregoing and notwithstanding
any other provision of these Amended and Restated Articles of Incorporation to
the contrary, any shares of capital stock of the Corporation determined by the
Board of Directors to be owned beneficially by an Alien or Aliens shall always
be subject to redemption by the Corporation by action of the Board of Directors,
pursuant to Section 2-310 of the Maryland General Corporation Law, or any other
applicable provision of law, to the extent necessary in the judgment of the
Board of Directors to comply with the Alien Ownership Restrictions. The terms
and conditions of such redemption shall be as follows:
(i) the redemption price of the shares to be redeemed pursuant to this
ARTICLE NINTH shall be equal to the fair market value of the shares to be
redeemed, as determined by reference to the closing price of such shares on the
last business day before the date of redemption if the shares are traded on a
national exchange or as determined by the Board of Directors in good faith if
the shares are not then being traded on a national exchange;
(ii) the redemption price of such shares may be paid in cash,
securities or any combination thereof;
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(iii) if less than all the shares held by Aliens are to be redeemed,
the shares to be redeemed shall be selected in any manner determined by the
Board of Directors to be fair and equitable;
(iv) at least 10 days' written notice of the redemption date shall be
given to the record holders of the shares selected to be redeemed (unless waived
in writing by any such holder), provided that the redemption date may be the
date on which written notice shall be given to record holders if the cash or
securities necessary to effect the redemption shall have been deposited in trust
for the benefit of such record holders and subject to immediate withdrawal by
them upon surrender of the stock certificates for their shares to be redeemed;
(v) from and after the redemption date, the shares to be redeemed
shall cease to be regarded as outstanding and any and all rights of the holders
in respect of the shares to be redeemed or attaching to such shares of whatever
nature (including, without limitation, any rights to vote or participate in
dividends declared on stock of the same class or series as such shares) shall
cease and terminate, and the holders thereof thenceforth shall be entitled only
to receive the cash or securities payable upon redemption; and
(vi) such other terms and conditions as the Board of Directors shall
determine.
For purposes of this ARTICLE NINTH, the determination of beneficial
ownership of shares of capital stock of the Corporation shall be made pursuant
to Rule 13d-3, 17 C.F.R. ss. 240.13d-3, as amended from time to time,
promulgated under the Securities Exchange Act of 1934, as amended.
TENTH: Directors.
(a) The number of directors of the Corporation which shall constitute
the whole Board shall be not less than three (3) nor more than nine (9)
directors. The exact number of directors shall be fixed from time to time by the
Board of Directors pursuant to a Resolution adopted by a majority of the entire
Board of Directors. Directors shall hold office for a term of one (1) year or
until the first annual meeting of stockholders following their election. Each
director elected shall hold office until his successor shall be elected and
shall qualify.
(b) Newly created directorships resulting from any increase in the
authorized number of directors or any vacancies in the Board of Directors
resulting from death, resignation, retirement, disqualification, removal from
office, or other cause shall be filled by a majority vote of the remaining
directors, though less than a quorum,
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and the directors so chosen shall hold office for a term expiring at the next
annual meeting of stockholders at which the successors shall be elected and
shall qualify.
(c) At any meeting of the stockholders called for the purpose, any
director may, by a majority vote of all of the shares of stock outstanding and
entitled to vote, be removed from office, but only for cause.
(d) Notwithstanding anything contained in these Amended and Restated
Articles of Incorporation to the contrary, the affirmative vote of stockholders
holding a majority of the votes entitled to be cast for election of directors
shall be required to amend or repeal or adopt any provision inconsistent with
this ARTICLE TENTH.
ELEVENTH: Indemnification. The Corporation shall indemnify (a) its
directors and officers, whether serving the Corporation or at the request of
another entity, and advance expenses to a director or officer of the Corporation
to the fullest extent permitted by and in accordance with Section 2-418 of the
Corporations and Associations Article of the Annotated Code of Maryland, as
amended, and (b) its other employees and agents to such extent as shall be
authorized by the Board of Directors and permitted by law. No amendment of the
Charter of the Corporation shall limit or eliminate the right to indemnification
provided hereunder with respect to acts or omissions occurring prior to such
amendment or repeal.
TWELFTH: Duration. The duration of the Corporation shall be perpetual.
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SINCLAIR BROADCAST GROUP, INC.
ARTICLES SUPPLEMENTARY
SERIES A EXCHANGEABLE PREFERRED STOCK
Sinclair Broadcast Group, Inc., a Maryland corporation, having its
principal office in Baltimore City, Maryland (the "Corporation"), hereby
certifies to the Maryland State Department of Assessments and Taxation (the
"SDAT") as follows:
FIRST: Pursuant to authority expressly vested in the Board of Directors
of the Corporation by Article Sixth of the Charter of the Corporation (the
"Charter"), the Board of Directors has duly divided and classified 1,500,000
shares of the Preferred Stock of the Corporation into a series designated
"Series A Exchangeable Preferred Stock" and has provided for the issuance of
such series.
SECOND: The terms of the Series A Exchangeable Preferred Stock, par
value of $.01 per share, as set by the Board of Directors are as follows:
1. Designation and Amount. The shares of such series shall be
designated as Series A Exchangeable Preferred Stock (the "Series A Preferred
Stock") and the number of shares constituting such series shall initially be
1,500,000, subject to increase by action of the Board of Directors effectuated
by further Articles Supplementary in order to provide for the issuance of
Dividend Shares (as defined herein).
2. Conversion. Each share of the Series A Preferred Stock will
automatically be exchanged for and converted into one share of Series B
Convertible Preferred Stock (the "Series B Preferred Stock") effective at the
time of filing with the SDAT of an amendment to the Charter authorizing the
issuance of Series B Preferred Stock, which shall be filed promptly following
approval of the amendment by the stockholders. The Series B Preferred Stock
shall have the terms, conditions and preferences set forth in Annex A attached
to these Articles Supplementary; provided, however, that such Series B Preferred
Stock shall be effective and may be issued only upon and after the filing of
such amendment with the SDAT. Upon the filing of the amendment with the SDAT and
surrender of a certificate representing shares of Series A Preferred Stock, the
Corporation will issue a certificate representing the same number of shares of
Series B Preferred Stock.
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3. Trigger Event.
(i) Upon the date that is 180 days after the occurrence of
a Trigger Event (as defined below), subject to paragraph 8 hereof, the holders
of shares of Series A Preferred Stock, in preference to the holders of any other
class of capital stock, shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the purpose,
cumulative quarterly dividends payable in cash or, at the Corporation's option,
additional shares of Series A Preferred Stock ("Dividend Shares") on the last
day of March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the date that is 180 days after the
occurrence of the Trigger Event, in an amount per share (rounded to the nearest
cent) equal to (a) with respect to the first four Quarterly Dividend Payment
Dates, Three Dollars and Seventy-Five Cents ($3.75) and (b) with respect to the
fifth and each succeeding Quarterly Dividend Payment Date, Five Dollars ($5.00).
In the event a quarterly dividend is paid (in whole or in part) in Dividend
Shares, the number of Dividend Shares to be issued in respect of such dividend
payment for each share of Series A Preferred Stock then outstanding shall equal
(x) that portion of the quarterly dividend paid in Dividend Shares (expressed in
Dollars) divided by (y) 100.
(ii) Whether or not declared, dividends shall begin to
accrue and be cumulative on initially outstanding shares of Series A Preferred
Stock from the 180th day following the Trigger Event. Whether or not declared,
dividends shall begin to accrue and be cumulative on Dividend Shares from the
date of the applicable Quarterly Dividend Payment Date. All dividends shall
accrue on each share on a daily basis, whether or not there are unrestricted
funds legally available for the payment of such dividends and whether or not
declared, from and after the date such dividends are payable and be rounded to
the nearest cent. Any dividends that become payable for any partial dividend
period shall be computed on the basis of the actual days elapsed in such period.
Dividends paid on the shares of Series A Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and payable on such
shares shall be allocated equally among all such shares at the time outstanding.
If a portion of a dividend is paid in cash and a portion is paid in Dividend
Shares, then the proportion paid in cash and the proportion paid in Dividend
Shares shall be the same for each share. The Board of Directors may fix a record
date for the determination of holders of shares of Series A Preferred Stock
entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be not more than 60 days prior to the date fixed for the
payment thereof.
(iii) At any time after the occurrence of a Trigger Event,
the Corporation shall have the right to purchase all of the shares of Series A
Preferred Stock then held by a holder at a purchase price per share equal to (a)
One Hundred Dollars ($100.00) plus (b) the amount of any accrued and unpaid
dividends and distributions on such share, whether or not declared, to the date
of such payment. If the Corporation elects to exercise its right to repurchase
pursuant to this paragraph, the Corporation shall fix the date for redemption
and shall give notice of such redemption not less than 30 nor more than 60 days
prior to the date fixed for redemption; provided, however, that the redemption
date shall not be sooner than 180 days after the Trigger Event Notice, and the
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Corporation may give notice of a redemption to occur on such 180th day at any
time after the Trigger Event Notice and before the 30th day preceding such 180th
day. The notice given under this Section 3(iii) should state (i) the time and
place at which the redemption will occur; (ii) the redemption price; and (iii)
the procedure for giving a Retention Notice and the Conversion Price applicable
to the Series B Stock into which a holder's shares of Series A Preferred Stock
will be exchanged if such holder gives a Retention Notice.
(iv) At any time following issuance of a notice of
redemption and prior to the date of redemption set forth therein, any holder of
Series A Preferred Stock may deliver a notice (a "Retention Notice") of its
intent to retain the shares of Series A Preferred Stock held by such holder, and
such holder's shares shall not be redeemed but, as of the redemption date, will
have only such rights as such holder would have if its shares of Series A
Preferred Stock were exchanged for Series B Preferred Stock on the redemption
date and converted on such date into shares of Class A Common Stock. Each share
of Series A Preferred Stock held by a holder who gives a Retention Notice will
automatically be exchanged for and converted into one share of Series B
Preferred Stock effective at the time of filing with the SDAT of an amendment to
the Charter authorizing the issuance of Series B Preferred Stock and such shares
of Series B Preferred Stock shall on such date automatically be converted into
Class A Common Stock on the terms set forth in Annex A hereto as if such
conversion had occurred on the redemption date.
(v) A "Trigger Event" means the termination of Barry
Baker's employment with the Corporation prior to the expiration of the initial
five-year Agreement Term under the Employment Agreement dated as of April 10,
1996 between Barry Baker and the Corporation (the "Employment Agreement") (x) by
the Corporation for any reason other than "for cause" under Section 9 of the
Employment Agreement, or (y) by Barry Baker under Section 10.3.1 of the
Employment Agreement.
(vi) The Corporation shall give each holder of Series A
Preferred Stock notice of the occurrence of a Trigger Event (the "Trigger Event
Notice") within 30 days following the occurrence of the Trigger Event. The
Trigger Event Notice shall advise the holders of Series A Preferred Stock of the
type of Trigger Event that has occurred and the date on which such Trigger Event
occurred.
4. Dividends. Subject to paragraph 8 hereof, so long as any
shares of Series A Preferred Stock remain outstanding, the Corporation shall not
declare or pay dividends on, make any other distributions on, or redeem or
purchase or otherwise acquire for consideration (whether cash, securities or
property) any shares of capital stock except as permitted with respect to the
Series A Preferred Stock under Paragraph 3 of this Article Second.
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<PAGE>
5. Preference Upon Liquidation, Dissolution or Winding Up.
(i) Subject to the provisions of paragraph 8 hereof, upon
any liquidation, dissolution or winding up of the Corporation, the holders of
Series A Preferred Stock shall be entitled to receive from assets available for
distribution to stockholders, in priority over any other class of capital stock
of the Corporation, an amount in cash (and, to the extent sufficient cash is not
available for such payment, property at its fair market value), per share, equal
to the Liquidation Price of the Series A Preferred Stock as of the date of
payment or distribution. In addition, after the payment of the Liquidation
Price, holders of Series A Preferred Stock shall be entitled to receive from
assets available for distribution to stockholders, on a pari passu basis and
concurrent with payments or distributions made upon liquidation, dissolution or
winding-up to the holders of the Corporation's Common Stock (as defined in the
Charter), an amount per share equal to the excess, if any, of (i) the amount
that would have been payable with respect to such share if it had been exchanged
for Series B Preferred Stock and converted into Common Stock on the terms set
forth in Annex A immediately prior to such payment or distribution (assuming for
such purposes that the Liquidation Price in respect of shares of Series A
Preferred Stock had not been previously paid) over (ii) the Liquidation Price
paid with respect to such share.
(ii) The "Liquidation Price" of any share of Series A
Preferred Stock will be the sum of (i) the Agreed Value of such share plus (ii)
all accrued and unpaid dividends on such share through and including the
determination date. The Agreed Value of any share of Series A Preferred Stock
will be One Hundred Dollars ($100.00).
(iii) A merger or consolidation of the Corporation in
which the holders of shares of capital stock of the Corporation immediately
prior to the merger or consolidation hold less than 50% of the votes of capital
stock immediately after the merger or consolidation, or a sale of all or
substantially all of the Corporation's assets, shall be deemed to be a
"liquidation, dissolution or winding-up of the Corporation" for purposes of this
paragraph 5.
6. Voting Rights. (i) The holders of Series A Preferred Stock
shall be entitled to vote on all matters as to which holders of the
Corporation's Class A Common Stock (as defined in the Charter) are entitled to
vote, with each share of Series A Preferred Stock being entitled to one vote and
with the holders of Series A Preferred Stock voting together with the holders of
Class A Common Stock as a single class. In addition, holders of Series A
Preferred Stock will be entitled to notice of, and to attend, all meetings of
stockholders of the Corporation and to vote as a separate class on all matters
submitted to the Corporation's stockholders with respect to which holders of
stock are required to vote as a separate class under Maryland law.
(ii) Without the consent of the holders of a majority of
the Series A Preferred Stock, voting separately as a single class, the
Corporation will not:
(a) increase, decrease or effect a subdivision,
combination or consolidation of the authorized amount of Series A Preferred
Stock or issue or authorize the issuance
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of authorized but unissued shares of Series A Preferred Stock (in each case,
other than for the payment of Dividend Shares pursuant to Section 3(i) hereof);
(b) amend, alter or repeal any provision of its
Charter or bylaws so as to effect any change in the rights, privileges, powers
or preferences of the holders of the Series A Preferred Stock (provided that
such separate class voting right shall not apply with respect to an amendment,
alteration or repeal of any provision that solely effects a change in the terms
of the Corporation's Class A Common Stock, as to which the holders of Series A
Preferred Stock will vote together with the holders of Common Stock); or
(c) amend, alter or repeal any resolution of the
Corporation's Board of Directors or any other instrument establishing and
designating the Series A Preferred Stock or any other capital stock of the
Corporation, and determining the relative rights and preferences thereof, so as
to effect any change in the rights, privileges, powers or preferences of the
holders of the Series A Preferred Stock (provided that such separate class
voting right shall not apply with respect to an amendment, alteration or repeal
of any provision that solely effects a change in the terms of the Corporation's
Class A Common Stock, as to which the holders of Series A Preferred Stock will
vote together with the holders of Common Stock).
7. Preemptive Rights. None.
8. Priority and Ranking of New Securities Offering.
Notwithstanding any other provision of these Articles Supplementary, (i) the
Corporation shall have the right to issue additional equity securities (the "New
Securities") in order to raise up to $400,000,000 and (ii) the New Securities
may bear dividends payable in cash or other consideration, be exchangeable for
or convertible into other securities of the Corporation, and will be senior to
and have priority over the Series A Preferred Stock in all respects (including
without limitation with respect to dividends and distributions upon liquidation,
dissolution and winding up of the Corporation), except that upon and after the
occurrence of a Trigger Event, the New Securities will rank pari passu with the
Series A Preferred Stock in respect of dividends, distributions upon
liquidation, dissolution and winding up of the Corporation; provided, however,
that the New Securities shall not be issued prior to the Closing Date under the
Asset Purchase Agreement by and between River City Broadcasting, L.P. and the
Corporation dated as of April 10, 1996 without the consent of the Seller
thereunder.
9. Miscellaneous
(a) All notices from the Corporation to the holders shall be
given by one of the methods specified in paragraph 9(b).
(b) All notices and other communications hereunder shall be
deemed given (i) on the first business day following the date received, if
delivered personally, (ii) on the business day following timely deposit with an
overnight courier service, if sent by overnight courier specifying next day
delivery and (iii) on the first business day that is five days following deposit
in the mails,
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if sent by first class mail to (x) a holder at its last address as it appears on
the transfer records oregistry for the Series A Preferred Stock and (y) the
Corporation at the following address (or at such other address as the
Corporation shall specify in a notice pursuant to this paragraph 9(b)): Sinclair
Broadcast Group, Inc., 2000 West 41st Street, Baltimore, Maryland 21211;
Attention: Corporate Secretary.
(c) The Corporation shall establish and maintain a register,
or cause a transfer agent to establish and maintain a register, identifying the
holders of shares of Series A Preferred Stock and shall, upon presentation of
certificates endorsed for transfer or accompanied by duly executed powers of
transfer, register the transfer of shares as evidenced by such certificates or
powers of transfer.
(d) Any shares of Series A Preferred Stock which have been
converted, redeemed, exchanged or otherwise acquired by the Corporation shall,
after such conversion, redemption, exchange or acquisition, as the case may be,
be retired and promptly canceled and the Corporation shall take all appropriate
action to cause such shares to obtain the status of authorized but unissued
shares of Preferred Stock without designation as to series, until such shares
are once more designated as part of a particular series by the Board of
Directors. The Corporation may cause a certificate setting forth a resolution
adopted by the Board of Directors that none of the authorized shares of Series A
Preferred Stock are outstanding to be filed with the Maryland State Department
of Assessments and Taxation. When such certificate becomes effective, all
references to Series A Preferred Stock shall be eliminated from the Charter and
the shares of Preferred Stock designated hereby as Series A Preferred Stock
shall have the status of authorized and unissued shares of Preferred Stock and
may be reissued as part of any new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors.
(e) The Corporation shall be entitled to recognize the
exclusive right of a holder registered according to the Corporation's register
as the holder of shares of Series A Preferred Stock, and such record holder
shall be deemed the holder of such shares for all purposes.
(f) Any registered holder of Series A Preferred Stock may
proceed to protect and enforce its rights by any available remedy by proceeding
at law or in equity to protect and enforce any such rights, whether for the
specific enforcement of any provision in these Articles Supplementary or in aid
of the exercise of any power granted herein, or to enforce any other proper
remedy.
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ANNEX A TO
ARTICLES SUPPLEMENTARY
Terms of Series B Preferred Stock
---------------------------------
1. Designation and Amount. The series shall be designated
Series B Convertible Preferred Stock (the "Series B Preferred Stock"). The
number of authorized shares of Series B Preferred Stock shall initially be
1,500,000 subject to increase by action of the Board of Directors effectuated by
further Articles Supplementary in order to provide for the issuance of Dividend
Shares (as defined herein).
2. Par Value. The Series B Preferred Stock shall have a par
value of $.01 per share.
3. Conversion. (a) Subject to the terms and conditions of this
paragraph 3, each holder of Series B Preferred Stock (a "Convertible Holder")
shall have the right (a "Conversion Right"), at its option at any time, to
convert any or all shares of Series B Preferred Stock held by such Convertible
Holder into such number of fully paid and nonassessable shares of Class A Common
Stock, par value $.01 per share, of the Corporation as is obtained by (i)
multiplying the number of shares of Series B Preferred Stock to be converted by
$100.00 per share and (ii) dividing the result by the conversion price of $27.50
or, in case an adjustment of such price has taken place pursuant to the
provisions of paragraph 4, then by the conversion price as last adjusted and in
effect at the date any share or shares of Series B Preferred Stock are
surrendered for conversion (such prices, or such price as last adjusted, being
referred to individually as a "Conversion Price" and collectively as the
"Conversion Prices"). After the occurrence of a Trigger Event (as defined
herein), each Convertible Holder shall be required to convert all shares if the
Holder elects to convert any shares. Such Conversion Rights shall be exercised
by a Convertible Holder by giving written notice that such Convertible Holder
elects to convert its shares of Series B Preferred Stock into Class A Common
Stock and by surrender of a certificate or certificates for the shares so to be
converted to the Corporation at its principal office (or such other office or
agency of the Corporation as the Corporation may designate by notice in writing
to the Convertible Holders) at any time during its usual business hours on the
date set forth in such notice, together with a statement of the name or names
(with address) in which the certificate or certificates for shares of Class A
Common Stock shall be issued.
(b) All shares of Series B Preferred Stock shall
automatically convert into shares of Class A Common Stock on May 31, 2001 at the
Conversion Price then in effect.
(c) Notwithstanding anything herein to the contrary, with
respect to (i) shares of Series B Preferred Stock which the Corporation has
called for redemption pursuant to
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<PAGE>
paragraph 5 and redeemed, Conversion Rights shall terminate at the close of
business on the redemption date, (ii) a liquidation of the Corporation,
Conversion Rights shall terminate at the close of business on the business day
fixed for payment of the amount distributable on the Series B Preferred Stock
and (iii) Dividend Shares (as hereinafter defined), no conversion to Class A
Common Stock shall be permitted and any such Dividend Shares shall be deemed to
have been surrendered for cancellation as of the effective time of the
conversion of the other shares of Series B Preferred Stock held by the holder of
such Dividend Shares.
(d) Promptly after surrender of the certificate or
certificates for the share or shares of Series B Preferred Stock to be
converted, the Corporation shall issue and deliver, or cause to be issued and
delivered, to the holder, registered in such name or names as such holder may
direct, a certificate or certificates for the number of whole shares of the
applicable class of Class A Common Stock issuable upon the conversion of such
share or shares of Series B Preferred Stock. No fractional shares of Class A
Common Stock will be issued, and a cash payment will be made in lieu of any
fractional share in an amount equal to the same fraction of the Conversion
Price. To the extent permitted by law, such conversion shall be deemed to have
been effected as of the close of business on the date a certificate or
certificates are delivered pursuant to paragraph (a) above or on the date of
automatic conversion pursuant to paragraph (b) above (whether or not such
certificate or certificates for such share or shares shall have been surrendered
on such date) and at such time the rights of the Convertible Holder shall cease,
and the person or persons in whose name or names any certificate or certificates
for shares of Class A Common Stock shall be issuable upon such conversion shall
be deemed to have become the holder or holders of record of the shares
represented thereby. If any certificate or certificates for Series B Preferred
Shares shall have been lost, stolen or destroyed, the holder shall, in lieu of
delivering such certificate or certificates, deliver to the Corporation or its
transfer agent or agents therefor an affidavit of lost certificate or any other
document reasonably satisfactory to the Corporation.
(e) If any Convertible Holder shall deliver shares for
conversion after the Corporation gives a Redemption Notice pursuant to paragraph
5(iii), below, and the Corporation fails to redeem all shares subject to such
Redemption Notice and not converted, then the Corporation shall give all
converting shareholders notice of its failure to redeem and each converting
Convertible Holder may, for a period of 30 days after such notice of failure to
redeem, withdraw its conversion and receive back shares of Series B Preferred
Stock together with any dividends paid on Series B Preferred Stock (or which
would have been paid on Series B Preferred Stock) during the period such
Convertible Holder held shares of Class A Common Stock (less any dividends
received with respect to such shares of Class A Common Stock).
4. Adjustment to Conversion Price. The Conversion Price is
subject to adjustment after April 10, 1996 from time to time as follows:
(a) Adjustment to Conversion Price for Stock Splits and
Combinations and Dividends and Distributions of Common Stock. If the Corporation
(i) pays a dividend or makes a distribution, without consideration, on Common
Stock in shares of Common Stock or in any right
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<PAGE>
to acquire Common Stock, (ii) subdivides (by stock split, reclassification or
otherwise) its outstanding shares of Common Stock into a greater number of
shares or (iii) combines (by reverse stock split, reclassification or otherwise)
its outstanding shares of Common Stock into a smaller number of shares, the
Conversion Price in effect immediately prior to such action will be adjusted so
that the holder of any Series B Preferred Stock thereafter surrendered for
conversion will be entitled to receive the number of shares of Common Stock
which such holder would have been entitled to receive immediately following such
action had the holder's Series B Preferred Stock been converted immediately
prior thereto. An adjustment made pursuant to this Section 4(a) will become
effective immediately after the record date in the case of a dividend or
distribution and will become effective immediately after the effective date in
the case of a subdivision or combination.
(b) Adjustments to Conversion Price for Certain Diluting
Issues.
(i) No Adjustment of Conversion Price. Any provision
herein to the contrary notwithstanding, no adjustment in the Conversion Price
will be made in respect of the issuance of additional shares of Common Stock (A)
unless the issue price for the additional shares of Common Stock issued by the
Corporation is less than the Conversion Price in effect on the date of, and
immediately prior to, such issue; (B) if the issuance of shares of Class A
Common Stock is upon conversion of Series B Preferred Stock; (C) if the issuance
of Class A Common Stock is upon the conversion of Class B Common Stock (as
defined in the Charter); or (D) if the issuance is of shares of Class A Common
Stock that have been reserved for issuance to employees of the Corporation
pursuant to stock options that have been granted or which are available to be
granted under the Corporation's existing stock option plans and stock options to
be granted pursuant to the terms of the Employment Agreement.
(ii) Adjustment of Conversion Price Upon Issuance of
Additional Shares of Common Stock. In case the Corporation issues or sells
additional shares of Common Stock, including but not limited to deemed issuances
as provided in paragraph 4(b)(iii), for a consideration per share less than the
then applicable Conversion Price of the Series B Preferred Stock, then, and in
each such case, the Conversion Price of the Series B Preferred Stock will be
adjusted so that the adjusted Conversion Price is equal to:
C*O + N*P + A
O + N
where:
C = the then current Conversion Price;
O = the number of shares of Common Stock outstanding on the record
date for the issuance (including all shares issuable on
conversion of the Series B Preferred Stock
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<PAGE>
and all other shares issuable pursuant to options or
convertible securities outstanding immediately prior to the
issuance);
N = the total number of additional shares of Common Stock issued
in the issuance, or issuable upon the exercise or conversion
of options or convertible securities;
P = the offering price per share of shares of Common Stock issued
in the issuance or the price per share of Common Stock payable
upon the exercise or conversion of options or convertible
securities, in each case minus the amount per share of any
expenses payable by the Corporation and any underwriting or
similar commissions, compensations or concessions paid or
allowed by the Corporation in connection with the issuance;
and
A = the aggregate consideration, if any, paid to the Corporation
upon the issuance for the issuance of options or convertible
securities minus the amount of any expenses payable by the
Corporation and any underwriting or similar commissions,
compensations or concessions paid or allowed by the
Corporation in connection with the issuance.
(iii) Options and Convertible Securities Deemed Additional
Shares of Common Stock. If the Corporation at any time or from time to time
after April 10, 1996 shall issue any options or convertible securities (other
than in a transaction resulting in an adjustment under paragraph 4(a) or a
transaction described in paragraph 4(b)(i)), then, subject to clause (E) below,
the maximum number of shares (as set forth in the instrument relating thereto
without regard to any provisions contained therein designed to protect against
dilution) of Common Stock issuable upon the exercise of such options, or, in the
case of convertible securities and options therefor, the conversion or exchange
of such convertible securities and options therefor, shall be deemed to be
additional shares of Common Stock issued as of the time such options or
convertible securities are issued or, in case a record date shall have been
fixed for the determination of holders of any class of securities then entitled
to receive any such options or convertible securities, as of the close of
business on such record date, provided that in any such case in which additional
shares of Common Stock are deemed to be issued:
(A) no further adjustments in the Conversion Price
shall be made upon the subsequent issue of convertible securities or shares of
Common Stock upon the exercise of such options or conversion or exchange of such
convertible securities;
(B) if such options or convertible securities by
their terms provide, with the passage of time or otherwise, for any increase or
decrease in the consideration payable to the Corporation, or decrease or
increase in the number of shares of Common Stock issuable upon the exercise,
conversion or exchange thereof, the Conversion Price computed upon the original
issue thereof (or upon the occurrence of a record date with respect thereto),
and any subsequent adjustments based thereon, shall, upon any such increase or
decrease becoming effective,
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<PAGE>
be recomputed to reflect such increase or decrease insofar as it affects such
options or the rights of conversion or exchange under such convertible
securities (provided, however, that no such adjustment of the Conversion Price
shall affect Common Stock previously issued upon conversion of the Series B
Preferred Stock);
(C) upon the expiration of any such options or any
rights of conversion or exchange under such convertible securities which shall
not have been exercised, the Conversion Price computed upon the original issue
thereof (or upon the occurrence of a record date with respect thereto), and any
subsequent adjustments based thereon, shall, upon such expiration, be recomputed
as if:
(i) in the case of convertible securities
or options for Common Stock, the only additional
shares of Common Stock issued were the shares of
Common Stock, if any, actually issued upon the
exercise of such options or the conversion or
exchange of such convertible securities and the
consideration received therefor was the
consideration actually received by the
Corporation (x) for the issue of all such
options, whether or not exercised, plus the
consideration actually received by the
Corporation upon such exercise, or (y) for the
issue of all such convertible securities which
were actually converted or exchanged, plus the
additional consideration, if any, actually
received by the Corporation upon such conversion
or exchange; and
(ii) in the case of options for convertible
securities, only the convertible securities, if
any, actually issued upon the exercise thereof
were issued at the time of issue of such
options, and the consideration received by the
Corporation for the additional shares of Common
Stock deemed to have been then issued was the
consideration actually received by the
Corporation for the issue of all such options,
whether or not exercised, plus the consideration
deemed to have been received by the Corporation
upon the issue of the convertible securities
with respect to which such options were actually
exercised:
(D) no readjustment pursuant to clause (B) or (C)
above shall have the effect of increasing the Conversion Price to an amount
which exceeds the lower of (i) the Conversion Price in effect immediately prior
to the original adjustment, or (ii) the Conversion Price that would have
resulted from any issuance of additional shares of Common Stock between the
original adjustment date and such readjustment date if the original adjustment
had not been made;
(E) in the case of any options which expire by their
terms not more than 30 days after the date of issue thereof, no adjustment of
the Conversion Price shall be made
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<PAGE>
until the expiration or exercise of all such
options, whereupon such adjustment shall be made in the same manner provided in
clause (C) above.
For purposes of this paragraph 4(b)(iii), options means options, warrants or
other rights to subscribe for, purchase or otherwise acquire shares of Common
Stock or convertiblesecurities, and convertible securities means any evidences
of indebtedness, shares (other than the Series A Exchangeable Preferred Stock
and the Series B Preferred Stock) or other securities convertible into or
exchangeable for shares of Common Stock.
(iv) Value of Consideration. For purposes of this
paragraph 4(b), the value of the consideration received by the Corporation for
the issuance of any additional shares of Common Stock will be computed as
follows:
(A) insofar as it consists of cash, be computed at
the aggregate amount of cash received by the Corporation, excluding amounts paid
or payable for accrued interest or accrued dividends;
(B) insofar as it consists of publicly traded
securities, be computed based upon the average closing price of such securities
for the 10 consecutive trading days immediately preceding the day on which the
Corporation receives such consideration; and
(C) insofar as it consists of property other than
cash or publicly traded securities, be computed at the fair value thereof at the
time of such issue, as determined in good faith by the Board of Directors.
In the event that additional shares of Common Stock are issued together with
other shares or securities or other assets of the Corporation for consideration
which covers both, the value of such consideration so received that is allocable
to such additional shares of Common Stock will be determined in good faith by
the Board.
(c) Minimum Adjustment. No adjustment in the Conversion Price will be
required unless such adjustment (plus any adjustments not previously made by
reason of this paragraph 4) would require an increase or decrease of at least 1%
in the Conversion Price; provided, that any adjustments which by reason of this
paragraph 4 are not required to be made will be carried forward and taken into
account in any subsequent adjustment. All calculations under this paragraph 4
will be made to the nearest cent.
(d) Certificate of Adjustment. Upon the occurrence of each adjustment
or readjustment of the Conversion Price of the Series B Preferred Stock pursuant
to this paragraph 4, the Corporation will promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to each
holder of such Series B Preferred Stock a certificate, signed by the Chairman of
the Board, the Chief Executive Officer, the Treasurer/Chief Financial Officer or
any
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<PAGE>
other officer of the Corporation of equivalent seniority setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustments or readjustment is based.
(e) Dividends and Distributions Payable in Securities of the Company
other than Shares of Common Stock. In case the Corporation makes or issues, or
fixes a record date for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in securities of the Company
(other than shares of Common Stock or rights to acquire Common Stock), then and
in each such event provision will be made so that the holders of Series B
Preferred Stock will receive upon conversion thereof in addition to the number
of shares of Common Stock receivable thereupon, the amount of securities of the
Company which they would have received had their Series B Preferred Stock been
converted into Common Stock on the date of, and immediately prior to such event
and had they thereafter retained such securities (together with any
distributions paid thereon) until the conversion date.
(f) Consolidation, Merger or Sale of Assets. Except as provided in
paragraph 7, if any transaction occurs, including without limitation (i) any
recapitalization or reclassification of shares of Common Stock (other than a
change in par value, or from par value to no par value, or from no par value to
par value, or as a result of a subdivision or combination of the Common Stock),
(ii) any consolidation or merger of the Corporation with or into another person
or any merger of another person into the Corporation (other than a merger in
which the Corporation is the surviving corporation and that does not result in a
reclassification, conversion, exchange or cancellation of Common Stock), (iii)
any sale, lease or transfer of all or substantially all of the assets of the
Corporation, or (iv) any compulsory share exchange, pursuant to any of which
holders of Common Stock will be entitled to receive other securities, cash or
other property, then appropriate provision will be made so that the holder of
each share of Series B Preferred Stock then outstanding will have the right
thereafter to convert such share only into the kind and amount of the
securities, cash or other property that would have been receivable upon such
recapitalization, reclassification, consolidation, merger, sale, lease,
transfer, or share exchanges by a holder of the number of shares or Common Stock
issuable upon conversion of such share of Series B Preferred Stock immediately
prior to such recapitalization, reclassification, consolidation, merger, sale,
lease, transfer or share exchange, and the Corporation will not enter into any
such merger, consolidation, sale, lease, transfer or share exchange unless the
company formed by such consolidation or resulting from such merger or that
acquires such assets or that acquires the Corporation's shares, as the case may
be, makes appropriate provisions to establish such right.
5. Trigger Event.
(i) Upon the date that is 180 days after the occurrence of
a Trigger Event (as defined below), subject to paragraph 10 hereof, the holders
of shares of Series B Preferred Stock, in preference to the holders of any other
class of capital stock, shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash or, at the Corporation's option, additional
shares of Series B Preferred Stock ("Dividend Shares") on the last day of March,
June, September and December in each year
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<PAGE>
(each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the date
that is 180 days after the occurrence of the Trigger Event, in an amount per
share (rounded to the nearest cent) equal to (a) with respect to the first four
Quarterly Dividend Payment Dates, Three Dollars and Seventy-Five Cents ($3.75)
and (b) with respect to the fifth and each succeeding Quarterly Dividend Payment
Date, Five Dollars ($5.00). In the event a quarterly dividend is paid (in whole
or in part) in Dividend Shares, the number of Dividend Shares to be issued in
respect of such dividend payment for each share of Series B Preferred Stock then
outstanding shall equal (x) that portion of the quarterly dividend paid in
Dividend Shares (expressed in Dollars) divided by (y) 100.
(ii) Whether or not declared, dividends shall begin to
accrue and be cumulative on initially outstanding shares of Series B Preferred
Stock from the 180th day following the Trigger Event. Whether or not declared,
dividends shall begin to accrue and be cumulative on Dividend Shares from the
date of the applicable Quarterly Dividend Payment Date. All dividends shall
accrue on each share on a daily basis, whether or not there are unrestricted
funds legally available for the payment of such dividends and whether or not
declared, from and after the date such dividends are payable and be rounded to
the nearest cent. Any dividends that become payable for any partial dividend
period shall be computed on the basis of the actual days elapsed in such period.
Dividends paid on the shares of Series B Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and payable on such
shares shall be allocated equally among all such shares at the time outstanding.
If a portion of a dividend is paid in cash and a portion is paid in Dividend
Shares, then the proportion of the dividend paid in cash and the proportion paid
in Dividend Shares shall be the same for each share. The Board of Directors may
fix a record date for the determination of holders of shares of Series B
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
(iii) At any time after the occurrence of a Trigger Event,
the Corporation shall have the right to purchase all of the shares of Series B
Preferred Stock then held by a holder at a purchase price per share equal to (a)
One Hundred Dollars ($100.00) plus (b) the amount of any accrued and unpaid
dividends and distributions on such share, whether or not declared, to the date
of such payment. If the Corporation elects to exercise its right to repurchase
pursuant to this paragraph, the Corporation shall fix the date for redemption
and shall give notice of such redemption (the "Redemption Notice") not less than
30 nor more than 60 days prior to the date fixed for redemption; provided,
however, that the redemption date shall not be sooner than 180 days after the
Trigger Event Notice, and the Corporation may give notice of a redemption to
occur on such 180th day at any time after the Trigger Event Notice and before
the 30th day preceding such 180th day. The Redemption Notice shall specify (i)
the time and date on which the redemption will occur; (ii) the redemption price;
(iii) that the holders of shares of Series B Preferred Stock have the right to
convert such shares into shares of Common Stock at any time prior to the
redemption date; and (iv) the Conversion Price on the date of the Redemption
Notice.
- 8 -
<PAGE>
(iv) A "Trigger Event" means the termination of Barry
Baker's employment with the Corporation prior to the expiration of the initial
five-year Agreement Term set forth in the Employment Agreement dated as of April
10, 1996 between Barry Baker and the Corporation (the "Employment Agreement")
(x) by the Corporation for any reason other than "for cause" under Section 9 of
the Employment Agreement, or (y) by Barry Baker under Section 10.3.1 of the
Employment Agreement.
(v) The Corporation shall give each Convertible Holder
notice of the occurrence of a Trigger Event (the "Trigger Event Notice") within
30 days following the occurrence of the Trigger Event. The Trigger Event Notice
shall advise the Convertible Holders of the type of Trigger Event that has
occurred and the date on which such Trigger Event occurred.
6. Dividends. Prior to the date that is 180 days after the
occurrence of a Trigger Event, the Series B Preferred Stock shall not be
entitled to receive any preference with respect to dividends. Notwithstanding
the preceding sentence, prior to the date that is 180 days after the occurrence
of a Trigger Event, the holders of Series B Preferred Stock shall be entitled to
share ratably (with each share of Series B Preferred Stock equivalent to the
number of shares of Class A Common Stock into which such share can be converted
pursuant to paragraphs 3 and 4 hereof), in the payments of any dividends or
other distributions made with respect to Common Stock, including dividends or
distributions made in the form of (i) cash, (ii) securities other than Common
Stock, (iii) other assets, or (iv) warrants or rights to subscribe for
securities other than Common Stock or for other assets.
7. Liquidation Dissolution or Winding Up. (i) Prior to the
occurrence of a Trigger Event, subject to the provisions of paragraph 10 hereof,
upon any liquidation, dissolution or winding up of the Corporation, the holders
of Series B Preferred Stock shall be entitled to receive from assets available
for distribution to stockholders, in priority over the Class A Common Stock and
the Class B Common Stock and after distributions to any other class of capital
stock of the Corporation, an amount in cash (and, to the extent sufficient cash
is not available for such payment, property at its fair market value), per
share, equal to the Liquidation Price of the Series B Preferred Stock as of the
date of payment or distribution. In addition, after the payment of the
Liquidation Price, holders of Series B Preferred Stock shall be entitled to
receive from assets available for distribution to stockholders, on a pari passu
basis and concurrent with payments or distributions made upon liquidation,
dissolution or winding-up to the holders of the Corporation's Class A Common
Stock and Class B Common Stock, an amount per share equal to the excess, if any,
of (i) the amount that would have been payable with respect to such share if it
had been converted into shares of Common Stock pursuant to the conversion
provisions in Paragraph 3 and Paragraph 4 hereof immediately prior to such
payment or distribution (assuming for such purposes that the Liquidation Price
in respect of shares of Series B Preferred Stock had not been previously paid)
over (ii) the Liquidation Price paid with respect to such share.
(ii) After the occurrence of a Trigger Event, subject to the
provisions of paragraph 10 hereof, upon any liquidation, dissolution or winding
up of the Corporation, the holders of Series
- 9 -
<PAGE>
B Preferred Stock shall be entitled to receive from assets available for
distribution to stockholders, in priority over any other class of capital stock
of the Corporation, an amount in cash (and, to the extent sufficient cash is not
available for such payment, property at its fair market value), per share, equal
to the Liquidation Price (as defined below) of the Series B Preferred Stock as
of the date of payment or distribution.
(iii) The Liquidation Price of any share of Series B Preferred
Stock will be the sum of (i) the Agreed Value of such share plus (ii) all
accrued and unpaid dividends on such share through and including the
determination date. The Agreed Value of any share of Series B Preferred Stock
will be One Hundred Dollars ($100.00).
(iv) A merger or consolidation of the Corporation in which the
holders of shares of capital stock of the Corporation immediately prior to the
merger or consolidation hold less than 50% of the votes of capital stock
immediately after the merger or consolidation, or a sale of all or substantially
all of the Corporation's assets, shall be deemed to be a "liquidation,
dissolution or winding-up of the Corporation" for purposes of this paragraph 7.
8. Voting Rights. (a) The holders of Series B Preferred Stock
shall be entitled to vote on all matters as to which holders of the
Corporation's Class A Common Stock are entitled to vote, with each share of
Series B Preferred Stock being entitled to a number of votes equal to the number
of shares of Class A Common Stock into which the share could be converted
pursuant to paragraphs 3 and 4 hereof, and with the holders of Series B
Preferred Stock voting together with the holders of Class A Common Stock as a
single class. In addition, holders of Series B Preferred Stock will be entitled
to notice of, and to attend, all meetings of stockholders of the Corporation and
to vote as a separate class on all matters submitted to the Corporation's
stockholders with respect to which holders of stock are required to vote as a
separate class under Maryland law.
(b) Without the consent of the holders of a majority of
the Series B Preferred Stock, voting separately as a single class, the
Corporation will not:
(i) increase, decrease or effect a subdivision,
combination or consolidation of the authorized amount of Series B Preferred
Stock or issue or authorize the issuance of authorized but unissued shares of
Series B Preferred Stock (in each case, other than for the payment of Dividend
Shares pursuant to Section 5(i) hereof);
(ii) amend, alter or repeal any provision of its
Charter or bylaws so as to effect any change in the rights, privileges, powers
or preferences of the holders of the Series B Preferred Stock (provided that
such separate class voting right shall not apply with respect to an amendment,
alteration or repeal of any provision that solely effects a change in the terms
of the Corporation's Class A Common Stock, as to which the holders of Series B
Preferred Stock will vote together with the holders of Common Stock); or
- 10 -
<PAGE>
(iii) amend, alter or repeal any resolution of the
Corporation's Board of Directors or any other instrument establishing and
designating the Series B Preferred Stock or any other capital stock of the
Corporation, and determining the relative rights and preferences thereof, so as
to effect any change in the rights, privileges, powers or preferences of the
holders of the Series B Preferred Stock (provided that much separate class
voting right shall not apply with respect to an amendment, alteration or repeal
of any provision that solely effects a change in the terms of the Corporation's
Class A Common Stock, as to which the holders of Series B Preferred Stock will
vote together with the holders of Common Stock).
9. Preemptive Rights. None.
10. Priority and Ranking of New Securities Offering.
Notwithstanding any other provisions of these Articles Supplementary, (i) the
Corporation shall have the right to issue additional equity securities (the "New
Securities") in order to raise up to $400,000,000 and (ii) the New Securities
may bear dividends payable in cash or other consideration, be exchangeable for
or convertible into other securities of the Corporation, and will be senior to
and have priority over the Series B Preferred Stock in all respects (including
without limitation with respect to dividends and distributions upon liquidation,
dissolution and winding up of the Corporation), except that upon and after the
occurrence of a Trigger Event, the New Securities will rank pari passu with the
Series B Preferred Stock in respect of dividends, distributions upon
liquidation, dissolution and winding up of the Corporation; provided, however,
that the New Securities shall not be issued prior to the Closing Date under the
Asset Purchase Agreement by and between River City Broadcasting, L.P. and the
Corporation dated as of April 10, 1996 without the consent of the Seller
thereunder.
11. Miscellaneous.
(a) The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of its authorized but unissued
stock, for the purpose of effecting the conversion of the shares of Series B
Preferred Stock, such number of its duly authorized shares of Class A Common
Stock as shall from time to time be sufficient to effect the conversion of all
outstanding shares of Series B Preferred Stock into such Class A Common Stock at
any time (assuming that, at the time of the computation of such number of
shares, all such Class A Common Stock would be held by a single holder);
provided, however, that nothing contained herein shall preclude the Corporation
from satisfying its obligations in respect of the conversion of the shares by
delivery of purchased shares of Class A Common Stock that are held in the
treasury of the Corporation. All shares of Class A Common Stock which shall be
deliverable upon conversion of the shares of Series B Preferred Stock shall be
duly and validly issued, fully paid and nonassessable. For purposes of this
paragraph 11(a), any shares of Class A Common Stock at any time outstanding
shall not include shares held in the treasury of the Corporation.
(b) The Corporation shall pay any and all issue or other taxes
that may be payable in respect of any issue or delivery of shares of Class A
Common Stock on conversion (or pursuant to redemption or exchange) of shares of
Series B Preferred Stock pursuant hereto. The Corporation
- 11 -
<PAGE>
shall not, however, be required to pay any tax which is payable in respect of
any transfer involved in the issue or delivery of Class A Common Stock in a name
other than that in which the shares of Series B Preferred Stock so converted
were registered, and no such issue or delivery shall be made unless and until
the Convertible Holder requesting such issue has paid to the Corporation the
amount of such tax, or has established, to the satisfaction of the Corporation,
that such tax has been paid.
(c) All notices from the Corporation to the holders shall be
given by one of the methods specified in paragraph 11(d).
(d) All notices and other communications hereunder shall be
deemed given (i) on the first business day following the date received, if
delivered personally, (ii) on the business day following timely deposit with an
overnight courier service, if sent by overnight courier specifying next day
delivery and (iii) on the first business day that is five days following deposit
in the mails, if sent by first class mail to (x) a holder at its last address as
it appears on the transfer records or registry for the Series B Preferred Stock
and (y) the Corporation at the following address (or at such other address as
the Corporation shall specify in a notice pursuant to this paragraph 11(d)):
Sinclair Broadcast Group, Inc., 2000 West 41st Street, Baltimore, Maryland
21211; Attention: Corporate Secretary.
(e) The Corporation shall establish and maintain a register,
or cause a transfer agent to establish and maintain a register, identifying the
holders of shares of Series B Preferred Stock and shall, upon presentation of
certificates endorsed for transfer or accompanied by a duly executed power of
transfer, register the transfer of shares as endorsed by such certificates or
powers of transfer.
(f) Any shares of Series B Preferred Stock which have been
converted, redeemed, exchanged or otherwise acquired by the Corporation shall,
after such conversion, redemption, exchange or acquisition, as the case may be,
be retired and promptly canceled and the Corporation shall take all appropriate
action to cause such shares to obtain the status of authorized but unissued
shares of Preferred Stock without designation as to series, until such shares
are once more designated as part of a particular series by the Board of
Directors; provided, however, that the Corporation shall retain as authorized
but unissued shares of Series B Preferred Stock a sufficient number of such
shares to allow exchange of shares of Class A Common Stock into Series B
Preferred Stock pursuant to paragraph 3(e) hereof or upon the occurrence of a
Trigger Event to the extent holders of Class A Common Stock have the right to
exchange their Common Stock for Series B Preferred Stock. The Corporation may
cause a certificate setting forth a resolution adopted by the Board of Directors
that none of the authorized shares of Series B Preferred Stock are outstanding
to be filed with the Secretary of State of the State of Maryland. When such
certificate becomes effective, all references to Series B Preferred Stock shall
be eliminated from the Charter and the shares of Preferred Stock designated
hereby as Series B Preferred Stock shall have the status of authorized and
unissued shares of Preferred Stock and may be reissued as part of any new series
of Preferred Stock to be created by resolution or resolutions of the Board of
Directors.
- 12 -
<PAGE>
(g) The Corporation shall be entitled to recognize the
exclusive right of a Convertible Holder registered according to the
Corporation's register as the holder of shares of Series B Preferred Stock, and
such record holder shall be deemed the holder of such shares for all purposes.
(h) Any registered holder of Series B Preferred Stock may
proceed to protect and enforce its rights by any available remedy by proceeding
at law or in equity to protect and enforce any such rights, whether for the
specific enforcement of any provision in these Articles Supplementary or in aid
of the exercise of any power granted herein, or to enforce any other proper
remedy.
- 13 -
[Execution Counterpart]
************************************************************
SINCLAIR BROADCAST GROUP, INC.
and
SUBSIDIARY GUARANTORS
-----------------------------
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of May 31, 1996
------------------------------
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Agent
------------------------------
************************************************************
<PAGE>
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which
it is attached but is inserted for convenience only.
Page
Section 1. Definitions and Accounting Matters............................... 3
1.01 Certain Defined Terms......................................... 3
1.02 Accounting Terms and Determinations...........................42
1.03 Classes and Types of Loans....................................44
1.04 References to Date............................................44
Section 2. Commitments......................................................44
2.01 Loans.........................................................44
2.02 Borrowings....................................................46
2.03 Changes of Commitments........................................46
2.04 Commitment Fees...............................................48
2.05 Lending Offices...............................................49
2.06 Several Obligations; Remedies Independent.....................49
2.07 Notes.........................................................49
2.08 Optional Prepayments and Conversions or
Continuations of Loans............................51
2.09 Mandatory Prepayments and Reductions of
Commitments.......................................52
2.10 Issuance of Letters of Credit.................................56
Section 3. Payments of Principal and Interest...............................61
3.01 Repayment of Loans............................................61
3.02 Interest......................................................64
Section 4. Payments; Pro Rata Treatment;
Computations;Etc..................................65
4.01 Payments......................................................65
4.02 Pro Rata Treatment............................................66
4.03 Computations..................................................67
4.04 Minimum Amounts, Etc..........................................67
4.05 Certain Notices...............................................67
4.06 Non-Receipt of Funds by the Agent.............................68
4.07 Sharing of Payments, Etc......................................69
Section 5. Yield Protection, Etc............................................71
5.01 Additional Costs..............................................71
5.02 Limitation on Types of Loans..................................74
5.03 Illegality....................................................74
5.04 Treatment of Affected Loans...................................75
5.05 Compensation..................................................75
5.06 Additional Costs in Respect of
Letters of Credit.................................76
5.07 U.S. Taxes....................................................77
5.08 Replacement of Lenders........................................79
(i)
<PAGE>
Page
Section 6. Guarantee........................................................80
6.01 Guarantee.....................................................80
6.02 Obligations Unconditional.....................................80
6.03 Reinstatement.................................................81
6.04 Subrogation...................................................82
6.05 Remedies......................................................82
6.06 Continuing Guarantee..........................................82
6.07 Rights of Contribution........................................82
6.08 Limitation on Guarantee Obligations...........................83
Section 7. Conditions Precedent.............................................84
7.01 Effectiveness of this Agreement...............................84
7.02 Initial and Subsequent Loans..................................94
Section 8. Representations and Warranties...................................95
8.01 Corporate Existence...........................................95
8.02 Financial Condition...........................................95
8.03 Litigation....................................................96
8.04 No Breach.....................................................96
8.05 Action........................................................96
8.06 Approvals.....................................................97
8.07 Use of Loans..................................................97
8.08 ERISA.........................................................97
8.09 Taxes.........................................................97
8.10 Investment Company Act........................................98
8.11 Public Utility Holding Company Act............................98
8.12 Indebtedness and Interest Rate Protection
Agreements........................................98
8.13 Hazardous Materials...........................................98
8.14 Subsidiaries, Etc............................................100
8.15 Broadcast Licenses...........................................101
8.16 Property.....................................................102
8.17 Ancillary Documents..........................................102
8.18 Film Obligations.............................................103
8.19 Capitalization...............................................103
8.20 True and Complete Disclosure.................................103
8.21 Tax Identification Numbers...............................104
8.22 Program Services Agreements..............................104
8.23 Options..................................................104
8.24 Asset Use and Operating Agreements.......................104
Section 9. Covenants of the Obligors.......................................104
9.01 Financial Statements.........................................105
9.02 Litigation...................................................109
9.03 Existence, Etc...............................................109
9.04 Insurance....................................................110
9.05 Prohibition of Fundamental Changes...........................111
9.06 Limitation on Liens..........................................118
9.07 Indebtedness.................................................119
9.08 Investments..................................................121
9.09 Dividend Payments............................................122
(ii)
<PAGE>
Page
9.10 Interest Coverage Ratio......................................123
9.11 Fixed Charges Ratio..........................................123
9.12 Capital Expenditures.........................................123
9.13 Senior Indebtedness Ratio....................................123
9.14 Total Indebtedness Ratio.....................................124
9.15 Film Cash Payments and
Sports Rights Payments...........................125
9.16 Corporate Expense............................................126
9.17 Interest Rate Protection Agreements..........................126
9.18 Subordinated Indebtedness....................................127
9.19 Lines of Business............................................127
9.20 Transactions with Affiliates.................................128
9.21 Use of Proceeds..............................................128
9.22 Certain Obligations Respecting
Subsidiaries.....................................128
9.23 Additional Subsidiary Guarantors.............................129
9.24 Modifications of Certain Documents...........................129
9.25 License Subsidiaries.........................................130
9.26 Equity Issuance..............................................131
9.27 CRESAP.......................................................132
9.28 Real Property................................................133
9.29 Program Services Agreements..................................136
9.30 FCC Filings..................................................137
9.31 Exercise of River City Options...............................137
9.32 Limitation on Cure Rights....................................137
Section 10. Events of Default..............................................138
10.01 Events of Default; Remedies.................................138
10.02 Collateral Account..........................................143
Section 11. The Agent......................................................144
11.01 Appointment, Powers and Immunities..........................144
11.02 Reliance by Agent...........................................145
11.03 Defaults....................................................146
11.04 Rights as a Lender..........................................146
11.05 Indemnification.............................................147
11.06 Non-Reliance on Agent and
Other Lenders....................................147
11.07 Failure to Act..............................................148
11.08 Resignation or Removal of Agent.............................148
11.09 Consents under Certain Documents............................148
11.10 Collateral Sub-Agents.......................................149
11.11 Managing Agents.............................................149
11.12 Conditions Precedent........................................149
Section 12. Miscellaneous..................................................150
12.01 Waiver......................................................150
12.02 Notices.....................................................150
12.03 Expenses, Etc...............................................150
12.04 Amendments, Etc.............................................152
12.05 Successors and Assigns......................................155
(iii)
<PAGE>
Page
12.06 Assignments and Participations...............................155
12.07 Survival.....................................................158
12.08 Captions.....................................................158
12.09 Counterparts.................................................159
12.10 Governing Law; Submission
to Jurisdiction...................................159
12.11 Waiver of Jury Trial.........................................159
12.12 Treatment of Certain Information.............................159
12.13 Cure of Defaults by Agent or Lenders.........................159
Schedule I - Indebtedness and Interest Rate Protection
Agreements
Schedule II - Hazardous Materials
Schedule III - Subsidiaries and Investments
Schedule IV - Broadcast Licenses
Schedule V - Film Obligations
Schedule VI - Real Property
Schedule VII - Tax Identification Numbers
Schedule VIII - Program Services Agreements
Schedule IX - Option Agreements
Schedule X - Asset Use and Operating Agreements
Schedule XI - Revolving Credit Commitments
Schedule XII - Tranche A Term Loan Commitments
Schedule XIII - Tranche B Term Loan Commitments
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Tranche A Term Loan Note
Exhibit A-3 - Form of Tranche B Term Loan Note
Exhibit A-4 - Form of Tranche C Term Loan Note
Exhibit B - Form of Tranche C Term Loan Activation Notice
Exhibit C - Form of Security Agreement
Exhibit D - Form of Affiliate Guaranty and Security Agreement
Exhibit E - Form of GDC Security Agreement
Exhibit F - Form of Founders Subordination Agreement
Exhibit G - Form of Asset Use and Operating Agreement
Exhibit H - Form of Consent and Agreement
Exhibit I - Form of Assignment and Acceptance
(iv)
<PAGE>
- 1 -
SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of May
31, 1996, between:
SINCLAIR BROADCAST GROUP, INC., a corporation duly organized
and validly existing under the laws of the State of Maryland (the
"Borrower");
each of the Persons (as defined in Section 1.01 hereof)
identified under the caption "SUBSIDIARY GUARANTORS" on the signature
pages hereof or which, pursuant to Section 9.23 hereof, shall become a
"Subsidiary Guarantor" hereunder (individually, a "Subsidiary
Guarantor" and, collectively, the "Subsidiary Guarantors"; the Borrower
and the Subsidiary Guarantors being collectively referred to herein as
the "Obligors");
each of the Persons identified under the caption "LENDERS" on
the signature pages hereof or which, pursuant to Section 12.06(b)
hereof, shall become a "Lender" hereunder (individually, a "Lender"
and, collectively, the "Lenders"); and
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a national
banking association, as agent for the Lenders (in such capacity,
together with its successors in such capacity, the "Agent").
WHEREAS, the Borrower, certain of the Subsidiary Guarantors,
certain of the Lenders (the "Existing Lenders") and the Agent are party to an
Amended and Restated Credit Agreement dated as of May 24, 1994 (as heretofore
modified and supplemented and in effect on the date hereof immediately before
giving effect to the amendment and restatement contemplated hereby, the
"Existing Credit Agreement"). Pursuant to the Existing Credit Agreement, (a)
certain of the Existing Lenders committed to make Facility A Revolving Credit
Loans (as defined in the Existing Credit Agreement and referred to herein as
"Existing Facility A Revolving Credit Loans") and Term Loans (as defined in the
Existing Credit Agreement and referred to herein as "Existing Term Loans") to
the Borrower in an original aggregate principal amount not exceeding
$225,000,000 at any one time outstanding (the "Existing Facility A
Commitments"), with a portion of such commitments made available for the
issuance of letters of credit in an aggregate face amount not exceeding
$15,000,000 at any one time outstanding, (b) by operation of a Facility B
Activation Notice (as defined in the Existing Credit Agreement), one Existing
Lender committed to make Facility B Revolving Credit Loans (as defined in the
Existing Credit Agreement and referred
Credit Agreement
<PAGE>
- 2 -
to herein as "Existing Facility B Revolving Credit Loans") to the Borrower in an
aggregate principal amount not exceeding $75,000,000 at any one time outstanding
(the "Existing Facility B Commitment") and (c) certain of the Existing Lenders
committed to make Facility C Loans (as defined in the Existing Credit Agreement
and referred to herein as "Existing Facility C Loans") to the Borrower in an
original aggregate principal amount not exceeding $125,000,000 (the "Existing
Facility C Commitments");
WHEREAS, on the date hereof (a) Existing Facility A
Commitments have been terminated and no Existing Facility A Revolving Credit
Loans, Existing Term Loans or Letters of Credit (and no reimbursement
obligations) are outstanding under the Existing Credit Agreement, (b) an
Existing Facility B Commitment in the amount of $75,000,000 remains outstanding
under the Existing Credit Agreement and Existing Facility B Revolving Credit
Loans in an aggregate principal amount equal to $36,000,000 are outstanding
under the Existing Credit Agreement and (c) the Existing Facility C Commitments
have been terminated and no Existing Facility C Loans are outstanding under the
Existing Credit Agreement; and
WHEREAS, the Borrower has requested that the Existing Lenders
(which include all of the Persons that on the date hereof are Lenders under, and
as defined in, the Existing Credit Agreement) and the Agent agree to amend and
restate the Existing Credit Agreement, and the Existing Lenders and the Agent
are willing to amend and restate the Existing Credit Agreement, in order to,
among other things, (a) reinstate the Existing Facility A Commitments and set
the initial aggregate amount thereof to be $250,000,000, change the name thereof
to "Revolving Credit Commitments" and set the amount thereof available for
Letters of Credit to be $50,000,000, (b) increase the aggregate principal amount
of the Existing Facility B Revolving Credit Loans to $550,000,000, convert the
Existing Facility B Revolving Credit Loans into term loans and change the name
thereof to "Tranche A Term Loans" and (c) provide for (i) Tranche B Term Loans
(as defined herein) to be made by certain Lenders to the Borrower in an
aggregate principal amount not exceeding $200,000,000 and (ii) if agreed to by
the Borrower and one or more Lenders after the date hereof, Tranche C Term Loans
(as defined herein) to be made by certain Lenders to the Borrower in an
aggregate principal amount not exceeding $200,000,000;
NOW, THEREFORE, the parties hereto hereby agree that the
Existing Credit Agreement shall be amended and restated as of the date hereof
(but subject to Section 7.01 hereof) to read in its entirety as follows:
Credit Agreement
<PAGE>
- 3 -
Section 1. Definitions and Accounting Matters.
----------------------------------
1.01 Certain Defined Terms. As used herein, the following
terms shall have the following meanings (all terms defined in this Section 1.01
or in other provisions of this Agreement in the singular to have the same
meanings when used in the plural and vice versa):
"Acquisitions" shall mean the River City Non-License
Acquisition, the River City License Acquisitions, the Approved Acquisitions and
the Other Acquisitions.
"Additional Corporate Expense" shall have the meaning assigned
to such term in Section 9.16 hereof.
"Additional Senior Subordinated Notes" shall have the meaning
assigned to such term in Section 9.07(c) hereof.
"Affiliate" shall mean any Person which directly or indirectly
controls, or is under common control with, or is controlled by, the Borrower
and, if such Person is an individual, any member of the immediate family
(including parents, spouse and children) of such individual and any trust whose
principal beneficiary is such individual or one or more members of such
immediate family and any Person who is controlled by any such member or trust.
As used in this definition, "control" (including, with its correlative meanings,
"controlled by" and "under common control with") shall mean possession, directly
or indirectly, of power to direct or cause the direction of management or
policies (whether through ownership of securities or partnership or other
ownership interests, by contract or otherwise), provided that, in any event, any
Person which owns directly or indirectly 5% or more of the securities having
ordinary voting power for the election of directors or other governing body of a
corporation or 5% or more of the partnership or other ownership interests of any
other Person (other than as a limited partner of such other Person) will be
deemed to control such corporation or other Person. Notwithstanding the
foregoing, no individual shall be deemed to be an Affiliate solely by reason of
his or her being a director, officer or employee of the Borrower or any of its
Subsidiaries and the Borrower and its Subsidiaries shall not be deemed to be
Affiliates of each other.
"Affiliate Guarantee and Security Agreement" shall mean a
second amended and restated Guarantee and Security Agreement substantially in
the form of Exhibit D hereto between Cunningham, GDLP, KIG and the Agent, as the
same shall be modified and supplemented and in effect from time to time.
Credit Agreement
<PAGE>
- 4 -
"Aggregate Consideration" shall mean, in connection with any
Acquisition, the aggregate consideration, in whatever form (including, without
limitation, cash payments, the principal amount of promissory notes and
Indebtedness assumed, the aggregate amounts payable to acquire, extend and
exercise any option, the aggregate amount payable under non-competition
agreements and management agreements, and the fair market value of other
Property delivered) paid, delivered or assumed by the Borrower and its
Subsidiaries for such Acquisition.
this "Agreement" shall mean this Second Amended and Restated
Credit Agreement, as modified and supplemented and in effect from time to time.
"Ancillary Documents" shall mean the River City Acquisition
Documents, the Asset Use and Operating Agreements, the Julian Smith Documents,
the Carolyn Smith Documents, the Program Services Agreements, the Senior
Subordinated Notes and the Senior Subordinated Note Indentures.
"Applicable Commitment Fee Rate" shall mean 1/2 of 1% per
annum; provided that if the Total Indebtedness Ratio as at the last day of any
fiscal quarter of the Borrower shall fall within any of the ranges set forth
below then, subject to the delivery to the Agent of a certificate of a senior
financial officer of the Borrower demonstrating such fact prior to the end of
the next succeeding fiscal quarter, the "Applicable Commitment Fee Rate" shall
be reduced to the rate set forth below opposite such range during the period
commencing on the Quarterly Date on or immediately following the date of receipt
of such certificate to but not including the next succeeding Quarterly Date
thereafter (except that notwithstanding the foregoing, the Applicable Commitment
Fee Rate shall not as a consequence of this proviso be so reduced for any period
during which an Event of Default shall have occurred and be continuing):
Range of
Total Applicable Commitment
Indebtedness Ratio Fee Rate (% p.a.)
------------------ -----------------
Greater than or
equal to 5.50 to 1 1/2 of 1%
less than 5.50 to 1
and greater than or
equal to 4.00 to 1 3/8 of 1%
Less than 4.00 to 1 1/4 of 1%
Credit Agreement
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"Applicable Lending Office" shall mean, for each Lender and
for each Type of Loan, the "Lending Office" of such Lender (or of an affiliate
of such Lender) designated for such Type of Loan on the signature pages hereof
or such other office of such Lender (or of an affiliate of such Lender) as such
Lender may from time to time specify to the Agent and the Borrower as the office
by which its Loans of such Type are to be made and maintained.
"Applicable Margin" shall mean: (a) with respect to Base Rate
Loans, (i) 1-1/4% per annum for Revolving Credit Loans and Tranche A Term Loans,
(ii) 1-3/4% per annum for Tranche B Term Loans and (iii) the rate per annum for
Tranche C Term Loans agreed to by the Borrower and the Tranche C Lenders in the
Tranche C Term Loan Activation Notice; and (b) with respect to Eurodollar Loans,
(i) 2-1/2% per annum for Revolving Credit Loans and Tranche A Term Loans, (ii)
2-3/4% per annum for Tranche B Term Loans and (iii) the rate per annum for
Tranche C Term Loans agreed to by the Borrower and the Tranche C Lenders in the
Tranche C Term Loan Activation Notice; provided that if the Total Indebtedness
Ratio as at the last day of any fiscal quarter of the Borrower shall fall within
any of the ranges set forth below then, subject to the delivery to the Agent of
a certificate of a senior financial officer of the Borrower demonstrating such
fact prior to the end of the next succeeding fiscal quarter, the "Applicable
Margin" for Revolving Credit Loans and Tranche A Term Loans shall be reduced to
the rate for the respective Type of Loan set forth below opposite such range
during the period commencing on the Quarterly Date on or immediately following
the date of receipt of such certificate to but not including the next succeeding
Quarterly Date thereafter (except that notwithstanding the foregoing, the
Applicable Margin for any such Loan shall not as a consequence of this proviso
be so reduced for any period during which an Event of Default shall have
occurred and be continuing):
Range of
Total Applicable Margin (% p.a.)
Indebtedness Ratio Base Rate Loans Eurodollar Loans
------------------ --------------- ----------------
Greater than or
equal to 6.00 to 1 1-1/4% 2-1/2%
less than 6.00 to 1
and greater than or
equal to 5.50 to 1 1% 2-1/4%
less than 5.50 to 1 and
greater than or equal
to 5.00 to 1 3/4% 2%
Credit Agreement
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less than 5.00 to 1 and
greater than or equal
to 4.00 to 1 1/4% 1-1/2%
Less than 4.00 to 1 0% 1-1/4%
"Approved Acquisitions" shall mean (a) the acquisition of
assets and assumption of liabilities in accordance with the terms hereof by the
Borrower or any of its Subsidiaries pursuant to the exercise of the KSMO Option,
(b) the acquisition of assets and assumption of liabilities in accordance with
the terms hereof by the Borrower or any of its Subsidiaries pursuant to the
exercise of the WSTR Option, (c) the WYZZ Acquisition, (d) the consummation of
the acquisition of assets by the Borrower or any of its Subsidiaries pursuant to
the exercise of any or all of the WPTT Conversion Option, the Glencairn Options
and the WDBB Options, (e) the acquisition of stock or assets and assumption of
liabilities relating to WFBC-AM and WFBC-FM, Greenville, South Carolina and
WORD-AM, Spartanburg, South Carolina in accordance with the terms hereof by the
Borrower or any of its Subsidiaries pursuant to the exercise of either option
granted to the Borrower or such Subsidiary under the Option Agreement dated as
of July 7, 1995, as amended, by and among Keymarket of South Carolina, Inc.
("Keymarket S.C.") and the Borrower (as assignee of River City), (f) the
acquisition of assets and assumption of liabilities relating to WSPA-AM and
WSPA-FM, Spartanburg, South Carolina in accordance with the terms hereof by the
Borrower or any of its Subsidiaries pursuant to the exercise of the option
granted to the Borrower or such Subsidiary under the Option Agreement dated as
of August 30, 1994, as amended, by and among The Spartan Radiocasting Company,
Inc. and the Borrower (as assignee of River City, which, in turn, is assignee of
Keymarket S.C.), (g) the acquisition of assets (or of the capital stock (or
other equity ownership interest) of the Person that owns such assets) and
assumption of liabilities relating to WPMR-AM and WKRF-FM, Tobyhanna,
Pennsylvania in accordance with the terms hereof, (h) the acquisition of assets
and assumption of liabilities relating to WQEQ-FM, Freeland, Pennsylvania and
WXPX-AM, West Hazelton, Pennsylvania in accordance with the terms hereof by the
Borrower or any of its Subsidiaries pursuant to the exercise of the option
granted to the Borrower or such Subsidiary under the Option Agreement dated as
of September 13, 1995, as amended, by and among Friendship Communications, Inc.
and the Borrower (as assignee of River City), (i) the acquisition of assets (or
of the capital stock (or other equity ownership interest) of the Person that
owns such assets) and assumption of liabilities relating to WWWS(AM) and
WGR(AM), Buffalo, New York and (j) the acquisition of assets (or of the capital
stock (or other equity ownership interest) of the Person that owns such assets)
and assumption of
Credit Agreement
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liabilities relating to WXWX-FM, Easley, South Carolina, and WXWZ-FM, Greer,
South Carolina.
"Asset Use and Operating Agreements" shall mean (a) the
agreements listed in Schedule X hereto and (b) with respect to each Owned
Station hereafter acquired by the Borrower, an Asset Use and Operating Agreement
entered into after the date hereof, as contemplated by Section 9.25 hereof,
between the Subsidiary of the Borrower that operates such Owned Station and a
License Subsidiary with respect to such Owned Station substantially in the form
of Exhibit G hereto, in each case as the same may be modified and supplemented
and in effect from time to time.
"Baker Employment Agreement" shall mean the Employment
Agreement dated as of April 10, 1996 between Barry Baker and the Borrower, as
the same may be modified and supplemented and in effect from time to time.
"Baker Stock Option Agreement" shall mean the Stock Option
Agreement dated as of April 10, 1996 between Barry Baker and the Borrower,
providing, among other things, for the right of Barry Baker to acquire 1,382,435
shares of the Borrower's Class A Common Stock on the terms and conditions set
forth therein, as the same may be modified and supplemented and in effect from
time to time.
"Base Rate" shall mean, for any day, the higher of (a) the
Federal Funds Rate for such day plus 1/2 of 1% per annum or (b) the Prime Rate
for such day. Each change in any interest rate provided for herein based upon
the Base Rate resulting from a change in the Base Rate shall take effect at the
time of such change in the Base Rate.
"Base Rate Loans" shall mean Loans which bear interest at
rates based upon the Base Rate.
"Basic Documents" shall mean, collectively, this Agreement,
the Notes, the Letter of Credit Documents, the Security Documents, each Consent
and Agreement and the Founders Subordination Agreement.
"Broadcast Licenses" shall mean (a) the licenses, permits,
authorizations or certificates to construct, own, operate or promote the
Stations granted by the FCC, and all extensions, additions and renewals thereto
or thereof, and (b) the licenses, permits, authorizations or certificates which
are necessary or desirable to construct, own, operate or promote the Stations
granted by administrative law courts or any state, county, city, town, village
or other local government authority, and all extensions, additions and renewals
thereto or thereof.
Credit Agreement
<PAGE>
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"Business Day" shall mean (a) any day on which commercial
banks are not authorized or required to close in New York City and (b) if such
day relates to a borrowing of, a payment or prepayment of principal of or
interest on, or a Conversion of or into, or an Interest Period for, a Eurodollar
Loan or a notice by the Borrower with respect to any such borrowing, payment,
prepayment, Conversion or Interest Period, which is also a day on which dealings
in Dollar deposits are carried out in the London interbank market.
"Capital Expenditures" shall mean, for any period,
expenditures (including the aggregate amount of Capital Lease Obligations
incurred during such period) made by the Borrower or any of its Consolidated
Subsidiaries to acquire or construct fixed assets, plant and equipment
(including renewals, improvements and replacements, but excluding repairs)
during such period computed in accordance with GAAP, but excluding any such
expenditures made as part of any Acquisition.
"Capital Lease Obligations" shall mean, for any Person, the
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real and/or personal Property to the
extent such obligations are required to be classified and accounted for as a
capital lease on a balance sheet of such Person under GAAP (including Statement
of Financial Accounting Standards No. 13 of the Financial Accounting Standards
Board) and, for purposes of this Agreement, the amount of such obligations shall
be the capitalized amount thereof, determined in accordance with GAAP (including
such Statement No. 13).
"Capital Stock" shall mean, as to any Person, any and all
shares, interests, warrants, participations or other equivalents (however
designated) of corporate stock of such Person.
"Carolyn Smith Documents" shall mean the Term Note dated
September 30, 1990 of the Borrower payable to Carolyn C. Smith in the original
face amount of $6,700,000 and all agreements, documents or other instruments
providing for any Guarantee of all or any portion of such Term Note by any
Obligor, in each case as modified and supplemented and in effect from time to
time.
"Casualty Event" shall mean, with respect to any Property of
any Person, any loss of or damage to, or any condemnation or other taking of,
such Property for which such Person or any of its Subsidiaries receives
insurance proceeds, or proceeds of a condemnation award or other compensation.
Credit Agreement
<PAGE>
- 9 -
"Chase" shall mean The Chase Manhattan Bank (National
Association) and its successors.
"Cincinnati TV 64" shall mean Cincinnati TV 64 Limited
Partnership, a Delaware limited partnership.
"Class" shall have the meaning assigned to such term in
Section 1.03 hereof.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Collateral Account" shall have the meaning assigned to such
term in Section 10.02 hereof.
"Columbus Option Agreement" shall mean the Columbus Option
Agreement dated as of May 31, 1996 by and among the River City Sellers, as
Sellers, and the Borrower, as Option Holder, as the same shall be modified and
supplemented and in effect from time to time.
"Commitments" shall mean the Revolving Credit Commitments, the
Tranche A Term Loan Commitments, the Tranche B Term Loan Commitments and the
Tranche C Term Loan Commitments.
"Consent and Agreement" shall mean a Consent and Agreement
substantially in the form of Exhibit H hereto.
"Consolidated Subsidiary" shall mean, for any Person, each
Subsidiary of such Person (whether now existing or hereafter created or
acquired) the financial statements of which shall be (or should have been)
consolidated with the financial statements of such Person in accordance with
GAAP.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.08 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.
"Contract Station" shall mean (a) each television or radio
station listed in Part B of Schedule IV hereto and (b) each television or radio
station that is the subject of an acquisition referred to in clause (b) of the
definition of "Other Acquisition" in this Section 1.01 consummated by the
Borrower or any of its Subsidiaries on or after the date hereof, in each case
referred to in the foregoing clauses (a) and (b) until such time, if any, as
such television or radio station becomes an Owned Station.
Credit Agreement
<PAGE>
- 10 -
"Convert", "Conversion" and "Converted" shall refer to a
conversion pursuant to Section 2.08 or 5.04 hereof of Loans of one Type into
Loans of the other Type, which may be accompanied by the transfer by a Lender
(at its sole discretion) of a Loan from one Applicable Lending Office to
another.
"Converted Senior Subordinated Notes" shall have the meaning
assigned to such term in Section 9.07(h) hereof.
"Corporate Expense" shall mean, for any period, all general
and administrative expenses of the Borrower for such period. In the event that
any general or administrative expense of the type heretofore borne by the
Borrower is hereafter borne by any Subsidiary of the Borrower, such general or
administrative expense borne by such Subsidiary shall be deemed to be "Corporate
Expense" for the purposes hereof.
"Corporate Employee Stock Option Agreements" shall mean the
respective Stock Option Agreements dated as of April 10, 1996 between the
Borrower and the respective River City Corporate Employees, providing, among
other things, for the right of the River City Corporate Employees to acquire, in
the aggregate, not more than 691,218 shares of the Borrower's Class A Common
Stock on the terms and conditions set forth therein, in each case as the same
may be modified and supplemented and in effect from time to time.
"Credit Exposure" of a Lender shall mean the aggregate
outstanding principal amount of the Loans held by such Lender, the aggregate
unutilized amounts of the outstanding Commitment(s) of such Lender and the
aggregate amount of Letter of Credit Liabilities of such Lender.
"Credit Parties" shall mean the Obligors, Cunningham, KIG,
GDLP and GDC.
"CRESAP" shall mean CRESAP Enterprises, Inc, a Maryland
corporation.
"CRESAP Investment" shall mean the Investment permitted by the
proviso to Section 9.27(e) hereof.
"Cunningham" shall mean Cunningham Communications, Inc., a
Maryland corporation.
"Debt Service" shall mean, for any period, the sum, for the
Borrower and its Consolidated Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP), of the following: (a) all payments
of principal of Indebtedness (including, without limitation, the principal
component of any
Credit Agreement
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payments in respect of Capital Lease Obligations) scheduled to be made during
such period plus (b) all Interest Expense for such period plus (c) fees and
other expenses payable in connection with this Agreement for such period
(excluding such fees and expenses constituting transaction costs payable on the
Restatement Effective Date, but including agency fees).
"Default" shall mean an Event of Default or an event which
with notice or lapse of time or both would become an Event of Default.
"Designated Employees Stock Option Plan" shall mean the
Incentive Stock Option Plan for Designated Participants providing for the right
of certain employees of the Borrower and its Subsidiaries to acquire, in the
aggregate, not more than 68,000 shares of the Borrower's Class A Common Stock.
"Disposition" shall mean any sale, assignment, transfer or
other disposition of any Property (whether now owned or hereafter acquired) by
the Borrower or any of its Subsidiaries to any Person excluding any sale,
assignment, transfer or other disposition of any Property sold or disposed of in
the ordinary course of business and on ordinary business terms.
"Dividend Payment" shall mean dividends (in cash, Property or
obligations) on, or other payments or distributions on account of, or the
setting apart of money for a sinking or other analogous fund for, or the
purchase, redemption, retirement or other acquisition of, any shares of any
class of stock of the Borrower or of any warrants, options or other rights to
acquire the same (or to make any payments to any Person, such as "phantom stock"
payments, where the amount thereof is calculated with reference to the fair
market or equity value of the Borrower or any of its Subsidiaries), but
excluding dividends payable solely in shares of capital stock of the Borrower.
"Dollars" and "$" shall mean lawful money of the United States
of America.
"EBITDA" shall mean, for any period, the sum, for the Borrower
and its Consolidated Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following for such period: (a) net
operating income for such period plus (b) taxes to the extent deducted in
determining net operating income for such period plus (c) depreciation and
amortization (including film amortization) for such period plus (d) Interest
Expense for such period to the extent deducted in determining net operating
income for such period plus (e) all other non-cash charges to the extent
deducted in determining net operating income for such period minus (f) Film Cash
Payments
Credit Agreement
<PAGE>
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made or scheduled to be made during such period (but, to the extent EBITDA for
such period is determined on a pro forma basis after giving effect to the River
City Non-License Acquisition, excluding Film Cash Payments scheduled to be made
but not made by River City during the portion of such period occurring prior to
the Restatement Effective Date) minus (g) Corporate Expense to the extent not
deducted in determining net operating income for such period (excluding up to
$1,028,000 of bonuses to the extent paid to the Smith Brothers in respect of
services rendered to the Borrower and its Subsidiaries in 1995) plus (h) the
Adjustment Amount (as defined below) for such period minus (i) non-cash revenues
to the extent included in net operating income for such period plus (j) the
aggregate amount of Additional Corporate Expense and Dividend Payments made by
the Borrower and its Subsidiaries as permitted by Sections 9.09(a) and 9.16
hereof to the extent deducted in determining net operating income for such
period or included in determining Corporate Expense pursuant to the preceding
clause (g) for such period plus (k) Permitted Termination Payments (as defined
in Section 9.29 hereof) to the extent deducted in determining net operating
income for such period or included in determining Corporate Expense pursuant to
the preceding clause (g) for such period plus (l) any WSYX Extension Payment
made by the Borrower or any of its Subsidiaries during such period to the extent
deducted in determining net operating income for such period. For purposes of
this definition, the "Adjustment Amount" for any period shall mean: (a) if such
period ends before September 30, 1996, $7,780,000, (b) if such period ends on or
after September 30, 1996, but before December 31, 1996, $6,000,000, (c) if such
period ends on or after December 31, 1996, but before June 30, 1997, $4,000,000
and (d) if such period ends on or after June 30, 1997, $0. In the event that any
Disposition occurs during any period for which EBITDA is to be calculated, such
EBITDA shall be calculated as if such Disposition had occurred on the first day
of such period using such reasonable estimates and pro forma adjustments
effected in accordance with generally accepted accounting principles as the
Borrower shall propose and the Agent and at least one Managing Agent shall
approve.
"EBITDA Percentage" shall mean, as of the date of the
consummation of any sale or exchange of assets (or capital stock (or other
equity ownership interest)) contemplated by Section 9.05(d)(iv) hereof, the
ratio, expressed as a percentage, obtained by dividing (a) the portion of EBITDA
attributable to such assets for the twelve-month period ending on, or most
recently ended prior to such date by (b) EBITDA for such period.
"Environmental Affiliate" shall mean, as to any Person (the
"successor"), any other Person whose liability (contingent or otherwise) for an
Environmental Claim the successor may have
Credit Agreement
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retained, assumed or otherwise become or remained liable for (contingently or
otherwise), whether by contract, operation of law or otherwise; provided that
each Subsidiary of the successor, and each former Subsidiary or division of the
successor transferred to another Person, shall in any event be an "Environmental
Affiliate" of the successor.
"Environmental Claim" shall mean, with respect to any Person,
any notice, claim, demand or other communication (whether written or oral) by
any other Person alleging or asserting such Person's liability for investigatory
costs, cleanup costs, governmental response costs, damages to natural resources
or other Property, personal injuries, fines or penalties arising out of, based
on or resulting from (a) the presence, or Release into the environment, of any
Hazardous Material at any location, whether or not owned by such Person, or (b)
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law.
"Environmental Laws" shall mean any and all Federal, state,
local and foreign statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees, permits, concessions, grants, franchises, licenses, agreements
or other governmental restrictions relating to the environment or to emissions,
discharges, Releases or threatened Releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"Equity Issuance" shall mean (a) any issuance or sale by the
Borrower or any of its Subsidiaries after the Restatement Effective Date of (i)
any capital stock, (ii) any warrants or options exercisable in respect of
capital stock (other than any warrants or options relating to capital stock of
the Borrower issued to directors, officers or employees of the Borrower or any
of its Subsidiaries pursuant to employee benefit plans established in the
ordinary course of business and any capital stock of the Borrower issued upon
the exercise of such warrants or options) or (iii) any other security or
instrument representing an equity interest (or the right to obtain any equity
interest) in the Borrower or any of its Subsidiaries or (b) the receipt by the
Borrower or any of its Subsidiaries after the Restatement Effective Date of any
capital contribution (whether or not evidenced by any equity security issued by
the recipient of such contribution); provided that Equity Issuance shall not
include (x) any such issuance or sale by any Subsidiary
Credit Agreement
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of the Borrower to the Borrower or any Wholly Owned Subsidiary of the Borrower
or (y) any capital contribution by the Borrower or any Wholly Owned Subsidiary
of the Borrower to any Subsidiary of the Borrower.
"Equity Public Offering" shall mean a public Equity Issuance
by the Borrower of its common stock pursuant to a registration statement filed
under the Securities Act of 1933, as amended.
"Equity Rights" shall mean, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including, without limitation, any stockholders' or voting trust
agreements) for the issuance, sale, registration or voting of, or securities
convertible into, any additional shares of capital stock of any class, or
partnership or other ownership interests of any type in, such Person.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or
business which is a member of the same controlled group of corporations (a)
described in Section 414(b) or (c) of the Code of which the Borrower is a member
and (b) solely for purposes of potential liability under Section 302(c)(11) of
ERISA and Section 412(c)(11) of the Code and the lien created under Section
302(f) of ERISA and Section 412(n) of the Code, described in Section 414(m) or
(o) of the Code of which the Borrower is a member.
"Eurodollar Base Rate" shall mean, with respect to any
Eurodollar Loan for any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/16 of 1%), as quoted by the Agent at
approximately 11:00 a.m. London time (or as soon thereafter as practicable) on
the date two Business Days prior to the first day of such Interest Period for
the offering by Chase to leading banks in the London interbank market of Dollar
deposits having a term comparable to such Interest Period and in an amount
comparable to the principal amount of the Eurodollar Loan to be made by Chase
for such Interest Period. If Chase is not participating in any Eurodollar Loan
during any Interest Period therefor, the Eurodollar Base Rate for such Loan for
such Interest Period shall be determined by reference to the amount of the Loan
which Chase would have made or had outstanding had it been participating in such
Loan during such Interest Period.
Credit Agreement
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"Eurodollar Loans" shall mean Loans that bear interest at
rates based on rates referred to in the definition of "Eurodollar Base Rate" in
this Section 1.01.
"Eurodollar Rate" shall mean, for any Eurodollar Loan for any
Interest Period therefor, a rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined by the Agent to be equal to the Eurodollar
Base Rate for such Loan for such Interest Period divided by 1 minus the Reserve
Requirement for such Loan for such Interest Period.
"Event of Default" shall have the meaning assigned to such
term in Section 10.01 hereof.
"Excess Cash Flow" shall mean, for any period, the sum
(without duplication) of (a) EBITDA for such period minus (b) the sum (without
duplication) of (i) all Debt Service during such period plus (ii) all Capital
Expenditures made by the Borrower and its Subsidiaries during such period plus
(iii) the excess, if any, of the consolidated Working Investment of the Borrower
and its Consolidated Subsidiaries at the end of such period over the
consolidated Working Investment of the Borrower and its Consolidated
Subsidiaries at the beginning of such period (or minus the excess, if any, of
such Working Investment at the beginning of such period over such Working
Investment at the end of such period) plus (c) Film Cash Payments scheduled to
have been made, but not made, during such period minus (d) the aggregate amount
of fees paid by the Borrower and its Subsidiaries to CRESAP during such period
minus (e) the aggregate amount of Federal and state income taxes paid by the
Borrower and its Consolidated Subsidiaries, net of refunds, for such period.
"Existing Credit Agreement" shall have the meaning assigned to
such term in the first "WHEREAS" clause of this Agreement.
"Existing Facility B Revolving Credit Loans" shall have the
meaning assigned to such term in the first "WHEREAS" clause of this Agreement.
"FCC" shall mean the Federal Communications Commission (or any
successor entity).
"Federal Funds Rate" shall mean, for any day, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (a) if the day for
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which such rate is to be determined is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if
such rate is not so published for any Business Day, the Federal Funds Rate for
such day shall be the average rate charged to Chase on such Business Day on such
transactions as determined by the Agent.
"Film Cash Payments" shall mean, for any period, the sum
(determined on a consolidated basis and without duplication) of all payments by
the Borrower and its Subsidiaries made or scheduled to be made during such
period in respect of Film Obligations; provided that amounts applied to the
prepayment of Film Obligations owing under Prepayable Film Contracts shall not
be deemed to be Film Cash Payments. For the purposes of Section 9.15 hereof
only, (a) if the payment schedule for a Film Obligation is modified at no cost
(including, but not limited to, interest costs) to the Borrower or any of its
Subsidiaries, then the payments with respect to such Film Obligation shall be
deemed to be scheduled to be made pursuant to such modified schedule and (b) any
down payment on a Film Obligation shall be equally allocated over the term of
the payment period for such Film Obligation in amount per month during such
payment period equal to the amount of such down payment divided by the number of
months during such payment period.
"Film Obligations" shall mean obligations in respect of the
purchase, use, license or acquisition of programs, programming materials, films,
and similar assets used in connection with the business and operations of the
Borrower and its Subsidiaries.
"Final FCC Order" shall mean an order of the FCC that is no
longer subject to reconsideration or review by the FCC or by any court or
administrative body.
"Fixed Charges Ratio" shall mean, as at any date, the ratio of
(a) EBITDA for the period of twelve consecutive full calendar months ending on
or most recently ended prior to such date to (b) the sum for such period of (i)
Debt Service plus (ii) Capital Expenditures plus (iii) the aggregate amount of
Federal and state income taxes paid by the Borrower and its Consolidated
Subsidiaries, net of refunds, during such period plus (iv) the aggregate amount
of fees paid by the Borrower and its Subsidiaries to CRESAP during such period
plus (v) Dividend Payments made as permitted by Section 9.09(b) during such
period plus (vi) the aggregate amount of WSYX Option Extension Payments made
during such period, except to the extent that such WSYX Option Extension
Payments were paid (x) out of 25% of Excess Cash Flow for each fiscal year of
the Borrower ending before the date
Credit Agreement
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of such payment (to the extent not otherwise applied by the Borrower in
accordance with the provisions of this Agreement), (y) with the proceeds of the
Loans or (z) by means of an Equity Issuance made pursuant to the Columbus Option
Agreement plus (vii) the WSYX Sale Price Differential, if paid during such
period, except to the extent such WSYX Sale Price Differential was paid (x) out
of 25% of Excess Cash Flow for each fiscal year of the Borrower ending before
the date of such payment (to the extent not otherwise applied by the Borrower in
accordance with the provisions of this Agreement), (y) with the proceeds of the
Loans or (z) by means of an Equity Issuance made pursuant to the Columbus Option
Agreement.
"Founders Notes" shall mean Indebtedness under the Julian
Smith Documents and Indebtedness under the Carolyn Smith
Documents.
"Founders Subordination Agreement" shall mean a second amended
and restated Founders Subordination Agreement substantially in the form of
Exhibit F hereto between Carolyn C. Smith and the Agent, as the same shall be
modified and supplemented and in effect from time to time.
"FSF-TV" shall mean FSF-TV, Inc., which operates WRDC- TV,
Channel 28, a television broadcasting station licensed to Raleigh-Durham, North
Carolina and serving the Raleigh-Durham area.
"GAAP" shall mean generally accepted accounting principles
applied on a basis consistent with those which, in accordance with the last
sentence of Section 1.02(a) hereof, are to be used in making the calculations
for purposes of determining compliance with the terms of this Agreement.
"GDC" shall mean Gerstell Development Corporation, a Maryland
corporation.
"GDC Security Agreement" shall mean a second amended and
restated Security Agreement substantially in the form of Exhibit E hereto
between GDC and the Agent, as the same shall be modified and supplemented and in
effect from time to time.
"GDLP" shall mean Gerstell Development Limited Partnership, a
Maryland limited partnership.
"Glencairn" shall mean Glencairn, Ltd., a Maryland
corporation.
Credit Agreement
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"Glencairn Options" shall mean options for the purchase of all
of the issued and outstanding non-voting stock of Glencairn.
"Governmental Authority" shall mean any nation or government,
any state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled (through stock or capital ownership or otherwise) by any of the
foregoing.
"Guarantee" shall mean a guarantee, an endorsement, a
contingent agreement to purchase or to furnish funds for the payment or
maintenance of, or otherwise to be or become contingently liable under or with
respect to, the Indebtedness, other obligations, net worth, working capital or
earnings of any Person, or a guarantee of the payment of dividends or other
distributions upon the stock or equity interests of any Person, or an agreement
to purchase, sell or lease (as lessee or lessor) Property, products, materials,
supplies or services primarily for the purpose of enabling a debtor to make
payment of his, her or its obligations or an agreement to assure a creditor
against loss, and including, without limitation, causing a bank or other
financial institution to issue a letter of credit or other similar instrument
for the benefit of another Person, but excluding endorsements for collection or
deposit in the ordinary course of business; provided that in no event shall the
term "Guarantee" include any Program Services Agreement or any obligations under
any Program Services Agreement. The terms "Guarantee" and "Guaranteed" used as a
verb shall have a correlative meaning.
"H and P Communications" shall mean H and P Communications,
Inc., a Nevada corporation, that on the date hereof owns 90% of the issued and
outstanding stock of WDBB.
"Hazardous Material" shall mean, collectively, (a) any
petroleum or petroleum products, flammable materials, explosives, radioactive
materials, asbestos, urea formaldehyde foam insulation, and transformers or
other equipment that contain polychlorinated biphenyls ("PCBs"), (b) any
chemicals or other materials or substances that are now or hereafter become
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous wastes," "restricted
hazardous wastes," "toxic substances," "toxic pollutants," "contaminants,"
"pollutants" or words of similar import under any Environmental Law and (c) any
other chemical or other material or substance, exposure to which is now
Credit Agreement
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or hereafter prohibited, limited or regulated under any Environmental Law.
"Immaterial Broadcast Licenses" shall mean Broadcast Licenses
(other than main transmitter licenses, auxiliary transmitter licenses (to the
extent in existence on the date hereof) and studio transmitter links (to the
extent necessary for the continued operation of the Stations), in each case
granted by the FCC, and extensions and renewals thereto or thereof) the absence
of which individually or together with all other such Broadcast Licenses could
not have a material adverse effect on the consolidated financial condition,
operations or prospects of the Borrower and its Consolidated Subsidiaries taken
as a whole.
"Indebtedness" shall mean, for any Person: (a) indebtedness
created, issued or incurred by such Person for borrowed money (whether by loan
or the issuance and sale of debt securities or the sale of Property to another
Person subject to an understanding or agreement, contingent or otherwise, to
repurchase such Property from such Person); (b) obligations of such Person to
pay the deferred purchase or acquisition price of Property or services, other
than trade accounts payable (other than for borrowed money) arising, and accrued
expenses incurred, in the ordinary course of business so long as such trade
accounts payable are payable within 90 days of the date the respective goods are
delivered or the respective services are rendered; (c) Indebtedness of others
secured by a Lien on the Property of such Person, whether or not the respective
Indebtedness so secured has been assumed by such Person; (d) obligations of such
Person in respect of letters of credit or similar instruments issued or accepted
by banks and other financial institutions for account of such Person; (e)
Capital Lease Obligations of such Person; (f) Indebtedness of others Guaranteed
by such Person; (g) obligations of such Person under any non-competition
agreement, consulting agreement or similar agreement (other than the Baker
Employment Agreement) entered into in connection with any Acquisition; and (h)
if the Aggregate Consideration payable by such Person to extend and exercise any
option acquired in connection with any Other Acquisition (an "Extension and
Exercise Price") exceeds 20% of the Aggregate Consideration payable in
connection with such Other Acquisition, such Extension and Exercise Price;
provided that in no event shall the term "Indebtedness" include (i) Film
Obligations of such Person, (ii) obligations of such Person under any Program
Services Agreement, (iii) the Preferred Stock or the In-Kind Preferred Stock or
(iv) obligations of such Person to make WSYX Option Extension Payments. For
purposes of calculations hereunder based upon the amount of principal of or
interest on Indebtedness, there shall be excluded the effect of any
double-counting of obligations owing by the Borrower or any of its Subsidiaries
to GDLP in
Credit Agreement
<PAGE>
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respect of Property owned by GDLP and used by the Borrower or any of its
Subsidiaries and Guarantees issued by the Borrower or any of its Subsidiaries of
Capital Lease Obligations related to such Property permitted by Section 9.07(g)
hereof.
"Initial FCC Order" shall mean an order of the FCC that is not
a Final FCC Order.
"In-Kind Preferred Stock" shall have the meaning assigned to
such term in the definition of "Preferred Stock" in this Section 1.01.
"Interest Coverage Ratio" shall mean, as at any date, the
ratio of (a) EBITDA for the period of twelve consecutive full calendar months
ending on or most recently ended prior to such date to (b) Interest Expense for
such period.
"Interest Expense" shall mean, for any period, the sum, for
the Borrower and its Consolidated Subsidiaries (determined on a consolidated
basis without duplication in accordance with GAAP), of the following: (a) all
interest in respect of Indebtedness accrued or capitalized during such period
(whether or not actually paid during such period) plus (b) the net amounts
payable (or minus the net amounts receivable) under Interest Rate Protection
Agreements accrued during such period (whether or not actually paid or received
during such period) minus (c) all cash interest income received during such
period. Any reference herein to calculating Interest Expense for any period on a
"pro forma" basis shall mean that, for purposes of the preceding clause (a), (i)
the Indebtedness on the basis of which Interest Expense is so calculated shall
mean Indebtedness outstanding as of the relevant date of calculation after
giving effect to any repayments and any incurrence of Indebtedness on such date
and (ii) such calculation shall be made applying the respective rates of
interest in effect for such Indebtedness on such date. Subject to the preceding
sentence, any reference herein to calculating Interest Expense for any period a
portion of which falls before the Restatement Effective Date shall be deemed to
mean Interest Expense for the portion of such period consisting of full calendar
months falling after the Restatement Effective Date multiplied by a fraction the
numerator of which is twelve and the denominator of which is the number of such
full calendar months included in such period. In the event that any Disposition
occurs during any period for which Interest Expense is to be calculated and
Loans are prepaid or Commitments are reduced in connection therewith, such
Interest Expense shall be calculated as if such prepayments and reductions had
occurred on the first day of such period using such reasonable estimates and pro
forma adjustments effected in accordance with generally
Credit Agreement
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accepted accounting principles as the Borrower shall propose and the Agent and
at least one Managing Agent shall approve.
"Interest Period" shall mean, with respect to any Eurodollar
Loan, each period commencing on the date such Eurodollar Loan is made or
Converted from a Base Rate Loan or (in the event of a Continuation) the last day
of the next preceding Interest Period for such Loan and ending on the
numerically corresponding day in the first, second, third, sixth or ninth
calendar month thereafter, as the Borrower may select as provided in Section
4.05 hereof, except that each Interest Period which commences on the last
Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing:
(a) if any Interest Period for any Revolving Credit Loan would
otherwise end after the Revolving Credit Commitment Termination Date,
such Interest Period shall end on the Revolving Credit Commitment
Termination Date;
(b) no Interest Period for any Revolving Credit Loan may
commence before and end after any Revolving Credit Commitment Reduction
Date unless, after giving effect thereto, the aggregate principal
amount of the Revolving Credit Loans having Interest Periods which end
after such Revolving Credit Commitment Reduction Date plus such
Lender's Revolving Credit Commitment Percentage of outstanding Letters
of Credit that expire after such Revolving Credit Commitment Reduction
Date, shall be equal to or less than the aggregate amount of the
Revolving Credit Commitments scheduled to be outstanding after giving
effect to the reductions thereof to occur on such Revolving Credit
Commitment Reduction Date;
(c) no Interest Period for any Tranche A Term Loan may
commence before and end after any Tranche A Principal Payment Date
unless, after giving effect thereto, the aggregate principal amount of
the Tranche A Term Loans having Interest Periods which end after such
Tranche A Principal Payment Date shall be equal to or less than the
aggregate principal amount of Tranche A Term Loans scheduled to be
outstanding after giving effect to the payments of principal required
to be made on such Tranche A Principal Payment Date;
(d) no Interest Period for any Tranche B Term Loan may
commence before and end after any Tranche B Principal Payment Date
unless, after giving effect thereto, the
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aggregate principal amount of the Tranche B Term Loans having Interest
Periods which end after such Tranche B Principal Payment Date shall be
equal to or less than the aggregate principal amount of Tranche B Term
Loans scheduled to be outstanding after giving effect to the payments
of principal required to be made on such Tranche B Principal Payment
Date;
(e) no Interest Period for any Tranche C Term Loan may
commence before and end after any Tranche C Principal Payment Date
unless, after giving effect thereto, the aggregate principal amount of
the Tranche C Term Loans having Interest Periods which end after such
Tranche C Principal Payment Date shall be equal to or less than the
aggregate principal amount of Tranche C Term Loans scheduled to be
outstanding after giving effect to the payments of principal required
to be made on such Tranche C Principal Payment Date;
(f) each Interest Period which would otherwise end on a day
which is not a Business Day shall end on the next succeeding Business
Day (or, if such next succeeding Business Day falls in the next
succeeding calendar month, on the next preceding Business Day); and
(g) notwithstanding clauses (a) through (e) above, no Interest
Period shall have a duration of less than one month and, if the
Interest Period for any Eurodollar Loan would otherwise be a shorter
period, such Loan shall not be available hereunder for such period.
"Interest Rate Protection Agreement" shall mean, for any
Person, an interest rate swap, cap or collar agreement or similar arrangement
between such Person and a financial institution providing for the transfer or
mitigation of interest risks either generally or under specific contingencies.
"Investment" shall mean, for any Person: (a) the acquisition
(whether for cash, Property, services or securities or otherwise) of capital
stock, bonds, notes, debentures, partnership or other ownership interests or
other securities of any other Person or any agreement to make any such
acquisition (including, without limitation, any "short sale" or any sale of any
securities at a time when such securities are not owned by the Person entering
into such short sale); (b) the making of any deposit with, or advance, loan or
other extension of credit to, any other Person (including the purchase of
Property from another Person subject to an understanding or agreement,
contingent or otherwise, to resell such Property to such Person, but excluding
any such advance, loan or extension of credit having a term not
Credit Agreement
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exceeding 90 days representing the purchase price of programming, advertising,
inventory or supplies sold in the ordinary course of business); or (c) the
entering into of any Guarantee of, or other contingent obligation with respect
to, Indebtedness or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent or extended to such
Person.
"Issuing Bank" shall mean Chase.
-------------
"Julian Smith Documents" shall mean (a) the Term Note dated
September 30, 1990 of the Borrower payable to Julian S. Smith in the original
face amount of $7,515,000 and heretofore assigned to Carolyn C. Smith and (b)
all agreements, documents or other instruments providing for any Guarantee of
all or any portion of such Term Note by any Obligor.
"Kansas City TV 62" shall mean Kansas City TV 62 Limited
Partnership, a Delaware limited partnership.
"KIG" shall mean Keyser Investment Group, Inc., a Maryland
corporation.
"KRRT-TV" shall mean KRRT-TV, a television broadcasting
station licensed to San Antonio, Texas and serving the San Antonio area.
"KSMO Option" shall mean the Option Agreement dated as of May
24, 1994 between Kansas City TV 62 and the Borrower or any of its Subsidiaries
(as assignee of the Smith Brothers) providing for the grant by Kansas City TV 62
to the Borrower or such Subsidiary of an option to acquire the Properties
relating to KSMO-TV referred to therein as "Station Assets" and to assume the
liabilities relating to KSMO-TV referred to therein as "Assumed Liabilities", as
the same may be modified and supplemented and in effect from time to time.
"KSMO-TV" shall mean KSMO-TV, a television broadcasting
station licensed to Kansas City, Missouri and serving the Kansas City area.
"Letter of Credit" shall have the meaning assigned to such
term in Section 2.10 hereof.
"Letter of Credit Documents" shall mean, collectively, any
application for a Letter of Credit and any other agreements, instruments,
guarantees or other documents (whether general in application or applicable only
to such Letter of Credit) governing or providing for (a) the rights and
obligations of the parties concerned or at risk with respect to such Letter of
Credit or (b) any collateral security for any of such
Credit Agreement
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obligations, each as the same may be modified and supplemented and in effect
from time to time.
"Letter of Credit Interest" shall mean, for each Revolving
Credit Lender, such Revolving Credit Lender's participation interest (or, in the
case of the Issuing Bank, the Issuing Bank's retained interest) in the Issuing
Bank's liability under Letters of Credit and such Revolving Credit Lender's
rights and interests in Reimbursement Obligations and fees, interest and other
amounts payable in connection with Letters of Credit and Reimbursement
Obligations.
"Letter of Credit Liability" shall mean, without duplication,
at any time, the sum of (a) the undrawn face amount of all outstanding Letters
of Credit plus (b) the aggregate unpaid principal amount of all Reimbursement
Obligations of the Borrower at such time due and payable in respect of all
drawings made under all Letters of Credit. For purposes of this Agreement, a
Revolving Credit Lender (other than the Issuing Bank) shall be deemed to hold a
Letter of Credit Liability in an amount equal to its participation interest in
all outstanding Letters of Credit and the aggregate unpaid principal amount of
all Reimbursement Obligations under Section 2.10 hereof, and the Issuing Bank
shall be deemed to hold a Letter of Credit Liability in an amount equal to its
retained interest in all outstanding Letters of Credit and the aggregate unpaid
principal amount of all Reimbursement Obligations after giving effect to the
acquisition by the Revolving Credit Lenders other than the Issuing Bank of their
participation interests under said Section 2.10.
"License Subsidiaries" shall mean, (a) with respect to each
Station that is an Owned Station on the date hereof, the Subsidiary of the
Borrower listed on Schedule IV hereto as the holder of the Broadcast Licenses
for such Owned Station and (b) with respect to any Owned Station hereafter
acquired by the Borrower or any of its Subsidiaries, the Subsidiary of the
Borrower formed, created, or acquired after the date hereof that holds the
Broadcast Licenses for such Owned Station.
"Lien" shall mean, with respect to any Property, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in respect of
such Property. For purposes of this Agreement and the other Basic Documents, the
Borrower or any of its Subsidiaries shall be deemed to own subject to a Lien any
Property which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement (other than an operating lease) relating to such Property.
Credit Agreement
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"Loans" shall mean Revolving Credit Loans, Tranche A Term
Loans, Tranche B Term Loans and Tranche C Term Loans.
"Majority Revolving Credit Lenders" shall mean, subject to the
last paragraph of Section 12.04 hereof, Revolving Credit Lenders having at least
51% of the aggregate amount of the Revolving Credit Commitments or, if the
Revolving Credit Commitments shall have terminated, Revolving Credit Lenders
holding at least 51% of the sum of (a) the aggregate unpaid principal amount of
the Revolving Credit Loans plus (b) the aggregate amount of all Letter of Credit
Liabilities.
"Majority Tranche A Lenders" shall mean, subject to the last
paragraph of Section 12.04 hereof, Tranche A Lenders having at least 51% of the
aggregate amount of the Tranche A Term Loan Commitments or, if the Tranche A
Term Loan Commitments shall have terminated, Tranche A Lenders holding at least
51% of the aggregate unpaid principal amount of the Tranche A Term Loans.
"Majority Tranche B Lenders" shall mean, subject to the last
paragraph of Section 12.04 hereof, Tranche B Lenders having at least 51% of the
aggregate amount of the Tranche B Term Loan Commitments or, if the Tranche B
Term Loan Commitments shall have terminated, Tranche B Lenders holding at least
51% of the aggregate unpaid principal amount of the Tranche B Term Loans.
"Majority Tranche C Lenders" shall mean, subject to the last
paragraph of Section 12.04 hereof, Tranche C Lenders having at least 51% of the
aggregate amount of the Tranche C Term Loan Commitments or, if the Tranche C
Term Loan Commitments shall have terminated, Tranche C Lenders holding at least
51% of the aggregate unpaid principal amount of the Tranche C Term Loans.
"Majority Lenders" shall mean, subject to the last paragraph
of Section 12.04 hereof, Lenders holding at least 51% of the aggregate amount of
the Credit Exposures of all of the Lenders outstanding at the time of
determination. For purposes of the foregoing calculations there shall be
excluded any Credit Exposure directly or indirectly held by the Borrower or any
of its Subsidiaries or any of their Affiliates following an assignment or
participation as contemplated by Section 12.06 hereof.
"Managing Agents" shall mean Bankers Trust Company, First
Union National Bank of North Carolina and NationsBank, N.A., excluding any such
Person that, at the time of determination, is not a Lender hereunder. If there
are no Managing Agents at the time of determination, each reference herein to
one or more Managing Agents shall be deemed to refer to the Agent.
Credit Agreement
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"Margin Stock" shall mean margin stock within the meaning of
Regulations G, U and X.
"Material Adverse Effect" shall mean a material adverse effect
on (a) the Property, business, operations, financial condition, liabilities,
prospects or capitalization of the Borrower and its Subsidiaries, or of the
Stations, taken as a whole, (b) the ability of any Person to perform its
obligations under any of the Transaction Documents to which it is a party, (c)
the validity or enforceability of any of the Basic Documents, (d) the rights and
remedies of the Lenders and the Agent under any of the Basic Documents or (e)
the timely payment of the principal of or interest on the Loans or the
Reimbursement Obligations or other amounts payable under any Basic Document.
"Material Third-Party Licensee" shall mean (a) each River City
Seller that holds a Broadcast License for any Contract Station, (b) each of
Glencairn and its Subsidiaries if, and for so long as, Glencairn or such
Subsidiary, as the case may be, holds a Broadcast License for any Contract
Station, (c) each Person holding a Broadcast License for WPTT-TV, a television
broadcasting station licensed to Pittsburgh, Pennsylvania and serving the
Pittsburgh area, until such time, if any, that such station ceases to be a
Contract Station, (d) each Person holding a Broadcast License for KRRT-TV, until
such time, if any, that such station ceases to be a Contract Station, and (e)
each Person holding a Broadcast License for any Contract Station acquired
pursuant to an Other Acquisition for an Aggregate Consideration exceeding
$6,000,000.
"Mortgage" shall mean each mortgage, deed of trust or similar
instrument executed and delivered to the Agent prior to the date hereof or
pursuant to Section 9.28 of this Agreement, as modified and supplemented and in
effect from time to time, including without limitation (in the case of Mortgages
executed and delivered pursuant to the Existing Credit Agreement) by operation
of the Mortgage Amendments.
"Mortgage Amendments" shall mean instruments satisfactory to
the Agent in form and substance amending those Mortgages that were executed and
delivered to the Agent prior to the date hereof.
"Multiemployer Plan" shall mean a multiemployer plan defined
as such in Section 3(37) of ERISA to which contributions have been made by the
Borrower or any ERISA Affiliate and which is covered by Title IV of ERISA.
"Net Assets" shall mean, with respect to any Subsidiary
Guarantor as at any date, an amount equal to the excess of the
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fair saleable value of the assets of such Subsidiary Guarantor as at such date
(without taking into account the rights of such Subsidiary Guarantor under
Section 6.07 hereof), and excluding the value of the shares of stock owned by
such Subsidiary Guarantor in any other Subsidiary Guarantor party to this
Agreement on such date over the amount that would be required to pay the
probable liabilities of such Subsidiary Guarantor determined as at such date
(excluding the obligations of such Subsidiary Guarantor under Section 6 hereof)
on all of its debts.
"Net Available Proceeds" shall mean:
----------------------
(a) in the case of any Disposition, an amount (not less than
zero) equal to the amount of Net Cash Payments received by the Borrower
and its Subsidiaries in connection with such Disposition;
(b) in the case of any Casualty Event, the aggregate amount of
proceeds of insurance, condemnation awards and other compensation
received by the Borrower and its Subsidiaries in respect of such
Casualty Event net of (i) reasonable expenses incurred by the Borrower
and its Subsidiaries in connection therewith and (ii) contractually
required repayments of Indebtedness to the extent secured by a Lien on
the Property to which such Casualty Event relates and any income and
transfer taxes payable by the Borrower any of its Subsidiaries in
respect of such Casualty Event;
(c) in the case of any Equity Issuance, the aggregate amount
of all cash received by the Borrower and its Subsidiaries in respect of
such Equity Issuance net of reasonable expenses incurred by the
Borrower and its Subsidiaries in connection therewith; and
(d) in the case of any issuance of any Additional Senior
Subordinated Notes, the aggregate principal amount thereof net of
reasonable expenses incurred by the Borrower and its Subsidiaries in
connection therewith.
"Net Cash Payments" shall mean, with respect to any
Disposition, the aggregate amount of all cash payments (including, without
limitation, all cash payments received by way of deferred payment of principal
pursuant to a note or installment receivable or otherwise, but only as and when
received), and the fair market value of any non-cash consideration, received by
the Borrower or its Subsidiaries directly or indirectly in connection with such
Disposition; provided that (a) Net Cash Payments shall be net of (i) the amount
of any legal, title and recording tax expenses, commissions and other fees and
expenses paid by the Borrower and
Credit Agreement
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its Subsidiaries in connection with such Disposition and (ii) any Federal, state
and local income or other taxes estimated to be payable by the Borrower and its
Subsidiaries as a result of such Disposition (but only to the extent that such
estimated taxes are in fact paid to the relevant Governmental Authority not
later than three months (in the case of Federal taxes) or nine months (in the
case of other taxes) after the date of such Disposition) and (b) Net Cash
Payments shall be net of any repayments by the Borrower or any of its
Subsidiaries of Indebtedness to the extent that (i) such Indebtedness is secured
by a Lien on the Property that is the subject of such Disposition and (ii) the
transferee of (or holder of a Lien on) such Property requires that such
Indebtedness be repaid as a condition to the Disposition of such Property.
"Net Cash Revenues" shall mean, for any period, the sum of (a)
gross cash operating revenues of the Borrower and its Subsidiaries for such
period minus (b) the aggregate amount of sales commissions payable in respect of
advertising or air time sold during such period (whether payable to national
advertising representatives, to advertising agencies or to third parties).
"1995 Senior Subordinated Note Indenture" shall mean the
Indenture dated as of August 28, 1995 among the Borrower, certain of its
Subsidiaries and United States Trust Company of New York, as trustee, as the
same shall, subject to Section 9.24 hereof, be modified and supplemented and in
effect from time to time.
"1995 Senior Subordinated Notes" shall mean the 10% Senior
Subordinated Notes due 2005 issued by the Borrower under the 1995 Senior
Subordinated Note Indenture, as the same shall, subject to Section 9.24 hereof,
be modified and supplemented and in effect from time to time.
"1993 Senior Subordinated Note Indenture" shall mean the
Indenture dated as of December 9, 1993 among the Borrower, certain of its
Subsidiaries and First Union National Bank of North Carolina, as trustee, as the
same shall, subject to Section 9.24 hereof, be modified and supplemented and in
effect from time to time.
"1993 Senior Subordinated Notes" shall mean the 10% Senior
Subordinated Notes due 2003 issued by the Borrower under the 1993 Senior
Subordinated Note Indenture, as the same shall, subject to Section 9.24 hereof,
be modified and supplemented and in effect from time to time.
"Notes" shall mean the Revolving Credit Notes, the Tranche A
Term Loan Notes, the Tranche B Term Loan Notes and the
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Tranche C Term Loan Notes.
"Other Acquisition" shall mean (a) the acquisition by the
Borrower or any of its Subsidiaries in accordance with the terms hereof of
substantially all of the assets (including, without limitation, Broadcast
Licenses) of a television or radio station in the United States in a single
transaction (i.e., not by means of the acquisition of an option for such assets
and the subsequent exercise of such option), (b) (i) the acquisition by the
Borrower or any of its Subsidiaries in accordance with the terms hereof of (x)
substantially all of the assets (other than Broadcast Licenses and other
Property required pursuant to the rules and regulations of the FCC to be sold in
connection with the transfer of such Broadcast Licenses) of a television or
radio station in the United States and (y) an option to acquire the Broadcast
Licenses and such other assets of such television or radio station and (ii) the
entering into by the Borrower or any of its Subsidiaries of an agreement
contemplated by clause (b) of the definition of "Program Services Agreement" in
this Section 1.01 with respect to such station, (c) the consummation of the
acquisition of assets by the Borrower or any of its Subsidiaries pursuant to the
exercise of an option referred to in the preceding clause (b)(y), together with
the termination of the related Program Services Agreement referred to in the
preceding clause (b)(ii) and (d) the acquisition of assets or capital stock (or
other equity ownership interest) of any Person pursuant to an exchange permitted
by Section 9.05(d)(iv)(y) hereof; provided that the term "Other Acquisition"
shall not include the River City Non-License Acquisition or any Subject
Acquisition. As used in this definition, the acquisition of assets shall be
deemed to include reference to the acquisition of the voting capital stock (or
other equity ownership interest) of the Person that owns such assets and
references to the acquisition and exercise of an option to acquire assets shall
be deemed to include the acquisition and exercise of the option to acquire
voting capital stock (or other equity ownership interest) of the Person that
owns such assets.
"Owned Station" shall mean (a) each television or radio
station listed in Part A of Schedule IV hereto and (b) any television or radio
station the Broadcast Licenses of which become owned by the Borrower or any of
its Subsidiaries on or after the date hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions under ERISA.
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"Permitted Investments" shall mean, for any Person: (a) direct
obligations of the United States of America, or of any agency thereof, or
obligations guaranteed as to principal and interest by the United States of
America, or of any agency thereof, in either case maturing not more than 90 days
from the date of acquisition thereof by such Person; (b) certificates of deposit
issued by any bank or trust company organized under the laws of the United
States of America or any state thereof and having capital, surplus and undivided
profits of at least $500,000,000, maturing not more than 90 days from the date
of acquisition thereof by such Person; and (c) commercial paper rated A-2 or
better or P-2 or better by Standard & Poor's Ratings Group or Moody's Investors
Service, Inc., respectively, maturing not more than 90 days from the date of
acquisition thereof by such Person.
"Person" shall mean any individual, corporation, company,
voluntary association, partnership, joint venture, trust, unincorporated
organization or government (or any agency, instrumentality or political
subdivision thereof).
"Plan" shall mean an employee benefit or other plan
established or maintained by the Borrower or any ERISA Affiliate and which is
covered by Title IV of ERISA, other than a Multiemployer Plan.
"Post-Default Interest Condition" shall mean (a) the failure
by the Borrower to pay when due (whether at stated maturity, by acceleration, by
mandatory prepayment or otherwise) any principal amount of any Loan, Note or
Reimbursement Obligation, (b) the failure by the Borrower to pay when due
(whether at stated maturity, by acceleration, by mandatory prepayment or
otherwise) any other amount payable by the Borrower hereunder or under any Note
for more than three Business Days or (c) the existence of any other Event of
Default.
"Post-Default Rate" shall mean a rate per annum equal to the
Post-Default Margin (as defined below) plus the Base Rate as in effect from time
to time plus the Applicable Margin, provided that, as applied to principal of a
Eurodollar Loan, the "Post-Default Rate" shall be the Post-Default Margin plus
the interest rate for such Loan as provided in Section 3.02(b) hereof. For
purposes of this definition, the "Post-Default Margin" shall mean 2% per annum
or, if at the time of determination the Borrower has failed to pay when due
(whether at stated maturity, by acceleration, by mandatory prepayment or
otherwise) any amount payable by the Borrower hereunder or under any Note and
such failure shall be continuing, 5% per annum.
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"Preferred Stock" shall mean (a) Preferred Stock issued by the
Borrower after the date hereof and on or before June 30, 1997 (i) having an
aggregate liquidation preference not exceeding $300,000,000 (excluding the
aggregate liquidation preference of the In-Kind Preferred Stock), (ii) providing
for a dividend for each share thereof at a rate not exceeding 15% of the
liquidation preference of such share, (iii) allowing the Borrower, at its
option, with respect to dividends accruing, accreting or accumulating on or
before the fifth anniversary of the date of initial issuance of such Preferred
Stock, to pay such dividends in lieu of cash by issuing additional shares
thereof having an aggregate liquidation preference equal to the amount of such
dividends that are payable at the time of issuance of such additional shares
(such additional shares being referred to herein as "In-Kind Preferred Stock"),
(iv) which neither the Borrower nor any of its Subsidiaries may be required to
repurchase or redeem or make sinking fund payments with respect to at any time
or under any circumstances before June 30, 2008, (v) which are convertible into
Converted Senior Subordinated Notes as provided in Section 9.07(h) hereof or
into the Borrower's Class A Common Stock and (vi) the other terms and conditions
of which are satisfactory to the Majority Lenders and (b) any Preferred Stock
(the "Replacement Preferred Stock") issued in exchange for the Preferred Stock
referred to in the preceding clause (a) or the In-Kind Preferred Stock, provided
that such Replacement Preferred Stock shall have the same aggregate liquidation
preference as the Preferred Stock for which it is exchanged and satisfy clauses
(ii) through (vi) of the preceding clause (a).
"Prepayable Film Contract" shall mean a contract evidencing a
Film Obligation in which the amount owed by the Borrower or any of its
Subsidiaries under such contract exceeds the remaining value of such contract to
the Borrower or such Subsidiary, as reasonably determined by the Borrower.
"Prime Rate" shall mean the rate of interest from time to time
announced by Chase at its principal office as its prime commercial lending rate.
"Program Services Agreements" shall mean (a) the agreements
listed in Schedule VIII hereto and (b) any agreement having a term of not less
than ten years entered into by the Borrower or any of its Subsidiaries (other
than License Subsidiaries) in accordance with Section 9.29 hereof as part of an
Other Acquisition relating to a Contract Station or in connection with a
disposition of property in accordance with Section 9.05(d)(iii) hereof, pursuant
to which agreement the Borrower or any of its Subsidiaries (other than License
Subsidiaries) will obtain the right to program and sell
Credit Agreement
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advertising on a substantial portion of such Contract Station's inventory of
broadcast time.
"Property" shall mean any right or interest in or to property
of any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, and including all Broadcast Licenses.
"Quarterly Dates" shall mean the last Business Day of March,
June, September and December in each year, the first of which shall be the first
such day after the date of this Agreement.
"Registered Holder" shall have the meaning assigned to such
term in Section 5.07(a)(ii) hereof.
"Registered Loan" shall have the meaning assigned to such term
in Section 2.07(g) hereof.
"Registered Note" shall have the meaning assigned to such term
in Section 2.07(g) hereof.
"Regulations A, D, G, U and X" shall mean, respectively,
Regulations A, D, G, U and X of the Board of Governors of the Federal Reserve
System (or any successor), as the same may be amended or supplemented from time
to time.
"Regulatory Change" shall mean, with respect to any Lender,
any change after the date of this Agreement in United States Federal, state or
foreign law or regulations (including, without limitation, Regulation D) or the
adoption or making after such date of any interpretation, directive or request
applying to a class of banks including such Lender of or under any United States
Federal, state or foreign law or regulations (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof.
"Reimbursement Obligations" shall mean, at any time, the
obligations of the Borrower then outstanding, or which may thereafter arise in
respect of Letters of Credit, to reimburse amounts paid by the Issuing Bank in
respect of any drawings thereunder.
"Release" shall mean any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment, including, without limitation,
the movement of
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Hazardous Materials through ambient air, soil, surface water, ground water,
wetlands, land or subsurface strata.
"Relevant Corporation" shall have the meaning assigned to such
term in Section 7.01(a)(i) hereof.
"Reserve Requirement" shall mean, for any Interest Period for
any Eurodollar Loan, the average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding one billion Dollars
against "Eurocurrency liabilities" (as such term is used in Regulation D).
Without limiting the effect of the foregoing, the Reserve Requirement shall
include any other reserves required to be maintained by such member banks by
reason of any Regulatory Change against (a) any category of liabilities which
includes deposits by reference to which the Eurodollar Base Rate is to be
determined as provided in the definition of "Eurodollar Base Rate" in this
Section 1.01 or (b) any category of extensions of credit or other assets which
includes Eurodollar Loans.
"Restatement Effective Date" shall mean the date on which the
Agent notifies the parties hereto that the conditions to effectiveness set forth
in Section 7.01 hereof shall have been satisfied or waived.
"Revolving Credit Commitment" shall mean, as to each Revolving
Credit Lender, the obligation of such Lender to make Revolving Credit Loans, and
to issue or participate in Letters of Credit pursuant to Section 2.10 hereof, in
an aggregate principal or face amount at any one time outstanding up to but not
exceeding the amount set opposite such Lender's name on Schedule XI hereto or,
in the case of a Person that becomes a Revolving Credit Lender pursuant to an
assignment permitted by Section 12.06 hereof, as specified in the respective
instrument of assignment pursuant to which such assignment is effected (in each
case as the same may be reduced at any time or from time to time pursuant to
Section 2.03 hereof). The aggregate amount of Revolving Credit Commitments on
the date hereof is $250,000,000.
"Revolving Credit Commitment Percentage" shall mean, with
respect to any Revolving Credit Lender, the ratio of (a) the amount of the
Revolving Credit Commitment of such Revolving Credit Lender to (b) the aggregate
amount of the Revolving Credit Commitments of all of the Revolving Credit
Lenders. If, at the time of determination of the Revolving Credit Commitment
Percentage of any Revolving Credit Lender or Revolving Credit Lenders, the
Revolving Credit Commitments have terminated, such determination shall be made
upon the basis of the Revolving
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Credit Commitments as in effect immediately prior to such termination.
"Revolving Credit Commitment Reduction Dates" shall mean (a)
the nineteen consecutive Quarterly Dates beginning on the Quarterly Date falling
on or nearest to March 31, 1999 and ending on the Quarterly Date falling on or
nearest to September 30, 2003 and (b) the Revolving Credit Commitment
Termination Date.
"Revolving Credit Commitment Termination Date" shall mean the
last Business Day of November, 2003.
"Revolving Credit Lenders" shall mean (a) on the date hereof,
the Lenders having Revolving Credit Commitments on the signature pages hereof
and (b) thereafter, the Lenders from time to time holding Revolving Credit
Commitments, Revolving Credit Loans and/or Letter of Credit Liabilities after
giving effect to any assignments thereof permitted by Section 12.06 hereof.
"Revolving Credit Loans" shall mean the loans provided for by
Section 2.01(a) hereof, which may be Base Rate Loans and/or Eurodollar Loans.
"Revolving Credit Notes" shall mean the promissory notes
provided for by Section 2.07(a) hereof and all promissory notes delivered in
substitution or exchange therefor, in each case as the same shall be modified
and supplemented and in effect from time to time. The term "Revolving Credit
Notes" shall include any Registered Notes evidencing Revolving Credit Loans
executed and delivered pursuant to Section 2.07(g) hereof.
"River City" shall mean River City Broadcasting, L.P., a
Delaware limited partnership.
"River City Acquisition Documents" shall mean the River City
Asset Purchase Agreement, the River City Option Agreements, the Baker Employment
Agreement, the Baker Stock Option Agreement, the Corporate Employee Stock Option
Agreement, the Station Employee Stock Option Agreement and all other agreements
and instruments (together with any and all exhibits, annexes and schedules
thereto) executed and delivered in connection with the River City Non-License
Acquisition.
"River City Asset Purchase Agreement" shall mean the Amended
and Restated Asset Purchase Agreement dated as of April 10, 1996, as amended and
restated as of a date prior to the date hereof, by and between River City, as
Seller, and the Borrower, as Buyer, as the same shall be modified and
supplemented and in effect from time to time.
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"River City Group I License Acquisition" shall mean the
acquisition by the Borrower or any of its subsidiaries, upon its exercise of any
option granted under the River City Group I Option Agreement, of the "License
Assets" referred to in the River City Group I Option Agreement used or held for
use by the River City Sellers with respect to a "Station" referred to in the
River City Group I Option Agreement and the assumption by the Borrower or such
Subsidiary of the "Assumed Liabilities" referred to in the River City Group I
Option Agreement with respect to such "Station".
"River City License Acquisitions" shall mean each River City
Group I License Acquisition and the WSYX Acquisition.
"River City Non-License Acquisition" shall mean the occurrence
on the Restatement Effective Date of all of the following (a) (i) the transfer
by River City to Borrower under the River City Asset Purchase Agreement of the
"Station Assets" referred to therein and (ii) the assumption by the Borrower
from River City of the "Assumed Liabilities" referred to in the River City Asset
Purchase Agreement, (b) the execution and delivery by the Borrower and the River
City Sellers of (i) the River City Group I Option Agreement, (ii) the Columbus
Option Agreement and (iii) a Program Services Agreement with respect to each
"Group I Station" referred to in the River City Group I Option Agreement, (c)
the execution and delivery by the Borrower and Barry Baker of the Baker
Employment Agreement and (d) the issuance by the Borrower to River City of the
Seller Stock.
"River City Group I Option Agreement" shall mean the Group I
Option Agreement dated as of May 31, 1996 by and between the River City Sellers,
as Sellers, and the Borrower, as Option Holder, as the same shall be modified
and supplemented and in effect from time to time.
"River City Option Agreements" shall mean the River City Group
I Option Agreement and the Columbus Option Agreement.
"River City Sellers" shall mean River City and River City
License Partnership, a Missouri general partnership.
"River City Corporate Employees" shall mean the Persons listed
in Schedule 2.5(d) to the River City Asset Purchase Agreement.
"Security Agreement" shall mean a second amended and restated
Security Agreement substantially in the form of Exhibit C hereto between the
Obligors and the Agent, as the same shall be modified and supplemented and in
effect from time to time.
Credit Agreement
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"Security Documents" shall mean, collectively, the Security
Agreement, the Affiliate Guarantee and Security Agreement, the GDC Security
Agreement, the Mortgages, the Mortgage Amendments and all Uniform Commercial
Code financing statements required by any of the foregoing Security Documents to
be filed with respect to the security interests in personal Property and
fixtures created pursuant thereto.
"Seller Stock" shall mean (a) the Borrower's Series A
Exchangeable Preferred Stock, par value $.01 per share, having a value on the
Restatement Effective Date of $115,000,000, issued by the Borrower to River City
in connection with the River City Non-License Acquisition and (b) the Borrower's
Series B Convertible Preferred Stock, par value $.01 per share, having a value
on the Restatement Effective Date of $115,000,000, to be issued by the Borrower
to River City in exchange for such Series A Exchangeable Preferred Stock.
"Senior Indebtedness" shall mean Total Indebtedness other than
Subordinated Indebtedness.
"Senior Indebtedness Ratio" shall mean, as at any date, the
ratio of (a) Senior Indebtedness outstanding on such date to (b) EBITDA for the
period of twelve consecutive full calendar months ending on or most recently
ended prior to such date.
"Senior Subordinated Note Indentures" shall mean the 1995
Senior Subordinated Note Indenture, the 1993 Senior Subordinated Note Indenture
and, after the respective issuances of the Additional Senior Subordinated Notes
and the Converted Subordinated Notes, the respective indentures under which the
same are issued.
"Senior Subordinated Notes" shall mean the 1993 Senior
Subordinated Notes, the 1995 Senior Subordinated Notes and, after the respective
issuances thereof, the Additional Senior Subordinated Notes and the Converted
Subordinated Notes.
"Smith Brothers" shall mean Frederick G. Smith, David D.
Smith, J. Duncan Smith and Robert E. Smith.
"Sports Rights Payments" shall mean, for any period, payments
made in cash by the Borrower and its Subsidiaries during such period to sports
networks or sports franchises for the rights to broadcast multiple sporting
events over a period of time.
"Station Employee Stock Option Agreements" shall mean the
respective Stock Option Agreements dated as of April 10, 1996 between the
Borrower and certain employees of the Borrower and
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its Subsidiaries, providing, among other things, for the right of such employees
to acquire, in the aggregate, not more than 400,000 shares of the Borrower's
Class A Common Stock on the terms and conditions set forth therein, in each case
as the same may be modified and supplemented and in effect from time to time.
"Stations" shall mean the Owned Stations and the Contract
Stations.
"Subject Acquisition" shall have the meaning assigned to such
term in Section 9.05(d)(i) hereof.
"Subordinated Film Indebtedness" shall mean Film Obligations
of the Borrower and its Subsidiaries which are subordinated to the obligations
of the Borrower and its Subsidiaries hereunder on terms and conditions, and
(except for Film Obligations owing on the date hereof with respect to KSMO-TV
and WSTR-TV) the other provisions of which are satisfactory to the Majority
Lenders.
"Subordinated Indebtedness" shall mean (a) Founders Notes, (b)
Indebtedness under the Senior Subordinated Notes, (c) Subordinated Film
Indebtedness and (d) guarantees of the Indebtedness under the Senior
Subordinated Notes provided by any Subsidiary Guarantor under the Senior
Subordinated Note Indentures.
"Subsidiary" shall mean, for any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person. "Wholly Owned Subsidiary" shall mean any such corporation,
partnership or other entity of which all of such securities or other ownership
interests (other than, in the case of a corporation, directors' qualifying
shares) are so owned or controlled. Notwithstanding anything contained herein to
the contrary, CRESAP shall be deemed to be a Subsidiary of the Borrower or of a
Subsidiary of the Borrower for all purposes of this Agreement except that CRESAP
shall not be required to be a Subsidiary Guarantor or to grant a security
interest in any of its Property.
Credit Agreement
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"Total Indebtedness" shall mean, as at any date, all
Indebtedness on such date of the Borrower and its Consolidated Subsidiaries
(determined on a consolidated basis without duplication in accordance with
GAAP).
"Total Indebtedness Ratio" shall mean, as at any date, the
ratio of (a) Total Indebtedness outstanding on such date to (b) EBITDA for the
period of twelve consecutive full calendar months ending on or most recently
ended prior to such date.
"Tranche A Lenders" shall mean (a) on the date hereof, the
Lenders having Tranche A Term Loan Commitments on the signature pages hereof and
(b) thereafter, the Lenders from time to time holding Tranche A Term Loans
and/or Tranche A Term Loan Commitments after giving effect to any assignments
thereof permitted by Section 12.06(b) hereof.
"Tranche A Principal Payment Dates" shall mean the 25
consecutive Quarterly Dates beginning on the Quarterly Date falling on or
nearest to December 31, 1996 and ending on the Quarterly Date falling on or
nearest to December 31, 2002.
"Tranche A Term Loan Commitment" shall mean, as to each
Tranche A Lender, the obligation of such Tranche A Lender to make a single
Tranche A Term Loan in an aggregate principal amount up to but not exceeding the
amount set opposite the name of such Tranche A Lender on Schedule XII hereto (as
the same may be reduced from time to time pursuant to Section 2.03). The
aggregate principal amount of the Tranche A Term Loan Commitments on the date
hereof is $550,000,000.
"Tranche A Term Loan Notes" shall mean the promissory notes
provided for by Section 2.07(b) hereof and all promissory notes delivered in
substitution or exchange therefor, in each case as the same shall be modified
and supplemented and in effect from time to time. The term "Tranche A Term Loan
Notes" shall include any Registered Notes evidencing Tranche A Term Loans
executed and delivered pursuant to Section 2.07(g) hereof.
"Tranche A Term Loans" shall mean the loans provided for by
Section 2.01(b) hereof, which may be Base Rate Loans and/or Eurodollar Loans.
"Tranche B Lenders" shall mean (a) on the date hereof, the
Lenders having Tranche B Term Loan Commitments on the signature pages hereof
and/or (b) thereafter, the Lenders from time to time holding Tranche B Term
Loans and Tranche B Term Loan Commitments after giving effect to any assignments
thereof permitted by Section 12.06(b) hereof.
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"Tranche B Principal Payment Dates" shall mean (a) the 28
consecutive Quarterly Dates beginning on the Quarterly Date falling on or
nearest to December 31, 1996 and ending on the Quarterly Date falling on or
nearest to September 30, 2003 and (b) the last Business Day of November, 2003.
"Tranche B Term Loan Commitment" shall mean, as to each
Tranche B Lender, the obligation of such Tranche B Lender to make a single
Tranche B Term Loan in an aggregate principal amount up to but not exceeding the
amount set opposite the name of such Tranche B Lender on Schedule XIII hereto
(as the same may be reduced from time to time pursuant to Section 2.03). The
aggregate principal amount of the Tranche B Term Loan Commitments on the date
hereof is $200,000,000.
"Tranche B Term Loan Notes" shall mean the promissory notes
provided for by Section 2.07(c) hereof and all promissory notes delivered in
substitution or exchange therefor, in each case as the same shall be modified
and supplemented and in effect from time to time. The term "Tranche B Term Loan
Notes" shall include any Registered Notes evidencing Tranche B Term Loans
executed and delivered pursuant to Section 2.07(g) hereof.
"Tranche B Term Loans" shall mean the loans provided for by
Section 2.01(c) hereof, which may be Base Rate Loans and/or Eurodollar Loans.
"Tranche C Lenders" shall mean (a) on Tranche C Term Loan
Activation Date, the Lenders signatory to the Tranche C Term Loan Activation
Notice and (b) thereafter, the Lenders from time to time holding Tranche C Term
Loans and/or Tranche C Term Loan Commitments after giving effect to any
assignments thereof permitted by Section 12.06(b) hereof.
"Tranche C Principal Payment Dates" shall mean (a) the 25
consecutive Quarterly Dates beginning on the Quarterly Date falling on or
nearest to September 30, 1997 and ending on the Quarterly Date falling on or
nearest to September 30, 2003 and (b) the last Business Day of November, 2003.
"Tranche C Term Loan Activation Date" shall mean the date
designated as such in the Tranche C Term Loan Activation Notice.
"Tranche C Term Loan Activation Notice" shall mean a notice
substantially in the form of Exhibit B hereto.
"Tranche C Term Loan Commitment" shall mean, as to each
Tranche C Lender, on and after the Tranche C Term Loan Activation Date, the
obligation of such Tranche C Lender to make one or more
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Tranche C Term Loans in an aggregate principal amount up to but not exceeding
the amount set opposite the name of such Tranche C Lender on the Tranche C Term
Loan Activation Notice under the caption "Tranche C Term Loan Commitment" or, in
the case of a Person that becomes a Tranche C Lender pursuant to an assignment
permitted under Section 12.06(b) hereof, as specified in the respective
instrument of assignment pursuant to which such assignment is effected (as the
same may be reduced from time to time pursuant to Section 2.03). The aggregate
principal amount of the Tranche C Term Loan Commitments on the date hereof is
zero and shall not exceed $200,000,000.
"Tranche C Term Loan Commitment Termination Date" shall mean
September 29, 1997.
"Tranche C Term Loan Notes" shall mean the promissory notes
provided for by Section 2.07(d) hereof and all promissory notes delivered in
substitution or exchange therefor, in each case as the same shall be modified
and supplemented and in effect from time to time. The term "Tranche C Term Loan
Notes" shall include any Registered Notes evidencing Tranche C Term Loans
executed and delivered pursuant to Section 2.07(g) hereof.
"Tranche C Term Loans" shall mean the loans provided for by
Section 2.01(d) hereof, which may be Base Rate Loans and/or Eurodollar Loans.
"Transaction Documents" shall mean the Ancillary Documents and
the Basic Documents.
"Type" shall have the meaning assigned that term in Section
1.03 hereof.
"U.S. Person" shall mean a citizen or resident of the United
States of America, a corporation, partnership or other entity created or
organized in or under any laws of the United States of America or any State
thereof, or any estate or trust that is subject to Federal income taxation
regardless of the source of its income.
"WDBB" shall mean WDBB-TV, Inc., an Alabama corporation.
"WDBB Options" shall mean (a) the option granted by Cecil
Heftel to the Borrower to acquire 50% of the issued and outstanding stock of H
and P Communications, (b) the option granted by Carl Parmer to the Borrower to
acquire 50% of the issued and outstanding stock of H and P Communications, and
(c) the option granted by D&C, L.L.C. to the Borrower to acquire 10% of the
issued and outstanding stock of WDBB.
Credit Agreement
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"WFBC-TV" shall mean WFBC-TV, a television broadcasting
station licensed to Greenville and Spartanburg, South Carolina and Asheville,
North Carolina and serving the Greenville, Spartanburg and Asheville areas.
"Working Investment" shall mean, as at any date of
determination thereof and for any Person, the excess of (a) the unpaid face
amount of all accounts receivable of such Person as at such date over (b) the
sum (determined without duplication) of (i) the unpaid amount of all accounts
payable of such Person at such date plus (ii) all accrued expenses of such
Person at such date (but excluding from accounts payable and accrued expenses,
the current portion of long-term debt and of Film Obligations as well as all
accrued interest and taxes).
"WPTT" shall mean WPTT, Inc., a Maryland corporation.
"WPTT Conversion Option" shall mean the Option Agreement dated
as of August 30, 1991 between WPTT and the Borrower (as successor by merger to
Commercial Radio Institute, Inc.), as the same may be modified and supplemented
and in effect from time to time.
"WPTT Convertible Debenture" shall mean the WPTT, Inc. 20-Year
Eight and One-Half Percent (8.5%) Convertible Subordinate Debenture Due 2011
dated August 30, 1991, payable by WPTT to the Borrower (as successor by merger
to Commercial Radio Institute, Inc.) in the original principal amount of
$1,000,000.
"WSTR Note" shall mean the Amended and Restated 8.5%
Subordinated Promissory Note originally issued as of November 6, 1989 and
amended and restated as of June 25, 1992 in the original principal amount of
$6,000,000 payable by Cincinnati TV 64 to United Cable Television Financing
Corporation, as the same shall be amended and supplemented and in effect from
time to time.
"WSTR Option" shall mean the Option Agreement dated as of May
24, 1994 between Cincinnati TV 64 and the Borrower or any of its Subsidiaries
(as assignee of the Smith Brothers) providing for the grant by Cincinnati TV 64
to the Borrower or such Subsidiary of an option to acquire the Properties
relating to WSTR-TV referred to therein as "Station Assets" and to assume the
liabilities relating to WSTR-TV referred to therein as "Assumed Liabilities", as
the same may be modified and supplemented and in effect from time to time.
"WSTR-TV" shall mean WSTR-TV, a television broadcasting
station licensed to Cincinnati, Ohio and serving the Cincinnati area.
Credit Agreement
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"WSYX Acquisition" shall mean, with respect the "Columbus
Station" referred to in the Columbus Option Agreement, the acquisition by the
Borrower or any of its Subsidiaries, upon its exercise of the option granted
under the Columbus Option Agreement with respect to the Columbus Station, of the
"Columbus Station Assets" referred to in the Columbus Option Agreement used or
held for use by the River City Sellers with respect to the Columbus Station and
the assumption by the Borrower or such Subsidiary of the "Assumed Liabilities"
referred to in the Columbus Option Agreement with respect to the Columbus
Station, all in accordance with terms and conditions of the Columbus Option
Agreement and shall include, if no Default has occurred and is continuing at the
time of the making of the payment thereof, (a) the payment by the Borrower or
such Subsidiary of WSYX Option Extension Payments and (b) the payment of the
WSYX Sale Price Differential.
"WSYX Option Extension Payments" shall mean each "Option
Extension Fee" payable by the Borrower or any of its Subsidiaries under Section
2.1(b) of the Columbus Option Agreement.
"WSYX Sale Price Differential" shall mean the amount payable
by the Borrower or any of its Subsidiaries under Section 11.1.C(b) of the
Columbus Option Agreement.
"WTTE-TV" shall mean WTTE-TV, Channel 28, a television
broadcasting station, licensed to Columbus, Ohio and serving the Columbus area.
"WYZZ Acquisition" shall mean the acquisition by the Borrower
or any of its Subsidiaries in accordance with the terms hereof of substantially
all of the assets (including, without limitation, the Broadcast Licenses)
relating to WYZZ-TV, a television broadcast station licensed to
Peoria/Bloomington, Illinois and serving the Peoria/Bloomington area.
1.02 Accounting Terms and Determinations.
(a) Except as otherwise expressly provided herein, all
accounting terms used herein shall be interpreted, and all financial statements
and certificates and reports as to financial matters required to be delivered to
the Lenders hereunder shall (unless otherwise disclosed to the Lenders in
writing at the time of delivery thereof in the manner described in subsection
(b) below) be prepared, in accordance with generally accepted accounting
principles applied on a basis consistent with that used in the preparation of
the latest financial statements furnished to the Lenders hereunder (which, prior
to the first financial statements delivered under Section 9.01 hereof, shall
Credit Agreement
<PAGE>
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mean the financial statements referred to in Section 8.02 hereof). All
calculations made for the purposes of determining compliance with the terms of
this Agreement shall (except as otherwise expressly provided herein) be made by
application of generally accepted accounting principles applied on a basis
consistent with that used in the preparation of the annual or quarterly
financial statements furnished to the Lenders pursuant to Section 9.01 hereof
(or, prior to the first financial statements delivered under Section 9.01
hereof, used in the preparation of the financial statements referred to in
Section 8.02 hereof) unless (i) the Borrower shall have objected to determining
such compliance on such basis at the time of delivery of such financial
statements or (ii) the Majority Lenders shall so object in writing within 30
days after delivery of such financial statements, in either of which events such
calculations shall be made on a basis consistent with those used in the
preparation of the latest financial statements as to which such objection shall
not have been made (which, if objection is made in respect of the first
financial statements delivered under Section 9.01 hereof, shall mean the
financial statements referred to in Section 8.02 hereof).
(b) The Borrower shall deliver to the Lenders at the same time
as the delivery of any annual or quarterly financial statement under Section
9.01 hereof a description in reasonable detail of any material variation between
the application of accounting principles employed in the preparation of such
statement and the application of accounting principles employed in the
preparation of the next preceding annual or quarterly financial statements as to
which no objection has been made in accordance with the last sentence of
subsection (a) above, and reasonable estimates of the difference between such
statements arising as a consequence thereof.
(c) To enable the ready and consistent determination of
compliance with the covenants set forth in Section 9 hereof, the Borrower will
not change the last day of its fiscal year from December 31 of each year, or the
last days of the first three fiscal quarters in each of its fiscal years from
March 31, June 30 and September 30 of each year, respectively.
(d) Except as expressly provided herein, all calculations made
with respect to any period during which an Acquisition is consummated shall be
calculated on a pro forma basis as if such Acquisition had been consummated on
the first day of such period and as if any Indebtedness incurred or assumed in
connection with such Acquisition were outstanding throughout such period, using
such reasonable estimates and pro forma adjustments effected in accordance with
generally accepted
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accounting principles as the Borrower shall propose and the Agent and at least
one Managing Agent shall approve.
1.03 Classes and Types of Loans. Loans hereunder are
distinguished by "Class" and by "Type". The "Class" of a Loan (or of a
Commitment to make a Loan) refers to whether such Loan is (a) a Revolving Credit
Loan, (b) a Tranche A Term Loan, (c) a Tranche B Term Loan or (d) a Tranche C
Term Loan, each of which constitutes a Class. The "Type" of a Loan refers to
whether such Loan is a Base Rate Loan or a Eurodollar Loan, each of which
constitutes a Type. Loans may be identified by both Class and Type.
1.04 References to Date. All references herein to "the date
hereof" and "the date of this Agreement", and similar references, shall mean May
31, 1996.
Section 2. Commitments.
2.01 Loans.
(a) Revolving Credit Loans. Each Revolving Credit Lender
severally agrees, on the terms and conditions of this Agreement, to make loans
to the Borrower in Dollars during the period from and including the Restatement
Effective Date to but excluding the Revolving Credit Commitment Termination Date
in an aggregate principal amount at any one time outstanding up to but not
exceeding the amount of the Revolving Credit Commitment of such Revolving Credit
Lender as in effect from time to time minus the aggregate amount of such
Revolving Credit Lender's Letter of Credit Liabilities; provided that there
shall remain unused Revolving Credit Commitments in an aggregate amount of not
less than $15,000,000 until the date that one (but not both) of KSMO- TV and
WSTR-TV become Owned Stations pursuant to the exercise of the KSMO Option or the
WSTR Option, as the case may be, and thereafter there shall remain unused
Revolving Credit Commitments in an aggregate amount of not less than $7,500,000
until the date that both of KSMO-TV and WSTR-TV have become Owned Stations
pursuant to the exercise of the KSMO Option and the WSTR Option. Subject to the
terms and conditions of this Agreement, during such period the Borrower may
borrow, repay and reborrow the amount of the Revolving Credit Commitments by
means of Base Rate Loans and Eurodollar Loans and may Convert Revolving Credit
Loans of one Type into Revolving Credit Loans of another Type (as provided in
Section 2.08 hereof) or Continue Revolving Credit Loans of one Type as Revolving
Credit Loans of the same Type (as provided in Section 2.08 hereof).
(b) Tranche A Term Loans.
Credit Agreement
<PAGE>
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(i) On the Restatement Effective Date, (x) each Tranche A
Lender severally agrees, on the terms and conditions of this Agreement,
to make a single term loan to the Borrower in Dollars on the
Restatement Effective Date in a principal amount equal to the amount of
the Tranche A Term Loan Commitment of such Tranche A Lender, (y) the
Borrower shall borrow such loans and use the proceeds thereof (A)
first, immediately to prepay in full the principal amount of the
Existing Facility B Revolving Credit Loans then outstanding, (B)
second, to pay all accrued and unpaid interest on the Existing Facility
B Revolving Credit Loans so prepaid and any amounts payable under
Section 5.05 of the Existing Credit Agreement in connection with such
prepayment and (C) third, for other uses permitted by Section 9.21
hereof.
(ii) After the Restatement Effective Date, subject to the terms and
conditions of this Agreement, the Borrower may Convert Tranche A Term
Loans of one Type into Tranche A Term Loans of another Type (as
provided in Section 2.08 hereof) or Continue Tranche A Term Loans of
one Type as Tranche A Term Loans of the same Type (as provided in
Section 2.08 hereof). Tranche A Term Loans that are prepaid may not be
reborrowed.
(c) Tranche B Term Loans. Each Tranche B Lender severally
agrees, on the terms and conditions of this Agreement, to make a single term
loan to the Borrower in Dollars on the Restatement Effective Date in a principal
amount equal to the amount of the Tranche B Term Loan Commitment of such Tranche
B Lender. Thereafter, subject to the terms and conditions of this Agreement, the
Borrower may Convert Tranche B Term Loans of one Type into Tranche B Term Loans
of another Type (as provided in Section 2.08 hereof) or Continue Tranche B Term
Loans of one Type as Tranche B Term Loans of the same Type (as provided in
Section 2.08 hereof). Tranche B Term Loans that are prepaid may not be
reborrowed.
(d) Tranche C Term Loans. The Borrower and all or certain of
the Lenders may, with the consent of the Agent, at any one time during the
period from and including the Restatement Effective Date to but excluding the
Tranche C Term Loan Commitment Termination Date agree that such Lenders shall
become Tranche C Lenders by executing and delivering to the Agent a Tranche C
Term Loan Activation Notice specifying the respective Tranche C Term Loan
Commitments of the Tranche C Lenders, the Tranche C Term Loan Activation Date,
the rate of commitment fee, if any, payable by the Borrower in respect of the
Tranche C Term Loan Commitments, the Applicable Margin for Tranche C Term Loans
and otherwise duly completed. Each Tranche C Lender severally
Credit Agreement
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agrees, on the terms and conditions of this Agreement, to make one or more term
loans to the Borrower in Dollars during the period from and including the
Tranche C Term Loan Activation Date to but excluding the Tranche C Term Loan
Commitment Termination Date in an aggregate principal amount up to but not
exceeding the amount of the Tranche C Term Loan Commitment of such Tranche C
Lender as in effect from time to time, provided that in no event shall the
proceeds of the Tranche C Term Loans be used for any purpose other than to
finance the consummation of the WSYX Acquisition and Other Acquisitions and
transaction expenses in connection therewith. Thereafter, subject to the terms
and conditions of this Agreement, the Borrower may Convert Tranche C Term Loans
of one Type into Tranche C Term Loans of another Type (as provided in Section
2.08 hereof) or Continue Tranche C Term Loans of one Type as Tranche C Term
Loans of the same Type (as provided in Section 2.08 hereof). Tranche C Term
Loans that are prepaid may not be reborrowed. Nothing in this Section 2.01(d)
shall be construed to obligate any Lender to execute a Tranche C Term Loan
Activation Notice.
(e) Limitation on Eurodollar Loans. No more than ten separate
interest periods in respect of Eurodollar Loans of a Class may be outstanding at
any one time, provided that prior to June 30, 1996, or such earlier date agreed
to in writing by the Agent, all Eurodollar Loans of any Class must have an
Interest Period of one month's duration and be coterminous with the Interest
Periods of all other Eurodollar Loans of such Class, and, to the extent that
prior to such date a Eurodollar Loan would not satisfy such conditions, such
Loan shall be made as or Converted into a Base Rate Loan.
2.02 Borrowings. The Borrower shall give the Agent notice of
each borrowing hereunder as provided in Section 4.05 hereof. Not later than 1:00
p.m. New York time on the date specified for each borrowing hereunder, each
Lender shall make available the amount of the Loan or Loans to be made by it on
such date to the Agent, at an account designated by the Agent, in immediately
available funds, for account of the Borrower. The amount so received by the
Agent shall, subject to the terms and conditions of this Agreement, be made
available to the Borrower by depositing the same, in immediately available
funds, in an account of the Borrower maintained with Chase at its principal
office designated by the Borrower.
2.03 Changes of Commitments.
(a) The aggregate amount of the Revolving Credit Commitments
shall be automatically reduced to zero at the close of business on the Revolving
Credit Commitment Termination Date. In addition, the aggregate amount of the
Revolving Credit
Credit Agreement
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Commitments shall be automatically reduced at the opening of business on each
Revolving Credit Commitment Reduction Date set forth in column (A) below to the
amount (subject to reduction pursuant to paragraph (d) below) set forth in
column (B) below opposite such Revolving Credit Commitment Reduction Date:
(A) (B)
Revolving Credit Commitment Revolving Credit Commitment
Reduction Date Falling on or Reduced to the Following
Nearest to: Amounts ($):
----------- ------------
March 31, 1999 $243,750,000
June 30, 1999 $237,500,000
September 30, 1999 $231,250,000
December 31, 1999 $225,000,000
March 31, 2000 $218,750,000
June 30, 2000 $212,500,000
September 30, 2000 $206,250,000
December 31, 2000 $200,000,000
March 31, 2001 $190,625,000
June 30, 2001 $181,250,000
September 30, 2001 $171,875,000
December 31, 2001 $162,500,000
March 31, 2002 $153,125,000
June 30, 2002 $143,750,000
September 30, 2002 $134,375,000
December 31, 2002 $125,000,000
March 31, 2003 $ 93,750,000
June 30, 2003 $ 62,500,000
September 30, 2003 $ 31,250,000
November 30, 2003 $ 0
(b) The Borrower shall have the right at any time or from time
to time (i) to terminate or to reduce the aggregate unused amount of the Tranche
A Term Loan Commitments, the Tranche B Term Loan Commitments or the Tranche C
Term Loan Commitments, (ii) so long as no Revolving Credit Loans or Letter of
Credit Liabilities are outstanding, to terminate the Revolving Credit
Commitments and (iii) to reduce the aggregate unused amount of
Credit Agreement
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the Revolving Credit Commitments (for which purpose use of the Revolving Credit
Commitments shall be deemed to include Letter of Credit Liabilities); provided
that (i) the Borrower shall give notice of each such termination or reduction as
provided in Section 4.05 hereof and (ii) each partial reduction shall be in an
aggregate amount at least equal to $5,000,000 and in integral multiples of
$1,000,000 in excess thereof.
(c) The Commitments shall automatically reduce as provided in
Section 2.09 hereof.
(d) Each reduction in the aggregate amount of the Revolving
Credit Commitments pursuant to paragraph (b) above, or pursuant to Section 2.09
hereof, on any date shall result in an automatic and simultaneous reduction (but
not below zero) in the aggregate amount of the Revolving Credit Commitments for
each Revolving Credit Commitment Reduction Date (as reflected in column (B) at
the end of paragraph (a) above) after such date in an amount equal to the amount
of such reduction.
(e) The aggregate amount of the Tranche A Term Loan
Commitments shall be automatically reduced to zero at the close of business on
the Restatement Effective Date.
(f) The aggregate amount of the Tranche B Term Loan
Commitments shall be automatically reduced to zero at the close of business on
the Restatement Effective Date.
(g) The aggregate amount of the Tranche C Term Loan
Commitments shall be automatically reduced to zero at the close of business on
the Tranche C Term Loan Commitment Termination Date.
(h) The Commitments once terminated or reduced may not be
reinstated.
2.04 Commitment Fees.
(a) The Borrower shall pay to the Agent for account of each
Revolving Credit Lender a commitment fee on the daily average unused amount of
such Revolving Credit Lender's Revolving Credit Commitment (for which purpose
the aggregate amount of any Letter of Credit Liabilities shall be deemed to be a
pro rata (based on the Revolving Credit Commitments) use of each Revolving
Credit Lender's Revolving Credit Commitment), for the period from and including
the date of this Agreement to but not including the earlier of the date such
Revolving Credit Commitment is terminated and the Revolving Credit Commitment
Termination Date, at a rate per annum equal to Applicable Commitment Fee Rate.
Credit Agreement
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(b) The Borrower shall pay to the Agent for account of each
Tranche C Lender a commitment fee on the daily average unused amount of such
Tranche C Lender's Tranche C Term Loan Commitment, for the period from and
including the Tranche C Term Loan Activation Date to but not including the
earlier of the date such Tranche C Term Loan Commitment is terminated and the
Tranche C Term Loan Commitment Termination Date, at a rate per annum equal to a
rate agreed to by the Borrower and the Tranche C Lenders and specified in the
Tranche C Term Loan Activation Notice.
(c) Accrued commitment fee shall be payable on each Quarterly
Date and on the earlier of the date the relevant Commitment is terminated and
either the Revolving Credit Commitment Termination Date or the Tranche C Term
Loan Commitment Termination Date, as the case may be.
2.05 Lending Offices. The Loans of each Type made by each
Lender shall be made and maintained at such Lender's Applicable Lending Office
for Loans of such Type.
2.06 Several Obligations; Remedies Independent. The failure of
any Lender to make any Loan to be made by it on the date specified therefor
shall not relieve any other Lender of its obligation to make its Loan on such
date, but (a) neither any Lender nor the Agent shall be responsible for the
failure of any other Lender to make a Loan to be made by such other Lender and
(b) no Lender shall have an obligation to any other Lender in respect of its
obligation to make any Loan hereunder. The amounts payable by the Borrower to
each Lender at any time hereunder and under the Note(s) payable to such Lender
shall be a separate and independent debt and such Lender shall be entitled to
protect and enforce its rights arising out of this Agreement and such Note(s),
and it shall not be necessary for any other Lender or the Agent to consent to,
or be joined as an additional party in, any proceedings for such purposes.
2.07 Notes.
(a) The Revolving Credit Loans (other than Registered Loans)
made by each Revolving Credit Lender shall be evidenced by a single promissory
note of the Borrower substantially in the form of Exhibit A-1 hereto, dated the
date hereof, payable to such Revolving Credit Lender in a principal amount equal
to the amount of its Revolving Credit Commitment as originally in effect and
otherwise duly completed.
(b) The Tranche A Term Loan (other than Registered Loans) made
by each Tranche A Lender shall be evidenced by a single promissory note of the
Borrower substantially in the form
Credit Agreement
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of Exhibit A-2 hereto, dated the date hereof, payable to such Tranche A Lender
in a principal amount equal to the original amount of its Tranche A Term Loan
Commitment and otherwise duly completed.
(c) The Tranche B Term Loan (other than Registered Loans) made
by each Tranche B Lender shall be evidenced by a single promissory note of the
Borrower substantially in the form of Exhibit A-3 hereto, dated the date hereof,
payable to such Tranche B Lender in a principal amount equal to the original
amount of its Tranche B Term Loan Commitment and otherwise duly completed.
(d) The Tranche C Term Loans (other than Registered Loans)
made by each Tranche C Lender shall be evidenced by a single promissory note of
the Borrower substantially in the form of Exhibit A-4 hereto, dated the Tranche
C Term Loan Activation Date, payable to such Tranche C Lender in a principal
amount equal to the original amount of its Tranche C Term Loan Commitment and
otherwise duly completed.
(e) The date, amount, Type, interest rate, and duration of
Interest Period (if applicable) of each Loan made by each Lender to the
Borrower, and each payment made on account of the principal thereof, shall be
recorded by such Lender on its books and, prior to any transfer of the Note
evidencing such Loan, endorsed by such Lender on the schedule attached to such
Note or any continuation thereof; provided that the failure of such Lender to
make any such recordation (or any error in making any such recordation) or
endorsement shall not affect the obligations of the Borrower to make a payment
when due of any amount owing hereunder or under such Note in respect of such
Loans.
(f) No Lender shall be entitled to have its Notes substituted
or exchanged for any reason, or subdivided for promissory notes of lesser
denominations, except in connection with a permitted assignment of all or any
portion of such Lender's relevant Commitment(s), Loan(s) or Note(s) pursuant to
Section 12.06(b) hereof and except as provided in clause (g) below (and, if
requested by any Lender, the Borrower agrees to so exchange any Note).
(g) Notwithstanding the foregoing, any Lender that is not a
U.S. Person and is not a "bank" within the meaning of Section 881(c)(3)(A) of
the Code may request the Borrower (through the Agent), and the Borrower agrees
thereupon, to record on the Register referred to in Section 12.06(g) hereof any
Loans of any Class held by such Lender under this Agreement. Loans recorded on
the Register ("Registered Loans") may not be
Credit Agreement
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evidenced by promissory notes other than Registered Notes as defined below and,
upon the registration of any Loan, any promissory note (other than a Registered
Note) evidencing the same shall be null and void and shall be returned to the
Borrower. The Borrower agrees, at the request of any Lender that is the holder
of Registered Loans, to execute and deliver to such Lender a promissory note in
registered form to evidence each such Registered Loan (i.e. containing the
optional registered note language as indicated in Exhibits A-1, A-2, A-3 or A-4
hereto, as the case may be) and registered as provided in Section 12.06(g)
hereof (herein, a "Registered Note"), dated (i) the date hereof if such
promissory note evidences Loans of any Class other than Tranche C Term Loans or
(ii) the Tranche C Term Loan Activation Date if such promissory note evidences
Tranche C Term Loans, in each case payable to such Lender and otherwise duly
completed. A Loan once recorded on the Register may not be removed from the
Register so long as it remains outstanding and a Registered Note may not be
exchanged for a promissory note that is not a Registered Note.
2.08 Optional Prepayments and Conversions or Continuations of
---------------------------------------------------------
Loans.
- -----
(a) Subject to Section 4.04(a) hereof, the Borrower shall have
the right to prepay Loans, or to Convert Loans of one Type into Loans of another
Type or Continue Loans of one Type as Loans of the same Type, at any time or
from time to time, provided that: (i) the Borrower shall give the Agent notice
of each such prepayment, Conversion or Continuation as provided in Section 4.05
hereof (and, upon the date specified in any such notice of prepayment, the
amount to be prepaid shall become due and payable hereunder); (ii) Eurodollar
Loans may be prepaid or Converted only on the last day of an Interest Period for
such Loans; and (iii) prepayments of Tranche A Term Loans, Tranche B Terms Loans
or Tranche C Term Loans under this Section 2.08(a) shall be applied to each of
such Classes of Loans (x) as between such Classes of Loans, pro rata in
accordance with the respective aggregate principal amounts thereof outstanding
on the date of prepayment and (y) as within such Classes of Loans, to the
respective installments thereof in the inverse order of their maturities.
(b) Notwithstanding anything contained herein to the contrary,
and without limiting the rights and remedies of the Lenders under Section 10
hereof, in the event that any Event of Default shall have occurred and be
continuing, the Agent may (and at the request of the Majority Lenders shall)
suspend the right of the Borrower to Convert any Loan into a Eurodollar Loan, or
to Continue any Loan as a Eurodollar Loan, in which event all Loans shall be
Converted (on the last day(s) of the respective Interest
Credit Agreement
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Periods therefor) or Continued, as the case may be, as Base Rate Loans.
2.09 Mandatory Prepayments and Reductions of Commitments.
---------------------------------------------------
(a) Casualty Events. Upon the date 90 days following the
receipt by the Borrower of the proceeds of insurance, condemnation award or
other compensation in respect of any Casualty Event affecting any Property of
the Borrower or any of its Subsidiaries or any Contract Station (or upon such
earlier date as the Borrower or such Subsidiary of the Borrower shall have
determined not to repair or replace the Property affected by such Casualty
Event), the Borrower shall prepay the Loans (and/or provide cover for Letter of
Credit Liabilities as specified in clause (f) below), and the Commitments shall
be subject to automatic reduction, in an aggregate amount, if any, equal to 100%
of the Net Available Proceeds of such Casualty Event not theretofore applied to
the repair or replacement of such Property, such prepayment and reduction to be
effected in each case in the manner and to the extent specified in clause (e) of
this Section 2.09. Notwithstanding the foregoing, in the event that a Casualty
Event shall occur with respect to Property covered by the Mortgage(s), the
Borrower shall prepay the Loans (and/or provide cover for Letter of Credit
Liabilities as specified in clause (f) below), and the Commitments shall be
subject to automatic reduction, on the dates, and in the amounts of the required
prepayments, specified in the Mortgage(s), if any. Nothing in this clause (a)
shall be deemed to limit any obligation of the Borrower or any of its
Subsidiaries pursuant to any of the Security Documents to remit to a collateral
or similar account maintained by the Agent pursuant to any of the Security
Documents (including, without limitation, the Collateral Account) the proceeds
of insurance, condemnation award or other compensation received in respect of
any Casualty Event.
(b) Issuance of Equity or Debt.
--------------------------
(i) Upon any Equity Issuance by the Borrower permitted
hereunder (other than the issuance by the Borrower of the Preferred
Stock or the In-Kind Preferred Stock, the conversion of the Preferred
Stock or the In-Kind Preferred Stock into the Borrower's Class A Common
Stock and any Equity Issuance made pursuant to the Columbus Option
Agreement), the Borrower shall prepay the Loans (and/or provide cover
for Letter of Credit Liabilities as specified in clause (f) below), and
the Commitments shall be subject to automatic reduction, in an
aggregate amount equal to 80% of such portion of the Net Available
Proceeds thereof not applied as permitted by Section 9.26(c)(iii)(x),
(y) and (z)
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hereof, such prepayment and reduction to be effected in each case in
the manner and to the extent specified in clause (e) of this Section
2.09.
(ii) Upon the issuance by the Borrower of the Preferred Stock, the
Borrower shall prepay the Revolving Credit Loans (and/or provide cover
for Letter of Credit Liabilities as specified in clause (f) below) (but
the Revolving Credit Commitments shall not be subject to automatic
reduction) in an aggregate amount equal to the Net Available Proceeds
thereof.
(iii) Upon the issuance of any Additional Senior Subordinated
Notes, the Borrower shall prepay the Loans (and/or provide cover for
Letter of Credit Liabilities as specified in clause (f) below), and the
Commitments shall be subject to automatic reduction, in an aggregate
amount equal to such portion of 100% of the Net Available Proceeds
thereof not applied as permitted by Section 9.07(c)(v)(x) hereof (the
"Available Prepayment Amount"), such prepayment and reduction to be
effected in the manner and to the extent specified in clause (e) of
this Section 2.09.
(c) Excess Cash Flow. Not later than the date 110 days after
the end of each fiscal year of the Borrower that ends in 1996 or thereafter, the
Borrower shall prepay the Loans (and/or provide cover for Letter of Credit
Liabilities as specified in clause (f) below), and Commitments shall be subject
to automatic reduction, in an aggregate amount equal to the excess of (i)
66-2/3% of Excess Cash Flow (as reported upon by independent certified public
accountants of recognized national standing on or before said date) for such
fiscal year (or in the case of the fiscal year of the Borrower that ends in
1996, for the third and fourth fiscal quarters of such fiscal year) over (ii)
the sum of (x) the aggregate amount of prepayments of Tranche A Term Loans,
Tranche B Term Loans and Tranche C Term Loans made during such fiscal year (or
such fiscal quarters, as the case may be) pursuant to Section 2.08 hereof plus
(y) (if the Tranche A Term Loans, Tranche B Term Loans and Tranche C Term Loans
shall have been paid or prepaid in full during such fiscal year) the aggregate
amount of the reductions of the Revolving Credit Commitments made during such
calendar year pursuant to Section 2.03(b) hereof, such prepayment and reduction
to be effected in each case in the manner and to the extent specified in clause
(e) of this Section 2.09.
(d) Sale of Assets. Without limiting the obligation of the
Borrower to obtain the consent of the Majority Lenders pursuant to Section 9.05
hereof to any Disposition not otherwise permitted hereunder, in the event that
the Net Available Proceeds
Credit Agreement
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of any Disposition (herein, the "Current Disposition"), and of all prior
Dispositions as to which a prepayment has not yet been made under this Section
2.09(d), but in all events excluding Excluded Net Available Proceeds (as defined
below), shall exceed $1,000,000 then, no later than five Business Days prior to
the occurrence of the Current Disposition, the Borrower will deliver to the
Lenders a statement, certified by a senior financial officer of the Borrower, in
form and detail satisfactory to the Agent, of the amount of the Net Available
Proceeds of the Current Disposition and of all such prior Dispositions and,
concurrently with the consummation of the Current Disposition, will prepay the
Loans (and/or provide cover for Letter of Credit Liabilities as specified in
clause (f) below), and the Commitments shall be subject to automatic reduction,
in an aggregate amount equal to 100% of the Net Available Proceeds of the
Current Disposition and such prior Dispositions, such prepayment and reduction
to be effected in each case in the manner and to the extent specified in clause
(e) of this Section 2.09. For purposes of this Section 2.09(d) "Excluded Net
Available Proceeds" shall mean (without duplication) (i) the first $250,000 of
Net Available Proceeds from Dispositions received by the Borrower and its
Subsidiaries in each of the Borrower's fiscal years, (ii) the proceeds of any
Disposition of the WSTR Note and (iii) the Net Available Proceeds of any
Disposition made pursuant to Section 9.05(d)(iv)(x) if, within twelve months
following the receipt by the Borrower or any of its Subsidiaries of such Net
Available Proceeds, (x) the Borrower or any of its Subsidiaries shall have
entered into one or more acquisition agreements providing for the Acquisition by
the Borrower or any of its Subsidiaries of one or more radio broadcasting
stations as permitted hereby and (y) the transfer of control to the Borrower or
any of its Subsidiaries of the Broadcast Licenses relating to such radio
broadcasting stations shall have been approved by Initial FCC Orders; provided
that if (A) the cash purchase price payable by the Borrower or any such
Subsidiary in connection with all such Acquisitions shall be less than the
amount of such Net Available Proceeds or (B) any such Acquisition shall fail to
have been consummated by reason of (1) the relevant Initial FCC Order having
been revoked, rescinded, cancelled or otherwise ceasing to be in full force and
effect for any reason, (2) the relevant acquisition agreement having expired,
been terminated or cancelled, or otherwise ceasing to be in full force and
effect for any reason or (3) the failure of the Borrower or any of its
Subsidiaries to consummate any such Acquisition not later than 30 days after the
transfer of control to the Borrower or such Subsidiary of the Broadcast Licenses
relating to the relevant radio broadcasting station having been approved by a
Final FCC Order, then the Borrower shall, promptly upon the execution of all
such agreements (in the case of the foregoing clause (A)) or upon such failure
(in the case of the foregoing clause (B)), prepay Loans (and/or provide cover
for
Credit Agreement
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Letter of Credit Liabilities as specified in clause (f) below) and reduce the
Commitments in the manner and to the extent specified in clause (e) below in an
aggregate amount equal to the excess of such Net Available Proceeds over the
aggregate amount of such cash purchase prices (in the case of the foregoing
clause (A)) or the amount of the cash purchase price for such failed Acquisition
(in the case of the foregoing clause (B)).
(e) Application. Any amount (the "Applicable Amount") required
to be applied to prepay Loans or reduce Commitments as provided in the foregoing
clauses of this Section 2.09 shall be effected (except as expressly set forth
above) as follows:
(i) first, the Borrower shall prepay the Tranche A Term Loans,
Tranche B Term Loans and Tranche C Term Loans in an aggregate amount
equal to the Applicable Amount, such prepayment to be applied (x) as
between such Classes of Loans, pro rata in accordance with the
respective aggregate principal amounts thereof outstanding on the date
of prepayment (as calculated after giving effect to all other payments
and prepayments of principal of such Loans on such date) and (y) as
within each such Class of Loans, to the respective installments thereof
in the inverse order of their maturities;
(ii) second, the Tranche C Term Loan Commitments shall be
automatically reduced by an amount equal to any excess of the
Applicable Amount over the aggregate principal amount of Loans prepaid
pursuant to the foregoing clause (i); and
(iii) third, the Revolving Credit Commitments shall be automatically
reduced by an amount equal to any excess of the Applicable Amount over
the aggregate principal amount of Loans prepaid and Commitments reduced
pursuant to the foregoing clauses (i) and (ii), and to the extent that,
after giving effect to such reduction, the aggregate principal amount
of Revolving Credit Loans, together with the aggregate amount of all
Letter of Credit Liabilities, would exceed the Revolving Credit
Commitments, the Borrower shall, first, prepay Revolving Credit Loans
and, second, provide cover for Letter of Credit Liabilities as
specified in clause (f) below, in an aggregate amount equal to such
excess.
(f) Cover for Letter of Credit Liabilities. In the event that
the Borrower shall be required pursuant to this Section 2.09 or Section 3.01(a)
hereof to provide cover for Letter of Credit Liabilities, the Borrower shall
effect the same by paying to the Agent immediately available funds in an amount
equal to the required amount, which funds shall be retained by
Credit Agreement
<PAGE>
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the Agent in the Collateral Account (as provided therein as collateral security
for the Letter of Credit Liabilities) until such time as the Letters of Credit
shall have been terminated and all of the Letter of Credit Liabilities paid in
full.
2.10 Issuance of Letters of Credit. Subject to the terms and
conditions of this Agreement, the Revolving Credit Commitments may be utilized
prior to the Revolving Credit Commitment Termination Date, upon the request of
the Borrower, in addition to the Revolving Credit Loans provided for by Section
2.01(a) hereof, by the issuance by the Issuing Bank of letters of credit (each,
a "Letter of Credit") for account of the Borrower or any of its Subsidiaries (as
specified by the Borrower), provided that in no event shall (i) the aggregate
amount of all Letter of Credit Liabilities, together with the aggregate
principal amount of the Revolving Credit Loans, exceed the aggregate amount of
the Revolving Credit Commitments as in effect from time to time, (ii) the
outstanding aggregate amount of all Letter of Credit Liabilities exceed
$50,000,000 and (iii) the expiration date of any Letter of Credit extend beyond
the Revolving Credit Commitment Termination Date. The following additional
provisions shall apply to Letters of Credit:
(a) The Borrower shall give the Agent at least five Business
Days' irrevocable prior notice (effective upon receipt) specifying the
Business Day (which shall be no later than 30 days preceding the
Revolving Credit Commitment Termination Date) on which each Letter of
Credit is to be issued and the account party or parties therefor and
describing in reasonable detail the proposed terms of such Letter of
Credit (including the beneficiary thereof) and the nature of the
transactions or obligations proposed to be supported thereby (including
whether such Letter of Credit is to be a commercial letter of credit or
a standby letter of credit). Upon receipt of any such notice, the Agent
shall advise the Issuing Bank of the contents thereof.
(b) On each day during the period commencing with the issuance
by the Issuing Bank of such Letter of Credit and until such Letter of
Credit shall have expired or been terminated, the Revolving Credit
Commitment of each Revolving Credit Lender shall be deemed to be
utilized for all purposes of this Agreement in an amount equal to such
Revolving Credit Lender's Revolving Credit Commitment Percentage of the
then undrawn face amount of such Letter of Credit. Each Revolving
Credit Lender (other than the Issuing Bank) agrees that, upon the
issuance of any Letter of Credit hereunder, it shall automatically
acquire a participation in the Issuing Bank's liability under such
Letter of Credit in an amount equal to such Revolving Credit
Credit Agreement
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Lender's Revolving Credit Commitment Percentage of such liability, and
each Revolving Credit Lender (other than the Issuing Bank) thereby
shall absolutely, unconditionally and irrevocably assume, as primary
obligor and not as surety, and shall be unconditionally obligated to
the Issuing Bank to pay and discharge when due, its Revolving Credit
Commitment Percentage of the Issuing Bank's liability under such Letter
of Credit.
(c) Upon receipt from the beneficiary of any Letter of Credit
of any demand for payment under such Letter of Credit, the Issuing Bank
shall promptly notify the Borrower (through the Agent) of the amount to
be paid by the Issuing Bank as a result of such demand and the date on
which payment is to be made by the Issuing Bank to such beneficiary in
respect of such demand. Notwithstanding the identity of the account
party of any Letter of Credit, the Borrower hereby unconditionally
agrees to pay and reimburse the Agent for account of the Issuing Bank
for the amount of each demand for payment under such Letter of Credit
at or prior to the date on which payment is to be made by the Issuing
Bank to the beneficiary thereunder, without presentment, demand,
protest or other formalities of any kind.
(d) Forthwith upon its receipt of a notice referred to in
clause (c) of this Section 2.10, the Borrower shall advise the Agent
whether or not the Borrower intends to borrow hereunder to finance its
obligation to reimburse the Issuing Bank for the amount of the related
demand for payment and, if it does, submit a notice of such borrowing
as provided in Section 4.05 hereof. In the event that the Borrower
fails to so advise the Agent, or if the Borrower fails to reimburse the
Issuing Bank for a payment under a Letter of Credit by the date of such
payment, the Agent shall give each Revolving Credit Lender prompt
notice of the amount of the demand for payment, specifying such
Revolving Credit Lender's Revolving Credit Commitment Percentage of the
amount of the related demand for payment.
(e) Each Revolving Credit Lender (other than the Issuing Bank)
shall pay to the Agent for account of the Issuing Bank at the Agent's
principal office in Dollars and in immediately available funds, the
amount of such Revolving Credit Lender's Revolving Credit Commitment
Percentage of any payment under a Letter of Credit upon notice by the
Issuing Bank (through the Agent) to such Revolving Credit Lender
requesting such payment and specifying such amount. Each such Revolving
Credit Lender's obligation to make such payment to the Agent for
account of the Issuing Bank under
Credit Agreement
<PAGE>
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this clause (e), and the Issuing Bank's right to receive the same,
shall be absolute and unconditional and shall not be affected by any
circumstance whatsoever, including, without limitation, the failure of
any other Revolving Credit Lender to make its payment under this clause
(e), the financial condition of the Borrower (or any other account
party), the existence of any Default or the termination of the
Revolving Credit Commitments. Each such payment to the Issuing Bank
shall be made without any offset, abatement, withholding or reduction
whatsoever. If any Revolving Credit Lender shall default in its
obligation to make any such payment to the Agent for account of the
Issuing Bank, for so long as such default shall continue the Agent may
at the request of the Issuing Bank withhold from any payments received
by the Agent under this Agreement or any Note for account of such
Revolving Credit Lender the amount so in default and, to the extent so
withheld, pay the same to the Issuing Bank in satisfaction of such
defaulted obligation.
(f) Upon the making of each payment by a Revolving Credit
Lender to the Issuing Bank pursuant to clause (e) above in respect of
any Letter of Credit, such Revolving Credit Lender shall, automatically
and without any further action on the part of the Agent, the Issuing
Bank or such Revolving Credit Lender, acquire (i) a participation in an
amount equal to such payment in the Reimbursement Obligation owing to
the Issuing Bank by the Borrower hereunder and under the Letter of
Credit Documents relating to such Letter of Credit and (ii) a
participation in a percentage equal to such Revolving Credit Lender's
Revolving Credit Commitment Percentage in any interest or other amounts
payable by the Borrower hereunder and under such Letter of Credit
Documents in respect of such Reimbursement Obligation (other than the
commissions, charges, costs and expenses payable to the Issuing Bank
pursuant to clause (g) of this Section 2.10). Upon receipt by the
Issuing Bank from or for account of the Borrower of any payment in
respect of any Reimbursement Obligation or any such interest or other
amount (including by way of setoff or application of proceeds of any
collateral security) the Issuing Bank shall promptly pay to the Agent
for account of each Revolving Credit Lender entitled thereto, such
Revolving Credit Lender's Revolving Credit Commitment Percentage of
such payment, each such payment by the Issuing Bank to be made in the
same money and funds in which received by the Issuing Bank. In the
event any payment received by the Issuing Bank and so paid to the
Revolving Credit Lenders hereunder is rescinded or must otherwise be
returned by the Issuing Bank, each Revolving Credit Lender shall, upon
the request of the Issuing Bank (through the Agent), repay to
Credit Agreement
<PAGE>
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the Issuing Bank (through the Agent) the amount of such payment paid to
such Revolving Credit Lender, with interest at the rate specified in
clause (j) of this Section 2.10.
(g) The Borrower shall pay to the Agent for account of each
Revolving Credit Lender (ratably in accordance with their respective
Revolving Credit Commitment Percentages) a letter of credit fee in
respect of each Letter of Credit at the rate per annum equal to the
Applicable Margin for Eurodollar Loans on the daily average undrawn
face amount of such Letter of Credit for the period from and including
the date of issuance of such Letter of Credit (i) in the case of a
Letter of Credit that expires in accordance with its terms, to and
including such expiration date and (ii) in the case of a Letter of
Credit that is drawn in full or is otherwise terminated other than on
the stated expiration date of such Letter of Credit, to but excluding
the date such Letter of Credit is drawn in full or is terminated (such
fee to be non-refundable, to be paid in arrears on each Quarterly Date
and on the Revolving Credit Commitment Termination Date and to be
calculated for any day after giving effect to any payments made under
such Letter of Credit on such day). In addition, the Borrower shall pay
to the Agent for account of the Issuing Bank a fronting fee in respect
of each Letter of Credit in an amount equal to 1/4 of 1% per annum of
the daily average undrawn face amount of such Letter of Credit for the
period from and including the date of issuance of such Letter of Credit
(i) in the case of a Letter of Credit that expires in accordance with
its terms, to and including such expiration date and (ii) in the case
of a Letter of Credit that is drawn in full or is otherwise terminated
other than on the stated expiration date of such Letter of Credit, to
but excluding the date such Letter of Credit is drawn in full or is
terminated (such fee to be non-refundable, to be paid in arrears on
each Quarterly Date and on the Revolving Credit Commitment Termination
Date and to be calculated for any day after giving effect to any
payments made under such Letter of Credit on such day) plus all
commissions, charges, costs and expenses in the amounts customarily
charged by the Issuing Bank from time to time in like circumstances
with respect to the issuance of each Letter of Credit and drawings and
other transactions relating thereto.
(h) Promptly following the end of each calendar quarter, the
Issuing Bank shall deliver (through the Agent) to each Revolving Credit
Lender and the Borrower a notice describing the aggregate amount of all
Letters of Credit outstanding at the end of such quarter. Upon the
request of any Revolving Credit Lender from time to time, the Issuing
Credit Agreement
<PAGE>
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Bank shall deliver any other information reasonably requested by such
Revolving Credit Lender with respect to each Letter of Credit then
outstanding.
(i) The issuance by the Issuing Bank of each Letter of Credit
shall, in addition to the conditions precedent set forth in Section 7
hereof, be subject to the conditions precedent that (i) such Letter of
Credit shall be in such form, contain such terms and support such
transactions as shall be satisfactory to the Issuing Bank consistent
with its then current practices and procedures with respect to letters
of credit of the same type and (ii) the Borrower shall have executed
and delivered such applications, agreements and other instruments
relating to such Letter of Credit as the Issuing Bank shall have
reasonably requested consistent with its then current practices and
procedures with respect to letters of credit of the same type, provided
that in the event of any conflict between any such application,
agreement or other instrument and the provisions of this Agreement or
any Security Document, the provisions of this Agreement and the
Security Documents shall control.
(j) To the extent that any Revolving Credit Lender shall fail
to pay any amount required to be paid pursuant to clause (e) or (f) of
this Section 2.10 on the due date therefor, such Revolving Credit
Lender shall pay interest to the Issuing Bank (through the Agent) on
such amount from and including such due date to but excluding the date
such payment is made at a rate per annum equal to the Federal Funds
Rate, provided that if such Revolving Credit Lender shall fail to make
such payment to the Issuing Bank within three Business Days of such due
date, then, retroactively to the due date, such Revolving Credit Lender
shall be obligated to pay interest on such amount at the Post-Default
Rate.
(k) The issuance by the Issuing Bank of any modification or
supplement to any Letter of Credit hereunder shall be subject to the
same conditions applicable under this Section 2.10 to the issuance of
new Letters of Credit, and no such modification or supplement shall be
issued hereunder unless either (i) the respective Letter of Credit
affected thereby would have complied with such conditions had it
originally been issued hereunder in such modified or supplemented form
or (ii) each Revolving Credit Lender shall have consented thereto.
(l) The Borrower hereby indemnifies and holds harmless
each Revolving Credit Lender and the Agent from and against
Credit Agreement
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any and all claims and damages, losses, liabilities, costs or expenses
that such Revolving Credit Lender or the Agent may incur (or that may
be claimed against such Revolving Credit Lender or the Agent by any
Person whatsoever) by reason of or in connection with the execution and
delivery or transfer of or payment or refusal to pay by the Issuing
Bank under any Letter of Credit; provided that the Borrower shall not
be required to indemnify any Revolving Credit Lender or the Agent for
any claims, damages, losses, liabilities, costs or expenses to the
extent, but only to the extent, caused by (x) the willful misconduct or
gross negligence of the Issuing Bank in determining whether a request
presented under any Letter of Credit complied with the terms of such
Letter of Credit or (y) in the case of the Issuing Bank, the Issuing
Bank's failure to pay under any Letter of Credit after the presentation
to it of a request strictly complying with the terms and conditions of
such Letter of Credit unless such payment was enjoined by court order.
Nothing in this Section 2.10 is intended to limit the other obligations
of the Borrower, any Revolving Credit Lender or the Agent under this
Agreement.
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans.
------------------
(a) The Borrower hereby promises to pay to the Agent for
account of each Revolving Credit Lender the entire outstanding principal amount
of such Revolving Credit Lender's Revolving Credit Loans, and each Revolving
Credit Loan shall mature, on the Revolving Credit Commitment Termination Date.
In addition, if the aggregate principal amount of the Revolving Credit Loans,
together with the aggregate amount of all Letter of Credit Liabilities, shall at
any time exceed the Revolving Credit Commitments, the Borrower shall, first, pay
Revolving Credit Loans and, second, provide cover for Letter of Credit
Liabilities as specified in Section 2.09(f) above, in an aggregate amount equal
to such excess.
(b) The Borrower hereby promises to pay to the Agent for
account of each Tranche A Lender the principal of such Tranche A Lender's
Tranche A Term Loan in twenty-five installments payable on the Tranche A
Principal Payment Dates as follows:
Tranche A Principal Payment Date
falling on or nearest to: Amount of Installment ($)
------------------------- -------------------------
December 31, 1996 $30,000,000
March 31, 1997 15,000,000
Credit Agreement
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June 30, 1997 15,000,000
September 30, 1997 15,000,000
December 31, 1997 15,000,000
March 31, 1998 17,500,000
June 30, 1998 17,500,000
September 30, 1998 17,500,000
December 31, 1998 17,500,000
March 31, 1999 22,500,000
June 30, 1999 22,500,000
September 30, 1999 22,500,000
December 31, 1999 22,500,000
March 31, 2000 25,000,000
June 30, 2000 25,000,000
September 30, 2000 25,000,000
December 31, 2000 25,000,000
March 31, 2001 25,000,000
June 30, 2001 25,000,000
September 30, 2001 25,000,000
December 31, 2001 25,000,000
March 31, 2002 25,000,000
June 30, 2002 25,000,000
September 30, 2002 25,000,000
December 31, 2002 25,000,000
If the aggregate principal amount of the Tranche A Term Loans made on the
Restatement Effective Date, is less than $550,000,000, the shortfall shall be
applied to reduce the foregoing installments ratably.
(c) The Borrower hereby promises to pay to the Agent for
account of each Tranche B Lender the principal of such Tranche B Lender's
Tranche B Term Loan in twenty-nine installments payable on the Tranche B
Principal Payment Dates as follows:
Tranche B Principal Payment Date
falling on or nearest to: Amount of Installment ($)
------------------------- -------------------------
December 31, 1996 $ 1,500,000
March 31, 1997 375,000
June 30, 1997 375,000
September 30, 1997 375,000
December 31, 1997 375,000
March 31, 1998 375,000
June 30, 1998 375,000
September 30, 1998 375,000
December 31, 1998 375,000
March 31, 1999 375,000
June 30, 1999 375,000
September 30, 1999 375,000
Credit Agreement
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December 31, 1999 375,000
March 31, 2000 375,000
June 30, 2000 375,000
September 30, 2000 375,000
December 31, 2000 375,000
March 31, 2001 375,000
June 30, 2001 375,000
September 30, 2001 375,000
December 31, 2001 375,000
March 31, 2002 3,750,000
June 30, 2002 3,750,000
September 30, 2002 3,750,000
December 31, 2002 3,750,000
March 31, 2003 44,000,000
June 30, 2003 44,000,000
September 30, 2003 44,000,000
November 30, 2003 44,000,000
If the aggregate principal amount of the Tranche B Term Loans made on the
Restatement Effective Date, is less than $200,000,000, the shortfall shall be
applied to reduce the foregoing installments ratably.
(d) The Borrower hereby promises to pay to the Agent for
account of each Tranche C Lender the principal of such Tranche C Lender's
Tranche C Term Loan in twenty-six installments payable on the Tranche C
Principal Payment Dates as follows:
Tranche C Principal Payment Date
falling on or nearest to: Amount of Installment ($)
------------------------- -------------------------
September 30, 1997 $ 4,000,000
December 31, 1997 4,000,000
March 31, 1998 2,500,000
June 30, 1998 2,500,000
September 30, 1998 2,500,000
December 31, 1998 2,500,000
March 31, 1999 3,000,000
June 30, 1999 3,000,000
September 30, 1999 3,000,000
December 31, 1999 3,000,000
March 31, 2000 3,500,000
June 30, 2000 3,500,000
September 30, 2000 3,500,000
December 31, 2000 3,500,000
March 31, 2001 4,000,000
June 30, 2001 4,000,000
September 30, 2001 4,000,000
December 31, 2001 4,000,000
March 31, 2002 4,500,000
Credit Agreement
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June 30, 2002 4,500,000
September 30, 2002 4,500,000
December 31, 2002 4,500,000
March 31, 2003 30,500,000
June 30, 2003 30,500,000
September 30, 2003 30,500,000
November 30, 2003 30,500,000
If the aggregate principal amount of the Tranche C Term Loans outstanding at the
close of business on the Tranche C Term Loan Commitment Termination Date is less
than $200,000,000, the shortfall shall be applied to reduce the foregoing
installments ratably.
3.02 Interest. The Borrower hereby promises to pay to the
Agent for account of each Lender interest on the unpaid principal amount of each
Loan made by such Lender for the period from and including the date of such Loan
to but excluding the date such Loan shall be paid in full, at the following
rates per annum:
(a) during such periods as such Loan is a Base Rate Loan, the
Base Rate (as in effect from time to time) plus the Applicable Margin
and
(b) during such periods as such Loan is a Eurodollar Loan, for
each Interest Period relating thereto, the Eurodollar Rate for such
Loan for such Interest Period plus the Applicable Margin.
Notwithstanding the foregoing, during any period that a Post- Default Interest
Condition exists (whether or not the same is thereafter cured), the Borrower
hereby promises to pay to the Agent for account of each Lender interest at the
applicable Post-Default Rate on any principal of any Loan made by such Lender
(whether or not then due), on any Reimbursement Obligation owing to such Lender
and on any other amount then due and payable by the Borrower hereunder or under
the Note(s) held by such Lender. Accrued interest on each Loan shall be payable
(i) in the case of a Base Rate Loan, quarterly on the Quarterly Dates, (ii) in
the case of a Eurodollar Loan, on the last day of each Interest Period therefor
and, if such Interest Period is longer than three months, at three-month
intervals following the first day of such Interest Period, and (iii) in the case
of any Loan, upon the payment or prepayment thereof or the Conversion of such
Loan to a Loan of another Type (but only on the principal amount so paid,
prepaid or Converted), except that interest payable at the Post-Default Rate
shall be payable from time to time on demand. Promptly after the determination
of any interest rate provided for herein or any change therein, the Agent shall
give
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notice thereof to the Lenders to which such interest is payable and to the
Borrower.
Section 4. Payments; Pro Rata Treatment; Computations;
Etc.
4.01 Payments.
--------
(a) Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by the Borrower
under this Agreement and the Notes, and, except to the extent otherwise provided
therein, all payments to be made by the Borrower under any other Basic Document,
shall be made in Dollars, in immediately available funds, without deduction,
set-off or counterclaim, to the Agent at an account designated by the Agent, not
later than 1:00 p.m. New York time on the date on which such payment shall
become due (each such payment made after such time on such due date to be deemed
to have been made on the next succeeding Business Day).
(b) Any Lender for whose account any such payment is to be
made, may (but shall not be obligated to) debit the amount of any such payment
which is not made by such time to any ordinary deposit account of the Borrower
with such Lender (with notice to the Borrower).
(c) The Borrower shall, at the time of making each payment
under this Agreement or any Note, specify to the Agent (which shall so notify
the intended recipient(s) thereof) the Loans, Reimbursement Obligations or other
amounts payable by the Borrower hereunder to which such payment is to be applied
(and in the event that it fails to so specify, or if an Event of Default has
occurred and is continuing, the Agent may distribute such payment to the Lenders
for application in such manner as it or the Majority Lenders, subject to Section
4.02 hereof, may determine to be appropriate).
(d) Except to the extent otherwise provided in the last
sentence of Section 2.10(e) hereof, each payment received by the Agent under
this Agreement or any Note for account of any Lender shall be paid by the Agent
promptly to such Lender, in immediately available funds, for account of such
Lender's Applicable Lending Office for the Loan or other obligation in respect
of which such payment is made.
(e) If the due date of any payment under this Agreement or any
Note would otherwise fall on a day which is not a Business Day such date shall
be extended to the next succeeding
Credit Agreement
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Business Day and interest shall be payable for any principal so extended for the
period of such extension.
4.02 Pro Rata Treatment. Except to the extent otherwise
provided herein:
(a) each borrowing of Loans of a particular Class from the
Lenders under Section 2.01 hereof shall be made from the relevant
Lenders, each payment of commitment fee under Section 2.04 hereof in
respect of Commitments of a particular Class shall be made for account
of the relevant Lenders, and each termination or reduction of the
amount of the Commitments of a particular Class under Section 2.03
hereof shall be applied to the respective Commitments of such Class of
the relevant Lenders, pro rata according to the amounts of their
respective Commitments of such Class;
(b) except as otherwise provided in Section 5.04 hereof,
Eurodollar Loans of any Class having the same Interest Period shall be
allocated among the relevant Lenders pro rata according to amounts of
their respective Commitments of such Class (in the case of the making
of Loans) or their respective Loans of such Class (in the case of
Conversions and Continuations of Loans);
(c) each payment or prepayment by the Borrower of principal of
Loans of any Class shall be made for account of the relevant Lenders
pro rata in accordance with the respective unpaid principal amounts of
the Loans of such Class held by them, provided that if immediately
prior to giving effect to any such payment in respect of any Loans of
any Class the outstanding principal amount of the Loans of such Class
shall not be held by the Lenders pro rata according to the amounts of
their respective Commitments of such Class in effect at the time such
Loans were made (by reason of a failure of a Lender to make a Loan
hereunder in the circumstances described in the last paragraph of
Section 12.04 hereof), then such payment shall be applied to the Loans
of such Class in such manner as shall result, as nearly as is
practicable, in the outstanding principal amount of the Loans of such
Class being held by the relevant Lenders pro rata according to the
amounts of their respective Commitments of such Class; and
(d) each payment by the Borrower of interest on Loans of any
Class shall be made for account of the relevant Lenders pro rata
according to the amounts of interest on such Loans then due and payable
to the respective Lenders.
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4.03 Computations. Interest on Eurodollar Loans and commitment
fee and letter of credit fees shall be computed on the basis of a year of 360
days and actual days elapsed (including the first day but, except as otherwise
provided in Section 2.10(g) hereof, excluding the last day) occurring in the
period for which payable and interest on Base Rate Loans and Reimbursement
Obligations shall be computed on the basis of a year of 365 or 366 days, as the
case may be, and actual days elapsed (including the first day but excluding the
last day) occurring in the period for which payable. Notwithstanding the
foregoing, for each day that the Base Rate is calculated by reference to the
Federal Funds Rate, interest on Base Rate Loans and Reimbursement Obligations
shall be computed on the basis of a year of 360 days and actual days elapsed.
4.04 Minimum Amounts, Etc.
(a) Except for mandatory prepayments made pursuant to
Section 2.09 hereof and Conversions or prepayments made pursuant to
Section 5.04 hereof, each borrowing, Conversion and partial prepayment
of principal of Loans shall be in an amount at least equal to
$1,000,000 and in integral multiples of $100,000 in excess thereof
(borrowings, Conversions or prepayments of or into Loans of different
Types or, in the case of Eurodollar Loans, having different Interest
Periods at the same time hereunder to be deemed separate borrowings,
Conversions and prepayments for purposes of the foregoing, one for each
Type or Interest Period).
(b) Anything in this Agreement to the contrary
notwithstanding, the aggregate principal amount of Eurodollar Loans
having the same Interest Period shall be in an amount at least equal to
$10,000,000 and in integral multiples of $500,000 in excess thereof
and, if any Eurodollar Loans would otherwise be in a lesser principal
amount for any period, such Loans shall be Base Rate Loans during such
period.
4.05 Certain Notices. Notices by the Borrower to the Agent of
terminations or reductions of the Commitments, of borrowings, Conversions,
Continuations and optional prepayments of Loans, and of Classes of Loans, of
Types of Loans and of the duration of Interest Periods shall be irrevocable and
shall be effective only if received by the Agent not later than 10:00 a.m. New
York time on the number of Business Days prior to the date of the relevant
termination, reduction, borrowing, Conversion, Continuation or prepayment or the
first day of such Interest Period specified below:
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Number of
Business
Notice Days Prior
------ ----------
Termination or reduction
of the Commitments 2
Borrowing or prepayment of,
or Conversions into,
Base Rate Loans 1
Borrowing or prepayment of,
Conversions into, Continuations
as, or duration of Interest
Period for, Eurodollar Loans 3
Each such notice of termination or reduction shall specify the amount and Class
of the Commitments to be terminated or reduced. Each such notice of borrowing,
Conversion, Continuation or optional prepayment shall specify the Class of Loans
to be borrowed, Converted, Continued or prepaid and the amount (subject to
Section 4.04(a) hereof) and Type of each Loan to be borrowed, Converted,
Continued or prepaid and the date of borrowing, Conversion, Continuation or
optional prepayment (which shall be a Business Day). Each such notice of the
duration of an Interest Period shall specify the Loans to which such Interest
Period is to relate. The Agent shall promptly notify the Lenders of the contents
of each such notice. In the event that the Borrower fails to select the Type of
Loan, or the duration of any Interest Period for any Eurodollar Loan within the
time period and otherwise as provided in this Section 4.05, such Loan (if
outstanding as a Eurodollar Loan) will be automatically Converted into a Base
Rate Loan on the last day of the then current Interest Period for such Loan or
(if outstanding as a Base Rate Loan) will remain as, or (if not then
outstanding) will be made as, a Base Rate Loan.
4.06 Non-Receipt of Funds by the Agent. Unless the Agent shall
have been notified by a Lender or the Borrower (the "Payor") prior to the date
on which the Payor is to make payment to the Agent of (in the case of a Lender)
the proceeds of a Loan to be made by it hereunder or (in the case of the
Borrower) a payment to the Agent for account of one or more of the Lenders
hereunder (such payment being herein called the "Required Payment"), which
notice shall be effective upon receipt, that the Payor does not intend to make
the Required Payment to the Agent, the Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption (but shall not
be required to), make the amount thereof available to the intended recipient(s)
on such date and, if the Payor has not in fact made
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the Required Payment to the Agent, the recipient(s) of such payment shall, on
demand, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date (the
"Advance Date") such amount was so made available by the Agent until the date
the Agent recovers such amount at a rate per annum equal to the Federal Funds
Rate for such day and, if such recipient(s) shall fail promptly to make such
payment, the Agent shall be entitled to recover such amount, on demand, from the
Payor, together with interest as aforesaid, provided that if neither the
recipient(s) nor the Payor shall return the Required Payment to the Agent within
three Business Days of the Advance Date, then, retroactively to the Advance
Date, the Payor and the recipient(s) shall each be obligated to pay interest on
the Required Payment as follows:
(i) if the Required Payment shall represent a payment to be
made by the Borrower to the Lenders, the Borrower and the recipient(s)
shall each be obligated retroactively to the Advance Date to pay
interest in respect of the Required Payment at the Post-Default Rate
(without duplication of the obligation of the Borrower under Section
3.02 hereof to pay interest on the Required Payment at the Post-Default
Rate), it being understood that the return by the recipient(s) of the
Required Payment to the Agent shall not limit such obligation of the
Borrower under said Section 3.02 to pay interest at the Post-Default
Rate in respect of the Required Payment, and
(ii) if the Required Payment shall represent proceeds of a Loan to
be made by the Lenders to the Borrower, the Payor and the Borrower
shall each be obligated retroactively to the Advance Date to pay
interest in respect of the Required Payment at whichever of the rates
of interest specified in Section 3.02 hereof is applicable to the Type
of such Loan, it being understood that the return by the Borrower of
the Required Payment to the Agent shall not limit any claim the
Borrower may have against the Payor in respect of such Required
Payment.
4.07 Sharing of Payments, Etc.
(a) Each Obligor agrees that, in addition to (and without
limitation of) any right of set-off, banker's lien or counterclaim a Lender may
otherwise have, each Lender shall be entitled, at its option (to the fullest
extent permitted by law), to set off and apply any deposit (general or special,
time or demand, provisional or final), or other indebtedness, held by it or any
of its affiliates for the credit or account of such Obligor at any of its
offices, in Dollars or in any other
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currency, against any principal of or interest on any of such Lender's Loans,
Reimbursement Obligations or any other amount payable to such Lender hereunder,
that is not paid when due (regardless of whether such deposit or other
indebtedness is then due to such Obligor), in which case it shall promptly
notify such Obligor and the Agent thereof, provided that such Lender's failure
to give such notice shall not affect the validity thereof.
(b) If any Lender shall obtain from any Obligor payment of any
principal of or interest on any Loan of any Class or Reimbursement Obligation
owing to it or payment of any other amount under this Agreement or any Note held
by it or any other Basic Document through the exercise of any right of set-off,
banker's lien or counterclaim or similar right or otherwise (other than from the
Agent as provided herein), and, as a result of such payment, such Lender shall
have received a greater percentage of the principal of or interest on the Loans
of such Class or Reimbursement Obligations or such other amounts then due
hereunder or thereunder by such Obligor to such Lender than the percentage
received by any other Lenders, it shall promptly purchase from such other
Lenders participations in (or, if and to the extent specified by such Lender,
direct interests in) the Loans of such Class or Reimbursement Obligations or
such other amounts, respectively, owing to such other Lenders (or in interest
due thereon, as the case may be) in such amounts, and make such other
adjustments from time to time as shall be equitable, to the end that all the
Lenders shall share the benefit of such excess payment (net of any expenses
which may be incurred by such Lender in obtaining or preserving such excess
payment) pro rata in accordance with the unpaid principal of and/or interest on
the Loans of such Class or such other amounts, respectively, owing to each of
the Lenders, provided that if at the time of such payment the outstanding
principal amount of the Loans of any Class shall not be held by the Lenders pro
rata in accordance with their respective relevant Commitments of such Class in
effect at the time such Loans were made (by reason of a failure of a Lender to
make a Loan hereunder in the circumstances described in the last paragraph of
Section 12.04 hereof), then such purchases of participations and/or direct
interests shall be made in such manner as will result, as nearly as is
practicable, in the outstanding principal amount of the Loans being held by the
Lenders pro rata according to the amounts of such Commitments. To such end all
the Lenders shall make appropriate adjustments among themselves (by the resale
of participations sold or otherwise) if such payment is rescinded or must
otherwise be restored.
(c) The Borrower agrees that any Lender so purchasing such a
participation (or direct interest) may exercise all rights
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of set-off, banker's lien, counterclaim or similar rights with respect to such
participation as fully as if such Lender were a direct holder of Loans or other
amounts (as the case may be) owing to such Lender in the amount of such
participation (or direct interest).
(d) Nothing contained herein shall require any Lender to
exercise any such right or shall affect the right of any Lender to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of any Obligor. If, under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in lieu of
a set-off to which this Section 4.07 applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders entitled under this Section 4.07 to
share in the benefits of any recovery on such secured claim.
Section 5. Yield Protection, Etc.
----------------------
5.01 Additional Costs.
----------------
(a) The Borrower shall pay directly to each Lender from time
to time such amounts as such Lender may determine to be necessary to compensate
it for any costs which such Lender determines are attributable to its making or
maintaining of any Eurodollar Loans or its obligation to make any Eurodollar
Loans hereunder, or any reduction in any amount receivable by such Lender
hereunder in respect of any of such Loans or such obligation (such increases in
costs and reductions in amounts receivable being herein called "Additional
Costs"), resulting from any Regulatory Change which:
(i) shall subject any Lender (or its Applicable Lending
Office for any of such Loans) to any tax, duty or other charge in
respect of such Loans or its Note(s) or changes the basis of taxation
of any amounts payable to such Lender under this Agreement or its
Note(s) in respect of any of such Loans (excluding changes in the rate
of tax on the overall net income of such Lender or of its Applicable
Lending Office for any of such Loans by the jurisdiction in which such
Lender has its principal office or such Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit or
similar requirements (other than the Reserve Requirement utilized in
the determination of the Eurodollar Rate for such Loan) relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities
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of, such Lender (including any of such Loans or any deposits referred
to in the definition of "Eurodollar Base Rate" in Section 1.01 hereof),
or any commitment of such Lender (including the Commitment of such
Lender hereunder); or
(iii) imposes any other condition affecting this Agreement
or its Note(s) (or any of such extensions of credit or liabilities) or
its Commitment.
If any Lender requests compensation from the Borrower under this Section
5.01(a), the Borrower may, by notice to such Lender (with a copy to the Agent),
suspend the obligation of such Lender to make or Continue Eurodollar Loans, or
to Convert Base Rate Loans into Eurodollar Loans, until the Regulatory Change
giving rise to such request ceases to be in effect (in which case the provisions
of Section 5.04 hereof shall be applicable), provided that such suspension shall
not affect the right of such Lender to receive the compensation so requested.
(b) Without limiting the effect of the provisions of paragraph
(a) of this Section 5.01, in the event that, by reason of any Regulatory Change,
any Lender either (i) incurs Additional Costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of such Lender which includes deposits by reference to which the
interest rate on Eurodollar Loans is determined as provided in this Agreement or
a category of extensions of credit or other assets of such Lender which includes
Eurodollar Loans or (ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets which it may hold, then, if such Lender so
elects by notice to the Borrower (with a copy to the Agent), the obligation of
such Lender to make or Continue, or to Convert Base Rate Loans into, Eurodollar
Loans hereunder shall be suspended until such Regulatory Change ceases to be in
effect (in which case the provisions of Section 5.04 hereof shall be
applicable).
(c) Without limiting the effect of the foregoing provisions of
this Section 5.01 (but without duplication), the Borrower shall pay directly to
each Lender from time to time on request such amounts as such Lender may
determine to be necessary to compensate such Lender (or, without duplication,
the bank holding company of which such Lender is a subsidiary) for any costs
which it determines are attributable to the maintenance by such Lender (or any
Applicable Lending Office or such bank holding company), pursuant to any law or
regulation or any interpretation, directive or request (whether or not having
the force of law and whether or not failure to comply therewith would be
unlawful) of any court or governmental or monetary authority (i) following any
Regulatory Change or (ii) implementing any
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risk-based capital guideline or requirement (whether or not having the force of
law and whether or not the failure to comply therewith would be unlawful)
heretofore or hereafter issued by any government or governmental or supervisory
authority implementing at the national level the Basle Accord (including,
without limitation, the Final Risk-Based Capital Guidelines of the Board of
Governors of the Federal Reserve System (12 CFR Part 208, Appendix A; 12 CFR
Part 225, Appendix A) and the Final Risk-Based Capital Guidelines of the Office
of the Comptroller of the Currency (12 CFR Part 3, Appendix A)), of capital in
respect of its Commitment or Loans (such compensation to include, without
limitation, an amount equal to any reduction of the rate of return on assets or
equity of such Lender (or any Applicable Lending Office or such bank holding
company) to a level below that which such Lender (or any Applicable Lending
Office or such bank holding company) could have achieved but for such law,
regulation, interpretation, directive or request). For purposes of this Section
5.01(c) and Section 5.06 hereof, "Basle Accord" shall mean the proposals for
risk-based capital framework described by the Basle Committee on Banking
Regulations and Supervisory Practices in its paper entitled "International
Convergence of Capital Measurement and Capital Standards" dated July 1988, as
amended, modified and supplemented and in effect from time to time or any
replacement thereof.
(d) Each Lender shall notify the Borrower of any event
occurring after the date of this Agreement that will entitle such Lender to
compensation under paragraph (a) or (c) of this Section 5.01 as promptly as
practicable, but in any event within 45 days, after such Lender obtains actual
knowledge thereof; provided, that (i) if such Lender fails to give such notice
within 45 days after it obtains actual knowledge of such an event, such Lender
shall, with respect to compensation payable pursuant to this Section 5.01 in
respect of any costs resulting from such event, only be entitled to payment
under this Section 5.01 for costs incurred from and after the date 45 days prior
to the date that such Lender does give such notice and (ii) each Lender will
designate a different Applicable Lending Office for the Loans of such Lender
affected by such event if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the sole opinion of such
Lender, be disadvantageous to such Lender, except that such Lender shall have no
obligation to designate an Applicable Lending Office located in the United
States of America. Each Lender will furnish to the Borrower a certificate
setting forth the basis and amount of each request by such Lender for
compensation under paragraph (a) or (c) of this Section 5.01. Determinations and
allocations by any Lender for purposes of this Section 5.01 of the effect of any
Regulatory Change pursuant to paragraph (a) or (b) of this Section 5.01, or of
the effect of
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capital maintained pursuant to paragraph (c) of this Section 5.01, on its costs
or rate of return of maintaining Loans or its obligation to make Loans, or on
amounts receivable by it in respect of Loans, and of the amounts required to
compensate such Lender under this Section 5.01, shall be conclusive, provided
that such determinations and allocations are made on a reasonable basis.
5.02 Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of any Eurodollar
Base Rate for any Interest Period:
(a) the Agent determines, which determination shall be
conclusive, that quotations of interest rates for the relevant deposits
referred to in the definition of "Eurodollar Base Rate" in Section 1.01
hereof are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining rates of interest for
Eurodollar Loans as provided herein; or
(b) with respect to Loans of any Class, the Majority Revolving
Credit Lenders, the Majority Tranche A Lenders, the Majority Tranche B
Lenders or the Majority Tranche C Lenders, as the case may be,
determine, which determination shall be conclusive, and notify the
Agent that the relevant rates of interest referred to in the definition
of "Eurodollar Base Rate" in Section 1.01 hereof upon the basis of
which the rate of interest for Eurodollar Loans of such Class for such
Interest Period is to be determined are not likely adequately to cover
the cost to such Lenders of making or maintaining Eurodollar Loans for
such Interest Period;
then the Agent shall give the Borrower and each Lender prompt notice thereof,
and so long as such condition remains in effect, the Lenders shall be under no
obligation to make additional Eurodollar Loans, to Continue Eurodollar Loans or
to Convert Base Rate Loans into Eurodollar Loans and the Borrower shall, on the
last day(s) of the then current Interest Period(s) for the outstanding
Eurodollar Loans, either prepay such Loans or Convert such Loans into Base Rate
Loans in accordance with Section 2.08 hereof.
5.03 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to honor its obligation to make or maintain Eurodollar
Loans hereunder (and, in the sole opinion of such Lender, the designation of a
different Applicable Lending Office would either not avoid such unlawfulness or
would
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be disadvantageous to such Lender), then such Lender shall promptly notify the
Borrower thereof (with a copy to the Agent) and such Lender's obligation to make
or Continue, or to Convert Loans of any other Type into, Eurodollar Loans shall
be suspended until such time as such Lender may again make and maintain
Eurodollar Loans (in which case the provisions of Section 5.04 hereof shall be
applicable).
5.04 Treatment of Affected Loans. If the obligation of any
Lender to make Eurodollar Loans or to Continue, or to Convert Base Rate Loans
into, Eurodollar Loans shall be suspended pursuant to Section 5.01 or 5.03
hereof, such Lender's Eurodollar Loans shall be automatically Converted into
Base Rate Loans on the last day(s) of the then current Interest Period(s) for
Eurodollar Loans (or, in the case of a Conversion required by Section 5.01(b) or
5.03 hereof, on such earlier date as such Lender may specify to the Borrower
with a copy to the Agent) and, unless and until such Lender gives notice as
provided below that the circumstances specified in Section 5.01 or 5.03 hereof
which gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have
been so Converted, all payments and prepayments of principal which
would otherwise be applied to such Lender's Eurodollar Loans shall be
applied instead to its Base Rate Loans; and
(b) all Loans which would otherwise be made or Continued by
such Lender as Eurodollar Loans shall be made or Continued instead as
Base Rate Loans and all Base Rate Loans of such Lender which would
otherwise be Converted into Eurodollar Loans shall remain as Base Rate
Loans.
If such Lender gives notice to the Borrower with a copy to the Agent that the
circumstances specified in Section 5.01 or 5.03 hereof which gave rise to the
Conversion of such Lender's Eurodollar Loans pursuant to this Section 5.04 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans of the same Class made by
other Lenders are outstanding, such Lender's Base Rate Loans of such Class shall
be automatically Converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Eurodollar Loans, to the extent necessary so
that, after giving effect thereto, all Loans of such Class are allocated among
the Lenders pro rata (as to principal amounts, Types and Interest Periods) in
accordance with their respective Commitments.
5.05 Compensation. The Borrower shall pay to the Agent for
account of each Lender, upon the request of such Lender
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through the Agent, such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost or
expense which such Lender determines is attributable to:
(a) any payment, mandatory or optional prepayment or
Conversion of a Eurodollar Loan made by such Lender for any reason
(including, without limitation, the acceleration of the Loans pursuant
to Section 10 hereof) on a date other than the last day of the Interest
Period for such Loan; or
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any of the conditions precedent
specified in Section 7 hereof to be satisfied) to borrow a Eurodollar
Loan from such Lender on the date for such borrowing specified in the
relevant notice of borrowing given pursuant to Section 2.02 hereof.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
which otherwise would have accrued on the principal amount so paid, prepaid or
Converted or not borrowed for the period from the date of such payment,
prepayment, Conversion or failure to borrow to the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow, the
Interest Period for such Loan which would have commenced on the date specified
for such borrowing) at the Eurodollar Rate for such Loan for such Interest
Period over (ii) the amount of interest which otherwise would have accrued on
such principal amount at a rate per annum equal to the interest component of the
amount such Lender would have bid in the London interbank market for Dollar
deposits of leading banks in amounts comparable to such principal amount and
with maturities comparable to such period (as reasonably determined by such
Lender).
5.06 Additional Costs in Respect of Letters of Credit. Without
limiting the obligations of the Borrower under Section 5.01 hereof (but without
duplication), if as a result of any Regulatory Change or any risk-based capital
guideline or other requirement heretofore or hereafter issued by any government
or governmental or supervisory authority implementing at the national level the
Basle Accord there shall be imposed, modified or deemed applicable any tax,
reserve, special deposit, capital adequacy or similar requirement against or
with respect to or measured by reference to Letters of Credit issued or to be
issued hereunder and the result shall be to increase the cost to any Lender or
Lenders of issuing (or purchasing participations in) or maintaining its
obligation hereunder to issue (or purchase participations in) any Letter of
Credit hereunder or reduce any
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amount receivable by any Lender hereunder in respect of any Letter of Credit
(which increases in cost, or reductions in amount receivable, shall be the
result of such Lender's or Lenders' reasonable allocation of the aggregate of
such increases or reductions resulting from such event), then, upon demand by
such Lender or Lenders (through the Agent), the Borrower shall pay immediately
to the Agent for account of such Lender or Lenders, from time to time as
specified by such Lender or Lenders (through the Agent), such additional amounts
as shall be sufficient to compensate such Lender or Lenders (through the Agent)
for such increased costs or reductions in amount. A statement as to such
increased costs or reductions in amount incurred by any such Lender or Lenders,
submitted by such Lender or Lenders to the Borrower shall be conclusive in the
absence of manifest error as to the amount thereof.
5.07 U.S. Taxes.
(a) The Borrower agrees to pay to each Lender that is not a
U.S. Person such additional amounts as are necessary in order that the net
payment of any amount due to such non-U.S. Person hereunder after deduction for
or withholding in respect of any U.S. Tax imposed with respect to such payment
(or in lieu thereof, payment of such U.S. Tax by such non-U.S. Person), will not
be less than the amount stated herein to be then due and payable, provided that
the foregoing obligation to pay such additional amounts shall not apply:
(i) to any payment to a Lender hereunder (other than in respect of
a Registered Loan) unless such Lender is, on the date hereof (or on the
date it becomes a Lender as provided in Section 12.06(b) hereof) and on
the date of any change in the Applicable Lending Office of such Lender,
delivers to the Borrower and the Agent a duly completed and executed
Form 1001 (relating to such Lender and entitling it to a complete
exemption from withholding on all interest to be received by it
hereunder in respect of the Loans) or Form 4224 (relating to all
interest to be received by such Lender hereunder in respect of the
Loans), or
(ii) to any payment to any Lender hereunder in respect of a
Registered Loan (a "Registered Holder"), unless such Registered Holder
(or, if such Registered Holder is not the beneficial owner of such
Registered Loan, the beneficial owner thereof), on the date hereof (or
on the date such Registered Holder becomes a Lender as provided in
Section 12.06(b) hereof) and on the date of any change in the
Applicable Lending Office of such Lender, delivers to the Borrower and
the Agent either (x) a duly completed and executed Form W-8, together
with an annual certificate
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stating that (A) such Registered Holder (or beneficial owner, as the
case may be) is not a "bank" within the meaning of Section 881(c)(3)(A)
of the Code, and (B) such Registered Holder (or beneficial owner, as
the case may be) shall promptly notify the Borrower if at any time,
such Registered Holder (or beneficial owner, as the case may be)
determines that it is no longer in a position to provide such
certificate to the Borrower (or any other form of certification adopted
by the relevant taxing authorities of the United States of America for
such purposes), or (y) if such Registered Holder is not entitled to
deliver a Form W-8, a duly executed and completed Form 1001 or Form
4224, or
(iii) to any U.S. Tax imposed solely by reason of the failure by
such non-U.S. Person to comply with applicable certification,
information, documentation or other reporting requirements concerning
the nationality, residence, identity or connections with the United
States of America of such non-U.S. Person if such compliance is
required by statute or regulation of the United States of America as a
precondition to relief or exemption from such U.S. Tax.
For the purposes of this Section 5.07(a), (w) "Form 1001" shall mean Form 1001
(Ownership, Exemption, or Reduced Rate Certificate) of the Department of the
Treasury of the United States of America, (x) "Form 4224" shall mean Form 4224
(Exemption from Withholding of Tax on Income Effectively Connected with the
Conduct of a Trade or Business in the United States) of the Department of the
Treasury of the United States of America (or in relation to either such Form
such successor and related forms as may from time to time be adopted by the
relevant taxing authorities of the United States of America to document a such
Form relates), (y) "Form W-8" shall mean Form W-8 (Certificate of Foreign Status
of the Department of Treasury of the United States of America) and (z) "U.S.
Taxes" shall mean any present or future tax, assessment or other charge or levy
imposed by or on behalf of the United States of America or any taxing authority
thereof or therein.
(b) Within 30 days after paying any amount to the Agent or any
Lender from which it is required by law to make any deduction or withholding,
and within 30 days after it is required by law to remit such deduction or
withholding to any relevant taxing or other authority, the Borrower shall
deliver to the Agent for delivery to such non-U.S. Person evidence satisfactory
to such Person of such deduction, withholding or payment (as the case may be).
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5.08 Replacement of Lenders. The Borrower may, at any time,
replace (a) any Lender that has requested compensation from the Borrower
pursuant to Section 5.01 or Section 5.07 hereof, (b) any Lender that fails to
make a Loan or to pay to the Agent for the account of the Issuing Bank the
amount of such Lender's Revolving Credit Commitment Percentage of any payment
under a Letter of Credit under the circumstances contemplated by Section 12.04
hereof or (c) any Lender that does not agree to any request by the Borrower for
a consent, approval, amendment or a waiver hereunder that requires the consent
or approval of all of the Lenders, by giving not less than ten Business Days'
prior notice to the Agent (which shall promptly notify such Lender), that it
intends to replace such Lender (a "Replaced Lender") with respect to its rights
and obligations (including, without limitation, its Loans and Letter of Credit
Interest outstanding and its Commitments) as a "Lender" under this Agreement and
such Replaced Lender's Notes (collectively, the "Transferred Interest") with one
or more banks or other financial institutions (including, but not limited to,
any other Lender or an affiliate of any Lender) selected by the Borrower and
acceptable to the Agent and the Issuing Bank (each, a "Replacement Lender").
Upon the effective date of any replacement under this Section 5.08 (and as a
condi tion thereto), (i) the Borrower shall pay or cause to paid to the Replaced
Lender an amount equal to all principal, interest, fees and other amounts
(including, without limitation, all amounts payable under Section 5.05 hereof as
if such Lender's Loans were being prepaid in full on such effective date) then
owing to such Replaced Lender hereunder and such Replaced Lender's Notes in
respect of the Transferred Interest (all or a portion of which amount may
constitute consideration for an assignment by such Replaced Lender of all or a
portion of the Transferred Interest) and (ii) such Replaced Lender shall assign
to each Replacement Lender (without representation, warranty or recourse
whatsoever) a portion of the Transferred Interest specified by the Borrower,
whereupon (x) each Replacement Lender shall become a "Lender" for all purposes
of this Agreement having the Commitments in the amount of such Replaced Lender's
Commitments assumed by it and all of the rights and obligations under this
Agreement of "Lender(s)" holding the Transferred Interest and (y) such Replaced
Lender shall cease to be responsible or liable for, and shall cease to be
entitled to the rights and benefits of, all or any portion of the Transferred
Interest (except that such Replaced Lender shall continue to benefit from the
obligations of the Borrower to such Replaced Lender under Sections 2.10(g),
2.10(l), 5.01, 5.05, 5.06, 5.07, 12.03 and 12.13 hereof and the obligations of
the Subsidiary Guarantors to such Replaced Lender under Section 6.03 hereof, and
the obligations of such Replaced Lender under Section 11.05 hereof shall survive
such replacement, in each case to the extent relating to events or circumstances
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that occurred or existed on or before the date of such replacement).
Section 6. Guarantee.
---------
6.01 Guarantee. The Subsidiary Guarantors hereby jointly and
severally guarantee to each Lender and the Agent and their respective successors
and assigns the prompt payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the principal of and interest on the Loans made by
the Lenders to, and the Note(s) held by each Lender of, the Borrower, all
Reimbursement Obligations and all other amounts from time to time owing to the
Lenders or the Agent by the Borrower under this Agreement and under the Notes
and under any Interest Rate Protection Agreements and by any Credit Party under
any of the other Basic Documents, in each case strictly in accordance with the
terms thereof (such obligations being herein collectively called the "Guaranteed
Obligations"). The Subsidiary Guarantors hereby further jointly and severally
agree that if the Borrower shall fail to pay in full when due (whether at stated
maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the
Subsidiary Guarantors will promptly pay the same, without any demand or notice
whatsoever, and that in the case of any extension of time of payment or renewal
of any of the Guaranteed Obligations, the same will be promptly paid in full
when due (whether at extended maturity, by acceleration or otherwise) in
accordance with the terms of such extension or renewal.
6.02 Obligations Unconditional. The obligations of the
Subsidiary Guarantors under Section 6.01 hereof are absolute and unconditional,
joint and several, irrespective of the value, genuineness, validity, regularity
or enforceability of the obligations of the Borrower under this Agreement, the
Notes or any other agreement or instrument referred to herein or therein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever which might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 6.02 that the obligations of the
Subsidiary Guarantors hereunder shall be absolute and unconditional, joint and
several, under any and all circumstances. Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more of the following
shall not affect the liability of the Subsidiary Guarantors hereunder which
shall remain absolute and unconditional as described above:
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(i) at any time or from time to time, without notice to the
Subsidiary Guarantors, the time for any performance of or compliance
with any of the Guaranteed Obligations shall be extended, or such
performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of this
Agreement or the Notes or any other agreement or instrument referred to
herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this
Agreement or the Notes or any other agreement or instrument referred to
herein or therein shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with;
(iv) any lien or security interest granted to, or in favor of, the
Agent or any Lender or Lenders as security for any of the Guaranteed
Obligations shall fail to be perfected;
(v) any of the Guaranteed Obligations shall be determined to be
void or voidable (including, without limitation, for the benefit of any
creditor of any Credit Party) or shall be subordinated to the claims of
any Person (including, without limitation, any creditor of any Credit
Party);
(vi) the Borrower shall be insolvent on the date hereof or shall
become insolvent on the date that any Loan is made; and
(vii) the execution and delivery of a Tranche C Term Loan Activation
Notice providing for the activation of Tranche C Term Loan Commitments
in any amount.
The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement that the
Agent or any Lender exhaust any right, power or remedy or proceed against the
Borrower under this Agreement or the Notes or any other agreement or instrument
referred to herein or therein, or against any other Person under any other
guarantee of, or security for, any of the Guaranteed Obligations.
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6.03 Reinstatement. The obligations of the Subsidiary
Guarantors under this Section 6 shall be automatically reinstated if and to the
extent that for any reason any payment by or on behalf of the Borrower in
respect of the Guaranteed Obligations is rescinded or must be otherwise restored
by any holder of any of the Guaranteed Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise and the Subsidiary
Guarantors jointly and severally agree that they will indemnify the Agent and
each Lender on demand for all reasonable costs and expenses (including, without
limitation, fees of counsel) incurred by the Agent or such Lender in connection
with such rescission or restoration, including any such costs and expenses
incurred in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
6.04 Subrogation. The Subsidiary Guarantors hereby jointly and
severally agree that until the payment and satisfaction in full of all
Guaranteed Obligations and the expiration and termination of the Commitments of
the Lenders under this Agreement they shall not exercise any right or remedy
arising by reason of any performance by them of their guarantee in Section 6.01
hereof, whether by subrogation or otherwise, against the Borrower or any other
guarantor of any of the Guaranteed Obligations or any security for any of the
Guaranteed Obligations.
6.05 Remedies. The Subsidiary Guarantors jointly and severally
agree that, as between the Subsidiary Guarantors, on the one hand, and the
Lenders and the Agent, on the other hand, the obligations of the Borrower under
this Agreement and the Notes may be declared to be forthwith due and payable as
provided in Section 10 hereof (and shall be deemed to have become automatically
due and payable in the circumstances provided in said Section 10) for purposes
of Section 6.01 hereof notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such obligations from becoming automatically due
and payable) as against the Borrower and that, in the event of such declaration
(or such obligations being deemed to have become automatically due and payable),
such obligations (whether or not due and payable by the Borrower) shall
forthwith become due and payable by the Subsidiary Guarantors for purposes of
said Section 6.01.
6.06 Continuing Guarantee. The guarantee in this Section 6 is
a continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
6.07 Rights of Contribution. The Subsidiary Guarantors hereby
agree, as between themselves, that if any
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Subsidiary Guarantor (an "Excess Funding Guarantor") shall pay Guaranteed
Obligations in excess of the Excess Funding Guarantor's Pro Rata Share (as
hereinafter defined) of such Guaranteed Obligations, the other Subsidiary
Guarantors shall, on demand (but subject to the next sentence hereof), pay to
the Excess Funding Guarantor an amount equal to their respective Pro Rata Shares
of such Excess Funding Guarantor's payment. The payment obligation of any
Subsidiary Guarantor to any Excess Funding Guarantor under this Section 6.07
shall be subordinate and subject in right of payment to the prior payment in
full of the obligations of such Subsidiary Guarantor under the other provisions
of this Section 6 and such Excess Funding Guarantor shall not exercise any right
or remedy with respect to such excess until payment and satisfaction in full of
all of such obligations. For the purposes hereof, "Pro Rata Share" shall mean,
for any Subsidiary Guarantor, a percentage equal to the percentage of such
Subsidiary Guarantor's Net Assets as of the Valuation Date (as defined in the
next sentence) of the aggregate Net Assets of all of the Subsidiary Guarantors
as at such date. For purposes of the preceding sentence, the "Valuation Date"
shall mean the date hereof; provided that, if the Agent requests from time to
time that the Subsidiary Guarantors ratify and confirm their respective
obligations under this Section 6, they shall promptly do so pursuant to an
instrument reasonably satisfactory to the Agent and the Valuation Date shall
mean the date of the latest such ratification and confirmation to occur at the
request of the Agent after the date hereof.
6.08 Limitation on Guarantee Obligations. In any action or
proceeding involving any State corporate law, or any State or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Subsidiary Guarantor under
Section 6.01 hereof would otherwise, taking into account the provisions of
Section 6.07 hereof, be held or determined to be void, invalid or unenforceable,
or subordinated to the claims of any other creditors, on account of the amount
of its liability under said Section 6.01, then, notwithstanding any other
provision hereof to the contrary, the amount of such liability shall, without
any further action by such Subsidiary Guarantor, as the case may be, any Lender,
the Agent or any other Person, be automatically limited and reduced to the
highest amount which is valid and enforceable and not subordinated to the claims
of other creditors as determined in such action or proceeding.
6.09 Instrument for the Payment of Money. Each Subsidiary
Guarantor hereby acknowledges that the guarantee in this Section 6 constitutes
an instrument for the payment of money, and consents and agrees that any Lender
or the Agent, at its sole option, in the event of a dispute by such Subsidiary
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Guarantor in the payment of any moneys due hereunder, shall have the right to
bring motion-action under New York CPLR Section 3213.
Section 7. Conditions Precedent.
--------------------
7.01 Effectiveness of this Agreement. The effectiveness of the
amendment and restatement of the Existing Credit Agreement provided for hereby
is subject to (i) the execution and delivery of an execution counterpart of this
Agreement by each Person stated to be a party to this Agreement and (ii) the
receipt by the Agent of the following documents and evidence, each of which
documents (and, in the case of certificates containing attachments, such
attachments) and all of which evidence shall, except as expressly specified
below, be satisfactory in form and substance to the Agent and, to the extent
specified below, to each Lender (provided that, if such conditions precedent
shall not have been satisfied on or before June 30, 1996, this Amendment and
Restatement shall have no force or effect, regardless of whether such conditions
precedent are thereafter satisfied):
(a) Authority. The following evidence and documents,
each of which documents shall be certified as indicated
below:
(i) (x) a copy of the charter, as amended, of each Credit
Party that is a corporation and each general partner of each
Credit Party that is a partnership (each such Credit Party and
general partner being referred to as a "Relevant Corporation")
certified by the Secretary of State of its jurisdiction of
incorporation, (y) a certificate as to the good standing of
and charter documents filed by such Relevant Corporation from
such Secretary of State, dated as of a recent date and (z) a
certificate as to the good standing or qualification to do
business of such Relevant Corporation from each jurisdiction
in which the nature of the business conducted by such Relevant
Corporation makes such qualification necessary and where
failure so to qualify would have a Material Adverse Effect;
(ii) a certificate of the Secretary or an Assistant
Secretary of each Relevant Corporation, dated the Restatement
Effective Date and certifying (w) that attached thereto is a
true and complete copy of the by-laws of such Relevant
Corporation as in effect on the date of such certificate, (x)
that attached thereto is a true and complete copy of
resolutions duly adopted
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by the board of directors of such Relevant Corporation
authorizing the execution, delivery and performance of such of
the Basic Documents to which such Relevant Corporation and/or
the partnership of which such Relevant Corporation is a
general partner, as the case may be, is or is intended to be a
party and the extensions of credit hereunder, and that such
resolutions have not been modified, rescinded or amended and
are in full force and effect, (y) that the charter of such
Relevant Corporation has not been amended since the date of
the certification thereto furnished pursuant to clause (i)
above, and (z) as to the incumbency and specimen signature of
each officer of such Relevant Corporation executing such of
the Basic Documents to which such Relevant Corporation and/or
the partnership of which such Relevant Corporation is a
general partner, as the case may be, is intended to be a party
and each other document to be delivered by such Relevant
Corporation and/or the partnership of which such Relevant
Corporation is a general partner, as the case may be, from
time to time in connection therewith (and the Agent and each
Lender may conclusively rely on such certificate until it
receives notice in writing from such Relevant Corporation);
(iii) a certificate of another officer of each Relevant
Corporation as to the incumbency and specimen signature of the
Secretary or Assistant Secretary, as the case may be, of such
Relevant Corporation; and
(iv) a certificate of the Secretary or an Assistant
Secretary of each general partner of each Credit Party that is
a partnership, dated the Effective Date, and certifying (x) as
to the names of all of the Persons that are partners in such
partnership and (y) that attached thereto is a true and
complete copy of the partnership agreement forming such
partnership as in effect on the date of such certificate.
(b) Officer's Certificate. A certificate of a senior officer
of the Borrower to the effect set forth in clauses (a) and (b) of the
first sentence of Section 7.02 hereof (excluding references to
representations and warranties under the Founders Subordination
Agreement) and including calculations demonstrating in reasonable
detail compliance with Section 1008(a) of the 1995 Senior Subordinated
Note Indenture and Section 1008(a) of the 1993 Senior Subordinated Note
Indenture after giving effect to the
Credit Agreement
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borrowings and prepayments hereunder to be made on the
Restatement Effective Date.
(c) Opinions of Counsel.
-------------------
(i) Opinion of Counsel to the Obligors. An opinion of
Thomas & Libowitz, P.A., counsel to the Obligors.
(ii) Opinion of Counsel to Chase. An opinion of Milbank,
Tweed, Hadley & McCloy, special New York counsel to Chase.
(d) Notes. The Notes, duly completed and executed for each
Lender (except that, in the case of a Registered Holder, Notes shall be
required only to the extent that such Registered Holder shall have
requested the execution and delivery of a Note pursuant to Section
2.07(g) hereof).
(e) Security Agreement. The Security Agreement, duly executed
and delivered by each Obligor and the Agent and the stock certificates
and promissory notes identified under the name of such Obligor in
Annexes 1 and 7 thereto, respectively, in each case accompanied by
undated stock powers or bond powers, as the case may be, executed in
blank. In addition, each Obligor shall have taken such other action
(including delivering to the Agent, for filing, appropriately completed
and duly executed copies of Uniform Commercial Code financing
statements) as the Agent shall have requested in order to perfect the
security interests created pursuant to the Security Agreement.
(f) Affiliate Guarantee and Security Agreement. The Affiliate
Guarantee and Security Agreement, duly executed and delivered by KIG,
Cunningham, GDLP and the Agent and the stock certificates identified
under the names of KIG, Cunningham and GDLP in Annex 1 thereto, in each
case accompanied by undated stock powers executed in blank. In
addition, KIG, Cunningham and GDLP shall have taken such other action
(including delivering to the Agent, for filing, appropriately completed
and duly executed copies of Uniform Commercial Code financing
statements) as the Agent shall have requested in order to perfect the
security interests created pursuant to the Affiliate Guarantee and
Security Agreement.
(g) GDC Security Agreement. The GDC Security Agreement, duly
executed and delivered by GDC and the Agent. In addition, GDC shall
have taken such other action (including delivery to the Agent, for
filing, appropriately completed and duly executed copies of Uniform
Commercial
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Code financing statements) as the Agent shall have requested in order
to perfect the security interests created pursuant to the GDC Security
Agreement.
(h) Interest, Fees and Expenses under Existing Credit
Agreement. Evidence that the Borrower shall have paid to the Agent all
accrued and unpaid interest, fees and expenses owing by the Borrower
under the Existing Credit Agreement.
(i) Founders Subordination Agreement. The Founders
Subordination Agreement, duly executed and delivered by Carolyn C.
Smith and the Agent.
(j) Program Services Agreements. A certificate of a senior
financial officer of the Borrower certifying that (i) attached thereto
are true and complete copies of each Program Services Agreement to
which the Borrower of any of its Subsidiaries is a party on the
Restatement Effective Date after the consummation of the River City
Non-License Acquisition, (ii) there has been no amendment or
modification to any such Program Services Agreement as furnished to the
Agent prior to the Restatement Effective Date and (iii) each such
Program Services Agreement is in full force and effect.
(k) Network Affiliations. A certificate of a senior financial
officer of the Borrower certifying that (i) for each Station that is an
Owned Station on the Restatement Effective Date, the Borrower or any of
its Subsidiaries has entered into a network affiliation agreement with
Fox Broadcasting Company or the United Paramount Network (or other
network satisfactory to the Agent) for the carriage of programming over
the facilities of such Station, (ii) attached thereto are true and
complete copies of each such network affiliation agreement,
satisfactory in form and substance to the Agent and the Lenders, and
(iii) each such network affiliation agreement is in full force and
effect.
(l) Asset Use and Operating Agreements. A certificate of a
senior financial officer of the Borrower certifying that (i) the
Borrower or Subsidiary operating each Owned Station and the respective
License Subsidiary have executed and delivered an Asset Use and
Operating Agreement with respect to such Owned Station, (ii) attached
thereto are true and complete copies of each such Asset Use and
Operating Agreement (including any and all modifications and
supplements thereto) and (iii) each such Asset Use and Operating
Agreement is in full force and effect.
Credit Agreement
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(m) River City Non-License Acquisition. A certificate
of a senior financial officer of the Borrower certifying that:
(i) attached thereto are true and complete copies of the
River City Acquisition Documents, which shall be satisfactory
in form and substance to the Agent;
(ii) neither any Obligor nor (to the knowledge of such
officer (after due inquiry)) any other party to the River City
Acquisition Documents shall be in breach of any of its
obligations under any of the River City Acquisition Documents;
(iii) the representations and warranties contained in each
River City Acquisition Document by any Obligor and (to the
knowledge of such officer (after due inquiry)) each of the
other parties thereto shall be true, correct and complete in
all material respects on and as of the Restatement Effective
Date as if made on and as of the Restatement Effective Date
(or, if any such representation and warranty is expressly
stated to have been made as of a specific date, as of such
specific date);
(iv) none of the provisions of the River City Asset
Purchase Agreement or the River City Option Agreements
heretofore delivered to the Agent and the Lenders shall have
been amended, waived or otherwise modified, or executed and
delivered in a form other than the form heretofore delivered
to the Agent and the Lenders (except with only such changes
thereto as (x) are effected pursuant to written instruments
copies of which have been delivered to the Agent prior to the
date of this Agreement and (y) are stated to be satisfactory
to the Agent and the Lenders in a notice delivered by the
Agent (on behalf of itself and the Lenders) to the Borrower);
(v) the conditions precedent to the transactions
contemplated by each of the River City Acquisition Documents
in connection with the River City Non-License Acquisition
shall (except as expressly provided in clause (iv) above) have
been duly satisfied in all respects and such transactions
shall have been duly consummated on the Restatement Effective
Date in the manner contemplated by such River City Acquisition
Documents (including, without limitation, the repayment by
River City of its outstanding indebtedness as
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contemplated by the River City Acquisition Documents);
and
(vi) the aggregate amount of consideration paid in cash on
the Restatement Effective Date by the Borrower and its
Subsidiaries for the River City Non-License Acquisition, which
shall not exceed $855,000,000.
(n) Consent and Agreement.
---------------------
(i) a Consent and Agreement, duly executed and
delivered by the River City Sellers, the Obligors and the
Agent relating to the River City Asset Purchase Agreement, the
River City Option Agreements and the Time Brokerage Agreement
dated as of May 31, 1996 by and among the River City Sellers
and the Borrower relating to each of the "Group I Stations" as
such term is defined in the River City Group I Option
Agreement;
(ii) a Consent and Agreement, duly executed and delivered
by Raleigh (WRDC-TV), Inc., Raleigh (WRDC-TV) Licensee, Inc.,
WLFL, Inc. and the Agent relating to the Program Services
Agreement dated as of March 27, 1995 between Raleigh
(WRDC-TV), Inc., Raleigh (WRDC-TV) Licensee, Inc. and WLFL,
Inc.;
(iii) a Consent and Agreement, duly executed and delivered
by Birmingham (WABM-TV), Inc., Birmingham (WABM-TV) Licensee,
Inc., WTTO, Inc. and the Agent relating to the Program
Services Agreement dated as of July 25, 1995 between
Birmingham (WABM-TV), Inc., Birmingham (WABM-TV) Licensee,
Inc. and WTTO, Inc.;
(iv) a Consent and Agreement, duly executed and delivered
by Baltimore (WNUV-TV), Inc., Baltimore (WNUV-TV) Licensee,
Inc., Chesapeake Television, Inc. and the Agent relating to
the Program Services Agreement dated as of July 24, 1995
between Baltimore (WNUV-TV), Inc., Baltimore (WNUV-TV)
Licensee, Inc. and Chesapeake Television, Inc.;
(v) a Consent and Agreement, duly executed and delivered
by WVTV, Inc., WVTV Licensee, Inc., WCGV, Inc. and the Agent
relating to the Program Services Agreement dated as of July
24, 1995 between WVTV, Inc., WVTV Licensee, Inc. and WCGV,
Inc.; and
(vi) a Consent and Agreement, duly executed and delivered
by WPTT, Inc., WPGH, Inc. and the Agent
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relating to the Program Services Agreement dated as of
May 5, 1995 between WPTT, Inc. and WPGH, Inc.
(o) KSMO and WSTR Options. A certificate of a senior
financial officer of the Borrower certifying that:
(i) the Borrower or any Subsidiary of the Borrower
party to the KSMO Option shall have delivered a notice of
exercise of the option thereunder and filed with the FCC all
applications in connection with such exercise for material
authorizations, licenses and permits issued by the FCC that
are required or necessary for the operation of KSMO-TV, and
the conduct of the business of the Borrower and its
Subsidiaries with respect to KSMO-TV, as proposed to be
conducted; and
(ii) the Borrower or any Subsidiary of the Borrower party
to the WSTR Option shall have delivered a notice of exercise
of the option thereunder and filed with the FCC all
applications in connection with such exercise for material
authorizations, licenses and permits issued by the FCC that
are required or necessary for the operation of WSTR-TV, and
the conduct of the business of the Borrower and its
Subsidiaries with respect to WSTR-TV, as proposed to be
conducted.
(p) Certain Financial Conditions. A certificate of a senior
financial officer of the Borrower certifying (and setting forth
calculations in reasonable detail and, where appropriate, assumptions,
which assumptions shall be acceptable to the Agent, demonstrating)
that:
(i) attached thereto is a complete and accurate
calculation of EBITDA for (x) the fiscal year of the Borrower
ending on December 31, 1995 and (y) the twelve-month period
ending on March 31, 1996, the amount of which for such period
ending on March 31, 1996 shall be greater than $185,000,000;
(ii) the ratio of Total Indebtedness on the Restatement
Effective Date (calculated after giving effect to borrowings
and prepayments hereunder to be made on the Restatement
Effective Date) to EBITDA for the twelve-month period ending
on March 31, 1996 (calculated on a pro forma basis as if the
River City Non-License Acquisition had been consummated on
April 1, 1995) does not exceed 6.85 to 1; and
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(iii) the Borrower will be in compliance on the Restatement
Effective Date with Sections 9.10, 9.11, 9.12, 9.13, 9.14,
9.15, 9.16 hereof (calculated after giving effect to
borrowings and prepayments hereunder to be made on the
Restatement Effective Date and calculated on a pro forma basis
as if the River City Non-License Acquisition had been
consummated on April 1, 1995).
(q) Financial Statements. A certificate of a senior financial
officer of the Borrower, satisfactory in form and substance to the
Agent and the Lenders, certifying that the Borrower has heretofore
delivered to the Lenders financial statements that are complete and
correct and present fairly, in all material respects, the consolidated
and consolidating financial condition of the Borrower and its
Consolidated Subsidiaries as at December 31, 1995 and the consolidated
and consolidating results of their operations for the fiscal year ended
on said date in accordance with generally accepted accounting
principles and practices applied on a consistent basis, in each case on
a pro-forma basis after giving effect to the River City Non-License
Acquisition and the borrowings and prepayments hereunder to be made on
the Restatement Effective Date.
(r) Solvency Analysis. A certificate of a senior financial
officer of the Borrower certifying that, as of the Restatement
Effective Date and after giving effect to the initial extension of
credit hereunder and to the other transactions contemplated hereby, (i)
the aggregate value of all Properties of the Borrower and its
Subsidiaries at their present fair saleable value (i.e., the amount
which may be realized within a reasonable time, considered to be six to
eighteen months, either through collection or sale at the regular
market value, conceiving the latter as the amount which could be
obtained for the Property in question within such period by a capable
and diligent businessman from an interested buyer who is willing to
purchase under ordinary selling conditions), exceeds the amount of all
the debts and liabilities (including contingent, subordinated,
unmatured and unliquidated liabilities) of the Borrower and its
Subsidiaries, (ii) the Borrower and its Subsidiaries will not, on a
consolidated basis, have an unreasonably small capital with which to
conduct their business operations as heretofore conducted and (iii) the
Borrower and its Subsidiaries will have, on a consolidated basis,
sufficient cash flow to enable them to pay their debts as they mature.
(s) No Material Adverse Change. A certificate of a senior
financial officer of the Borrower certifying that
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since December 31, 1995 through the Restatement Effective Date there
has been no material adverse change in the condition (financial or
otherwise), operations, business, prospects, Properties (including,
without limitation, Broadcast Licenses), nature of Properties or
liabilities of any of (x) River City and its Affiliates from that set
forth in the audited financial statements as at said date and furnished
to the Agent prior to the date hereof or (y) the Borrower and its
Subsidiaries from that set forth in the audited financial statement as
at said date and furnished to the Agent prior to the date hereof. In
addition since April 10, 1996, there shall not have occurred a material
adverse change in loan syndication conditions generally.
(t) Insurance.
----------
(i) Certificates of insurance evidencing the
existence of all insurance required to be maintained by the
Borrower and its Subsidiaries pursuant to Section 9.04 hereof
and the designation of the Agent as the loss payee, or
additional insured, as appropriate, thereunder to the extent
required by said Section 9.04 in respect of all insurance
covering tangible Property, such certificates to be in such
form and contain such information as is specified in said
Section 9.04;
(ii) A certificate of a senior financial officer of the
Borrower setting forth the insurance obtained by it in
accordance with the requirements of Section 9.04 and stating
that such insurance is in full force and effect and that all
premiums then due and payable thereon have been paid; and
(iii) a written report, dated reasonably near the Effective
Date, of PSA Financial Center, or any other firm of
independent insurance brokers of nationally recognized
standing, as to such insurance and stating that, in their
opinion, such insurance adequately protects the interests of
the Agent and the Lenders, is in compliance with the
provisions of said Section 9.04, and is comparable in all
respects with insurance carried by responsible owners and
operators of Properties similar to those covered or
contemplated to be covered by the Mortgages.
(u) Environmental Surveys. Environmental surveys and
assessments prepared by a firm of licensed engineers (familiar with the
identification of toxic and hazardous substances) covering such
Properties as may be reasonably requested by any Lender.
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(v) No Judgment and Litigation. A certificate of a senior
financial officer of the Borrower certifying that (i) there exists no
judgment, order, injunction or other restraint issued or filed which
prohibits the making of any Loans, the issuance of any Letters of
Credit or the consummation of the River City Non-License Acquisition,
any River City License Acquisition or the other transactions
contemplated hereby and (ii) no action, suit or litigation proceeding
at law or in equity by or before any court or Governmental Authority or
agency exists or is threatened with respect to the River City
Non-License Acquisition or any River City License Acquisition.
(w) Structure, Etc. Neither the Agent nor any Lender shall
have objected in writing to (i) the Borrower's state and Federal tax
assumptions, (ii) the ownership, capital, organizational and legal
structure of the Borrower and its Subsidiaries, including, without
limitation, the terms and conditions of the Seller Stock of the
Borrower to be issued to River City in connection with the River City
Non-License Acquisition, (iii) the quality and condition of the
Properties of the Borrower, River City and their respective
Subsidiaries, (iv) all material contracts (including, without
limitation, programming agreements) of the Borrower, River City and
their respective Subsidiaries or (v) any issues relating to the Federal
Communications Act of 1934, as amended, or any applicable FCC rule,
regulation or policy.
(x) Indebtedness. A certificate of a senior financial officer
of the Borrower certifying that on the Restatement Effective Date
(after giving effect to the initial extension of credit to be made
hereunder on such date) there exists no Indebtedness of any Obligors
other than Indebtedness permitted by clauses (a) and (b) of Section
9.07 hereof.
(y) Estate of Julian S. Smith. A letter addressed to the Agent
and the Lenders from the attorney for the Estate of Julian S. Smith
stating that, and indicating the date as of which, (i) the Estate of
Julian S. Smith has been closed and (ii) the Term Note dated September
30, 1990 of the Borrower payable to Julian S. Smith in the original
face amount of $7,515,000 has been validly assigned to Carolyn C.
Smith.
(z) Other Documents. Such other documents as the Agent or any
Lender or special New York counsel to Chase may reasonably request.
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The obligation of any Lender to make its initial extension of credit hereunder
is also subject to the payment by the Borrower of such fees as the Borrower
shall have agreed to pay or deliver to any Lender or the Agent in connection
herewith, including, without limitation, the reasonable fees and expenses of
Milbank, Tweed, Hadley & McCloy, special New York counsel to Chase, and Wiley,
Rein & Fielding, special FCC counsel to Chase, in connection with the
negotiation, preparation, execution and delivery of this Agreement and the other
Basic Documents and the making of the Loans hereunder (to the extent that bills
for such fees and expenses have been delivered to the Borrower).
7.02 Initial and Subsequent Loans. The obligation of the
Lenders to make any Loan to the Borrower upon the occasion of each borrowing
hereunder (including the borrowing on the Restatement Effective Date), and the
obligation of the Issuing Bank to issue any Letter of Credit hereunder, is
subject to the conditions precedent that, both immediately prior to the making
of such Loan or issuance of such Letter of Credit and also after giving effect
thereto:
(a) no Default shall have occurred and be continuing;
(b) the representations and warranties made by the Borrower in
Section 8 hereof, and by each Credit Party and Carolyn C. Smith in each
of the other Basic Documents to which such Person is a party, shall be
true and complete on and as of the date of the making of such Loan or
issuance of such Letter of Credit with the same force and effect as if
made on and as of such date (or, if any such representation and
warranty is expressly stated to have been made as of a specific date,
as of such specific date); and
(c) the Borrower shall be in compliance with the terms and
conditions of each Senior Subordinated Note Indenture.
Each notice of borrowing by the Borrower or request for a Letter of Credit
hereunder shall constitute a certification by the Borrower to the effect set
forth in the preceding sentence (both as of the date of such notice or request
and, unless the Borrower otherwise notifies the Agent prior to the date of such
borrowing or issuance, as of the date of such borrowing or issuance) and, in the
case of any borrowing of any Revolving Credit Loan or request for any Letter of
Credit, shall include calculations demonstrating in reasonable detail, and, if
requested by the Agent, a certificate from (i) the trustee under the 1995 Senior
Subordinated Note Indenture confirming compliance with Section 1008(a) of the
Senior Subordinated Note and (ii) the trustee under the 1993 Senior Subordinated
Note Indenture confirming compliance with Section 1008(a) of the 1993 Senior
Subordinated
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Note Indenture, in the case of each of the foregoing clauses (i) and (ii) after
giving effect to such borrowing or the issuance of such Letter of Credit. If the
Majority Revolving Credit Lenders, the Majority Tranche A Lenders, the Majority
Tranche B Lenders or the Majority Tranche C Lenders, as the case may be, notify
the Agent prior to the proceeds of such borrowing being made available to the
Borrower or prior to the issuance of such Letter of Credit (as the case may be)
that there is a reasonable basis to doubt the accuracy of the calculations
referred to in the preceding sentence, such borrowing or such issuance (as the
case may be) shall not occur.
Section 8. Representations and Warranties. The Obligors
represent and warrant to the Lenders and the Agent that:
8.01 Corporate Existence. Each of the Borrower and its
Subsidiaries: (a) is a corporation, partnership or other entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization; (b) has all requisite corporate or other power, and has all
material governmental licenses, authorizations, consents and approvals necessary
to own its assets and carry on its business as now being or as proposed to be
conducted; and (c) is qualified to do business and is in good standing in all
jurisdictions in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify would have a Material
Adverse Effect.
8.02 Financial Condition. The Borrower has heretofore
furnished to each of the Lenders consolidated and consolidating balance sheets
of the Borrower and its Consolidated Subsidiaries as at December 31, 1995 and
the related consolidated and consolidating statements of income, retained
earnings and changes in financial position (or of cash flow, as the case may be)
of the Borrower and its Consolidated Subsidiaries for the fiscal year ended on
said date, with the opinion thereon (in the case of said consolidated balance
sheet and statements) of Arthur Andersen & Company. All such financial
statements are complete and correct and present fairly, in all material
respects, the consolidated and consolidating financial condition of the Borrower
and its Consolidated Subsidiaries as at said date and the consolidated and
consolidating results of their operations for the fiscal year ended on said date
in accordance with generally accepted accounting principles and practices
applied on a consistent basis. Neither the Borrower nor any of its Subsidiaries
had on said date any material contingent liabilities, liabilities for taxes,
unusual forward or long-term commitments or unrealized or anticipated losses
from any unfavorable commitments, except as referred to or reflected or
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provided for in said balance sheet as at said date. Since December 31, 1995,
there has been no material adverse change in the consolidated financial
condition, operations, business or prospects taken of the Borrower and its
Consolidated Subsidiaries taken as a whole from that set forth in said financial
statements as at said date. The projections and assumptions underlying the
calculations contained in the certificates referred to in Section 7.01(p) and
the financial statements referred to in Section 7.01(q) hereof will be
reasonable, and the pro forma adjustments underlying such calculations will be
based upon reasonable estimates and properly effected in accordance with
generally accepted accounting principles after giving effect to the River City
Non-License Acquisition.
8.03 Litigation. Except as disclosed to the Lenders in writing
on or prior to the date of this Agreement, there are no legal or arbitral
proceedings, or any proceedings by or before any governmental or regulatory
authority or agency, now pending or (to the knowledge of the Borrower (after due
inquiry)) threatened (a) against the Borrower, any of its Subsidiaries or any
Material Third-Party Licensee or any Person that owns the capital stock (or
other equity ownership interest) of such Material Third-Party Licensee which, if
adversely determined, could have a Material Adverse Effect or (b) relating to
the River City Non-License Acquisition, any River City License Acquisition or
the other transactions contemplated hereby.
8.04 No Breach. None of the execution and delivery of this
Agreement and the Notes and the other Transaction Documents, the consummation of
the transactions herein and therein contemplated and compliance with the terms
and provisions hereof and thereof will conflict with or result in a breach of,
or require any consent (other than the approvals of the FCC provided in the
Security Documents and those referred to in Section 8.06 hereof) under, the
charter or by-laws of any Obligor, or any applicable law or regulation, or any
order, writ, injunction or decree of any court or governmental authority or
agency, or any agreement or instrument to which the Borrower or any of its
Subsidiaries is a party or by which any of them is bound or to which any of them
is subject, or constitute a default under any such agreement or instrument, or
(except for the Liens created pursuant to the Security Documents) result in the
creation or imposition of any Lien upon any Property of the Borrower or any of
its Subsidiaries pursuant to the terms of any such agreement or instrument.
8.05 Action. Each Obligor has all necessary corporate power
and authority to execute, deliver and perform its obligations under each of the
Transaction Documents to which it is a party; the execution, delivery and
performance by each
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Obligor of each of the Transaction Documents to which it is a party have been
duly authorized by all necessary corporate action on its part (including,
without limitation, any required shareholder approvals); and this Agreement has
been duly and validly executed and delivered by each Obligor and constitutes,
and each of the other Transaction Documents to which such Obligor is a party
when executed and delivered by such Obligor will constitute, its legal, valid
and binding obligation, enforceable in accordance with its terms.
8.06 Approvals. No authorizations, approvals or consents of,
and no filings or registrations with, any governmental or regulatory authority
or agency are necessary for the execution, delivery or performance by any
Obligor of the Transaction Documents to which such Obligor is a party or for the
validity or enforceability thereof, except (a) for filings and recordings in
respect of the Liens created pursuant to the Security Documents, (b) filings
under 47 CFR ss.73.3613 and (c) the approvals by the FCC for the acquisition of
any Broadcast Licenses.
8.07 Use of Loans. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying Margin Stock and no part of the proceeds of
any extension of credit hereunder will be used to buy or carry any Margin Stock.
8.08 ERISA. The Borrower and the ERISA Affiliates have
fulfilled their respective obligations under the minimum funding standards of
ERISA and the Code with respect to each Plan and are in compliance in all
material respects with the presently applicable provisions of ERISA and the
Code, and have not incurred any liability to the PBGC or any Plan or
Multiemployer Plan (other than to make contributions in the ordinary course of
business).
8.09 Taxes. United States Federal income tax returns of the
Borrower and its Subsidiaries have been examined and closed through the fiscal
year of the Borrower ended December 31, 1992. The Borrower and its Subsidiaries
have filed all United States Federal income tax returns and all other material
tax returns which are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by the Borrower
or any of its Subsidiaries. The charges, accruals and reserves on the books of
the Borrower and its Subsidiaries in respect of taxes and other governmental
charges are, in the opinion of the Borrower, adequate. The Borrower has not
given or been requested to give a waiver of the
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statute of limitations relating to the payment of any Federal, state, local or
foreign taxes or other impositions. If the Borrower is a member of an affiliated
group of corporations filing consolidated returns for United States Federal
income tax purposes, it is the "common parent" of such group.
8.10 Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
8.11 Public Utility Holding Company Act. Neither the Borrower
nor any of its Subsidiaries is a "holding company", or an "affiliate" of a
"holding company" or a "subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
8.12 Indebtedness and Interest Rate Protection Agreements. (a)
Part A of Schedule I hereto is a complete and correct list, as of the date of
this Agreement, of each credit agreement, loan agreement, indenture, purchase
agreement, guarantee, letter of credit or other arrangement providing for or
otherwise relating to any Indebtedness or any extension of credit (or commitment
for any extension of credit) to, or guarantee by, the Borrower or any of its
Subsidiaries, the aggregate principal or face amount of which equals or exceeds
(or may equal or exceed) $150,000, and the aggregate principal or face amount
outstanding or which may become outstanding under each such arrangement is
correctly described in Part A of Schedule I hereto.
(b) Part B of Schedule I hereto is a complete and correct
list, as of the date of this Agreement, of each Interest Rate Protection
Agreement in respect of a notional principal amount which equals or exceeds (or
may equal or exceed) $150,000.
8.13 Hazardous Materials. The Borrower and each of its
Subsidiaries have obtained all permits, licenses and other authorizations which
are required under all Environmental Laws, except to the extent failure to have
any such permit, license or authorization would not result in a liability
(individually or in the aggregate) exceeding $1,000,000. The Borrower and each
of its Subsidiaries are in compliance with the terms and conditions of all such
permits, licenses and authorizations, and are also in compliance with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any applicable Environmental
Law or in any regulation, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved thereunder,
except to the extent failure to comply would not
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result in a liability (individually or in the aggregate) exceeding $1,000,000.
In addition, except as set forth in Schedule II hereto:
(a) No notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint has been
filed, no penalty has been assessed and no investigation or review is
pending or threatened by any governmental or other entity with respect
to any alleged failure by the Borrower or any of its Subsidiaries to
have any permit, license or authorization required in connection with
the conduct of the business of the Borrower or any of its Subsidiaries
or with respect to any generation, treatment, storage, recycling,
transportation, discharge or disposal, or any Release of any Hazardous
Materials generated by the Borrower or any of its Subsidiaries.
(b) Neither the Borrower nor any of its Subsidiaries or
Environmental Affiliates has operated a treatment, storage or disposal
facility requiring a permit under the Resource Conservation and
Recovery Act of 1976, as amended, or under any comparable state or
local statute at any Property now or previously owned or leased by the
Borrower or any of its Subsidiaries or Environmental Affiliates; and
(i) no substance containing PCBs is or has been present
at any Property now or previously owned or leased by the
Borrower or any of its Subsidiaries or Environmental
Affiliates;
(ii) no asbestos is or has been present at any Property
now or previously owned or leased by the Borrower or any of
its Subsidiaries or Environmental Affiliates;
(iii) there are no underground storage tanks active or
abandoned, at any Property now or previously owned or leased
by the Borrower or any of its Subsidiaries or Environmental
Affiliates;
(iv) no Hazardous Materials have been Released, in a
reportable quantity, where such a quantity has been
established by statute, ordinance, rule, regulation or order,
at, on or under any Property now or previously owned by the
Borrower or any of its Subsidiaries or Environmental
Affiliates; and
(v) no Hazardous Materials have been otherwise Released
at, on or under any Property now or previously
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owned or leased by the Borrower or any of its Subsidiaries to
an extent that it has, or may reasonably be expected to have,
a liability exceeding $1,000,000.
(c) Neither the Borrower nor any of its Subsidiaries or
Environmental Affiliates has transported or arranged for the
transportation of any Hazardous Material to any location which is
listed on the National Priorities List under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), listed for possible inclusion on the National
Priorities List by the Environmental Protection Agency in CERCLIS or on
any similar state list or which is the subject of Federal, state or
local enforcement actions or other investigations which may lead to
claims against the Borrower or any of its Subsidiaries for clean-up
costs, remedial work, damages to natural resources or for personal
injury claims, including, but not limited to, claims under CERCLA.
(d) No Hazardous Material generated by the Borrower or any of
its Environmental Affiliates has been recycled, treated, stored,
disposed of or Released by the Borrower or any of its Environmental
Affiliates at any location other than those listed in Schedule II
hereto.
(e) No oral or written notification of a Release of a
Hazardous Material has been filed by or on behalf of the Borrower or
any of its Subsidiaries and no Property now or previously owned or
leased by the Borrower or any of its Subsidiaries is listed or proposed
for listing on the National Priorities list promulgated pursuant to
CERCLA, on CERCLIS or on any similar state list of sites requiring
investigation or clean-up.
(f) No Liens have arisen under or pursuant to any
Environmental Laws on any of the real Property or Properties owned or
leased by the Borrower or any of its Subsidiaries, and no government
actions have been taken or are in process which could subject any of
such Properties to such Liens and neither the Borrower nor any of its
Subsidiaries would be required to place any notice or restriction
relating to the presence of Hazardous Materials at any Property owned
by it in any deed to such Property.
(g) There have been no environmental investigations, studies,
audits, tests, reviews or other analyses conducted by or which are in
the possession of the Borrower or any of its Subsidiaries in relation
to any Property or facility now or previously owned or leased by the
Borrower or any of its
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Subsidiaries which have not been made available to the Lenders.
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8.14 Subsidiaries, Etc.
(a) Set forth in Part A of Schedule III hereto is a complete
and correct list, as of the date hereof, of all of the Subsidiaries of the
Borrower, together with, for each such Subsidiary, (i) the jurisdiction of
organization of such Subsidiary, (ii) each Person holding ownership interests in
such Subsidiary and (iii) the nature of the ownership interests held by each
such Person and the percentage of ownership of such Subsidiary represented by
such ownership interests. Except as disclosed in Part A of Schedule III hereto,
(x) each of the Borrower and its Subsidiaries owns, free and clear of Liens
(other than Liens created pursuant to the Security Documents), and has the
unencumbered right to vote, all outstanding ownership interests in each Person
shown to be held by it in Part A of Schedule III hereto, (y) all of the issued
and outstanding capital stock of each such Person organized as a corporation is
validly issued, fully paid and nonassessable and (z) there are no outstanding
Equity Rights with respect to such Person.
(b) Set forth in Part B of Schedule III hereto is a complete
and correct list, as of the date of this Agreement, of each Investment (other
than Investments disclosed in Part A of said Schedule III hereto) in an amount
exceeding $25,000 held by the Borrower or any of its Subsidiaries in any Person
and, for each such Investment, (i) the identity of the Person or Persons holding
such Investment and (ii) the nature of such Investment. Except as disclosed in
Part B of Schedule III hereto, each of the Borrower and its Subsidiaries owns,
free and clear of all Liens (other than Liens created pursuant to the Security
Documents), all such Investments.
(c) None of the Subsidiaries of the Borrower is, on the date
of this Agreement, subject to any indenture, agreement, instrument or other
arrangement of the type described in the last sentence of 9.22 hereof.
8.15 Broadcast Licenses.
(a) Part A of Schedule IV hereto accurately and completely
lists, as of the date hereof, for each Owned Station, all Broadcast Licenses
granted or assigned to the Borrower or any of its Subsidiaries, or under which
the Borrower and its Subsidiaries have the right to operate such Owned Station.
The Broadcast Licenses listed on Part A of Schedule IV hereto with respect to
any Owned Station include all material authorizations, licenses and permits
issued by the FCC that are required or necessary for the operation of such Owned
Station, and the conduct of the business of the Borrower and its Subsidiaries
with respect to such Owned Station, as now conducted or proposed to be
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conducted. The Broadcast Licenses listed in Part A of Schedule IV hereto are
issued in the name of the respective License Subsidiary for the Owned Station
being operated under authority of such Broadcast Licenses and are on the date
hereof validly issued and in full force and effect, and the Borrower and its
Subsidiaries have fulfilled and performed in all material respects all of their
obligations with respect thereto and have full power and authority to operate
thereunder.
(b) Part B of Schedule IV hereto accurately and completely
lists, as of the date hereof, for each Contract Station, all Broadcast Licenses
granted or assigned to the Material Third-Party Licensee for such Contract
Station, or under which the Material Third-Party Licensee for such Contract
Station has the right to operate such Contract Station. The Broadcast Licenses
listed on Part B of Schedule IV hereto with respect to any Contract Station
include all material authorizations, licenses and permits issued by the FCC that
are required or necessary for the operation of such Contract Station, and the
conduct of the business of the Material Third-Party Licensee for such Contract
Station with respect to such Contract Station, as now conducted or proposed to
be conducted. The Broadcast Licenses listed in Part B of Schedule IV hereto are
issued in the name of the Material Third-Party Licensee for the Contract Station
being operated under authority of such Broadcast Licenses and are on the date
hereof validly issued and in full force and effect, and the Material Third-Party
Licensee for such Contract Station has fulfilled and performed in all material
respects all of its obligations with respect thereto and has full power and
authority to operate thereunder.
8.16 Property. The Borrower and its Subsidiaries will own or
hold all easements, rights-of-way, licenses in respect of real property and
similar rights as are necessary for the acquisition, ownership and operation of
the Stations. Each of the Borrower and its Subsidiaries has good title to its
properties and assets free and clear of all Liens, except for Liens permitted
under Section 9.06 hereof. Set forth on Schedule VI attached hereto is a list,
as of the Restatement Effective Date (after giving effect to the consummation of
the River City Non-License Acquisition), of all of the real property interests
held by the Borrower and its Subsidiaries, indicating in each case whether the
respective Property is owned or leased, the identity of the owner or lessee and
the location of the respective Property.
8.17 Ancillary Documents. The Borrower has heretofore
delivered to the Agent a true and complete copy of the Ancillary Documents, in
each case as in effect on the date hereof, and each of the same is in full force
and effect and no default of any
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Obligor party thereto of any of the provisions thereof is in existence on the
date hereof.
8.18 Film Obligations. Set forth in Schedule V hereto is a
complete and correct list as at March 31, 1996 (on a pro forma basis after
giving effect to the River City Non-License Acquisition), setting forth for each
Station on a program-by- program basis, the respective Film Cash Payments to be
made in each fiscal year during the period commencing on January 1, 1996 through
and including December 31, 2003.
8.19 Capitalization. The authorized capital stock of the
Borrower consists, on the date hereof, of 75,000,000 shares consisting of (a)
35,000,000 shares of Class A Common Stock, par value $.01 per share, of which
6,273,000 shares are duly and validly issued and outstanding, each of which
shares is fully paid and nonassessable, (b) 35,000,000 shares of Class B Common
Stock, par value $.01 per share, of which 28,476,981 shares are duly and validly
issued and outstanding, each of which shares is fully paid and nonassessable,
(c) 5,000,000 shares of Series A Exchangeable Preferred Stock, par value $.01
per share, of which 4,181,818 shares are duly and validly issued and
outstanding, each of which shares is fully paid and nonassessable. As of the
date hereof 0.000797% of such issued and outstanding shares of Class A Common
Stock are owned beneficially and of record by the Smith Brothers and 100% of
such issued and outstanding shares of Class B Common Stock are owned
beneficially and of record, directly or indirectly, by the Smith Brothers. As of
the date hereof, (i) except for (x) the Designated Employee Stock Option Plan
and (y) Equity Rights created pursuant to the River City Acquisition Documents,
there are no outstanding Equity Rights with respect to the Borrower and (ii)
except for the right of the holders of the Seller Stock (or of any such stock
converted into the Borrower's Class A Common Stock) to require the Borrower to
repurchase such Seller Stock (or Class A Common Stock), there are no outstanding
obligations of the Borrower or any of its Subsidiaries to repurchase, redeem, or
otherwise acquire any shares of capital stock of the Borrower nor are there any
outstanding obligations of the Borrower or any of its Subsidiaries to make
payments to any Person, such as "phantom stock" payments, where the amount
thereof is calculated with reference to the fair market value or equity value of
the Borrower or any of its Subsidiaries.
8.20 True and Complete Disclosure. The information, reports,
financial statements, exhibits and schedules furnished in writing by or on
behalf of the Obligors to the Agent or any Lender in connection with the
negotiation, preparation or delivery of this Agreement and the other Basic
Documents or included herein or therein or delivered pursuant hereto or
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thereto, when taken as a whole do not contain any untrue statement of material
fact or omit to state any material fact necessary to make the statements herein
or therein, in light of the circumstances under which they were made, not
misleading. All written information furnished after the date hereof by the
Borrower and its Subsidiaries to the Agent and the Lenders in connection with
this Agreement and the other Basic Documents and the transactions contemplated
hereby and thereby will be true, complete and accurate in every material
respect, or (in the case of projections) based on reasonable estimates, on the
date as of which such information is stated or certified. There is no fact known
to the Borrower that could have a Material Adverse Effect that has not been
disclosed herein, in the other Basic Documents or in a report, financial
statement, exhibit, schedule, disclosure letter or other writing furnished to
the Lenders for use in connection with the transactions contemplated hereby or
thereby.
8.21 Tax Identification Numbers. The tax identification number
for each Obligor on the date hereof is correctly set forth opposite the name of
such Obligor on Schedule VII hereto.
8.22 Program Services Agreements. Schedule VIII hereto is a
complete and correct list, as of the date of this Agreement, of (a) each
agreement pursuant to which the Borrower or any of its Subsidiaries has the
right to program and sell advertising on a substantial portion of the inventory
of broadcast time of any Station and (b) any such agreement that will be
assigned to, or entered into by, the Borrower or any of its Subsidiaries, in
connection with the River City Non-License Acquisition.
8.23 Options. Schedule IX hereto is a complete and correct
list, as of the date of this Agreement, of (a) each option agreement pursuant to
which the Borrower or any of its Subsidiaries has the right to acquire licenses,
permits, authorizations or certificates to construct, own, operate or promote
any television or radio broadcasting station and (b) any such option agreement
that will be assigned to, or entered into by, the Borrower or any of its
Subsidiaries, in connection with the River City Non-License Acquisition.
8.24 Asset Use and Operating Agreements. Schedule X hereto is
a complete and correct list, as of the date of this Agreement, with respect to
each Owned Station, of the agreement between the Subsidiary of the Borrower that
operates such Owned Station and a License Subsidiary with respect to such Owned
Station.
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Section 9. Covenants of the Obligors. The Obligors covenant
and agree with the Lenders and the Agent that, so long as any Commitment, Loan
or Letter of Credit Liability is outstanding and until payment in full of all
amounts payable by the Borrower hereunder:
9.01 Financial Statements. The Borrower shall deliver to the
Agent (with sufficient copies for each Lender):
(a) as soon as available and in any event within 45 days after
the end of each quarterly fiscal period of each fiscal year of the
Borrower, consolidated and consolidating statements of income, retained
earnings and cash flow of the Borrower and its Consolidated
Subsidiaries for such period and for the period from the beginning of
the respective fiscal year to the end of such period, and the related
consolidated and consolidating balance sheets as at the end of such
period, setting forth in each case in comparative form the
corresponding consolidated and consolidating figures for the
corresponding period in the preceding fiscal year, accompanied by a
certificate of a senior financial officer of the Borrower, which
certificate shall state that said financial statements present fairly,
in all material respects, the consolidated financial condition and
results of operations of the Borrower and its Consolidated
Subsidiaries, and the respective individual unconsolidated financial
condition and results of operations of the Borrower and of each of its
Consolidated Subsidiaries, in each case in accordance with generally
accepted accounting principles, consistently applied, as at the end of,
and for, such period (subject to normal year-end audit adjustments);
(b) as soon as available and in any event within 110 days
after the end of each fiscal year of the Borrower, consolidated and
consolidating statements of income, retained earnings and cash flow of
the Borrower and its Consolidated Subsidiaries for such year and the
related consolidated and consolidating balance sheets as at the end of
such year, setting forth in each case in comparative form the
corresponding consolidated and consolidating figures for the preceding
fiscal year, and accompanied (i) in the case of said consolidated
statements and balance sheet, by an opinion thereon of independent
certified public accountants of recognized national standing, which
opinion shall state that said consolidated financial statements present
fairly, in all material respects, the consolidated financial condition
and results of operations of the Borrower and its Consolidated
Subsidiaries as at the end of, and for, such fiscal year in accordance
with generally accepted accounting
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principles, and a certificate of such accountants stating that, in
making the examination necessary for their opinion, they obtained no
knowledge, except as specifically stated, of any Default, and (ii) in
the case of said consolidating statements and balance sheets, by a
certificate of a senior financial officer of the Borrower, which
certificate shall state that said consolidating financial statements
fairly present the respective individual unconsolidated financial
condition and results of operations of the Borrower and of each of its
Consolidated Subsidiaries, in each case in accordance with generally
accepted accounting principles, consistently applied, as at the end of,
and for, such fiscal year;
(c) as soon as available, and in any event within 30 days (on
a Station-by-Station basis) after the end of each monthly accounting
period in each fiscal year of the Borrower, a statement of EBITDA for
such monthly accounting period and for the beginning of such fiscal
year to the end of such monthly accounting period, setting forth, in
each case in comparative form the corresponding figures for the
corresponding monthly accounting period and period in the preceding
fiscal year;
(d) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any
(including, without limitation, reports on Forms 10-Q and 10-K), which
the Borrower or any of its Subsidiaries shall have filed with the
Securities and Exchange Commission (or any governmental agency
substituted therefor) or any national securities exchange;
(e) promptly upon the furnishing thereof generally to the
holders of any class or issue of securities of the Borrower (or to any
of their respective agents or trustees) copies of all financial
statements, reports, proxy statements, notices and other communications
so furnished; and promptly upon the receipt thereof by the Borrower,
copies of any notices, reports or other communications from any holder
of any Preferred Stock, any In-Kind Preferred Stock or any Senior
Subordinated Notes (or any agent or trustee therefor);
(f) as soon as possible, and in any event within ten days
after the Borrower knows or has reason to believe that any of the
events or conditions specified below with respect to any Plan or
Multiemployer Plan have occurred or exist, a statement signed by a
senior financial officer of the Borrower setting forth details
respecting such event or condition and the action, if any, which the
Borrower or its
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ERISA Affiliate proposes to take with respect thereto (and a copy of
any report or notice required to be filed with or given to PBGC by the
Borrower or an ERISA Affiliate with respect to such event or
condition):
(i) any reportable event, as defined in Section 4043(c)
of ERISA and the regulations issued thereunder, with respect
to a Plan, as to which PBGC has not by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified
within 30 days of the occurrence of such event (provided that
a failure to meet the minimum funding standard of Section 412
of the Code or Section 302 of ERISA shall be a reportable
event regardless of the issuance of any waivers in accordance
with Section 412(d) of the Code);
(ii) the filing under Section 4041 of ERISA of a notice
of intent to terminate any Plan or the termination of any
Plan;
(iii) the institution by PBGC of proceedings under Section
4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the
Borrower or any ERISA Affiliate of a notice from a
Multiemployer Plan that such action has been taken by PBGC
with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal by the Borrower or
any ERISA Affiliate under Section 4201 or 4204 of ERISA from a
Multiemployer Plan, or the receipt by the Borrower or any
ERISA Affiliate of notice from a Multiemployer Plan that it is
in reorganization or insolvency pursuant to Section 4241 or
4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against the Borrower or any ERISA Affiliate
to enforce Section 515 of ERISA, which proceeding is not
dismissed within 30 days; and
(vi) the adoption of an amendment to any Plan that,
pursuant to Section 401(a)(29) of the Code or Section 307 of
ERISA, would result in the loss of tax-exempt status of the
trust of which such Plan is a part if the Borrower or an ERISA
Affiliate fails to timely provide security to such Plan in
accordance with the provisions of said Sections;
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(g) as soon as available and in any event within 45 days after
the end of each of the quarterly fiscal periods of each fiscal year of
the Borrower, a schedule setting forth for each Station, the respective
Film Cash Payments for such Station for each fiscal year commencing
with the then current fiscal year through and including the fiscal year
ending December 31, 2003;
(h) promptly after any Obligor knows or has reason to believe
that any Default has occurred, a notice of such Default describing the
same in reasonable detail and, together with such notice or as soon
thereafter as possible, a description of the action that the Borrower
has taken and proposes to take with respect thereto;
(i) promptly following delivery thereof to or by the Borrower
or any of its Subsidiaries, copies of all material notices, reports,
approvals and other material communications that are received by the
Borrower or any of its Subsidiaries from the FCC or filed by the
Borrower or any of its Subsidiaries with the FCC;
(j) promptly following delivery thereof to or by the Borrower
or any of its Subsidiaries, copies of all material notices (including,
without limitation, notices of default), financial statements, reports,
approvals and other material communications that are received by the
Borrower or any of its Subsidiaries from or on behalf of any Material
Third- Party Licensee or Affiliate of any Material Third-Party Licensee
or furnished by the Borrower or any of its Subsidiaries to any Material
Third-Party Licensee or Affiliate of any Material Third-Party Licensee;
(k) from time to time such other information regarding the
financial condition, operations, business or prospects of the Borrower,
any of its Subsidiaries, any Station, any Material Third-Party Licensee
or any Person that owns the capital stock (or other equity ownership
interest) of any Material Third-Party Licensee (including, without
limitation, any Plan or Multiemployer Plan and any reports or other
information required to be filed under ERISA) as any Lender or the
Agent may reasonably request.
The Borrower will furnish to the Agent (with sufficient copies for each Lender),
at the time it furnishes each set of financial statements pursuant to paragraph
(a) or (b) above, a certificate of a senior financial officer of the Borrower
(i) to the effect that no Default has occurred and is continuing (or, if any
Default has occurred and is continuing, describing the same in reasonable detail
and describing the action that the Borrower has
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taken and proposes to take with respect thereto) and (ii) setting forth in
reasonable detail the computations necessary to determine whether the Borrower
is in compliance with Sections 9.07(e), 9.09, 9.10, 9.11, 9.12, 9.13, 9.14, 9.15
and 9.16 hereof as of the end of the respective quarterly fiscal period or
fiscal year. In addition, the Borrower shall in each of its fiscal years
(commencing with its fiscal year ending 1996) as soon as available and in any
event on or before December 31 of each fiscal year, deliver to each Lender, a
budget for the next following fiscal year setting forth anticipated income,
expense and capital expenditure items for each quarter during such fiscal year
and, on a date to be mutually agreed upon with the Agent, arrange for its
relevant officers to be present at a meeting with the Lenders for the purpose of
discussing its business, prospects and financial affairs (including its
near-term projections) with the Lenders.
9.02 Litigation. The Borrower will promptly give to the Agent
(with sufficient copies for each Lender) notice of all legal or arbitral
proceedings, and of all proceedings by or before any governmental or regulatory
authority or agency, and any material development in respect of such legal or
other proceedings (collectively, "Proceedings"), affecting the Borrower or any
of its Subsidiaries or any of their respective assets, franchises or licenses
(including, without limitation, the Broadcast Licenses for Owned Stations)
except Proceedings which, if adversely determined, would not (either
individually or in the aggregate) have a Material Adverse Effect or result in
the loss of a franchise or license (including, without limitation, any Broadcast
License for an Owned Station other than an Immaterial Broadcast License). The
Borrower will promptly give to the Agent (with sufficient copies for each
Lender) notice of all Proceedings affecting the Material Third-Party Licensee
for a Contract Station or any Broadcast Licenses for such Contract Station
except Proceedings which, if adversely determined, would not (either
individually or in the aggregate) have a Material Adverse Effect or result in
the loss of any Broadcast License (other than an Immaterial Broadcast License)
for such Contract Station.
9.03 Existence, Etc. The Borrower will, and will cause each of
its Subsidiaries to:
(a) preserve and maintain its legal existence and all of its
material rights, privileges and franchises (including, without
limitation, the Broadcast Licenses, but excluding Immaterial Broadcast
Licenses, for Owned Stations) (provided that nothing in this Section
9.03 shall prohibit any transaction expressly permitted under Section
9.05 hereof);
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(b) comply with the requirements of all applicable laws,
rules, regulations and orders of governmental or regulatory authorities
if failure to comply with such requirements would (either individually
or in the aggregate) have a Material Adverse Effect;
(c) pay and discharge all taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any
of its Property prior to the date on which penalties attach thereto,
except for any such tax, assessment, charge or levy the payment of
which is being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained;
(d) maintain all of its Properties used or useful in its
business in good working order and condition, ordinary wear and tear
excepted; and
(e) permit representatives of any Lender or the Agent, during
normal business hours, to examine, copy and make extracts from its
books and records, to inspect its Properties, and to discuss its
business and affairs with its officers, all to the extent reasonably
requested by such Lender or the Agent (as the case may be).
9.04 Insurance. The Borrower will, and will cause each of its
Subsidiaries to, maintain insurance with financially sound and reputable
insurance companies, and with respect to Property and risks of a character
usually maintained by corporations engaged in the same or similar business
similarly situated, against loss, damage or liability of the kinds and in the
amounts customarily maintained by such corporations and maintain such other
insurance as is usually carried by such corporations, provided that the Borrower
will in any event maintain (with respect to itself, each of its Subsidiaries and
each Owned Station), and will cause the Material Third-Party Licensee for each
Contract Station (or the Person that owns the capital stock (or other equity
ownership interest) of such Material Third-Party Licensee) to maintain (with
respect to itself and such Contract Station), casualty insurance and insurance
against claims and damages with respect to defamation, libel, slander, privacy
or other similar injury to person or reputation (including, without limitation,
misappropriation of personal likeness), in such amounts as are then customary
for Persons engaged in the same or similar business similarly situated. The
Borrower shall provide to the Agent at the same time it furnishes its annual
financial statements under Section 9.01(b) hereof a certificate of insurance
comparable in scope to the certificate furnished under Section 7.01(t)(i) hereof
demonstrating compliance with this Section 9.04.
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9.05 Prohibition of Fundamental Changes.
----------------------------------
(a) The Borrower will not, nor will it permit any of its
Subsidiaries to, enter into any transaction of merger or consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution).
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, acquire any business or Property from, or capital stock of, or
be a party to any acquisition of, any Person, or acquire any option to make any
such acquisition, except for purchases of inventory, programming rights and
other Property to be sold or used in the ordinary course of business,
Investments permitted under Section 9.08 hereof, Capital Expenditures permitted
under Section 9.12 hereof and the River City Non-License Acquisition.
(c) The Borrower will not, and will not permit any of its
Subsidiaries to, without the prior written consent of the Majority Lenders,
convey, sell, lease, transfer or otherwise dispose of, in one transaction or a
series of transactions, all or a substantial part of its business or Property,
whether now owned or hereafter acquired including, without limitation,
receivables and leasehold interests, but excluding (i) any inventory or other
Property sold or disposed of in the ordinary course of business and on ordinary
business terms and (ii) obsolete or worn-out Property, tools or equipment no
longer used or useful in its business so long as the amount thereof sold in any
single fiscal year by the Borrower and its Subsidiaries shall not have a fair
market value in excess of $250,000.
(d) Notwithstanding the foregoing provisions of this Section
9.05:
(i) the Borrower and its Subsidiaries may consummate any River
City License Acquisition or any Approved Acquisition (each, a "Subject
Acquisition") provided that:
(w) both immediately prior to such Subject
Acquisition and, after giving effect thereto, no Default shall
have occurred and be continuing;
(x) each assignment or transfer of control of
Broadcast Licenses to the Borrower or any of its Subsidiaries
shall have been approved by (A) a Final FCC Order, in the case
of the consummation of the exercise of any of the WPTT
Conversion Option, the Glencairn Options or the WDBB Option,
or (B) an Initial FCC Order, in the case of any Subject
Acquisition other than those referred to in the preceding
clause (A) and,
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if the Agent or the Majority Lenders shall have so requested,
the Agent shall have received an opinion of Fisher Wayland
Cooper Leader and Zaragoza L.L.P. (or other counsel
satisfactory to the Agent or the Majority Lenders, as the case
may be, in its (or their) reasonable judgment) to the effect
that such transfer shall have been so approved by a Final FCC
Order or an Initial FCC Order, as the case may be, and that
such Broadcast Licenses have been validly assigned to the
Borrower or such Subsidiary;
(y) (A) (in the case of (1) the WYZZ Acquisition, (2)
the acquisition of assets (or of the capital stock (or other
equity ownership interest) of the Person that owns such
assets) and assumption of liabilities relating to WWWS(AM) and
WGR(AM), Buffalo, New York, (3) the acquisition of assets (or
of the capital stock (or other equity ownership interest) of
the Person that owns such assets) and assumption of
liabilities relating to of WXWX-FM, Easley, South Carolina and
WXWX-FM, Greer, South Carolina and (4) the acquisition of
assets (or of the capital stock (or other equity ownership
interest) of the Person that owns such assets) and assumption
of liabilities relating to WPMR- AM and WKRF-FM, Tobyhanna,
Pennsylvania) no later than twenty Business Days prior to the
consummation of such acquisition, the Borrower shall have
delivered to the Agent drafts or executed counterparts of such
of the respective agreements or instruments pursuant to which
such acquisition is to be consummated (together with any
related management, non-compete, employment, option or other
material agreements), any schedules or other material
ancillary documents to be executed or delivered in connection
therewith, all of which shall be satisfactory to the Agent in
form and substance and (B) promptly following request
therefor, copies of such other information or documents
relating to any Subject Acquisition as the Agent or any Lender
or Lenders (through the Agent) shall have reasonably
requested; and
(z) on the date on which the Borrower or any of its
Subsidiaries pays any WSYX Option Extension Payment or the
WSYX Sale Price Differential, the Borrower shall furnish to
the Lenders a certificate showing calculations (after giving
effect to such payment) in reasonable detail that demonstrate
that such payment will not result in a Default under Section
9.11 hereof;
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(ii) the Borrower or any of its Subsidiaries may make any
Other Acquisition provided that:
(s) the Aggregate Consideration for all Other
Acquisitions (other than the acquisition of assets or capital
stock (or other equity ownership interest) of any Person
pursuant to an exchange permitted by Section 9.05(d)(iv)(y)
hereof and the consummation of Other Acquisitions with the
proceeds of dispositions pursuant to Section 9.05(d)(iv)(x)
hereof) shall not exceed the sum of (A) aggregate amount of
Net Available Proceeds of all Equity Issuances permitted by
Section 9.26 hereof received by the Borrower after the date
hereof and on or prior to the date of consummation of such
Other Acquisition, plus (B) 25% of Excess Cash Flow for each
fiscal year of the Borrower ending before the date of
consummation of such Other Acquisition (to the extent not
otherwise applied by the Borrower in accordance with the
provisions of this Agreement) plus (C) the aggregate unused
amount of the Revolving Credit Commitments in effect at the
time of such Other Acquisition (before giving effect to any
borrowing thereunder to finance such Other Acquisition) minus
(D) $25,000,000;
(t) both immediately prior to such Other Acquisition
and, after giving effect thereto, no Default shall have
occurred and be continuing;
(u) each assignment or transfer of control of
Broadcast Licenses to the Borrower or any of its Subsidiaries
pursuant to any such Other Acquisition shall have been
approved by an order of the FCC that is no longer subject to
reconsideration or review by the FCC or by any court or
administrative body and, if the Agent or the Majority Lenders
shall have so requested, the Agent shall have received an
opinion of Fisher Wayland Cooper Leader and Zaragoza L.L.P.
(or other counsel reasonably satisfactory to the Agent or the
Majority Lenders, as the case may be) to the effect that such
transfer shall have been so approved by a final order of the
FCC and that such Broadcast Licenses have been validly
assigned to the Borrower or such Subsidiary;
(v) the ratio of Total Indebtedness on the date that
such Other Acquisition is consummated (calculated after giving
effect to the borrowings and prepayments hereunder to be made
on such date) to EBITDA for the period of four fiscal quarters
of the Borrower ending
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on or most recently ended prior to such date (calculated on a
pro forma basis as if such Other Acquisition had been
consummated on the first day of such period) will not be
greater than the lesser of (x) 6.50 to 1 and (y) such ratio as
shall be required by Section 9.14 hereof on such date;
(w) on the date that such Other Acquisition is
consummated, the Borrower shall furnish to the Lenders a
certificate showing calculations (after giving effect to
borrowings and prepayments hereunder to be made on such date
and calculated on a pro forma basis as if such Other
Acquisition had been consummated on the first day of the
period of four fiscal quarters of the Borrower ending on or
most recently ended prior to such date) in reasonable detail
that demonstrate that such purchase will not result in a
Default under any of (A) Sections 9.10, 9.11, 9.12, 9.13 or
9.15 hereof and (B) clause (v) of this Section 9.05(d)(ii);
(x) (A) no later than twenty Business Days prior to
the date that such Other Acquisition is consummated, the
Borrower shall have delivered to the Agent drafts or executed
counterparts of such of the respective agreements or
instruments (including, without limitation, Program Services
Agreements) pursuant to which such Other Acquisition is to be
consummated (together with any related management,
non-compete, employment, option or other material agreements),
any schedules or other material ancillary documents to be
executed or delivered in connection therewith, all of which
shall be satisfactory in form and substance to the Agent (or,
if the portion of the Aggregate Consideration for such Other
Acquisition payable to extend and exercise any option acquired
in connection with such Other Acquisition exceeds 20% of the
Aggregate Consideration payable in connection with such Other
Acquisition, the Majority Lenders) and sufficient to
demonstrate compliance by the Borrower with the requirements
of this Section 9.05(d)(ii) and (B) promptly following request
therefor, copies of such other information or documents
relating to such Other Acquisition as the Agent or any Lender
or Lenders (through the Agent) shall have reasonably
requested;
(y) in connection with each Other Acquisition in
which the Borrower or any of its Subsidiaries acquires real
estate (other than by means of an office lease), the Borrower
shall (if and to the extent requested by the Agent or the
Majority Lenders) have undertaken
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environmental surveys and assessments prepared by a firm of
licensed engineers (familiar with the identification of toxic
and hazardous substances) in form and substance satisfactory
to the Agent and Majority Lenders and having results
satisfactory to the Agent and Majority Lenders; provided that
neither the Agent nor any Lender shall have any responsibility
to the Borrower or any Subsidiary or any other Person arising
out of or relating to the scope or results of such
environmental due diligence; and
(z) if requested by the Agent or the Majority Lenders
with respect to any agreement (A) entered into by any Obligor
and any other Person in connection with such Other Acquisition
or (B) to be transferred to any Obligor in connection with
such Other Acquisition, which agreement is determined by the
Agent or the Majority Lenders, as the case may be, to be
material (a "Material Agreement"), the Borrower shall cause
such Obligor and such other Person to execute and deliver to
the Agent a Consent and Agreement with respect to such
Material Agreement;
(iii) the Borrower or any of its Subsidiaries may sell to Glencairn
or a Subsidiary of Glencairn the Broadcast Licenses for any one or more
of WTTE-TV, WFBC-TV or KRRT-TV, and any Property required pursuant to
the rules and regulations of the FCC to be sold in connection with the
transfer of such Broadcast Licenses, provided that (x) any such sale
shall be for an amount not less than 80% of the appraised value (as
determined by an appraiser satisfactory to the Agent and the Borrower
and experienced in the appraisal of properties similar to those being
so sold), which amount shall be payable in cash, (y) Glencairn or such
Subsidiary of Glencairn, as the case may be, shall enter into a Program
Services Agreement with a Subsidiary of the Borrower with respect to
each Station the Broadcast Licenses of which are so sold and (z)
Glencairn or such Subsidiary of Glencairn, as the case may be, shall
enter into a Consent and Agreement with the Agent relating to such
Program Services Agreement;
(iv) the Borrower or any of its Subsidiaries may dispose of
substantially all of the assets relating to any Owned Station that is a
radio broadcasting station (or the capital stock of the Subsidiary of
the Borrower that owns such assets if such Subsidiary does not own any
Property relating to any other Owned Station that is a television
broadcasting station), provided that both immediately prior
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to such disposition and, after giving effect thereto, no Default shall
have occurred and be continuing and:
(x) such disposition is a sale to any Person for cash
in an amount not less than the fair market value of such
assets and (A) the EBITDA Percentage attributable to such
assets together with the EBITDA Percentage attributable to all
other assets sold pursuant to this clause (x) or exchanged
pursuant to the following clause (y) during the immediately
preceding twelve-month period (or, if shorter, the period from
the Restatement Effective Date) shall not exceed 5% and (B)
the EBITDA Percentage attributable to all assets of the
Borrower and its Subsidiaries sold pursuant to this clause (x)
or exchanged pursuant to the following clause (y) since the
Restatement Effective Date shall not exceed 15%, (C) the
Borrower shall have furnished to the Lenders, not later than
the tenth Business Day preceding the date of such disposition
a certificate in form and detail satisfactory to the Agent
stating (and setting forth calculations in reasonable detail
demonstrating) the EBITDA Percentage attributable to the
assets so sold and (D) promptly following request therefor,
copies of such other information or documents relating to such
disposition as the Agent of any Lender or Lenders (through the
Agent) shall have reasonably requested; or
(y) such disposition is an exchange, with any Person,
of such assets for assets owned by such Person (or the capital
stock (or other equity ownership interest) of such Person)
comprising a radio broadcasting station of equal or greater
value, as determined in good faith by the Board of Directors
of the Borrower or such Subsidiary and, (A) the EBITDA
Percentage attributable to such assets of the Borrower or such
Subsidiary together with the EBITDA Percentage attributable to
all other assets of the Borrower or any of its Subsidiaries
sold pursuant to the foregoing clause (x) or exchanged
pursuant to the this clause (y) during the immediately
preceding twelve-month period (or, if shorter, the period from
the Restatement Effective Date) shall not exceed 5% and (B)
the EBITDA Percentage attributable to all assets of the
Borrower and its Subsidiaries sold pursuant to the foregoing
clause (x) or exchanged pursuant to this clause (y) since the
Restatement Effective Date shall not exceed 15%, (C) the
acquisition of such assets of such Person pursuant to such
exchange shall comply with the provisions of clause (d)(ii) of
this Section 9.05 and
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(D) the Borrower shall have furnished to the Lenders, not
later than the tenth Business Day preceding the date of such
disposition a certificate in form and detail satisfactory to
the Agent stating (and setting forth calculations in
reasonable detail demonstrating) the EBITDA Percentage
attributable to the assets so sold;
provided that, notwithstanding the foregoing clauses (x) and (y), no
more than one-half of the number of radio broadcasting stations that
may be acquired pursuant to Subject Acquisitions shall be disposed of
pursuant this clause (iv).
(v) the Borrower or any of its Subsidiaries may dispose of
Properties for fair market value, provided that the aggregate fair
market value of Properties disposed of by the Borrower and its
Subsidiaries in any fiscal year of the Borrower may not exceed
$1,000,000;
(vi) the Borrower or any of its Subsidiaries may dispose of
Properties acquired by any of them in the River City Non-License
Acquisition that are substantially duplicative of Properties
theretofore owned by any of them, provided that (x) any such
disposition shall be for fair market value and (y) the aggregate fair
market value of all such Properties disposed of the Borrower and its
Subsidiaries after the date hereof may not exceed $2,500,000;
(vii) the Borrower or any of its Subsidiaries may sell the WSTR Note
to any Person (including, without limitation, any Affiliate) for cash
in an amount not less than (x) $4,750,000 plus (y) the aggregate amount
of unpaid interest on the WSTR Note accrued after the acquisition by
the Borrower or any of its Subsidiaries of the WSTR Note minus (z) the
aggregate amount of principal of the WSTR Note received by the Borrower
and its Subsidiaries after such acquisition; and
(viii) the Borrower or any of its Subsidiaries may sell in accordance
with Section 10.4 of the Baker Employment Agreement to Barry Baker or
to any Person designated by Barry Baker under said Section 10.4 the
Property of the Borrower or such Subsidiary required to be so sold
pursuant to said Section 10.4, provided that any such sale shall be for
cash in an amount not less than the fair market value of the Property
so sold.
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9.06 Limitation on Liens. The Borrower will not, nor will it
permit any of its Subsidiaries to, create, incur, assume or suffer to exist any
Lien upon any of its Property, whether now owned or hereafter acquired, except:
(a) Liens created pursuant to the Security Documents;
(b) Liens imposed by any governmental authority for taxes,
assessments or charges not yet due or which are being contested in good
faith and by appropriate proceedings if adequate reserves with respect
thereto are maintained on the books of the Borrower or any of its
Subsidiaries, as the case may be, in accordance with GAAP;
(c) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 30 days or
which are being contested in good faith and by appropriate proceedings
and Liens securing judgments but only to the extent for an amount and
for a period not resulting in an Event of Default under Section 10(h)
hereof;
(d) pledges or deposits under worker's compensation,
unemployment insurance and other social security legislation;
(e) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(f) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements, licenses,
restrictions on the use of Property or minor imperfections in title
thereto which, in the aggregate, are not material in amount, and which
do not in any case materially detract from the value of the Property
subject thereto or interfere with the ordinary conduct of the business
of the Borrower or any of its Subsidiaries;
(g) rights of tenants, as tenants only, under leases of real
property acquired on the date hereof as part of the River City
Non-License Acquisition, which rights do not materially detract from
the value of the real property subject thereto or interfere with the
ordinary conduct of the business of the Borrower or any of its
Subsidiaries performed thereon;
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(h) Liens on the capital stock of Glencairn owned by Carolyn
C. Smith acquired by the Borrower or any of its Subsidiaries pursuant
to the exercise of the Glencairn Options, to the extent such Liens are
in existence on the date of such acquisition;
(i) additional Liens upon real and/or personal Property (other
than the partnership interest of FSF-TV in the Auburn Tower
Partnership, a North Carolina general partnership) created after the
date hereof, provided that the aggregate Indebtedness secured thereby
and incurred on and after the date hereof shall not exceed $1,000,000
in the aggregate at any one time outstanding; and
(j) any extension, renewal or replacement of the foregoing,
provided, however, that the Liens permitted hereunder shall not be
spread to cover any additional Indebtedness or Property (other than a
substitution of like Property).
9.07 Indebtedness. The Borrower will not, and will not permit
any of its Subsidiaries to, create, incur or suffer to exist any Indebtedness
except:
(a) Indebtedness to the Lenders hereunder;
(b) Indebtedness outstanding on the date hereof and listed in
Schedule I hereto;
(c) Indebtedness of the Borrower evidenced by senior
subordinated notes in an aggregate principal amount not exceeding
$200,000,000 at any one time outstanding and subordinated guarantees
thereof by Subsidiary Guarantors (such Indebtedness and guarantees
being collectively referred to as the "Additional Senior Subordinated
Notes"), provided that (i) such notes are issued at not less than 97%
of par, (ii) such notes and guarantees shall be unsecured and such
notes shall bear interest at a fixed rate not greater than 12% per
annum on the face amount thereof, (iii) no scheduled payments,
prepayments, redemptions or sinking fund or like payments on such notes
shall be required before the tenth anniversary of the date of issuance
of such notes, (iv) the terms and conditions of such notes shall not be
less favorable to the Borrower, its Subsidiaries, the Lenders and the
Agent than the terms and conditions of the 1995 Senior Subordinated
Note Indenture and the 1995 Senior Subordinated Notes, (v) the proceeds
of such Indebtedness shall be used solely (x) to finance the
consummation of the WSYX Acquisition and transaction expenses in
connection therewith and/or (y) to prepay the Loans and reduce the
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Commitments pursuant to Section 2.09(b)(iii) hereof and (vi) no Default
shall have occurred and be continuing at the time of incurrence of such
Indebtedness or would result therefrom;
(d) Indebtedness of Subsidiaries of the Borrower to the
Borrower or to other Subsidiaries of the Borrower;
(e) additional Indebtedness of the Borrower in an aggregate
principal amount not exceeding $50,000,000 at any one time outstanding,
provided (i) that no Default shall have occurred and be continuing at
the time of incurrence of such Indebtedness or would result therefrom
and (ii) such Indebtedness shall be unsecured;
(f) Subordinated Film Indebtedness of the Borrower in an
aggregate principal amount not to exceed $10,000,000 at any one time
outstanding, provided that the terms and conditions of each agreement
or instrument evidencing or governing such Indebtedness shall be
satisfactory to the Majority Lenders;
(g) Guarantees of Indebtedness of GDLP incurred in connection
with Property used by the Borrower and its Subsidiaries in an aggregate
principal amount (including all such Indebtedness, if any, permitted by
Section 9.07(b) hereof) not exceeding $2,000,000 at any one time
outstanding; and
(h) Indebtedness of the Borrower evidenced by senior
subordinated notes and subordinated guarantees thereof by Subsidiary
Guarantors (such Indebtedness and guarantees being collectively
referred to as the "Converted Senior Subordinated Notes"), provided
that (i) such notes and guarantees shall be unsecured and such notes
shall bear interest at a fixed rate not greater than 15% per annum,
(ii) no scheduled payments, prepayments, redemptions or sinking fund or
like payments on such notes shall be required before the tenth
anniversary of the date of issuance of the Preferred Stock, (iii) the
terms and conditions of such notes shall not be less favorable to the
Borrower, its Subsidiaries, the Lenders and the Agent than the terms
and conditions of the 1995 Senior Subordinated Note Indenture and the
1995 Senior Subordinated Notes, (iv) the Borrower shall issue such
notes pursuant to the conversion of all, but not less than all, of the
Preferred Stock and the In-Kind Preferred Stock into such notes in an
aggregate principal amount not exceeding the aggregate liquidation
preference of the Preferred Stock and the In- Kind Preferred Stock so
converted, (v) both immediately
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prior to such conversion of the Preferred Stock and the In- Kind
Preferred Stock and, after giving effect thereto, no Default shall have
occurred and be continuing and (vi) such conversion shall not be made
prior to January 1, 1997.
9.08 Investments. The Borrower will not, and will not permit
any of its Subsidiaries to, make or permit to remain outstanding any Investments
except:
(a) operating deposit accounts with banks;
(b) Permitted Investments;
(c) Investments by the Borrower and its Subsidiaries in
capital stock of Subsidiaries of the Borrower to the extent outstanding
on the date of the financial statements of the Borrower and its
Consolidated Subsidiaries referred to in Section 8.02 hereof or
required by Section 9.25 hereof and advances by the Borrower and its
Subsidiaries to Subsidiary Guarantors in the ordinary course of
business permitted to be incurred by Section 9.07(d) hereof;
(d) Investments outstanding on the Restatement Effective Date
(after giving effect to the consummation of the River City Acquisition)
and identified in Schedule III hereto;
(e) the formation of special purpose Wholly Owned Subsidiaries
of the Borrower for the acquisition of capital stock of or partnership
interests in Persons resulting in such Persons becoming Wholly Owned
Subsidiaries of the Borrower, in each case for the purpose of enabling
the Borrower and its Subsidiaries to consummate acquisitions permitted
by Section 9.05 hereof;
(f) Guarantees by Subsidiary Guarantors of Indebtedness of the
Borrower to the extent such guarantees are expressly permitted by
Section 9.07 hereof;
(g) Guarantees permitted by Section 9.07(g) hereof;
(h) the conversion by the Borrower of the outstanding
principal amount of the WPTT Convertible Debenture into non-voting
common stock of WPTT in accordance with the terms thereof;
(i) Investments by the Borrower in Affiliates in an amount up
to but not exceeding $125,000,000 in the aggregate provided that (x) no
Default shall have occurred and be continuing at the time of the making
of such Investment or
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would result therefrom, (y) at the time of the making of such
Investment, the Total Indebtedness Ratio shall not be greater than the
lesser of (A) 6.40 to 1 and (B) such ratio as shall be required by
Section 9.14 hereof at the time of the making of such Investment and
(z) each such Affiliate shall be engaged solely in lines of business
activity that would be permitted by Section 9.19 hereof if such
Affiliate were an Obligor hereunder; and
(j) additional Investments in an amount up to but not
exceeding $10,000,000 in the aggregate, provided that no Default shall
have occurred and be continuing at the time of the making of such
Investment or would result therefrom.
9.09 Dividend Payments. The Borrower will not, and will not
permit any of its Subsidiaries to declare or make any Dividend Payment at any
time, except that, so long as no Default exists at the time of making such
Dividend Payment or would result therefrom:
(a) the Borrower may pay to any Person (including, without
limitation, an Affiliate) dividends in cash in any of its fiscal years
ending after December 31, 1996 provided that (i) the aggregate amount
of such dividends plus the aggregate amount of Additional Corporate
Expense paid in such fiscal year does not exceed 25% of Excess Cash
Flow for its fiscal year immediately preceding the fiscal year in which
such dividends and Additional Corporate Expense are paid (to the extent
that such 25% of Excess Cash Flow has not otherwise been applied by the
Borrower in accordance with the provisions of this Agreement), and (ii)
such dividend may not be paid earlier than three Business Days after
the prepayment of Loans required by Section 2.09(c) hereof in such
fiscal year of payment;
(b) the Borrower may pay dividends in cash on the Preferred
Stock and the In-Kind Preferred Stock provided that at the time of the
making of such Dividend Payment, the Total Indebtedness Ratio shall not
be greater than the lesser of (i) 5.80 to 1 and (ii) such ratio as
shall be required by Section 9.14 hereof at the time of the making of
such Dividend Payment;
(c) the Borrower may convert any Preferred Stock into
Convertible Senior Notes in accordance with Section 9.07(h) hereof; and
(d) the Borrower may make Equity Issuances permitted by
Section 9.26 hereof.
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9.10 Interest Coverage Ratio. The Borrower will not permit the
Interest Coverage Ratio on any date to be less than the ratio set forth below
opposite the period during which such date falls:
Period Ratio
------ -----
From the Restatement Effective
Date through December 30, 1996 1.60 to 1
From December 31, 1996
through December 30, 1997 1.80 to 1
From December 31, 1997
through December 30, 1998 2.00 to 1
From December 31, 1998
and at all times thereafter 2.20 to 1
9.11 Fixed Charges Ratio. The Borrower will not permit the
Fixed Charges Ratio to be less than or equal to 1.05 to 1 at any time.
9.12 Capital Expenditures. The Borrower will not permit the
aggregate amount of Capital Expenditures to exceed (a) for its fiscal year
ending in 1996, $30,000,000 and (b) for any of its fiscal years thereafter, 1.05
multiplied by the maximum aggregate amount of Capital Expenditures (excluding
Additional Capital Expenditures (as defined below)) permitted under this Section
9.12 for the immediately preceding fiscal year of the Borrower; provided that
the Borrower may permit additional Capital Expenditures ("Additional Capital
Expenditures") in an aggregate amount (whether in one or more fiscal years of
the Borrower) not exceeding $75,000,000, which Additional Capital Expenditures
shall be used by the Borrower and its Subsidiaries solely to finance the
conversion from an analog to a digital format of the television broadcasting
facilities and equipment owned by Borrower and its Subsidiaries.
9.13 Senior Indebtedness Ratio. The Borrower will not permit
the Senior Indebtedness Ratio on any date to be greater than the ratio set forth
below opposite the period during which such date falls:
Period Ratio
------ -----
From the Restatement Effective
Date through September 29, 1996 5.00 to 1
From September 30, 1996
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through December 30, 1996 4.75 to 1
From December 31, 1996
through June 29, 1997 4.50 to 1
From June 30, 1997
through December 30, 1997 4.25 to 1
From December 31, 1997
through December 30, 1998 4.00 to 1
From December 31, 1998
through December 30, 1999 3.50 to 1
From December 31, 1999
and at all times thereafter 2.50 to 1
Notwithstanding the foregoing, if the Borrower shall have consummated the WSYX
Acquisition on or prior to March 31, 1997, the Senior Indebtedness Ratio for the
period from December 31, 1996 through June 29, 1997 may exceed 4.50 to 1 but
shall not exceed 4.75 to 1.
9.14 Total Indebtedness Ratio. The Borrower will not permit
the Total Indebtedness Ratio on any date to be greater than the ratio set forth
below opposite the period during which such date falls:
Period Ratio
------ -----
From the Restatement Effective
Date through September 29, 1996 6.90 to 1
From September 30, 1996
through December 30, 1996 6.60 to 1
From December 31, 1996
through June 29, 1997 6.25 to 1
From June 30, 1997
through December 30, 1997 5.90 to 1
From December 31, 1997
through December 30, 1998 5.50 to 1
From December 31, 1998
through December 30, 1999 5.00 to 1
From December 31, 1999
and at all times thereafter 4.00 to 1
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Notwithstanding the foregoing, if the Borrower shall have consummated the WSYX
Acquisition on or prior to March 31, 1997, the Total Indebtedness Ratio for the
period from December 31, 1996 through June 29, 1997 may exceed 6.25 to 1 but
shall not exceed 6.50 to 1.
9.15 Film Cash Payments and Sports Rights Payments. The
Borrower will not permit the aggregate amount of the sum of Film Cash Payments
plus Sports Rights Payments to exceed the following respective amounts (or such
other amounts as the Borrower and the Agent may from time to time agree) for the
following respective periods:
Period Amount
------ ------
From the Restatement Effective
Date through December 31, 1996 $63,000,000
From January 1, 1997
through December 31, 1997 $69,000,000
From January 1, 1998
through December 31, 1998 $75,000,000
From January 1, 1999
through December 31, 1999 $85,000,000
From January 1, 2000
through December 31, 2000 $85,000,000
From January 1, 2001
through December 31, 2001 $85,000,000
From January 1, 2002
through December 31, 2002 $85,000,000
From January 1, 2003
through December 31, 2003 $85,000,000
The Borrower will not, and will not permit any of its Subsidiaries to, incur any
Film Obligations if the payment of the related Film Cash Payments, together with
the payment of all other Film Cash Payments related to Film Obligations then
outstanding, would result in a violation of the preceding sentence of this
Section 9.15 for any period. Neither the Borrower nor any of its Subsidiaries
shall purchase, redeem, retire or otherwise acquire for value, or set apart any
money for a sinking, defeasance or other analogous fund for, the purchase,
redemption, retirement or other acquisition of, or make any voluntary payment or
prepayment of the principal of or interest
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on, or any other amount owing in respect of, any Film Obligations, except for
(a) regularly scheduled payments in respect thereof required pursuant to the
instruments evidencing such Film Obligations and (b) with the consent of the
Agent, prepayments of Film Obligations not exceeding $15,000,000 after the date
hereof.
9.16 Corporate Expense. The Borrower will not permit Corporate
Expense to exceed $9,000,000 for its fiscal year ending December 31, 1996 or,
for any of its subsequent fiscal years thereafter, 3% of the Net Cash Revenue
for such subsequent fiscal year, except that the Borrower may permit additional
Corporate Expense ("Additional Corporate Expense") for any of its fiscal years
provided that (a) the aggregate amount of such Additional Corporate Expense plus
the aggregate amount of Dividend Payments made pursuant to Section 9.09(a) in
such fiscal year does not exceed 25% of Excess Cash Flow for its fiscal year
immediately preceding the fiscal year in which such Corporate Expense and such
Dividend Payments are paid (to the extent that such 25% of Excess Cash Flow has
not otherwise been applied by the Borrower in accordance with the provisions of
this Agreement), (b) such Additional Corporate Expense may not be paid earlier
than three Business Days after the prepayment of Loans required by Section
2.09(c) hereof in such fiscal year of payment and (c) no such Additional
Corporate Expense may be paid at any time if a Default exists or would result
therefrom.
9.17 Interest Rate Protection Agreements.
(a) The Borrower will obtain and maintain in full force and
effect from the date not later than the 45th day after the Restatement Effective
Date until no sooner than the second anniversary of the Restatement Effective
Date one or more Interest Rate Protection Agreements with one or more of the
Lenders (and/or with a bank or other financial institution having capital,
surplus and undivided profits of at least $500,000,000), which effectively
enables the Borrower (in a manner satisfactory to the Agent and at least one
Managing Agent), as at any date, to protect itself against three-month London
interbank offered rates plus the respective Applicable Margins for Eurodollar
Loans in effect at the time such Interest Rate Protection Agreements are
obtained exceeding (i) 9.5% per annum as to a notional principal amount at least
equal to the 66-2/3% of the sum of (i) the aggregate principal amount of Tranche
A Term Loans and Tranche C Term Loans scheduled to be outstanding from time to
time and (ii) 9.75% per annum as to a notional principal amount at least equal
to the 66-2/3% of the aggregate principal amount of Tranche B Term Loans
scheduled to be outstanding from time to time.
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(b) The Borrower will not, and will not permit any of its
Subsidiaries to, obtain or enter into any Interest Rate Protection Agreements
except as bona fide hedges against fluctuations in interest rates.
(c) Notwithstanding the foregoing clause (a), the Borrower
shall be permitted to modify the requirements under the Interest Rate Protection
Agreement with the consent of the Agent and at least one Managing Agent.
9.18 Subordinated Indebtedness. Neither the Borrower nor any
of its Subsidiaries shall purchase, redeem, retire or otherwise acquire for
value, or set apart any money for a sinking, defeasance or other analogous fund
for, the purchase, redemption, retirement or other acquisition of, or make any
voluntary payment or prepayment of the principal of or interest on, or any other
amount owing in respect of, any Subordinated Indebtedness, except for (a)
prepayments on the Carolyn Smith Documents and the Julian Smith Documents in an
aggregate amount not exceeding $2,000,000 in any fiscal year of the Borrower and
(b) regularly scheduled payments of principal and interest in respect thereof
required pursuant to the instruments evidencing such Subordinated Indebtedness.
9.19 Lines of Business. The Borrower will not, nor will it
permit any of its Subsidiaries to, engage to any substantial extent in any line
or lines of business activity other than (a) the business of owning and
operating the Stations (and related retransmission facilities), (b) the
commercial utilization of frequencies licensed, granted or leased to the
Borrower or any of its Subsidiaries by the FCC, any other governmental authority
or any Person in connection with the television or radio broadcasting businesses
and (c) the production, development, sale, lease or other provision of equipment
and/or services to Persons engaged in the businesses relating to those referred
to in the preceding clause (b); provided that the Borrower shall not permit the
portion of EBITDA for any period derived from the business activity referred to
in the foregoing clause (a) to be less than 85% of EBITDA for such period. None
of the License Subsidiaries will engage in any line or lines of business
activity other than as expressly contemplated in its respective Asset Use and
Operating Agreement. The Borrower will cause all Broadcast Licenses for Owned
Stations at all times to be held in the name of the respective License
Subsidiary for the Owned Station being operated under authority of such
Broadcast Licenses. Notwithstanding the foregoing, CRESAP shall be permitted to
engage in the business referred to in Section 9.27(a) hereof.
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9.20 Transactions with Affiliates. Except as expressly
permitted by this Agreement, the Borrower will not, nor will it permit any of
its Subsidiaries to, directly or indirectly: (a) make any Investment in an
Affiliate; (b) transfer, sell, lease, assign or otherwise dispose of any
Property to an Affiliate; (c) merge into or consolidate with or purchase or
acquire Property from an Affiliate; or (d) enter into any other transaction
directly or indirectly with or for the benefit of an Affiliate (including,
without limitation, guarantees and assumptions of obligations of an Affiliate);
provided that (i) any Affiliate who is an individual may serve as a director,
officer or employee of the Borrower or any of its Subsidiaries and receive
reasonable compensation for his or her services in such capacity and (ii) the
Borrower and its Subsidiaries may enter into transactions (other than extensions
of credit by the Borrower or any of its Subsidiaries to an Affiliate) providing
for the leasing of Property, the rendering or receipt of services or the
purchase or sale of inventory and other Property in the ordinary course of
business (it being understood and agreed that no Acquisition shall be deemed to
be in the ordinary course of business) if the monetary or business consideration
arising therefrom would be substantially as advantageous to the Borrower and its
Subsidiaries as the monetary or business consideration which would obtain in a
comparable transaction with a Person not an Affiliate.
9.21 Use of Proceeds. The Borrower will use the proceeds of
the Loans hereunder (a) to repay loans outstanding under the Existing Credit
Agreement, (b) to finance (i) the River City Non-License Acquisition, (ii) the
River City License Acquisitions, (iii) the Approved Acquisitions, (iv) Other
Acquisitions and (v) transaction costs in connection with all of the foregoing
and (c) for its and its Subsidiaries' general corporate purposes (in compliance
with all applicable legal and regulatory requirements); provided that neither
the Agent nor any Lender shall have any responsibility as to the use of any of
such proceeds.
9.22 Certain Obligations Respecting Subsidiaries. The Borrower
will, and will cause each of its Subsidiaries to, take such action from time to
time as shall be necessary to ensure that each of its Subsidiaries is a Wholly
Owned Subsidiary. Without limiting the generality of the foregoing, none of the
Borrower nor any of its Subsidiaries shall sell, transfer or otherwise dispose
of any shares of stock in any Subsidiary owned by them, nor permit any
Subsidiary to issue any shares of stock of any class whatsoever to any Person
(other than to the Borrower or another Obligor and except as aforesaid). In the
event that any such additional shares of stock shall be issued by any Subsidiary
(except as aforesaid), the respective Obligor agrees
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forthwith to deliver to the Agent pursuant to the Security Agreement the
certificates evidencing such shares of stock, accompanied by undated stock
powers executed in blank and shall take such other action as the Agent shall
request to perfect the security interest created therein pursuant to the
Security Agreement. The Borrower will not permit any of its Subsidiaries to
enter into, after the date of this Agreement, any indenture, agreement,
instrument or other arrangement that, directly or indirectly, prohibits or
restrains, or has the effect of prohibiting or restraining, or imposes
materially adverse conditions upon, the incurrence or payment of Indebtedness,
the granting of Liens, the declaration or payment of dividends, the making of
loans, advances or Investments or the sale, assignment, transfer or other
disposition of Property.
9.23 Additional Subsidiary Guarantors. The Borrower will, and
will cause each of its Subsidiaries to, take such action, from time to time as
shall be necessary to ensure that all Subsidiaries of the Borrower are
Subsidiary Guarantors (and, thereby, "Obligors") hereunder and to pledge and
grant to the Agent for the benefit of the Lenders a security interest in all of
its respective Property to secure its respective obligations under its
respective guarantees pursuant to documentation substantially to the effect of
the Security Documents, mutatis mutandis, and otherwise reasonably satisfactory
to the Lenders and the Agent. Without limiting the generality of the foregoing,
in the event that the Borrower or any of its Subsidiaries shall form or acquire
any new Subsidiary after the date hereof, the Borrower or the respective
Subsidiary will cause such new Subsidiary to become a "Subsidiary Guarantor"
(and, thereby, an "Obligor") hereunder and to pledge and grant to the Agent for
the benefit of the Lenders a security interest on all of its Property to secure
its respective obligations under its respective guarantees pursuant to
documentation substantially to the effect of the Security Documents, mutatis
mutandis, and otherwise reasonably satisfactory to the Lenders and the Agent and
to deliver such proof of corporate action, incumbency of officers, opinions of
counsel and other documents as is consistent with those delivered by each
Obligor pursuant to Section 7.01 hereof upon the Restatement Effective Date or
as any Lender or the Agent shall have requested.
9.24 Modifications of Certain Documents. Without the prior
written consent of the Majority Lenders, the Borrower will not, and will not
permit any of its Subsidiaries to, consent to any modification, supplement,
waiver or termination of any of the provisions of (a) any instrument evidencing
or governing any of the Film Cash Payments unless such instrument is modified,
supplemented or waived at no cost (including, but not limited to interest costs)
to the Borrower or any of its Subsidiaries, (b)
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the WSTR Note, (c) the Ancillary Documents or (d) the River City Acquisition
Documents, except that the Borrower or any of its Subsidiaries may (i) amend any
of the Asset Use and Operating Agreements entered into prior to the date hereof
to cause the same to be substantially in the form of Exhibit G hereto and (ii)
amend any of the Program Services Agreements to extend the stated expiration
date thereof. The Borrower will not, and will not permit any of its Subsidiaries
to, designate any Indebtedness as Designated Senior Indebtedness or Designated
Guarantor Senior Indebtedness, in each case under and as defined in either
Senior Subordinated Note Indenture.
9.25 License Subsidiaries.
(a) Whenever the Borrower or any of its Subsidiaries acquires
any Broadcast License after the Restatement Effective Date, the Borrower shall
(without limiting its obligations under Section 9.23 hereof) cause such
acquisition to take place as follows in accordance with all applicable laws and
regulations, including, without limitation, pursuant to approvals from the FCC:
(i) each Broadcast License so acquired shall be transferred to and held by a
separate Wholly-Owned Subsidiary of the Borrower that is a License Subsidiary,
provided that (x) the Broadcast Licenses for one or more radio broadcasting
stations serving a single "Area of Dominant Influence" as determined by Arbitron
Company may be held by any one or more License Subsidiaries that do not hold any
Broadcast License for any one or more television broadcasting stations and (y)
the Broadcast Licenses for WTTV-TV, a television broadcasting station licensed
to Bloomington, Indiana and serving the Bloomington area, and for WTTK-TV, a
television broadcasting station licensed to Kokomo, Indiana and serving the
Kokomo area, may be held in a single License Subsidiary, (ii) the related
operating assets shall be transferred to and held by an operating company that
is a Subsidiary of the Borrower (an "Operating Subsidiary"), (iii) such License
Subsidiary and such Operating Subsidiary shall enter into a Asset Use and
Operating Agreement, (iv) the Borrower shall deliver or cause to be delivered to
the Agent in pledge under the Security Agreement all capital stock of such
License Subsidiary and such Operating Subsidiary and (v) the Borrower shall
furnish to the Agent such evidence as may be reasonably requested by the Agent
or any Lender that the foregoing transactions have been so effected.
(b) Notwithstanding anything herein to the contrary, the
Borrower shall not permit any License Subsidiary to:
(i) create, incur, assume or have outstanding any
Indebtedness or other liabilities or obligations except for
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obligations under the Basic Documents and an Asset Use and Operating
Agreement;
(ii) own any right, franchise or other asset except for
Broadcast Licenses transferred to it by the Borrower of which it is a
direct, Wholly Owned Subsidiary and Broadcast Licenses acquired in the
ordinary course of business and rights under a Asset Use and Operating
Agreement;
(iii) enter into any transaction of merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution);
(iv) create, incur or permit to exist any Lien (other than
the Lien created by the Security Agreement) on or in respect of, or
sell, lease, assign, transfer or otherwise dispose of, any of its
rights, franchises or other assets;
(v) engage in any business other than holding Broadcasting
Licenses and entering into a Asset Use and Operating Agreement; or
(vi) make or hold any Investment.
(c) Notwithstanding anything in this Section 9.25 to the
contrary, the Borrower and the Subsidiary Guarantors shall not be obligated to
effect any transaction contrary to law or the rules, regulations or policies of
the FCC, and shall be permitted to unwind the transactions contemplated by this
Section 9.25 to the extent necessary to comply with a ruling of the FCC;
provided that the Borrower shall and shall cause each of the Subsidiary
Guarantors to use its best efforts to carry out the provisions of this Section
9.25 consistent with all laws and all rules, regulations and policies of the
FCC, including, without limitation, pursuing any necessary approval or consents
of the FCC.
9.26 Equity Issuance. The Borrower will not effect an Equity
Issuance; provided that the Borrower may (a) (i) issue the Seller Stock on the
Restatement Effective Date, (ii) issue its Class A Common Stock as contemplated
by the Baker Stock Option Agreement, the Corporate Employee Stock Option
Agreement, the Station Employee Stock Option Agreement and the Designated
Employee Stock Option Plan and (iii) make an Equity Issuance pursuant to the
Columbus Option Agreement; (b) issue the Preferred Stock and the In-Kind
Preferred Stock (and any of its Class A Common Stock upon the conversion of any
Preferred Stock or In-Kind Preferred Stock), provided that the Net Available
Proceeds of the Preferred Stock shall be applied to the prepayment of Revolving
Credit Loans as provided in
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Section 2.09(b)(ii) hereof; and (c) make any other Equity Issuance so long as,
in the case of this clause (c) only, (i) such Equity Issuance is an Equity
Public Offering, (ii) after giving effect thereto, no Default shall have
occurred and be continuing and (iii) the Net Available Proceeds thereof shall be
applied either (x) to finance the purchase by the Borrower of the Seller Stock
and transaction expenses in connection therewith, (y) to finance the
consummation of any Acquisition (other than the River City Non-License
Acquisition) and transaction expenses in connection with such Acquisition or (z)
any combination of the foregoing clauses (x) and (y), provided that 80% of any
portion of such Net Available Proceeds not so applied shall be applied to the
prepayment of Loans as provided in Section 2.09(b)(i) hereof.
9.27 CRESAP. Notwithstanding anything contained herein to the
contrary, prior to the making of the CRESAP
Investment:
(a) The Borrower shall not permit CRESAP to engage in any
business activity other than employing commercial airplane pilots and
contracting the services of such pilots to other Persons;
(b) subject to the proviso to Section 9.27(e) hereof, the
Borrower shall not, and shall not permit its Subsidiaries to, transfer
cash or other Property to CRESAP after the Restatement Effective Date,
howsoever such transfer may be characterized or effected; provided that
the Borrower and its Subsidiaries may pay to CRESAP, in cash, fees not
exceeding $695,500 in any calendar year;
(c) neither the Borrower nor any of its Subsidiaries shall
become obligated to CRESAP in any manner whatsoever except with respect
to the payment of fees permitted by the preceding paragraph (b);
(d) the Borrower shall not permit CRESAP to incur Indebtedness
in an aggregate principal amount exceeding $1,500,000 at any one time
outstanding; and
(e) without limiting the effect of clause (b) of this Section
9.27, neither the Borrower nor any of its Subsidiaries shall make, hold
or maintain any Investment (including, without limitation, any
Investment made before the Restatement Effective Date) in CRESAP other
than the capital stock of CRESAP held by the Borrower on the
Restatement Effective Date; provided that the Borrower or any one of
its Subsidiaries may make a single Investment in CRESAP not exceeding
$1,000,000, the proceeds of which shall be used by CRESAP immediately
upon receipt thereof to repay
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in full all Indebtedness of CRESAP outstanding on the date of the such
Investment.
9.28 Real Property.
(a) Not later than 90 days after the Restatement Effective
Date, each Credit Party shall take the following actions with respect to its
interests in real property (including real property acquired as part of the
River City Non-License Acquisition) specified by the Agent or the Majority
Lenders, acquired after May 24, 1994 and with respect to which such actions have
not heretofore been taken by such Credit Party:
(i) cause such interests to be mortgaged to the Agent as
security for its obligations under the Basic Documents pursuant to a
mortgage, deed of trust or similar instrument in form and substance
satisfactory to the Agent in its reasonable judgment;
(ii) in the case of leases under which such Credit Party is
lessee, cause the respective landlords to execute such estoppel
agreements, cause such leases to be recorded in the appropriate county
land offices and take such other action as the Agent may reasonably
request to ensure that such leases are "mortgageable", as determined by
the Agent in its reasonable judgment;
(iii) cause to be issued by Chicago Title Insurance Company
(the "Title Company") and delivered to the Agent mortgagee policies of
title insurance satisfactory to the Agent in form and substance
insuring the validity and first- priority of the Liens created under
each of the Mortgages for and in amounts satisfactory to the Agent
subject only to such exceptions as are satisfactory to the Agent and
containing such affirmative coverage and endorsements as the Lenders
may require;
(iv) cause to be delivered to the Agent, in respect of each of
the facilities covered by the Mortgages, as-built surveys, or such
other evidence demonstrating to the satisfaction of the Agent that the
improvements represented to the Agent as being located on such facility
are in fact located thereon; and
(v) cause to be executed and delivered to the Agent such other
documentation as the Agent may reasonably request in connection
therewith, including, without limitation, Uniform Commercial Code
financing statements, certified corporate resolutions and other
corporate documents of the mortgagor and favorable opinions of counsel
to the mortgagor
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(which shall cover, among other things, the legality, validity, binding
effect and enforceability of such mortgage, subject to customary
exceptions satisfactory to the Agent in its reasonable judgment).
(b) Not later than 90 days after the Restatement Effective
Date, each Credit Party shall take the following actions with respect to its
interests in real property specified by the Agent or the Majority Lenders held
by it prior to the River City Non-License Acquisition and subject to a Mortgage:
(i) execute and deliver a Mortgage Amendment amending each
Mortgage covering such interests;
(ii) in the case of leases under which such Credit Party is
lessee, cause the respective landlords to execute such estoppel
agreements, cause such leases to be recorded in the appropriate county
land offices and take such other action as the Agent may reasonably
request to ensure that such leases are "mortgageable", as determined by
the Agent in its reasonable judgment;
(iii) cause to be issued by the Title Company and delivered to
the Agent endorsements to the existing title insurance policies issued
by the Title Company pursuant to the Existing Credit Agreement which
endorsements shall be satisfactory to the Agent in form and substance
insuring the validity and priority of the Liens created under each of
the Mortgages (as amended by the Mortgage Amendments) for and in
amounts satisfactory to the Agent, subject only to such exceptions as
are satisfactory to the Agent and containing such affirmative coverage
and endorsements as the Lenders may require;
(iv) cause to be delivered to the Agent, in respect of each of
the facilities covered by the Mortgages, as-built surveys, or such
other evidence demonstrating to the satisfaction of the Agent that the
improvements represented to the Agent as being located on such facility
are in fact located thereon; and
(v) cause to be executed and delivered to the Agent such other
documentation as the Agent may reasonably request in connection
therewith, including, without limitation, Uniform Commercial Code
financing statements, certified corporate resolutions and other
corporate documents of the mortgagor and favorable opinions of counsel
to the mortgagor (which shall cover, among other things, the legality,
validity, binding effect and enforceability of such Mortgage
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Amendment, subject to customary exceptions satisfactory to the Agent in
its reasonable judgment).
(c) The Borrower shall (i) notify the Agent with respect to
any interest acquired by any Credit Party in any real estate after the date
hereof not less than three Business Days after such acquisition and (ii) not
later than 60 days after any request by the Majority Lenders:
(v) cause such interest to be mortgaged to the Agent by the
owner thereof (as security for their respective obligations under the
Basic Documents) pursuant to a mortgage, deed of trust or similar
instrument in form and substance satisfactory to the Agent in its
reasonable judgment;
(w) in the case of leases under which such owner is lessee,
cause the respective landlords to execute such estoppel agreements,
cause such leases to be recorded in the appropriate county land offices
and take such other action as the Agent may reasonably request to
ensure that such leases are "mortgageable", as determined by the Agent
in its reasonable judgment;
(x) cause to be issued by the Title Company and delivered to
the Agent mortgagee policies of title insurance satisfactory to the
Agent in form and substance insuring the validity and first-priority of
the Liens created under each of the Mortgages for and in amounts
satisfactory to the Agent subject only to such exceptions as are
satisfactory to the Agent and containing such affirmative coverage and
endorsements as the Lenders may require;
(y) cause to be delivered to the Agent, in respect of each of
the facilities covered by the Mortgages on the interests in real estate
so acquired, as-built surveys, or such other evidence demonstrating to
the satisfaction of the Agent that the improvements represented to the
Agent as being located on such facility are in fact located thereon;
and
(z) cause to be executed and delivered to the Agent such other
documentation as the Agent may reasonably request in connection
therewith, including, without limitation, Uniform Commercial Code
financing statements, environmental assessments, title insurance,
certified corporate resolutions and other corporate documents of the
mortgagor and favorable opinions of counsel to the mortgagor (which
shall cover, among other things, the legality, validity, binding effect
and enforceability of such mortgage, subject
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to customary exceptions) reasonably satisfactory to the Agent.
(d) In connection with the foregoing clauses (a), (b) and (c)
of this Section 9.28, the Borrower shall pay to the Title Company all expenses
and premiums in connection with the issuance of the title insurance and in
addition shall pay to the Title Company an amount equal to the recording and
stamp taxes payable in connection with recording each Mortgage and Mortgage
Amendment in the appropriate county land office.
9.29 Program Services Agreements. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into any local marketing
agreement, time brokerage agreement, program services agreement or any similar
agreement providing for:
(a) the Borrower or any of its Subsidiaries to program or sell
advertising time on all or any portion of the broadcast time of any
television or radio station; or
(b) any Person other than the Borrower or any of its
Subsidiaries to program or sell advertising time on all or any portion
of the broadcast time of any Station except for KBLA(AM), a radio
broadcasting station licensed to Santa Monica, California and serving
the Santa Monica area.
Notwithstanding the preceding sentence, the Borrower or any of its Subsidiaries
(other than License Subsidiaries) may enter into any Program Services Agreement
with any other Person (including, without limitation, Affiliates) provided that
the aggregate amount payable by the Borrower and its Subsidiaries under all
Program Services Agreements during any fiscal year of the Borrower (beginning
with its fiscal year ending in 1996), excluding Permitted Termination Payments
(as defined in the next sentence), shall not exceed the Maximum Amount (as
defined in the next sentence) for such fiscal year. For purposes of the
preceding sentence, (i) a "Permitted Termination Payment" shall mean a payment
owing by the Borrower or any of its Subsidiaries by reason of the early
termination of a Program Services Agreement relating to any of the television
stations referred to below provided that the amount of such payment shall not
exceed the amount set forth below opposite the name of such television station:
Station Termination Payment
------- -------------------
WVTV-TV $3,000,000
WNUV-TV $3,000,000
WRDC-TV $4,000,000
WABM-TV $5,000,000
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WTTE-TV $2,500,000
WFBC-TV $2,500,000
KRRT-TV $2,500,000; and
(ii) the "Maximum Amount" for any fiscal year of the Borrower shall mean (x) for
its fiscal year ending in 1996, $25,000,000 and (y) for any of its fiscal years
thereafter, an amount equal to the Maximum Amount for its preceding fiscal year
increased (or decreased, as the case may be) by the percentage of the increase
(or decrease, as the case may be) in the Consumer Price Index for all Urban
Consumers (as published by the U.S. Department of Labor) for the twelve-month
period ending in September of such preceding fiscal year. As used in this
Section 9.29, (w) "WABM- TV" shall mean WABM-TV, Channel 68, a television
broadcasting station licensed to Birmingham, Alabama and serving the Birmingham
area, (x) "WNUV-TV" shall mean WNUV-TV, a television broadcasting station
licensed to Baltimore, Maryland and serving the Baltimore area, (y) "WRDC-TV"
shall mean WRDC-TV, Channel 28, a television broadcasting station licensed to
Raleigh-Durham, North Carolina and serving the Raleigh-Durham area, and (z)
"WVTV-TV" shall mean WVTV-TV, a broadcasting television station licensed to
Milwaukee, Wisconsin and serving the Milwaukee area.
9.30 FCC Filings. Not later than 30 days after the Restatement
Effective Date, the Borrower will cause to be filed with the FCC in connection
with the proposed transfer to the Borrower or any of its Subsidiaries of the
"License Assets" referred to in the River City Group I Option Agreement and the
"Columbus Station Assets" referred to in the Columbus Option Agreement,
applications for all material authorizations, licenses and permits issued by the
FCC that are required or necessary for the conduct of business of the Borrower
and its Subsidiaries as proposed to be conducted with respect to each of the
Stations to which such "License Assets" relate or the "Columbus Station Assets"
relate, as the case may be.
9.31 Exercise of River City Options. Not later than 90 days
after the issuance by the FCC of an order approving the assignment or transfer
of control to the Borrower or any of its Subsidiaries of Broadcast Licenses for
any "Station" referred to in the River City Group I Option Agreement or the
"Columbus Station" referred to in the Columbus Option Agreement (whether or not
such order is subject to reconsideration or review by the FCC or by any court or
administrative body), the Borrower shall consummate the applicable River City
License Acquisition in accordance with Section 9.05(d)(i) hereof.
9.32 Limitation on Cure Rights. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into
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any agreement (a "Cure Right Agreement") with or for the benefit of any other
Person that limits the ability of the Borrower or such Subsidiary to exercise
any rights or remedies under any agreement (an "Acquisition Agreement") pursuant
to which an Acquisition is to be consummated; provided that the Borrower or any
of its Subsidiaries may enter into or suffer to exist any Cure Right Agreement
for the benefit of the lenders to Glencairn or to River City, as the case may
be, to the extent that such lenders (or an agent on behalf of such lenders) has
a security interest in the Acquisition Agreement to which such Cure Right
Agreement relates.
Section 10. Events of Default.
10.01 Events of Default; Remedies. If one or more of the
following events (herein called "Events of Default") shall occur and be
continuing:
(a) Any Obligor shall default in the payment when due (whether
at stated maturity or upon mandatory or optional prepayment) of any
principal of or interest on any Loan, or any Reimbursement Obligation,
any fee or any other amount payable by it hereunder or under any other
Basic Document; or
(b) Any of the Obligors shall default in the payment when due
of any principal of or interest on any of its other Indebtedness
aggregating $5,000,000 or more, or in the payment when due of any
amount under any Interest Rate Protection Agreement for a notional
principal amount exceeding $5,000,000; or any event specified in any
note, agreement, indenture or other document evidencing or relating to
any such Indebtedness or any event specified in any Interest Rate
Protection Agreement shall occur if the effect of such event is to
cause, or (with the giving of any notice or the lapse of time or both)
to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause, such Indebtedness
to become due, or to be prepaid in full (whether by redemption,
purchase, offer to purchase or otherwise), prior to its stated maturity
or to have the interest rate thereon reset to a level so that
securities evidencing such Indebtedness trade at level specified in
relation to the par value thereof or, in the case of an Interest Rate
Protection Agreement, to permit the payments owing under such Interest
Rate Protection Agreement to be liquidated; or
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(c) Any representation, warranty or certification made or
deemed made in any Basic Document (or in any modification or supplement
thereto) by any of the Credit Parties or any certificate furnished to
any Lender or the Agent pursuant to the provisions thereof, shall prove
to have been false or misleading as of the time made or furnished in
any material respect; or
(d) Any of the Credit Parties shall default in the performance
of any of its obligations under (i) any of Sections 9.01(h), 9.05
through 9.20, 9.25, 9.29, 9.30, or 9.31 hereof, (ii) either of Section
4.02 or 5.02 of the Security Agreement, (iii) either of Section 5.02
and 7.02 of the Affiliate Guarantee and Security Agreement or (iv) any
provision of any of the Mortgages; or any of the Credit Parties shall
default in the performance of any of its other obligations in this
Agreement or any other Basic Document and such default shall continue
unremedied for a period of ten days after notice thereof to the
Borrower by the Agent or any Lender (through the Agent); or
(e) Any of the Obligors or Material Third-Party Licensees
shall admit in writing its inability to, or be generally unable to, pay
its debts as such debts become due; or
(f) Any of the Obligors or Material Third-Party Licensees,
shall (i) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee, examiner or liquidator
of itself or of all or a substantial part of its Property, (ii) make a
general assignment for the benefit of its creditors, (iii) commence a
voluntary case under the Bankruptcy Code, (iv) file a petition seeking
to take advantage of any other law relating to bankruptcy, insolvency,
reorganization, liquidation, dissolution, arrangement or winding-up, or
composition or readjustment of debts, (v) fail to controvert in a
timely and appropriate manner, or acquiesce in writing to, any petition
filed against it in an involuntary case under the Bankruptcy Code, or
(vi) take any corporate action for the purpose of effecting any of the
foregoing; or
(g) A proceeding or case shall be commenced, without the
application or consent of any of the Obligors or Material Third-Party
Licensees in any court of competent jurisdiction, seeking (i) its
liquidation, reorganization, dissolution, arrangement or winding-up, or
the composition or readjustment of its debts, (ii) the appointment of a
trustee, receiver, custodian, examiner, liquidator or the like of such
Obligor, River City or such Subsidiary, as the
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case may be, or of all or any substantial part of its Property, or
(iii) similar relief in respect of such Obligor under any law relating
to bankruptcy, insolvency, reorganization, winding-up, or composition
or adjustment of debts, and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or ordering any
of the foregoing shall be entered and continue unstayed and in effect,
for a period of 60 or more days; or an order for relief against such
Obligor, River City or such Subsidiary, as the case may be, shall be
entered in an involuntary case under the Bankruptcy Code; or
(h) A final judgment or judgments for the payment of money in
excess of $5,000,000 in the aggregate shall be rendered by one or more
courts, administrative tribunals or other bodies having jurisdiction
against any of the Obligors and the same shall not be discharged (or
provision shall not be made for such discharge), or a stay of execution
thereof shall not be procured, within 30 days from the date of entry
thereof and the relevant Obligor shall not, within said period of 30
days, or such longer period during which execution of the same shall
have been stayed, appeal therefrom and cause the execution thereof to
be stayed during such appeal; or
(i) An event or condition specified in Section 9.01(f) hereof
shall occur or exist with respect to any Plan or Multiemployer Plan
and, as a result of such event or condition, together with all other
such events or conditions, the Borrower or any ERISA Affiliate shall
incur or in the opinion of the Majority Lenders shall be reasonably
likely to incur a liability to a Plan, a Multiemployer Plan or PBGC (or
any combination of the foregoing) which would constitute, in the
determination of the Majority Lenders, a Material Adverse Effect; or
(j) During any period of 25 consecutive calendar months,
individuals who were directors of the Borrower on the first day of such
period shall no longer constitute a majority of the board of directors
of the Borrower; or
(k) Except for expiration in accordance with its terms, any of
the Security Documents shall be terminated or shall cease to be in full
force and effect, for whatever reason; or
(l) Any Broadcast License (other than an Immaterial Broadcast
License) shall be terminated, forfeited or revoked or shall fail to be
renewed for any reason whatsoever, or shall be modified in a manner
materially adverse to the
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Borrower, or for any other reason (i) any License Subsidiary shall at
any time cease to be a licensee under any Broadcast License (other than
an Immaterial Broadcast License) relating to the Owned Station to which
such Broadcast Licenses have been granted or the Subsidiary of the
Borrower that owns 100% of the capital stock of such License Subsidiary
shall otherwise fail to have all required authorizations, licenses and
permits to construct, own, operate or promote such Owned Station, or
(ii) any Material Third-Party Licensee for any Contract Station shall
fail to preserve and maintain its legal existence or any of its
material rights, privileges or franchises (including the Broadcast
Licenses (other than an Immaterial Broadcast Licenses) for such
Contract Station (other than by reason of such Contract Station
becoming an Owned Station)); or
(m) With respect to any Owned Station, the License Subsidiary
with respect to such Owned Station shall at any time cease to be a
Wholly Owned Subsidiary of the Subsidiary of the Borrower that owns the
operating assets related to the Broadcast Licenses for such Owned
Station; or the Borrower shall cease at any time to own all of the
issued shares of the Capital Stock of any such Subsidiary; or
(n) Any transfer of any common stock of the Borrower or any of
its Subsidiaries or any right to receive such common stock or any other
interest in the Borrower or any of its Subsidiaries shall be
transferred and either (i) such transfer shall fail to comply with any
applicable provision of the Federal Communications Act of 1934, as
amended from time to time, or any applicable FCC rule, regulation or
policy, or (ii) the Agent shall not have received prior to such
transfer any opinion reasonably satisfactory to the Majority Lenders of
counsel reasonably satisfactory to the Majority Lenders to the effect
that such transfer does so comply; or
(o) the Smith Brothers shall cease at any time collectively to
own, legally or beneficially, shares of stock of the Borrower
representing at least 51% of the voting power and economic value of the
Borrower (other than, in any case referred to in this paragraph (o), by
reason of death or disability); or
(p) the Borrower shall deliver any Change of Control Purchase
Notice under and as defined in any Senior Subordinated Note Indenture;
or
(q) any Program Services Agreement shall be terminated prior
to its stated expiration date and the Obligor party
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thereto shall not have entered into a substantially identical agreement
relating to the Contract Station to which such Program Services
Agreement relates or any party to any Program Services Agreement shall
default in any of its obligations thereunder; or
(r) any party to any of the River City Acquisition Documents
shall default in the performance of any of its obligations thereunder;
or
(s) any party to a Consent and Agreement shall default in the
performance of any of its obligations thereunder; or
(t) there shall have been asserted against any Credit Party an
Environmental Claim that, in the judgment of the Majority Lenders, is
reasonably likely to be determined adversely to the affected Credit
Parties, and the amount thereof is, singly or in the aggregate,
reasonably likely to have a Material Adverse Effect (insofar as such
amount is payable by any of the Credit Parties by after deducting any
portion thereof that is reasonably expected to be paid by other
creditworthy Persons jointly and severally liable thereof;
THEREUPON: (i) in the case of an Event of Default other than one referred to in
clause (f) or (g) of this Section 10.01 with respect to any Obligor, the Agent
may, by notice to the Borrower, terminate the Commitments and/or declare the
principal amount then outstanding of, and the accrued interest on, the Loans,
the Reimbursement Obligations and all other amounts payable by the Obligors
hereunder and under the Notes (including, without limitation, any amounts
payable under Section 5.05 or 5.06 hereof) to be forthwith due and payable,
whereupon such amounts shall be immediately due and payable (provided that (x)
if so requested by the Majority Revolving Credit Lenders, the Majority Tranche A
Lenders, the Majority Tranche B Lenders and the Majority Tranche C Lenders, the
Agent shall take such action with respect to the Commitment and/or Loans of any
Class and other amounts in respect thereof (including, in the case of the
Revolving Credit Commitments and/or the Revolving Credit Loans, the
Reimbursement Obligations) to the extent owed to the relevant Lenders) without
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by each Obligor; and (ii) in the case of the occurrence
of an Event of Default referred to in clause (f) or (g) of this Section 10.01
with respect to any Obligor, the Commitments shall automatically be terminated
and the principal amount then outstanding of, and the accrued interest on, the
Loans, the Reimbursement Obligations and all other amounts payable by the
Obligors hereunder and under the Notes (including, without
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limitation, any amounts payable under Section 5.05 or 5.06 hereof) shall
automatically become immediately due and payable without presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by each Obligor.
Without limiting the rights of the Lenders under the preceding paragraph of this
Section 10.01, upon the occurrence and during the continuance of any Event of
Default, the Borrower agrees that it shall, if requested by the Agent or the
Majority Revolving Credit Lenders through the Agent (and, in the case of any
Event of Default referred to in clause (f) or (g) of this Section 10.01 with
respect to the Borrower, forthwith, without any demand or the taking of any
other action by the Agent or such Majority Revolving Credit Lenders) provide
cover for the Letter of Credit Liabilities by paying to the Agent immediately
available funds in an amount equal to the then aggregate undrawn face amount of
all Letters of Credit, which funds shall be held by the Agent in the Collateral
Account as collateral security for the Letter of Credit Liabilities and be
subject to withdrawal only as therein provided.
10.02 Collateral Account.
(a) The Borrower hereby establishes with the Agent a separate
cash collateral account (the "Collateral Account") in the name and under the
control of the Agent into which there shall be deposited from time to time such
amounts as required to be paid to the Agent under Section 2.09, 3.01 or 10.01
hereof.
(b) As collateral security for the prompt payment in full when
due (whether at stated maturity, upon mandatory or optional prepayment, pursuant
to requirements for cash collateral or otherwise) of the Reimbursement
Obligations, interest thereon, and all obligations of the Borrower under the
Letter of Credit Documents relating to Letters of Credit and under Section
2.10(g) hereof (whether or not then outstanding or due and payable) (such
obligations being herein collectively called the "Secured Letter of Credit
Obligations"), the Borrower hereby pledges and grants to the Agent, for the
benefit of the Issuing Bank, the Revolving Credit Lenders and the Agent as
provided herein, a security interest in all of its right, title and interest in
and to the Collateral Account and the balances from time to time in the
Collateral Account (including the investments and reinvestments therein provided
for below). The balances from time to time in the Collateral Account shall not
constitute payment of any Secured Letter of Credit Obligations until applied by
the Agent as provided herein. Anything in this Agreement to the contrary
notwithstanding, funds held in the Collateral Account shall be subject to
withdrawal only as provided in Section 2.09(f) hereof and in this Section 10.02.
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(c) Amounts on deposit in the Collateral Account shall be
invested and reinvested by the Agent in such Permitted Investments as the
Borrower shall determine in its sole discretion, provided that (i) failing
receipt by the Agent of instructions from the Borrower, the Agent may invest and
reinvest such amounts as the Agent shall determine in its sole discretion and
(ii) the approval of the Agent shall be required for the investments and
reinvestments to be made during any period while a Default has occurred and is
continuing. All such investments and reinvestments shall be held in the name and
be under the control of the Agent.
(d) If an Event of Default shall have occurred and be
continuing, the Agent may (and, if instructed by the Majority Revolving Credit
Lenders, shall) in its (or their) discretion at any time and from time to time
elect to liquidate any such investments and reinvestments and credit the
proceeds thereof to the Collateral Account and apply or cause to be applied such
proceeds and any other balances in the Collateral Account to the payment of any
of the Secured Letter of Credit Obligations due and payable.
(e) If (i) no Default has occurred and is continuing and (ii)
all of the Secured Letter of Credit Obligations have been paid in full, the
Agent shall, from time to time, at the request of the Borrower, deliver to the
Borrower, against receipt but without any recourse, warranty or representation
whatsoever, such of the balances in the Collateral Account as exceed the
aggregate undrawn face amount of the Letters of Credit. When all of the Secured
Letter of Credit Obligations shall have been paid in full and all Letters of
Credit have expired or been terminated, the Agent shall promptly deliver to the
Borrower, against receipt but without any recourse, warranty or representation
whatsoever, the balances remaining in the Collateral Account.
(f) The Borrower shall pay to the Agent from time to time such
fees as the Agent normally charges for similar services in connection with the
Agent's administration of the Collateral Account and investments and
reinvestments of funds therein.
Section 11. The Agent.
11.01 Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Basic Documents with such powers as are specifically delegated
to the Agent by the terms of this Agreement and of the other Basic Documents,
together with such other powers as are reasonably incidental thereto. The
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Agent (which term as used in this sentence and in Section 11.05 and the first
sentence of Section 11.06 hereof shall include reference to its affiliates and
its own and its affiliates' officers, directors, employees and agents):
(a) shall have no duties or responsibilities except those
expressly set forth in this Agreement and in the other Basic Documents,
and shall not by reason of this Agreement or any other Basic Document
be a trustee for any Lender;
(b) shall not be responsible to the Lenders for any recitals,
statements, representations or warranties contained in this Agreement
or in any other Basic Document, or in any certificate or other document
referred to or provided for in, or received by any of them under, this
Agreement or any other Basic Document, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Basic Document or any other document referred to
or provided for herein or therein or for any failure by the Borrower or
any other Person to perform any of its obligations hereunder or
thereunder;
(c) shall not, except to the extent expressly instructed by
the Majority Lenders with respect to collateral security under the
Security Documents, be required to initiate or conduct any litigation
or collection proceedings hereunder or under any other Basic Document;
and
(d) shall not be responsible for any action taken or omitted
to be taken by it hereunder or under any other Basic Document or under
any other document or instrument referred to or provided for herein or
therein or in connection herewith or therewith, except for its own
gross negligence or willful misconduct.
The Agent may employ agents and attorneys-in-fact and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it in good faith. In that connection, the administrative functions
to be performed by the Agent under this Agreement may be performed by Chemical
Bank. The Agent may deem and treat the payee of any Note as the holder thereof
for all purposes hereof unless and until a notice of the assignment or transfer
thereof shall have been filed with the Agent, together with the consent of the
Borrower to such assignment or transfer.
11.02 Reliance by Agent. The Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, telegram or cable) believed
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by it to be genuine and correct and to have been signed or sent by or on behalf
of the proper Person or Persons, and upon advice and statements of legal
counsel, independent accountants and other experts selected by the Agent. As to
any matters not expressly provided for by this Agreement or any other Basic
Document, the Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or thereunder in accordance with instructions
given by the Majority Lenders or, if provided herein, in accordance with the
instructions given by all of the Lenders as is required in such circumstance,
and such instructions of such Lenders and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders.
11.03 Defaults. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default (other than the non-payment
of principal of or interest on Loans or of commitment fees) unless the Agent has
received notice from a Lender or the Borrower specifying such Default and
stating that such notice is a "Notice of Default". In the event that the Agent
receives such a notice of the occurrence of a Default, the Agent shall give
prompt notice thereof to the Lenders (and shall give each Lender prompt notice
of each such non-payment). The Agent shall (subject to Section 11.07 hereof)
take such action with respect to such Default as shall be directed by the
Majority Lenders or, if provided herein, the Majority Revolving Credit Lenders,
the Majority Tranche A Lenders, the Majority Tranche B Lenders or the Majority
Tranche C Lenders, provided that, unless and until the Agent shall have received
such directions, the Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default as it shall
deem advisable in the best interest of the Lenders except to the extent that
this Agreement expressly requires that such action be taken, or not be taken,
only with the consent or upon the authorization of the Majority Lenders, the
Majority Revolving Credit Lenders, the Majority Tranche A Lenders, the Majority
Tranche B Lenders, the Majority Tranche C Lenders, all of the Lenders with
respect to any Class of Loans or all of the Lenders.
11.04 Rights as a Lender. With respect to its Commitment(s)
and the Loans made by it, Chase (and any successor acting as Agent) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same, and its rights as Issuing Bank
hereunder, as though it were not acting as the Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include the Agent in
its individual capacity. Chase (and any successor acting as Agent) and its
affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to and generally engage in any kind of banking, trust
or other
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business with the Obligors (and any of their Subsidiaries or Affiliates) as if
it were not acting as the Agent, and Chase (and any such successor) and its
affiliates may accept fees and other consideration from the Obligors for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
11.05 Indemnification. The Lenders agree to indemnify the
Agent (to the extent not reimbursed under Section 12.03 hereof, but without
limiting the obligations of the Borrower under said Section 12.03, and including
in any event any payments under any indemnity which the Agent is required to
issue to any bank referred to in Section 4.02 of the Security Agreement and
Section 5.02 of the Affiliate Guarantee and Security Agreement to which
remittances in respect of Accounts, as defined therein, are to be made), ratably
in accordance with their respective Credit Exposures, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Agent (including by any Lender)
arising out of or by reason of any investigation or in any way relating to or
arising out of this Agreement or any other Basic Document or any other documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby (including, without limitation, the costs and expenses which
the Borrower is obligated to pay under Section 12.03 hereof, and including also
any payments under any indemnity which the Agent is required to issue to any
bank referred to in Section 4.02 of the Security Agreement and Section 5.02 of
the Affiliate Guarantee and Security Agreement to which remittances in respect
of Accounts, as defined therein, are to be made, but excluding, unless a Default
has occurred and is continuing, normal administrative costs and expenses
incident to the performance of its agency duties hereunder) or the enforcement
of any of the terms hereof or thereof or of any such other documents, provided
that no Lender shall be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the party to be indemnified.
11.06 Non-Reliance on Agent and Other Lenders. Each Lender
agrees that it has, independently and without reliance on the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower and its Subsidiaries
and decision to enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under this Agreement
or any of the other Basic Documents. The Agent shall not be required to keep
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itself informed as to the performance or observance by any Obligor of this
Agreement or any of the other Basic Documents or any other document referred to
or provided for herein or therein or to inspect the Properties or books of the
Borrower or any of its Subsidiaries. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Agent hereunder or under the Security Documents, the Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of the
Borrower or any of its Subsidiaries (or any of their affiliates) which may come
into the possession of the Agent or any of its affiliates.
11.07 Failure to Act. Except for action expressly required of
the Agent hereunder and under the other Basic Documents, the Agent shall in all
cases be fully justified in failing or refusing to act hereunder and thereunder
unless it shall receive further assurances to its satisfaction from the Lenders
of their indemnification obligations under Section 11.05 hereof against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
11.08 Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving notice thereof to the Lenders and the Borrower, and
the Agent may be removed at any time with or without cause by the Majority
Lenders. Upon any such resignation or removal, the Majority Lenders shall have
the right to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Majority Lenders and shall have accepted such appointment
within 30 days after the retiring Agent's giving of notice of resignation or the
Majority Lenders' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent, which shall be a bank which
has an office in New York, New York with a combined capital and surplus of at
least $500,000,000. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Section 11 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
the Agent.
11.09 Consents under Certain Documents. Except as otherwise
provided in Section 12.04 hereof with respect to this
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Agreement, the Agent may, with the prior consent of the Majority Lenders (but
not otherwise), consent to any modification, supplement or waiver under any of
the Basic Documents or under either Senior Subordinated Note Indenture, provided
that, without the prior consent of each Lender, the Agent shall not (except as
provided herein or in the Security Documents) release any guarantor from its
liability in respect of its guarantee, release any collateral or otherwise
terminate any Lien under any Basic Document providing for collateral security,
or agree to additional obligations being secured by such collateral security
(unless the Lien for such additional obligations shall be junior to the Lien in
favor of the other obligations secured by such Basic Document), except that no
such consent shall be required, and the Agent is hereby authorized, to release
any Lien covering Property which is the subject of a disposition of Property
permitted hereunder or to which the Majority Lenders have consented.
11.10 Collateral Sub-Agents. Each Lender by its execution and
delivery of this Agreement agrees, as contemplated by Section 4.03 of the
Security Agreement, that, in the event it shall hold any Permitted Investments
referred to therein, such Permitted Investments shall be held in the name and
under the control of such Lender, and such Lender shall hold such Permitted
Investments as a collateral sub-agent for the Agent thereunder. The Borrower by
its execution and delivery of this Agreement hereby consents to the foregoing.
11.11 Managing Agents. Neither Bankers Trust Company, First
Union National Bank of North Carolina nor NationsBank, N.A. shall have any
rights (except to the extent expressly provided herein) or obligations hereunder
in their capacities as managing agents.
11.12 Conditions Precedent. To the extent that any document
referred to in Section 7.01 hereof is required by such Section to be
satisfactory to the Agent, any Lender or the Majority Lenders, in no case shall
the Agent be liable for accepting any such document as being satisfactory unless
such acceptance constituted gross negligence or willful misconduct, and the
objecting Lender attended the closing of the amendment and restatement of the
Existing Credit Agreement on the Restatement Effective Date and objected to the
acceptability of such document by notice received by an account officer of Chase
at such closing.
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Section 12. Miscellaneous.
12.01 Waiver. No failure on the part of the Agent or any
Lender to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under this Agreement or any Note shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under this Agreement or any Note preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
Each Obligor irrevocably waives, to the fullest extent
permitted by applicable law, any claim that any action or proceeding commenced
by the Agent or any Lender relating in any way to this Agreement should be
dismissed or stayed by reason, or pending the resolution, of any action or
proceeding commenced by any Obligor relating in any way to this Agreement
whether or not commenced earlier. To the fullest extent permitted by applicable
law, the Obligors shall take all measures necessary for any such action or
proceeding commenced by the Agent or any Lender to proceed to judgment prior to
the entry of judgment in any such action or proceeding commenced by any Obligor.
12.02 Notices. All notices and other communications provided
for herein and under the Security Documents (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, telecopy) delivered to the
intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof (or below the name of the Borrower, in the case of any
Subsidiary Guarantor); or, as to any party, at such other address as shall be
designated by such party in a notice to each other party. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
12.03 Expenses, Etc. The Borrower agrees to pay or reimburse
each of the Lenders and the Agent for paying: (a) all reasonable out-of-pocket
costs and expenses of the Agent (including, without limitation, the reasonable
fees and expenses of Milbank, Tweed, Hadley & McCloy, special New York counsel
to Chase, and Wiley, Rein & Fielding, special FCC counsel to Chase), in
connection with (i) the negotiation, preparation, execution and delivery of this
Agreement and the other Basic Documents and the making of the Loans hereunder,
(ii) the negotiation or preparation of any amendment, modification or waiver of
any of the terms of this Agreement or any of the other Basic Documents
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(whether or not consummated), (iii) the consummation of any Acquisition, (iv)
compliance by the Borrower with any of Sections 9.23, 9.25 and 9.28 hereof; (b)
all reasonable costs and expenses of the Lenders and the Agent (including
reasonable counsels' fees and expenses) in connection with (i) any Default and
any enforcement or collection proceedings resulting therefrom, including,
without limitation, all manner of participation in or other involvement with (x)
bankruptcy, insolvency, receivership, foreclosure, winding up or liquidation
proceedings, (y) judicial or regulatory proceedings and (z) workout,
restructuring or other negotiations or proceedings (whether or not the workout,
restructuring or transaction contemplated thereby is consummated) and (ii) the
enforcement of this Section 12.03; (c) all transfer, stamp, documentary,
mortgage, mortgage recording, intangible or other similar taxes, assessments or
charges levied by any governmental or revenue authority in respect of this
Agreement or any of the other Basic Documents or any other document referred to
herein or therein and all costs, expenses, taxes, assessments and other charges
incurred in connection with any filing, registration, recording or perfection of
any security interest contemplated by this Agreement or any other Basic Document
or any other document referred to herein or therein; and (d) all costs, expenses
and other charges in respect of title insurance procured with respect to the
Liens created pursuant to the Mortgages.
The Borrower hereby agrees to indemnify the Agent and each
Lender and their respective directors, officers, employees and agents for, and
hold each of them harmless against, any and all losses, liabilities, claims,
damages or expenses incurred by any of them (including any and all losses,
liabilities, claims, damages or expenses incurred by the Agent to any Lender,
whether or not the Agent or any Lender is a party thereto) arising out of or by
reason of any investigation or litigation or other proceedings (including any
threatened investigation or litigation or other proceedings) relating to the
extensions of credit hereunder or any actual or proposed use by the Borrower or
any of its Subsidiaries of the proceeds of any of the extensions of credit
hereunder, including, without limitation, the reasonable fees and disbursements
of counsel incurred in connection with any such investigation or litigation or
other proceedings (but excluding any such losses, liabilities, claims, damages
or expenses incurred by reason of the gross negligence or willful misconduct of
the Person to be indemnified). Without limiting the generality of the foregoing,
the Borrower will indemnify the Agent for any payments which the Agent is
required to make under any indemnity issued to any bank referred to in Section
4.02 of the Security Agreement to which remittances in respect to Accounts, as
defined therein, are to be made and indemnify the Agent and each Lender from,
and hold the Agent and each Lender harmless against, any losses, liabilities,
claims, damages or
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expenses described in the preceding sentence (including any Lien filed against
any Property covered by the Mortgage(s) in favor of any governmental entity, but
excluding, as provided in the preceding sentence, any loss, liability, claim,
damage or expense incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified) arising as a result of any
representation, warranty or certification made or deemed to be made in Section
8.13 hereof and proved to have been false or misleading as of the time made or
arising under any Environmental Law as a result of the past, present or future
operations of the Borrower or any of its Subsidiaries (or any predecessor in
interest to the Borrower or any of its Subsidiaries), or the past, present or
future condition of any site or facility owned, operated or leased at any time
by the Borrower or any of its Subsidiaries (or any such predecessor in
interest), or any Release or threatened Release of any Hazardous Materials at or
from any such site or facility, including any such Release or threatened Release
that shall occur during any period when the Agent or any Lender shall be in
possession of any such site or facility following the exercise by the Agent or
any Lender of any of its rights and remedies hereunder or under any of the
Security Documents.
12.04 Amendments, Etc. Except as otherwise expressly provided
in this Agreement, any provision of this Agreement may be amended or modified
only by an instrument in writing signed by the Borrower, the Agent and the
Majority Lenders, or by the Borrower and the Agent acting with the consent of
the Majority Lenders, and any provision of this Agreement may be waived only by
an instrument in writing signed by the Majority Lenders or by the Agent acting
with the consent of the Majority Lenders; provided that:
(a) no amendment, modification or waiver shall, unless by an
instrument signed by all of the Lenders or by the Agent acting with the
consent of all of the Lenders:
(i) increase or extend the term, or extend the time
or waive any requirement for the reduction or termination, of
any of the Commitments;
(ii) extend the date fixed for the payment of
principal of or interest on any Loan, any Reimbursement
Obligation or any fee hereunder;
(iii) reduce the amount of any such payment of
principal;
(iv) reduce the rate at which interest is payable
thereon or any fee is payable hereunder;
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(v) alter the rights or obligations of the Borrower
to prepay Loans;
(vi) alter the terms of Section 11.09 hereof or of
this Section 12.04;
(vii) amend the definition of the term "Majority
Lenders", "Majority Revolving Credit Lenders", "Majority
Tranche A Lenders", "Majority Tranche B Lenders" or "Majority
Tranche C Lenders" or modify in any other manner the number or
percentage of the Lenders (or Class of Lenders) required to
make any determinations or waive any rights hereunder or to
modify any provision hereof;
(viii) alter the manner in which payments or
prepayments of principal, interest or other amounts hereunder
shall be applied as between the Lenders or Types or Classes of
Loans; or
(ix) waive any of the conditions precedent set forth
in Section 7.01 hereof;
(b) no amendment, modification or waiver shall, unless by an
instrument signed by all of the Revolving Credit Lenders or by the
Agent acting with the consent of all of the Revolving Credit Lenders
waive any condition precedent set forth in Section 7.02 hereof to the
making of any Revolving Credit Loan or the issuance of any Letter of
Credit;
(c) no amendment, modification or waiver shall, unless by an
instrument signed by all of the Tranche A Lenders or by the Agent
acting with the consent of all of the Tranche A Lenders waive any
condition precedent set forth in Section 7.02 hereof to the making of
any Tranche A Term Loan;
(d) no amendment, modification or waiver shall, unless by an
instrument signed by all of the Tranche B Lenders or by the Agent
acting with the consent of all of the Tranche B Lenders waive any
condition precedent set forth in Section 7.02 hereof to the making of
any Tranche B Term Loan;
(e) no amendment, modification or waiver shall, unless by an
instrument signed by all of the Tranche C Lenders or by the Agent
acting with the consent of all of the Tranche C Lenders waive any
condition precedent set forth in Section 7.02 hereof to the making of
any Tranche C Term Loan;
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(f) any amendment modifying Section 11 hereof, or which
affects the rights or obligations of the Agent hereunder, shall require
the consent of the Agent;
(g) any modification or supplement to this Agreement that
affects the rights, remedies or obligations of the Issuing Bank in its
capacity as issuer of the Letter of Credit shall require the consent of
the Issuing Bank; and
(h) any modification or supplement of Section 6 hereof shall
require the consent of each Subsidiary Guarantor and, if such
modification or supplement expressly releases any Subsidiary Guarantor
from its liability thereunder, the consent of each Lender.
In furtherance of clauses (b), (c), (d) and (e) of this
Section 12.04, no amendment to or waiver of any representation or warranty or
any covenant contained in this Agreement or any other Basic Document, or of any
Event of Default, shall be deemed to be effective for purposes of determining
whether the conditions precedent set forth in Section 7.02 hereof to the making
of any Loan of any Class have been satisfied unless the Majority Revolving
Credit Lenders, the Majority Tranche A Lenders, the Majority Tranche B Lenders
or the Majority Tranche C Lenders (as the case may be) shall have consented to
such amendment or waiver.
Anything in this Agreement to the contrary notwithstanding,
if:
(x) at a time when the conditions precedent set forth in
Section 7 hereof to a Loan of any Class hereunder are, in the opinion
of the Majority Revolving Credit Lenders, the Majority Tranche A
Lenders, the Majority Tranche B Lenders or the Majority Tranche C
Lenders (as the case may be), satisfied, any Lender shall fail to
fulfill its obligations to make such Loan; or
(y) any Revolving Credit Lender shall fail to pay to the Agent
for the account of the Issuing Bank the amount of such Revolving Credit
Lender's Revolving Credit Commitment Percentage of any payment under a
Letter of Credit pursuant to Section 2.10(e) hereof;
then, for so long as such failure shall continue, such Lender shall (unless the
Majority Lenders, the Majority Revolving Credit Lenders, the Majority Tranche A
Lenders, the Majority Tranche B Lenders or the Majority Tranche C Lenders (as
the case may be), determined as if such Lender were not a "Lender" hereunder,
shall otherwise consent in writing) be deemed for all purposes relating
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to amendments, modifications, waivers or consents under this Agreement or any of
the other Basic Documents (including, without limitation, under this Section
12.04 and under Section 11.09 hereof) to have no Loans, Letter of Credit
Liabilities or Commitments, shall not be treated as a "Lender" hereunder when
performing the computation of the Majority Lenders, the Majority Revolving
Credit Lenders, the Majority Tranche A Lenders, the Majority Tranche B Lenders
or the Majority Tranche C Lenders (as the case may be), and shall have no rights
under the preceding paragraph of this Section 12.04; provided that any action
taken by the other Lenders with respect to the matters referred to in clause (a)
of the preceding paragraph shall not be effective as against such Lender.
12.05 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
12.06 Assignments and Participations.
(a) No Obligor may assign its rights or obligations hereunder
or under the Notes without the prior consent of all of the Lenders and the
Agent.
(b) Each Lender may assign any of its Loans, its Notes, its
Letter of Credit Interest and its Commitments without the consent of the
Borrower or the Agent; provided that:
(i) any such partial assignment shall be in an amount at least
equal to $5,000,000 (which, in the case of simultaneous assignments by
any of Chase and the Managing Agents, shall be the minimum amount of
the sum of such assignments);
(ii) each such assignment by a Revolving Credit Lender of its
Revolving Credit Loans, Revolving Credit Note, Revolving Credit
Commitment or Letter of Credit Interest shall be made in such manner so
that the same portion of its Revolving Credit Loans, Revolving Credit
Note, Revolving Credit Commitment and Letter of Credit Interest is
assigned to the respective assignee and shall require the prior consent
of the Issuing Bank;
(iii) each such assignment by a Tranche C Lender of its
Tranche C Term Loans, Tranche C Term Loan Note or Tranche C Term Loan
Commitment shall be made in such manner so that the same portion of its
Tranche C Term Loans, Tranche C Term Loan Note or Tranche C Term Loan
Commitment is assigned to the respective assignee; and
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(iv) each such assignment shall be effected pursuant to an
Assignment and Acceptance in substantially the form of Exhibit I hereto
and the assignor and assignee shall deliver to the Borrower, the Agent
and (if the assignment is of Revolving Credit Commitments and Letter of
Credit Interest) the Issuing Bank a fully executed copy thereof.
Upon execution and delivery by the assignor and the assignee to the Borrower,
the Agent and (if applicable) the Issuing Bank of such Assignment and Acceptance
and upon consent thereto by the Issuing Bank to the extent required above, the
assignee shall have, to the extent of such assignment (unless otherwise provided
in such assignment with the consent of the Borrower and the Agent), the
obligations, rights and benefits of a Lender hereunder holding the
Commitment(s), Letter of Credit Interest and Loans (or portions thereof)
assigned to it (in addition to the Commitment(s), Letter of Credit Interest and
Loans, if any, theretofore held by such assignee) and the assigning Lender
shall, to the extent of such assignment, be released from the Commitment(s) (or
portion(s) thereof) so assigned. Upon each such assignment the assigning Lender
shall pay the Agent an assignment fee of $3,000.
(c) A Lender may sell or agree to sell to one or more other
Persons a participation in all or any part of any Loans held by it, or in its
Commitment(s) or Letter of Credit Interests in which event each purchaser of a
participation (a "Participant") shall be entitled to the rights and benefits of
the provisions of Section 9.01(k) hereof with respect to its participation in
such Loans, Commitment(s) and Letter of Credit Interests as if (and the Borrower
shall be directly obligated to such Participant under such provisions as if)
such Participant were a "Lender" for purposes of said Section, but, except as
otherwise provided in Section 4.07(c) hereof, shall not have any other rights or
benefits under this Agreement or any Note or any other Basic Document (the
Participant's rights against such Lender in respect of such participation to be
those set forth in the agreements executed by such Lender in favor of the
Participant). All amounts payable by the Borrower to any Lender under Section 5
hereof in respect of Loans held by it, its Commitment and its Letter of Credit
Interests shall be determined as if such Lender had not sold or agreed to sell
any participations in such Loans, Commitment and Letter of Credit Interests and
as if such Lender were funding each of such Loan, Commitment and Letter of
Credit Interests in the same way that it is funding the portion of such Loan,
Commitment and Letter of Credit Interests in which no participations have been
sold. In no event shall a Lender that sells a participation agree with the
Participant to take or refrain from taking any action hereunder or under any
other Basic Document except that such Lender may
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agree with the Participant that it will not, without the consent of the
Participant, agree to (i) increase or extend the term, or extend the time or
waive any requirement for the reduction or termination, of such Lender's related
Commitment, (ii) extend the date fixed for the payment of principal of or
interest on the related Loan or Loans, Reimbursements Obligations or any portion
of any fee hereunder payable to the Participant, (iii) reduce the amount of any
such payment of principal, (iv) reduce the rate at which interest is payable
thereon, or any fee hereunder payable to the Participant, to a level below the
rate at which the Participant is entitled to receive such interest or fee, (v)
alter the rights or obligations of the Borrower to prepay the related Loans, or
(vi) consent to any modification, supplement or waiver hereof or of any of the
other Basic Documents to the extent that the same, under Section 11.10 hereof,
requires the consent of each Lender.
(d) In addition to the assignments and participations
permitted under the foregoing provisions of this Section 12.06, any Lender may
(without notice to the Borrower, the Agent or any other Lender and without
payment of any fee) (i) assign and pledge all or any portion of its Loans and
its Note(s) to any Federal Reserve Bank as collateral security pursuant to
Regulation A and any Operating Circular issued by such Federal Reserve Bank and
(ii) assign all or any portion of its rights under this Agreement and its Loans
and its Note(s) to an affiliate. No such assignment shall release the assigning
Lender from its obligations hereunder.
(e) A Lender may furnish any information concerning the
Borrower or any of its Subsidiaries in the possession of such Lender from time
to time to assignees and participants (including prospective assignees and
participants).
(f) Anything in this Section 12.06 to the contrary
notwithstanding, no Lender may assign or participate any interest in any Loan or
Reimbursement Obligation held by it hereunder to the Borrower or any of its
Affiliates or Subsidiaries without the prior consent of each Lender.
(g) At the request of any Lender that is not a U.S. Person and
is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code, the
Borrower shall maintain, or cause to be maintained, a register (the "Register")
that, at the request of the Borrower, shall be kept by the Agent on behalf of
the Borrower at no charge to the Borrower at the address to which notices to the
Agent are to be sent hereunder, on which it enters the name of such Lender as
the registered owner of each Registered Loan held by such Lender. A Registered
Loan (and the Registered Note, if any, evidencing the same) may be assigned or
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otherwise transferred in whole or in part only by registration of such
assignment or transfer on the Register (and each Registered Note shall expressly
so provide). Any assignment or transfer of all or part of such Loan (and the
Registered Note, if any, evidencing the same) may be effected by registration of
such assignment or transfer on the Register, together with the surrender of the
Registered Note, if any, evidencing the same duly endorsed by (or accompanied by
a written instrument of assignment or transfer duly executed by) the holder of
such Registered Note, whereupon, at the request of the designated assignee(s) or
transferee(s), one or more new Registered Notes in the same aggregate principal
amount shall be issued to the designated assignee(s) or transferee(s). Prior to
the registration of assignment or transfer of any Registered Loan (and the
Registered Note, if any, evidencing the same), the Borrower shall treat the
Person in whose name such Loan (and the Registered Note, if any, evidencing the
same) is registered as the owner thereof for the purpose of receiving all
payments thereon and for all other purposes, notwithstanding notice to the
contrary.
(h) The Register shall be available for inspection by the
Borrower and any Lender that is a Registered Holder at any reasonable time upon
reasonable prior notice.
12.07 Survival. The obligations of the Borrower under Sections
2.10(g), 2.10(l), 5.01, 5.05, 5.06, 5.07, 12.03 and 12.13 hereof, the
obligations of each Subsidiary Guarantor under Section 6.03 hereof and the
obligations of the Lenders under Section 11.05 hereof shall survive the
repayment of the Loans and Reimbursement Obligations and the termination of the
Commitments and, in the case of any Lender that may assign any interest in its
Commitments, Loans or Letter of Credit Interest hereunder, shall survive the
making of such assignment, notwithstanding that such assigning Lender may cease
to be a "Lender" hereunder. In addition, each representation and warranty made,
or deemed to be made by a notice of any extension of credit, herein or pursuant
hereto shall survive the making of such representation and warranty, and no
Lender shall be deemed to have waived, by reason of making any extension of
credit hereunder, any Default which may arise by reason of such representation
or warranty proving to have been false or misleading, notwithstanding that such
Lender or the Agent may have had notice or knowledge or reason to believe that
such representation or warranty was false or misleading at the time such
extension of credit was made.
12.08 Captions. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.
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12.09 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
12.10 Governing Law; Submission to Jurisdiction. This
Agreement and the Notes shall be governed by, and construed in accordance with,
the law of the State of New York. Each Obligor hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York state court sitting in New York City
for the purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. Each Obligor irrevocably
waives, to the fullest extent permitted by law, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum.
12.11 Waiver of Jury Trial. EACH OF THE OBLIGORS, THE AGENT
AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
12.12 Treatment of Certain Information. The Borrower
acknowledges that (a) services may be offered or provided to it (in connection
with this Agreement or otherwise) by each Lender or by one or more subsidiaries
or affiliates of such Lender and (b) information delivered to each Lender by the
Borrower and its Subsidiaries may be provided to each such subsidiary and
affiliate.
12.13 Cure of Defaults by Agent or Lenders. Notwithstanding
anything contained herein to the contrary, the Agent or any Lender may in its
sole discretion, but shall not be obligated to, (a) cure any monetary default
under any Program Services Agreement or (b) cure, by monetary payment or by
performance, any default under any lease or option agreement to which the
Borrower or any Subsidiary is a party. In each case referred to in the foregoing
clauses (a) and (b), the Borrower shall reimburse the Agent or such Lender for
any such payment, and shall indemnify the Agent or such Lender for any and all
costs and expenses (including, without limitation, the fees and expenses of
counsel) incurred by the Agent or such Lender in connection with any such
performance, in each case with interest, at the Base Rate plus the Applicable
Margin, payable from the date of such payment or performance by the Agent or
such Lender
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to the date of reimbursement by the Borrower. Without limiting the generality of
the foregoing, the Agent or any Lender may in its sole discretion, but shall not
be obligated to, cure, by monetary payment or by performance, any default as
permitted by any Consent and Agreement and the Borrower shall reimburse the
Agent or such Lender for any such payment, and shall indemnify the Agent or such
Lender for any and all costs and expenses (including, without limitation, the
fees and expenses of counsel) incurred by the Agent or such Lender in connection
with any such performance, in each case with interest, at the Base Rate plus the
Applicable Margin, payable from the date of such payment or performance by the
Agent or such Lender to the date of reimbursement by the Borrower.
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<PAGE>
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
SINCLAIR BROADCAST GROUP, INC.
By /s/ David B. Amy
---------------------------------
Name: David B. Amy
Title: Chief Financial Officer
Address for Notices:
Sinclair Broadcast Group, Inc.
2000 West 41st Street
Baltimore, MD 21211
Telecopier No.: (410) 467-5043
Telephone No.: (410) 467-5005
Attention: David D. Smith
with a copy to:
Thomas & Libowitz, P.A.
100 Light Street
Baltimore, MD 21202
Telephone No.: (410) 752-2468
Telecopier No.: (410) 752-2046
Attention: Steven Thomas
Credit Agreement
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SUBSIDIARY GUARANTORS
CHESAPEAKE TELEVISION, INC.
KABB, INC.
KDNL, INC.
KDSM, INC.
KSMO, INC.
SCI - INDIANA, INC.
SCI - SACRAMENTO, INC.
SINCLAIR COMMUNICATIONS, INC.
SINCLAIR RADIO OF ALBUQUERQUE, INC.
SINCLAIR RADIO OF BUFFALO, INC.
SINCLAIR RADIO OF GREENVILLE, INC.
SINCLAIR RADIO OF LOS ANGELES, INC
SINCLAIR RADIO OF MEMPHIS, INC.
SINCLAIR RADIO OF NASHVILLE, INC.
SINCLAIR RADIO OF NEW ORLEANS, INC.
SINCLAIR RADIO OF ST. LOUIS, INC.
SUBSIDIARY GUARANTORS WILKES-BARRE, INC.
TUSCALOOSA BROADCASTING, INC.
WCGV, INC
WDBB, INC.
WLFL, INC.
WLOS, INC.
WPGH, INC.
WPGH LICENSEE, INC.
WSMH, INC.
WSTR, INC.
WSTR LICENSEE, INC.
WTTE, CHANNEL 28, INC.
WTTE, CHANNEL 28 LICENSEE, INC.
WTTO, INC.
WTVZ, INC.
WTVZ LICENSEE, INC.
WYZZ, INC.
SUPERIOR COMMUNICATIONS OF
OKLAHOMA, INC.
By /s/ David B.Amy
---------------------------------
Name: David B. Amy
Title: Secretary/Treasurer
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Credit Agreement
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Credit Agreement
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SUBSIDIARY GUARANTORS
---------------------
CHESAPEAKE TELEVISION
LICENSEE, INC
FSF TV, INC.
KABB LICENSEE, INC.
KDNL LICENSEE, INC.
KDSM LICENSEE, INC.
KSMO LICENSEE, INC.
SCI - INDIANA LICENSEE, INC.
SCI - SACRAMENTO LICENSEE, INC.
SINCLAIR RADIO OF ALBUQUERQUE
LICENSEE, INC.
SINCLAIR RADIO OF BUFFALO
LICENSEE, INC.
SINCLAIR RADIO OF GREENVILLE
LICENSEE, INC.
SINCLAIR RADIO OF LOS ANGELES
LICENSEE, INC.
SINCLAIR RADIO OF MEMPHIS
LICENSEE, INC.
SINCLAIR RADIO OF NASHVILLE
LICENSEE, INC.
SINCLAIR RADIO OF NEW ORLEANS
LICENSEE, INC.
SINCLAIR RADIO OF ST. LOUIS
LICENSEE, INC.
SINCLAIR RADIO OF WILKES-BARRE
LICENSEE, INC.
SUPERIOR COMMUNICATIONS GROUP, INC.
SUPERIOR COMMUNICATIONS OF
KENTUCKY, INC.
SUPERIOR KY LICENSE CORP.
SUPERIOR OK LICENSE CORP.
WCGV LICENSEE, INC.
WLFL LICENSEE, INC.
WLOS LICENSEE, INC.
WSMH LICENSEE, INC.
WTTO LICENSEE, INC.
WYZZ LICENSEE, INC.
By /s/ J. Duncan Smith
-----------------------------------
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<PAGE>
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Name: J. Duncan Smith
Title: Secretary
Credit Agreement
----------------
Credit Agreement
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THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Agent
By /s/ Tracey A. Navin
----------------------------------
Name: Tracey A. Navin
Title: Vice President
Address-for Notices to
Chase as Agent:
The Chase Manhattan Bank
(National Association)
c/o Chemical Bank
Agent Bank Services
140 East 45th Street, 29th Floor
New York, NY 10017
Telecopier No.: (212) 622-0122
Telephone No.: (212) 622-0004
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION)
By /s/ Tracey A. Navin
----------------------------------
Name: Tracey A. Navin
Title: Vice President
Lending Office for All Loans:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, NY 10081
Address for Notices:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, NY 10081
Telecopier No.: (212) 552-0259/4905
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Telephone No.: (212) 552-5953
Attention: Tracey A. Navin
Credit Agreement
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LEHMAN COMMERCIAL PAPER INC.
By /s/ Dennis J. Dee
----------------------------------
Name: Dennis J. Dee
Title: Authorized Signatory
Lending office for all Loans:
Lehman Commercial Paper Inc.
c/o Bankers Trust Company
Corporate Trust & Agency Group
4 Albany Street, 10th Floor
New York, NY 10006
Attention: Chris Pohl
with a copy to:
Lehman Commercial Paper Inc.
101 Hudson Street, 30th Floor
Jersey City, NJ 07302
Telecopier No.: (201) 524-5847
Telephone No.: (201) 524-4518
Attention: Tom Wilson
Address for Notices:
Lehman Commercial Paper Inc.
c/o Bankers Trust Company
Corporate Trust & Agency Group
4 Albany Street, 10th Floor
New York, NY 10006
Attention: Chris Pohl
with a copy to:
Lehman Commercial Paper Inc.
101 Hudson Street, 30th Floor
Jersey City, NJ 07302
Telecopier No.: (201) 524-5847
Telephone No.: (201) 524-4518
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Attention: Tom Wilson
Lehman Commercial Paper Inc.
3 World Financial Center, 10th Floor
New York, NY 10285
Telecopier No.: (212) 528-0819
Telephone No.: (212) 526-0330
Attention: Michelle Swanson
Credit Agreement
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FIRST HAWAIIAN BANK
By /s/ Donald C. Young
----------------------------------
Name: Donald C. Young
Title: Assistant Vice President
Lending Office for all Loans:
First Hawaiian Bank
1132 Bishop Street
19th Floor
Honolulu, HI 96813
Attention: Donald C. Young
Address for Notices:
First Hawaiian Bank
1132 Bishop Street
19th Floor
Honolulu, HI 96813
Telecopier No.: (808) 525-8973/ 6372
Telephone No.: (808) 525-8100
Attention: Brenda Deakins
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SOUTHERN PACIFIC THRIFT & LOAN
ASSOCIATION
By /s/ Charles D. Martorano
----------------------------------
Name: Charles D. Martorano
Title: Senior Vice President
Lending Office for all Loans:
Southern Pacific Thrift &
Loan Association
12300 Wilshire Boulevard
Los Angeles, CA 90025
Attention: Chris Kelleher/Charles Martorana
Address for Notices:
Southern Pacific Thrift &
Loan Association
12300 Wilshire Boulevard
Los Angeles, CA 90025
Telecopier No.: (310) 207-4067
Telephone No.: (310) 442-3315
Attention: Chris Kelleher/Charles Martorana
Credit Agreement
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FIRST UNION NATIONAL BANK OF NORTH
CAROLINA
By /s/ Jim F. Redman
----------------------------------
Name: Jim F. Redman
Title: Senior Vice President
Lending Office for all Loans:
First Union National Bank of
North Carolina
301 S. College Street, TW-19
Charlotte, NC 28288-0735
Attention: Hilda Weathers
Address for Notices:
First Union National Bankof
North Carolina
301 S. College Street, TW-19
Charlotte, NC 28288-0735
Telecopier No.: (704) 374-4092
Telephone No.: (704) 374-4897
Attention: Hilda Weathers
Credit Agreement
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CORESTATES BANK, N.A.
By /s/ Edward L. Kittrell
----------------------------------
Name: Edward L. Kittrell
Title: Vice President
Lending Office for all Loans:
Corestates Bank, N.A.
1339 Chestnut Street, FC 1-8-11-28
Philadelphia, PA 19101
Attention: Diane Quinn
Address for Notices:
Corestates Bank, N.A.
1339 Chestnut Street
FC 1-8-11-28
Philadelphia, PA 19101
Telecopier No.: (215) 786-7721
Telephone No.: (215) 786-4343
Attention: Diane Ouinn
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BARCLAYS BANK plc
By /s/ Craig J. Lewis
----------------------------------
Name: Craig J. Lewis
Title: Associate Director
Lending Office for all Loans:
Barclays Bank
222 Broadway
12th Floor
New York, NY 10038
Attention: Christina Challenger
Address for Notices:
Barclays Bank
222 Broadway
12th Floor
New York, NY 10038
Telecopier No.: (212) 412-1098/1099
Telephone No.: (212) 412-1193
Attention: Christina Challenger
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THE SAKURA BANK, LTD.-
By /s/ Masahiro Nakajo
----------------------------------
Name: Masahiro Nakajo
Title: Senior Vice President & Manager
Lending Office for all Loans:
The Sakura Bank, Ltd.
277 Park Avenue
New York, NY 10172
Attention: Loan Administration Dept.
Address for Notices:
The Sakura Bank, Ltd.
277 Park Avenue
New York, NY 10172
Telecopier No.: (212) 644-9565/ 754-6690
Telephone No.: (212) 756-6788
Attention: Loan Administration Dept.
Credit Agreement
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DRESDNER BANK AG NEW YORK &
GRAND CAYMAN BRANCHES
By /s/ Brian E. Haughney
----------------------------------
Name: Brian E. Haughney
Title: Assistant Treasurer
By /s/ William E. Lambert
----------------------------------
Name: William E. Lambert
Title: Assistant Vice President
Lending Office for Base Rate Loans:
Dresdner Bank AG
75 Wall Street
New York, NY 10005-2889
Lending Office for Eurodollar Loans:
Dresdner Bank AG
Grand Cayman Branch
75 Wall Street
New York, NY 10005-2889
Address for Notices:
Dresdner Bank
75 Wall Street
New York, NY 10005-2889
Telecopier No.: (212) 429-2130
Telephone No.: (212) 429-2288
Attention: Laura Lam
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MELLON BANK, N.A.
By /s/ John T. Kranefuss
----------------------------------
Name: John T. Kranefuss
Title: Assistant Vice President
Lending Office for all Loans:
Mellon Bank, N.A.
Room 2306, 3MBC
Pittsburgh, PA 15259
Address for Notices:
Mellon Bank, N.A.
Room 2306, 3MBC
Pittsburgh, PA 15259
Telecopier No.: (412) 236-2027/2028
Telephone No.: (412) 236-4749
Attention: Carol Pitrelli
Credit Agreement
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THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Michael P. King
----------------------------------
Name: Michael P. King
Title: Corporate Banking Officer
Lending Office for all Loans:
The First National Bank of Chicago
1 First National Plaza
10th Floor
Suite 0634
Chicago, IL 60670
Address for Notices:
The First National Bank of Chicago
1 First National Plaza
10th Floor
Suite 0634
Chicago, IL 60670
Telecopier No.: (312) 732-4840/7091
Telephone No.: (312) 732-4794
Attention: Ron Cromey
Credit Agreement
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THE FIRST NATIONAL BANK OF MARYLAND
By /s/ W. Blake Hampson
----------------------------------
Name: W. Blake Hampson
Title: Vice President
Lending Office for all Loans:
The First National Bank of Maryland
Communications Banking Division
Mail Code 101-511
25 South Charles Street
Baltimore, MD 21203
Attention: Barbara Bennett
Communications Banking Specialist
Address for Notices:
The First National Bank of Maryland
Communications Banking Division
Mail Code 101-511
25 South Charles Street
Baltimore, MD 21203
Telecopier No.: (410) 244-4746
Telephone No.: (410) 244-4930
Attention: Mark L. Cook
Senior Vice President
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BANQUE NATIONALE DE PARIS
By /s/ Serge Desrayaud
----------------------------------
Name: Serge Desrayaud
Title: Vice President/Team Leader
By /s/ Pamela Lucash
----------------------------------
Name: Pamela Lucash
Title: Assistant Treasurer
Lending Office for all Loans:
Banque Nationale de Paris
499 Park Avenue
New York, NY 10022-1078
Attention: Julie Requena
Address for Notices:
Banque Nationale de Paris
499 Park Avenue
New York, NY 10022-1078
Telecopier No.: 212-418-8269/415-9805
Telephone No.: 212-415-9655
Attention: Julie Requena
Credit Agreement
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THE SANWA BANK LTD.
By /s/ Christian Kambour
----------------------------------
Name: Christian Kambour
Title: Assistant Vice President
Lending Office for all Loans:
The Sanwa Bank Ltd.
55 East 52nd Street
New York, NY 10055
Attention: Renko Hara
Loan Administration
Credit Contract:
Christian Kambour
The Sanwa Bank Ltd.
55 East 52nd Street
New York, NY 10055
Phone: (212) 339-6232
Fax: (212) 754-1304
Administrative Contact:
Renko Hara
Loan Administration
The Sanwa Bank Ltd.
55 East 52nd Street
New York, NY 10055
Phone: (212) 339-6390
Fax: (212) 754-2368
Credit Agreement
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PNC BANK, NATIONAL ASSOCIATION
By /s/ Christopher Chaplin
----------------------------------
Name: Christopher Chaplin
Title: Banking Officer
Lending Office for all Loans:
PNC Bank, N.A.
Communications Banking Divisions
MS F5-F012-09-1
Land Title Building
100 South Broad Street
Philadelphia, PA 19110
Attention: Jeffrey Hauser
Vice President
Address for Notices:
PNC Bank, N.A.
Communications Banking Division/
MS F5-F012-09-l
Land Title Building
100 South Broad Street
Philadelphia, PA 19110
Telecopier No.: (215) 585-6680
Telephone No.: (215) 585-6468
Attention: Jeffrey Hauser
Vice President
Credit Agreement
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COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENNE
By /s/ Brian O'Learv
----------------------------------
Name: Brian O'Leary
Title: Vice President
By /s/ Dora DeBlasi-Hyduk
----------------------------------
Name: Dora DeBlasi-Hyduk
Title: Vice President
Lending Office for all Loans:
Compagnie Financiere de CIC et de
l'Union Europeenne
520 Madison Avenue
37th Floor
New York, NY 10022
Attention: Louvenia Davis
Address for Notices:
Compagnie Financiere de CIC et de
1'Union Europeenne
520 Madison Avenue
37th Floor
New York, NY 10022
Telecopier No.: (212) 715-4535/4477
Telephone No.: (212) 715-4681
Attention: Louvenia Davis
Credit Agreement
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MERCANTILE BANK OF ST. LOUIS,
NATIONAL ASSOCIATION
By /s/ Gregory D. Knudsen
----------------------------------
Name: Gregory D. Knudsen
Title: Vice President
Lending Office for all Loans:
Mercantile Bank of St. Louis,
National Association
7th and Washington, 12-3
St. Louis, MO 63101
Attention: Tonja Sadl
Eloise Engman
Address for Notices:
Mercantile Bank of St. Louis,
National Association
7th and Washington, 12-3
St. Louis, MO 63101
Telecopier No.: (314) 425-8292/2162
Telephone No.: (314) 425-2014
Attention: Tonja Sadl
Eloise Engman
Credit Agreement
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MICHIGAN NATIONAL BANK
By /s/ Stephane E. Lubin
----------------------------------
Name: Stephane E. Lubin
Title: Vice President
Lending Office for all Loans:
Michigan National Bank
27777 Inkster Road
Farmington Hills, MI 48334
Address for Notices:
Michigan National Bank
27777 Inkster Road
Farmington Hills, MI 48334
Telecopier No.: (810) 473-4345
Telephone No.: (810) 473-4380
Attention: Stephane E. Lubin
Credit Agreement
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THE NIPPON CREDIT BANK, LTD.
By /s/ David C. Carrington
---------------------------
Name: David C. Carrington
Title: Vice President and Manager
Lending Office for all Loans:
The Nippon Credit Bank, Ltd.
245 Park Avenue, 30th Floor
New York, NY 10167
Address for Notices:
The Nippon Credit Bank, Ltd.
245 Park Avenue, 30th Floor
New York, NY 10067
Telecopier No.: (212) 697-8034/490-3895
Telephone No.: (212) 984-1338
Attention: David Carrington
Credit Agreement
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COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND," NEW YORK BRANCH
By /s/ Dana W. Hemenway
--------------------
Name: Dana W. Hemenway
Title: Vice President
By /s/ W. Jeffrey Vollack
-----------------------
Name: W. Jeffrey Vollack
Title: Vice President, Manager
Lending Office for all Loans:
Rabobank Nederland, New York Branch
245 Park Avenue
New York, NY 10067
Address for Notices:
Rabobank Nederland, New York Branch
245 Park Avenue
New York, NY 10067
Telecopier No.: (212) 916-7830
Telephone No.: (212) 916-7845
Attention: Debra Rivers/ Madeline Ricci
Corporate Services Dept.
with a copy to:
Rabobank Nederland
300 South Wacker Drive
Suite 3500
Chicago, IL 60606
Telecopier No.: (312) 408-8240
Telephone No.: (312) 408-8248
Attention: Douglas W. Zylstra
Credit Agreement
<PAGE>
- 189 -
THE ROYAL BANK OF SCOTLAND plc
By /s/ Grant F. Stoddart
----------------------
Name: Grant F. Stoddart
Title: Senior Vice President & Manager
Lending Office for all Loans:
The Royal Bank of Scotland plc
Wall Street Plaza 88 Pine Street
26th Floor
New York, NY 10005
Attention: Karen Stefancic
Address for Notices:
The Royal Bank of Scotland plc
Wall Street Plaza
88 Pine Street
26th Floor
New York, NY 10005
Telecopier No.: (212) 480-0791/269-8929
Telephone No.: (212) 269-3390
Attention: Helaine Griffin
Credit Agreement
<PAGE>
- 190 -
SOCIETY NATIONAL BANK
By /s/ Jason R. Weaver
-------------------
Name: Jason R. Weaver
Title: Assistant Vice President
Lending Office for all Loans:
Society National Bank
127 Public Square
Mail Code OH-01-27-0602
Cleveland, OH
Attention: Janice Darden
Address for Notices:
Society National Bank
127 Public Square
Mail Code OH-01-27-0602
Cleveland, OH
Telecopier No.: (216) 689-4666
Telephone No.: (216)689-4460
Attention: Janice Darden
Credit Agreement
<PAGE>
- 191 -
BANKERS TRUST COMPANY
By /s/ Christopher Kinslow
------------------------
Name: Christopher Kinslow
Title: Vice President
Lending Office for all Loans:
Bankers Trust Company
130 Liberty Street
New York, NY 10006
Attention: Robert Telesca
Address for Notices:
Bankers Trust Company
130 Liberty Street
New York, NY 10006
Telecopier No.: (212) 250-7351/ 6029
Telephone No.: (212) 250-7342
Attention: Robert Telesca
Credit Agreement
<PAGE>
- 192 -
FLEET NATIONAL BANK
By /s/ Lynne S. Randall
--------------------
Name: Lynne S. Randall
Title: Vice President
Lending Office for all Loans:
Fleet National Bank
111 Westminster Street
Providence, RI 02903
Attention: Denise Berard
Address for Notices:
Fleet National Bank
56 East 42nd Stree
New York, NY 10017
Telecopier No.: (212) 907-5610
Telephone No.: (212) 907-5207
Attention: Lynne Randall
Credit Agreement
<PAGE>
- 193 -
HIBERNIA NATIONAL BANK
By /s/ Troy J. Vil1afarra
----------------------
Name: Troy J. Villafarra
Title: Vice President
Lending Office for all Loans:
Hibernia National Bank
313 Carondelet Street
New Orleans, LA 70130
Attention: Troy J. Villafarra
Address for Notices:
Hibernia National Bank
313 Caronde1et Street
New Or1eans, LA 70130
Telecopier No.: (504) 533-5344
Telephone No.: (504) 533-2738
Attention: Troy J. Villafarra
Credit Agreement
<PAGE>
- 194 -
LTCB TRUST COMPANY
By /s/ John A. Krob
-----------------
Name: John A. Krob
Title: Senior Vice President
Lending Office for all Loans:
LTCB Trust Company
165 Broadway
49th Floor
New York, NY 10006
Attention: Winston Brown
Address for Notices:
LTCB Trust Company
165 Broadway
49th F1oor
New York, NY 10006
Telecopier No.: (212) 608-3081
Telephone No.: (212) 335-4854
Attention: Winston Brown
Credit Agreement
<PAGE>
- 195 -
THE TORONTO-DOMINION BANK
By /s/ Debbie A. Greene
--------------------
Name: Debbie A. Greene
Title: Vice President
Lending Office for all Loans:
Toronto Dominion (New York), Inc.
909 Fannin Street
17th F1oor
Houston, TX 77010
Telecopier No.: (713) 951-9921
Telephone No.: (713) 653-8245
Attention: Debbie Greene
Address for Notices:
The Toronto-Dominion Bank
31 West 52nd Street
New York, NY 10019-6101
Telecopier No.: (212) 262-1928
Telephone No.: (212) 468-0716
Attention: Paul Stamoulis
Credit Agreement
<PAGE>
- 196 -
THE FUJI BANK, LTD., NEW YORK BRANCH
By /s/ Teiji Teramoto
-------------------
Name: Teiji Teramoto
Title: Vice President & Manager
Lending Office for all Loans:
The Fuji Bank, Ltd.
New York Branch
Two World Trade Center
79th Floor
New York, NY 10048
Attention: Kathleen Barsotti
Telecopier No.: (212) 912-0516
Telephone No.: (212) 898-2065
Address for Notices:
The Fuji Bank, Ltd.
New York Branch
Two World Trade Center
79th Floor
New York, NY 10048
Telecopier No.: (212) 912-0516
Telephone No.: (212) 898-2088
Attention: Joseph D'Virgilio
Credit Agreement
<PAGE>
- 197 -
THE FIRST NATIONAL BANK OF BOSTON
By /s/ Lisa C. Gallagher
--------------------
Name: Lisa C. Gallagher
Title: Managing Director
Lending Office for all Loans:
The First National Bank of Boston
100 Federal Street
MS 01-08-08
Boston, MA 02110
Attention: Lisa C. Gallagher
Telecopier No.: (617) 434-3401
Telephone No.: (617) 434-7156
Address for Notices:
The First National Bank of Boston
100 Federal Street
MS 01-08-08
Boston, MA 02110
Telecopier No.: (617) 434-9820
Telephone No.: (617) 434-9725
Attention: Angie Karayiannis
Credit Agreement
<PAGE>
- 198 -
THE BANK OF NEW YORK
By /s/ Benjamin Todres
-------------------
Name: Benjamin Todres
Title: Vice President
Lending Office for all Loans:
The Bank of New York
One Wall Street
New York, NY 10286
Attention: Edward F. Ryan, Jr.
Senior Vice President
Address for Notices:
The Bank of New York
One Wall Street
New York, NY 10286
Telecopier No.: (212) 635-8593/ 8595
Telephone No.: (212) 635-8608
Attention: Edward F. Ryan, Jr.
Senior Vice President
Credit Agreement
<PAGE>
- 199 -
BANK OF IRELAND GRAND CAYMAN
By /s/ Roger M. Burns
-------------------
Name: Roger M. Burns
Title: Vice President
Lending Office for all Loans:
Bank of Ireland Grand Cayman
640 Fifth Avenue
New York, NY 10019
Attention: Joan Mitchell
Telecopier No.: (212) 586-7752
Telephone No.: (212) 397-1759
Address for Notices:
Bank of Ireland Grand Cayman
640 Fifth Avenue
New York, NY 10019
Telecopier No.: (212) 307-5559
Telephone No.: (212) 408-9409
Attention: Robert Powell
Credit Agreement
<PAGE>
- 200 -
UNION BANK OF CALIFORNIA, N.A.
By /s/ Christine P. Ball
---------------------
Name: Christine P. Ball
Title: Vice President
Lending Office for all Loans:
Union Bank of California, N.A.
445 South Figueroa Street
Los Angeles, CA 90071
Attention: Christine Ball
Communications/Media Division
Address for Notices:
Union Bank of California, N.A.
445 South Figueroa Street
Los Angeles, CA 90071
Telecopier No.: (213) 236-5747
Telephone No.: (213) 236-6176
Attention: Christine Ball
Communications/Media Division
Credit Agreement
<PAGE>
- 201 -
BANQUE PARIBAS
By /s/ Philippe Vaurchex
----------------------
Name: Philippe Vaurchex
Title: Vice President
By /s/ Nicole Cawley
-----------------------
Name: Nicole Cawley
Title: Vice President
Lending Office for all Loans:
Banque Paribas
787 Seventh Avenue
New York, NY 10019
Attention: John Andersen
Address for Notices:
Banque Paribas
787 Seventh Avenue
New York, NY 10019
Telecopier No.: (212) 841-2217/2146/2147/2148/2149
Telephone No.: (212) 841-2229
Attention: John Andersen
Credit Agreement
<PAGE>
- 202 -
ABN AMRO BANK N.V.
By /s/ Ann Schwalbenberg
-----------------------
Name: Ann Schwalbenberg
Title: Vice President
By /s/ John W. Smith
----------------------
Name: John W. Smith
Title: Assistant Vice President
Lending Office for all Loans:
ABN AMRO Bank N.V.
500 Park Avenue
New York, NY 10022
Attention: Ann Schwalbenberg
Address for Notices:
ABN AMRO Bank N.V.
500 Park Avenue
New York, NY 10022
Telecopier No.: (212) 446-4203
Telephone No.: (212) 446-4181
Attention: Ann Schwalbenberg
Credit Agreement
<PAGE>
- 203 -
BANK OF HAWAII
By /s/ Elizabeth O. MacLean
------------------------
Name: Elizabeth O. MacLean
Title: Vice President
Lending Office for all Loans:
Bank of Hawaii
130 Merchant Street
20th Floor
Honolulu, HI 96813
Address for Notices:
Bank of Hawaii
1839 S. Alma School Rd.
Suite 150
Mesa, AZ 85210
Telecopier No.: (602) 752-8007
Telephone No.: (212) 752-8019
Attention: Elizabeth MacLean
Credit Agreement
<PAGE>
- 204 -
BANQUE FRANCAISE DU COMMERCE EXTERIEUR
By /s/ Frederick K. Kammler
------------------------
Name: Frederick K. Kammler
Title: Vice President
By /s/ William C. Maier
--------------------
Name: William C. Maier
Title: Vice President - Group Manager
Lending Office for all Loans:
Banque Francaise du Commerce Exterieur
645 Fifth Avenue
20th Floor
New York, NY 10022
Address for Notices:
Banque Francaise du Commerce Exterieur
645 Fifth Avenue
20th Floor
New York, NY 10022
Telecopier No.: (212) 872-5045
Telephone No.: (212) 872-5041
Attention: Frederick Kammler, Vice President
Bill Maier, Group Manager
Credit Agreement
<PAGE>
- 205 -
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By /s/ Patricia Loret de Mola
--------------------------
Name: Patricia Loret de Mola
Title: Senior Vice President
Lending Office for all Loans:
The Mitsubishi Trust and Banking Corporation
520 Madison Avenue
26th F1oor
New York, NY 10022
Attention: Susan LeFevre
Address for Notices:
The Mitsubishi Trust and Banking Corporation
520 Madison Avenue
26th F1oor
New York, NY 1002
Telecopier No.: (212) 644-6825/593-4691
Telephone No.: (212) 891-8243
Attention: Susan LeFevre
Credit Agreement
<PAGE>
- 206 -
THE DAI-ICHI KANGYO BANK, LTD.
By /s/ Julie L. Zarenko
------------------------
Name: Julie L. Zarenko
Title: Credit Officer
Lending Office for all Loans:
The Dai-Ichi Kangyo Bank, Ltd.
One World Trade Center
Suite 4911
New York, NY 10048
Attention: Julie Zarenko
Address for Notices:
The Dai-Ichi Kangyo Bank, Ltd.
One World Trade Center
Suite 4911
New York, NY 10048
Telecopier No.: (212) 524-0579/(212) 912-1879
Telephone No.: (212) 432-6632
Attention: Julie Zarenko
Credit Agreement
<PAGE>
- 207 -
NATIONSBANK, N.A.
By /s/ Jennifer O. Bishop
--------------------
Name: Jennifer O. Bishop
Title: Vice President
Lending Office for all Loans:
NationsBank, N.A.
901 Main Street, 64
Dallas, TX 75202
Address for Notices:
NationsBank, N.A.
101 South Tryon
NationsBank Plaza
Charlotte, NC 28255
Telecopier No.: (704) 386-8694
Telephone No.: (704) 386-8201
Attention: Judy Dudley
Credit Agreement
<PAGE>
- 208 -
CIBC, INC.
By /s/ Lorain C. Granberg
---------------------
Name: Lorain C. Granberg
Title: Authorized Signatory
Lending Office for all Loans:
CIBC, Inc.
425 Lexington Avenue
New York, NY 10017
Address. for Notices:
CIBC, Inc.
425 Lexington Avenue
New York, NY 10017
Telecopier No.: (212) 856-3558
Telephone No.: (212) 856-3630
Attention: Lorain C. Granberg
Credit Agreement
<PAGE>
- 209 -
BANK OF AMERICA, ILLINOIS
By /s/ Carl F. Salas
----------------------------
Name: Carl F. Salas
Title: Vice President
Lending Office for all Loans:
Bank of America, Illinois
231 South LaSalle Street
Chicago, IL 60697
Address for Notices:
Bank of America, Illinois
335 Madison Avenue
New York, NY 10017
Telecopier No.: (212) 503-7173
Telephone No.: (212) 503-8425
Attention: Carl Salas
Credit Agreement
<PAGE>
- 210 -
VAN KAMPEN AMERICAN CAPITAL PRIME RATE
INCOME TRUST
By /s/ Jeffrev W. Maillet
--------------------------
Name: Jeffrey W. Maillet
Title: Senior Vice President, Portfolio Manager
Lending Office for all Loans:
Van Kampen American Capital Prime
Rate Income Trust
One Parkview Plaza
Oakbrook Terrace, IL 60181
Address for Notices:
Van Kampen American Capital Prime
Rate Income Trust
One Parkview Plaza
Oakbrook Plaza
Oakbrook Terrace, IL 60181
Telecopier No.: (708) 684-6740/6741
Telephone No.: (708) 684-6479
Attention: Brian Murphy
with a copy to:
State Street Bank & Trust
Corporate Trust Department
P.O. Box 778
Boston, MA 02102
Telecopier No.: (617) 664-5366/5367
Telephone No.: (617) 664-5481
Attention: Laura Magazu
Credit Agreement
<PAGE>
- 211 -
NEW YORK LIFE INSURANCE COMPANY
By /s/ Adam G. Clemens
----------------------
Name: Adam G. Clemens
\ Title: Investment Vice President
Lending Office for all Loans:
New York Life Insurance Company
51 Madison Avenue
New York, NY 10010
Attention: John Cibbarelli
Address for Notices:
New York Life Insurance Company
51 Madison Avenue
New York, NY 10010
Telecopier No.: (212) 447-4122
Telephone No.: (212) 576-7016
Attention: John Cibbarelli
Credit Agreement
<PAGE>
- 212 -
CHL HIGH YIELD LOAN PORTFOLIO
(A UNIT OF CHEMICAL BANK)
By /s/ Andrew D. Gordon
---------------------
Name: Andrew D. Gordon
Title: Managing Director
Lending Office for all Loans:
CHL High Yield Loan Portfolio
A Unit of Chemical Bank
380 Madison Avenue, 12th Floor
New York, NY 10017
Address for Notices:
CHL High Yield Loan Portfolio
A Unit of Chemical Bank
380 Madison Avenue, 12th Floor
New York, NY 10017
Telecopier No.: (212) 622-0122
Telephone No.: (212) 622-0621
Attention: Joe Nerich
Credit Agreement
<PAGE>
- 213 -
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By /s/ John E. Schlifske
---------------------------
Name: John E. Schlifske
Title: Vice President
Lending Office for all Loans:
The Northwestern Mutual Life
Insurance Company
720 East Wisconsin Avenue
Mi1waukee, WI 53202
Attention: Jeff Lueken
Securities Department
Address for Notices:
The Northwestern Mutual Life
Insurance Company
720 East Wisconsin Avenue
Mi1waukee, WI 53202
Telecopier No.: (414) 299-7124
Telephone No.: (414) 299-2572
Attention: Jeff Lueken
Securities Department
Credit Agreement
<PAGE>
- 214 -
PRIME INCOME TRUST
By /s/ Rafael Scolari
-------------------
Name: Rafael Scolari
Title: Vice President, Portfolio Manager
Lending Office for all Loans:
Prime Income Trust
2 World Trade Center
72nd Floor
New York, NY 10048
Address for Notices:
Prime Income Trust
2 World Trade Center
72nd F1oor
New York, NY 10048
Telecopier No.: (212) 392-5345
Telephone No.: (212) 392-5686
Attention: Rafael Scolari
Credit Agreement
<PAGE>
- 215 -
PROTECTIVE LIFE INSURANCE COMPANY
By /s/ Mark K. Okada, CFA
---------------------------
Name: Mark K. Okada, CFA
Title: Principal
Protective Asset Management Co.
Lending Office for all Loans:
Protective Life Insurance company
1150 Two Galleria Tower
13455 Noel Road, LB #45
Dallas, TX 75240
Address for Notices:
Protective Life Insurance company
1150 Two Galleria Tower
13455 Noel Road, LB #45
Dallas, TX 75240
Telecopier No.: (214) 233-4343
Telephone No.: (214) 233-4300
Attention: Mark K. Okada
Credit Agreement
<PAGE>
- 216 -
MERRILL LYNCH SENIOR FLOATING
RATE FUND, INC.
By /s/ John W. Fraser
---------------------------
Name: John W. Fraser
Title: Authorized Signatory
Lending Office for all Loans:
Merrill Lynch Asset Management
800 Scudders Mill Road, Area 2C
Plainsboro, NJ 08536
Address for Notices:
Merrill Lynch Senior Floating Rate Fund, Inc.
800 Scudders Mill Road, Area 2C
Plainsboro, NJ 08536
Telecopier No.: (609) 282-2550
Telephone No.: (609) 282-3102
Attention: Jill Montanye
with a copy to:
MLAM Accounting
500 College Road, 4E
Plainsboro, NJ 08536
Telecopier No.: (609) 282-7612
Telephone No.: (609) 282-7705
Attention: John Dugan
Bank of New York
90 Washington Street
12th Floor
New York, NY 10286
Telecopier No.: (212) 495-2935/2936/2937
Telephone No.: (212) 495-2929
Attention: Nick Ruggiero
Credit Agreement
<PAGE>
- 217 -
Credit Agreement
<PAGE>
- 218 -
SENIOR HIGH INCOME PORTFOLIO, INC.
By /s/ John W. Fraser
---------------------
Name: John W. Fraser
Title: Authorized Signatory
Lending Office for all Loans:
Merrill Lynch Asset Management
800 Scudders Mill Road, Area 2C
Plainsboro, NJ 08536
Address for Notices:
Senior High Income
Portfolio, Inc.
800 Scudders Mill Road, Area 2C
Plainsboro, NJ 08536
Telecopier No.: (609) 282-2550
Telephone No.: (609) 282-3102
Attention: Jill Montanye
with a copy to:
MLAM Accounting
500 College Road, 4E
Plainsboro, NJ 08536
Telecopier No.: (609) 282-7612
Telephone No.: (609) 282-7711
Attention: David Alu
Bank of New York
90 Washington Street
12th F1oor
New York, NY 10286
Telecopier No.: (212) 495-2935/2936/2937
Telephone No.: (212) 495-3415
Attention: Yvette Lee
Credit Agreement
<PAGE>
EXHIBIT A-1
[Form of Revolving Credit Note]
PROMISSORY NOTE
$_______________ May 31, 1996
New York, New York
FOR VALUE RECEIVED, SINCLAIR BROADCAST GROUP, INC., a Maryland
corporation (the "Borrower"), hereby promises to pay to __________________ (the
"Lender") [or registered assigns]*, for account of its respective Applicable
Lending Offices provided for by the Credit Agreement referred to below, at the
principal office of The Chase Manhattan Bank (National Association) in New York,
New York, the principal sum of _______________ Dollars (or such lesser amount as
shall equal the aggregate unpaid principal amount of the Revolving Credit Loans
made by the Lender to the Borrower under the Credit Agreement), in lawful money
of the United States of America and in immediately available funds, on the dates
and in the principal amounts provided in the Credit Agreement, and to pay
interest on the unpaid principal amount of each such Revolving Credit Loan, at
such office, in like money and funds, for the period commencing on the date of
such Revolving Credit Loan until such Revolving Credit Loan shall be paid in
full, at the rates per annum and on the dates provided in the Credit Agreement.
[This Note and the Revolving Credit Loans evidenced hereby may
be transferred in whole or in part only by registration of such transfer on the
register maintained for such purpose by or on behalf of the Borrower as provided
in Section 12.06(g) of the Credit Agreement.]
The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of each Revolving Credit Loan made by the Lender to the
Borrower, and each payment made on account of the principal thereof, shall be
recorded by the Lender on its books and, prior to any transfer of this Note,
endorsed by the Lender on the schedule attached hereto or any continuation
thereof, provided that the failure of the Lender to make any such recordation
(or any error in making any such recordation) or endorsement shall not affect
the obligations of the Borrower to make a payment when due of any amount owing
under the Credit Agreement or hereunder in respect of the Revolving Credit Loans
made by the Lender.
This Note is one of the Revolving Credit Notes referred to in
the Second Amended and Restated Credit Agreement dated as
--------------------
* Bracketed language to be inserted into Registered Notes.
Revolving Credit Note
<PAGE>
- 2 -
of May 31, 1996 (as modified and supplemented and in effect from time to time,
the "Credit Agreement") between the Borrower, the Subsidiary Guarantors party
thereto, the Lenders party thereto and The Chase Manhattan Bank (National
Association), as Agent, and evidences Revolving Credit Loans made by the Lender
thereunder. Capitalized terms used but not defined in this Note have the
respective meanings assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the
maturity of this Note upon the occurrence of certain events and for prepayments
of Loans upon the terms and conditions specified therein.
Payment of this Note is secured by certain collateral under
the Security Documents referred to in the Credit Agreement.
Except as permitted by Section 12.06(b) of the Credit
Agreement, this Note may not be assigned by the Lender to any other Person.
This Note shall be governed by, and construed in accordance
with, the law of the State of New York.
SINCLAIR BROADCAST GROUP, INC.
By_________________________
Title:
Revolving Credit Note
<PAGE>
- 3 -
SCHEDULE OF REVOLVING CREDIT LOANS
This Note evidences Revolving Credit Loans made, Continued or
Converted under the within-described Credit Agreement to the Borrower, on the
dates, in the principal amounts, of the Types, bearing interest at the rates and
having Interest Periods (if applicable) of the durations set forth below,
subject to the payments, Continuations, Conversions and prepayments of principal
set forth below:
Amount
Date Prin- Paid,
Made, cipal Duration Prepaid, Unpaid
Continued Amount Type of Continued Prin-
or of of Interest Interest or cipal Notation
Converted Loan Loan Rate Period Converted Amount Made by
- --------- ---- ---- ---- ------ --------- ------ -------
Revolving Credit Note
<PAGE>
- 1 -
EXHIBIT A-2
[Form of Tranche A Term Loan Note]
PROMISSORY NOTE
$_______________ May 31, 1996
New York, New York
FOR VALUE RECEIVED, SINCLAIR BROADCAST GROUP, INC., a Maryland
corporation (the "Borrower"), hereby promises to pay to __________________ (the
"Lender") [or registered assigns]*, for account of its respective Applicable
Lending Offices provided for by the Credit Agreement referred to below, at the
principal office of The Chase Manhattan Bank (National Association) at 1 Chase
Manhattan Plaza, New York, New York 10081, the principal sum of _______________
Dollars (or such lesser amount as shall equal the aggregate unpaid principal
amount of the Tranche A Term Loan made by the Lender to the Borrower under the
Credit Agreement), in lawful money of the United States of America and in
immediately available funds, on the dates and in the principal amounts provided
in the Credit Agreement, and to pay interest on the unpaid principal amount of
such Tranche A Term Loan, at such office, in like money and funds, for the
period commencing on the date of such Tranche A Term Loan until such Term Loan
shall be paid in full, at the rates per annum and on the dates provided in the
Credit Agreement.
[This Note and the Tranche A Term Loan evidenced hereby may be
transferred in whole or in part only by registration of such transfer on the
register maintained for such purpose by or on behalf of the Borrower as provided
in Section 12.06(g) of the Credit Agreement.]
The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of the Tranche A Term Loan, and each portion thereof (if
applicable), made by the Lender to the Borrower, and each payment made on
account of the principal thereof, shall be recorded by the Lender on its books
and, prior to any transfer of this Note, endorsed by the Lender on the schedule
attached hereto or any continuation thereof, provided that the failure of the
Lender to make any such recordation (or any error in making any such
recordation) or endorsement shall not affect the obligations of the Borrower to
make a payment when due of any amount owing under the Credit Agreement or
hereunder in respect of the Tranche A Term Loan made by the Lender.
This Note is one of the Tranche A Term Loan Notes referred to
in the Second Amended and Restated Credit Agreement
---------------------------
* Bracketed language to be inserted into Registered Notes.
Tranche A Term Loan Note
<PAGE>
- 2 -
dated as of May 31, 1996 (as modified and supplemented and in effect from time
to time, the "Credit Agreement") between the Borrower, the Subsidiary Guarantors
party thereto, the Lenders party thereto and The Chase Manhattan Bank (National
Association), as Agent, and evidences the Tranche A Term Loan made by the Lender
thereunder. Capitalized terms used but not defined in this Note have the
respective meanings assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the
maturity of this Note upon the occurrence of certain events and for prepayments
of Tranche A Term Loans upon the terms and conditions specified therein.
Payment of this Note is secured by certain collateral under
the Security Documents referred to in the Credit Agreement.
Except as permitted by Section 12.06(b) of the Credit
Agreement, this Note may not be assigned by the Lender to any other Person.
This Note shall be governed by, and construed in accordance
with, the law of the State of New York.
SINCLAIR BROADCAST GROUP, INC.
By_________________________
Title:
Tranche A Term Loan Note
<PAGE>
- 3 -
SCHEDULE OF TRANCHE A TERM LOANS
This Note evidences Tranche A Term Loans made, and the
respective portions thereof Continued or Converted under the within-described
Credit Agreement to the Borrower, on the dates, in the principal amounts, of the
Types, bearing interest at the rates and having Interest Periods (if applicable)
of the durations set forth below, subject to the payments, Continuations,
Conversions and prepayments of principal set forth below:
Amount
Date Prin- Paid,
Made, cipal Duration Prepaid, Unpaid
Continued Amount Type of Continued Prin-
or of of Interest Interest or cipal Notation
Converted Loan Loan Rate Period Converted Amount Made by
- --------- ---- ---- ---- ------ --------- ------ -------
Tranche A Term Loan Note
<PAGE>
- 1 -
EXHIBIT A-3
[Form of Tranche B Term Loan Note]
PROMISSORY NOTE
$_______________ May 31, 1996
New York, New York
FOR VALUE RECEIVED, SINCLAIR BROADCAST GROUP, INC., a Maryland
corporation (the "Borrower"), hereby promises to pay to __________________ (the
"Lender") [or registered assigns]*, for account of its respective Applicable
Lending Offices provided for by the Credit Agreement referred to below, at the
principal office of The Chase Manhattan Bank (National Association) in New York,
New York, the principal sum of _______________ Dollars (or such lesser amount as
shall equal the aggregate unpaid principal amount of the Tranche B Term Loan
made by the Lender to the Borrower under the Credit Agreement), in lawful money
of the United States of America and in immediately available funds, on the dates
and in the principal amounts provided in the Credit Agreement, and to pay
interest on the unpaid principal amount of such Tranche B Term Loan, at such
office, in like money and funds, for the period commencing on the date of such
Tranche B Term Loan until such Term Loan shall be paid in full, at the rates per
annum and on the dates provided in the Credit Agreement.
[This Note and the Tranche B Term Loan evidenced hereby may be
transferred in whole or in part only by registration of such transfer on the
register maintained for such purpose by or on behalf of the Borrower as provided
in Section 12.06(g) of the Credit Agreement.]
The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of the Tranche B Term Loan, and each portion thereof (if
applicable), made by the Lender to the Borrower, and each payment made on
account of the principal thereof, shall be recorded by the Lender on its books
and, prior to any transfer of this Note, endorsed by the Lender on the schedule
attached hereto or any continuation thereof, provided that the failure of the
Lender to make any such recordation (or any error in making any such
recordation) or endorsement shall not affect the obligations of the Borrower to
make a payment when due of any amount owing under the Credit Agreement or
hereunder in respect of the Tranche B Term Loan made by the Lender.
This Note is one of the Tranche B Term Loan Notes referred to
in the Second Amended and Restated Credit Agreement
----------------------------
* Bracketed language to be inserted into Registered Notes.
Tranche B Term Loan Note
<PAGE>
- 2 -
dated as of May 31, 1996 (as modified and supplemented and in effect from time
to time, the "Credit Agreement") between the Borrower, the Subsidiary Guarantors
party thereto, the Lenders party thereto and The Chase Manhattan Bank (National
Association), as Agent, and evidences the Tranche B Term Loan made by the Lender
thereunder. Capitalized terms used but not defined in this Note have the
respective meanings assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the
maturity of this Note upon the occurrence of certain events and for prepayments
of Tranche B Term Loans upon the terms and conditions specified therein.
Payment of this Note is secured by certain collateral under
the Security Documents referred to in the Credit Agreement.
Except as permitted by Section 12.06(b) of the Credit
Agreement, this Note may not be assigned by the Lender to any other Person.
This Note shall be governed by, and construed in accordance
with, the law of the State of New York.
SINCLAIR BROADCAST GROUP, INC.
By_________________________
Title:
Tranche B Term Loan Note
<PAGE>
- 3 -
SCHEDULE OF TRANCHE B TERM LOANS
This Note evidences Tranche B Term Loans made, and the
respective portions thereof Continued or Converted under the within-described
Credit Agreement to the Borrower, on the dates, in the principal amounts, of the
Types, bearing interest at the rates and having Interest Periods (if applicable)
of the durations set forth below, subject to the payments, Continuations,
Conversions and prepayments of principal set forth below:
Amount
Date Prin- Paid,
Made, cipal Duration Prepaid, Unpaid
Continued Amount Type of Continued Prin-
or of of Interest Interest or cipal Notation
Converted Loan Loan Rate Period Converted Amount Made by
- --------- ---- ---- ---- ------ --------- ------ -------
Tranche B Term Loan Note
<PAGE>
- 1 -
EXHIBIT A-4
[Form of Tranche C Term Loan Note]
PROMISSORY NOTE
$_______________ _____________, 199_
New York, New York
FOR VALUE RECEIVED, SINCLAIR BROADCAST GROUP, INC., a Maryland
corporation (the "Borrower"), hereby promises to pay to __________________ (the
"Lender") [or registered assigns]*, for account of its respective Applicable
Lending Offices provided for by the Credit Agreement referred to below, at the
principal office of The Chase Manhattan Bank (National Association) in New York,
New York, the principal sum of _______________ Dollars (or such lesser amount as
shall equal the aggregate unpaid principal amount of the Tranche C Term Loans
made by the Lender to the Borrower under the Credit Agreement), in lawful money
of the United States of America and in immediately available funds, on the dates
and in the principal amounts provided in the Credit Agreement, and to pay
interest on the unpaid principal amount of each such Tranche C Term Loan, at
such office, in like money and funds, for the period commencing on the date of
such Tranche C Term Loan until such Term Loan shall be paid in full, at the
rates per annum and on the dates provided in the Credit Agreement.
[This Note and the Tranche C Term Loans evidenced hereby may
be transferred in whole or in part only by registration of such transfer on the
register maintained for such purpose by or on behalf of the Borrower as provided
in Section 12.06(g) of the Credit Agreement.]
The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of each Term Loan made by the Lender to the Borrower, and
each payment made on account of the principal thereof, shall be recorded by the
Lender on its books and, prior to any transfer of this Note, endorsed by the
Lender on the schedule attached hereto or any continuation thereof, provided
that the failure of the Lender to make any such recordation (or any error in
making any such recordation) or endorsement shall not affect the obligations of
the Borrower to make a payment when due of any amount owing under the Credit
Agreement or hereunder in respect of the Tranche C Term Loans made by the
Lender.
This Note is one of the Tranche C Term Loan Notes referred to
in the Second Amended and Restated Credit Agreement
-------------------------
* Bracketed language to be inserted into Registered Notes.
Tranche C Term Loan Note
<PAGE>
- 2 -
dated as of May 31, 1996 (as modified and supplemented and in effect from time
to time, the "Credit Agreement") between the Borrower, the Subsidiary Guarantors
party thereto, the Lenders party thereto and The Chase Manhattan Bank (National
Association), as Agent, and evidences Revolving Credit Loans made by the Lender
thereunder. Terms used but not defined in this Note have the respective meanings
assigned to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the
maturity of this Note upon the occurrence of certain events and for prepayments
of Tranche C Term Loans upon the terms and conditions specified therein.
Payment of this Note is secured by certain collateral under
the Security Documents referred to in the Credit Agreement.
Except as permitted by Section 12.06(b) of the Credit
Agreement, this Note may not be assigned by the Lender to any other Person.
This Note shall be governed by, and construed in accordance
with, the law of the State of New York.
SINCLAIR BROADCAST GROUP, INC.
By_________________________
Title:
Tranche C Term Loan Note
<PAGE>
- 3 -
SCHEDULE OF TRANCHE C TERM LOANS
This Note evidences Tranche C Term Loans made, Continued or
Converted under the within-described Credit Agreement to the Borrower, on the
dates, in the principal amounts, of the Types, bearing interest at the rates and
having Interest Periods (if applicable) of the durations set forth below,
subject to the payments, Continuations, Conversions and prepayments of principal
set forth below:
Amount
Date Prin- Paid,
Made, cipal Duration Prepaid, Unpaid
Continued Amount Type of Continued Prin-
or of of Interest Interest or cipal Notation
Converted Loan Loan Rate Period Converted Amount Made by
- --------- ---- ---- ---- ------ --------- ------ -------
Tranche C Term Loan Note
<PAGE>
- 1 -
EXHIBIT B
[Form of Tranche C Term Loan Activation Notice]
TRANCHE C TERM LOAN ACTIVATION NOTICE
To: The Chase Manhattan Bank (National Association)
as Agent under the Credit Agreement
referred to below
Reference is hereby made to the Second Amended and Restated
Credit Agreement dated as of May 31, 1996 (as modified and supplemented and in
effect from time to time, the "Credit Agreement"). Terms defined in the Credit
Agreement and not defined herein are used herein as defined therein.
This notice is the Tranche C Term Loan Activation Notice
referred to in the Credit Agreement, and the Borrower and each of the Lenders
signatory hereto (the "Tranche C Lenders") hereby notify you that:
1. The Tranche C Term Loan Activation Date is
-----------.
2. The Tranche C Term Loan Commitment of each Tranche C
Lender is set forth opposite such Tranche C Lender's
name on the signature pages hereof under the caption
"Tranche C Term Loan Commitment".
Each of the Tranche C Lenders and the Borrower hereby agrees
that (a) the rate of commitment fee payable by the Borrower to each Tranche C
Lender under Section 2.04 of the Credit Agreement on the daily average unused
amount of such Trance C Lender's Tranche C Term Loan Commitment shall be
______________ and (b) the Applicable Margin for Tranche C Term Loans shall be
______________.
SINCLAIR BROADCAST GROUP, INC.
By____________________________
Name:
Title:
Tranche C Term Loan Activation Notice
<PAGE>
- 2 -
Tranche C Term Loan Commitment [NAME OF TRANCHE C LENDER]
- ------------------------------
$
By__________________________
Name:
Title:
CONSENTED TO:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Agent
By_______________________
Name:
Title:
Tranche C Term Loan Activation Notice
<PAGE>
- 1 -
EXHIBIT C
[Form of Security Agreement]
SECOND AMENDED AND RESTATED SECURITY AGREEMENT
SECOND AMENDED AND RESTATED SECURITY AGREEMENT dated as of May
31, 1996, between:
SINCLAIR BROADCAST GROUP, INC., a corporation duly organized
and validly existing under the laws of the State of Maryland (the
"Borrower");
each of the Subsidiaries of the Borrower identified under the
caption "SUBSIDIARY GUARANTORS" on the signature pages hereof
(individually, a "Subsidiary Guarantor" and, collectively, the
"Subsidiary Guarantors" and, together with the Borrower, the
"Obligors"); and
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as agent for
the lenders party to the "Credit Agreement" defined below (in such
capacity, together with its successors in such capacity, the "Agent").
WHEREAS, the Borrower, certain Subsidiary Guarantors (the
"Existing Subsidiary Guarantors"), certain of the lenders (the "Existing
Lenders") and the Agent are parties to an Amended and Restated Credit Agreement
dated as of May 24, 1994 (as heretofore amended, supplemented and otherwise
modified and in effect on the date hereof before giving effect to the amendment
and restatement thereof contemplated by the Credit Agreement (as defined below),
the "Existing Credit Agreement"), and in connection therewith the Borrower, the
Existing Subsidiary Guarantors and the Agent have executed and delivered an
Amended and Restated Security Agreement dated as of May 24, 1994 (as heretofore
amended, supplemented and otherwise modified and in effect on the date hereof
before giving effect to the amendment and restatement contemplated hereby, the
"Existing Security Agreement") pursuant to which the Borrower and the Existing
Subsidiary Guarantors granted to the Agent, for the benefit of the Existing
Lenders, a security interest in the Collateral referred to therein.
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Borrower, the Subsidiary Guarantors and certain lenders
(collectively, the "Lenders") and the Agent are entering into a Second Amended
and Restated Credit Agreement dated as of May 31, 1996 (as modified and
supplemented and in effect from time to time (including, without limitation, to
increase the amount of credit to be extended thereunder), the "Credit
Agreement"), providing, subject to the terms and conditions thereof, for the
extension and renewal of the Borrower's indebtedness under the Existing Credit
Agreement and
Security Agreement
<PAGE>
- 2 -
for additional extensions of credit to the Borrower. In addition, the Borrower
may now or hereafter from time to time be obligated to various of the Lenders in
respect of certain Interest Rate Protection Agreements (as defined in the Credit
Agreement) (such obligations being herein referred to as the "Other
Indebtedness").
To induce said Lenders to amend and restate the Existing
Credit Agreement and to extend credit thereunder and to extend credit to the
Borrower which would constitute Other Indebtedness, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Obligors and the Agent hereby agree that the Existing Security
Agreement shall be hereby amended and restated to read as follows:
Section 1. Definitions. Terms defined in the Credit Agreement
are used herein as defined therein. In addition, as used herein:
"Accounts" shall have the meaning ascribed thereto in Section
3(d) hereof.
"Collateral" shall have the meaning ascribed thereto in
Section 3 hereof.
"Collateral Account" shall have the meaning ascribed thereto
in Section 4.01 hereof.
"Copyright Collateral" shall mean all Copyrights, whether now
owned or hereafter acquired by any Obligor, including each Copyright
identified in Annex 2 hereto.
"Copyrights" shall mean all copyrights, copyright
registrations and applications for copyright registrations, including,
without limitation, all renewals and extensions thereof, the right to
recover for all past, present and future infringements thereof, and all
other rights of any kind whatsoever accruing thereunder or pertaining
thereto.
"Documents" shall have the meaning ascribed thereto in Section
3(j) hereof.
"Equipment" shall have the meaning ascribed thereto in Section
3(h) hereof.
"Instruments" shall have the meaning ascribed thereto in
Section 3(e) hereof.
Security Agreement
<PAGE>
- 3 -
"Intellectual Property" shall mean all Copyright Collateral,
all Patent Collateral and all Trademark Collateral, together with (a)
all inventions, processes, production methods, proprietary information,
know-how and trade secrets; (b) all licenses or user or other
agreements granted to any Obligor with respect to any of the foregoing,
in each case whether now or hereafter owned or used including, without
limitation, the licenses or other agreements with respect to the
Copyright Collateral, the Patent Collateral or the Trademark
Collateral, listed in Annex 5 hereto; (c) all information, customer
lists, identification of suppliers, data, plans, blueprints,
specifications, designs, drawings, recorded knowledge, surveys,
engineering reports, test reports, manuals, materials standards,
processing standards, performance standards, catalogs, computer and
automatic machinery software and programs; (d) all field repair data,
sales data and other information relating to sales or service of
products now or hereafter manufactured; (e) all accounting information
and all media in which or on which any information or knowledge or data
or records may be recorded or stored and all computer programs used for
the compilation or printout of such information, knowledge, records or
data; (f) all licenses, consents, permits, variances, certifications
and approvals of governmental agencies now or hereafter held by any
Obligor; and (g) all causes of action, claims and warranties now or
hereafter owned or acquired by any Obligor in respect of any of the
items listed above.
"Inventory" shall have the meaning ascribed thereto in Section
3(f) hereof.
"Issuers" shall mean, collectively, the respective
corporations identified beneath the names of the Obligors in Annex 1
hereto under the caption "Issuer".
"Makers" shall mean, collectively, the respective Persons
identified beneath the names of the Obligors in Annex 7 hereto under
the caption "Maker".
"Motor Vehicles" shall mean motor vehicles, tractors, trailers
and other like property, whether or not the title thereto is governed
by a certificate of title or ownership.
"Patent Collateral" shall mean all Patents, whether now owned
or hereafter acquired by any Obligor, including each Patent identified
in Annex 3 hereto.
"Patents" shall mean all patents and patent applications,
including, without limitation, the inventions and improvements
described and claimed therein together with
Security Agreement
<PAGE>
- 4 -
the reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof, all income, royalties, damages and
payments now or hereafter due and/or payable under and with respect
thereto, including, without limitation, damages and payments for past
or future infringements thereof, the right to sue for past, present and
future infringements thereof, and all rights corresponding thereto
throughout the world.
"Pledged Notes" shall mean the notes listed in Annex 7
attached hereto and all other evidence of indebtedness owing to any of
the Obligors by any of the Credit Parties, the Smith Brothers, WPTT,
Inc., a Maryland corporation, and Bay Television, Inc., a Florida
corporation.
"Pledged Stock" shall have the meaning ascribed thereto in
Section 3(a) hereof.
"Secured Obligations" shall mean, collectively, (a) the
principal of and interest on the Loans made by the Lenders to, and the
Note(s) held by each Lender of, the Borrower, all Reimbursement
Obligations and interest thereon and all other amounts from time to
time owing to the Lenders or the Agent by the Credit Parties under the
Basic Documents, (b) all Other Indebtedness and interest thereon, (c)
all obligations of the Subsidiary Guarantors under the Credit Agreement
and the other Basic Documents (including, without limitation, in
respect of their Guarantee under Section 6 of the Credit Agreement),
and (d) all obligations of the Obligors to the Lenders and the Agent
hereunder.
"Stock Collateral" shall mean, collectively, the Collateral
described in clauses (a) through (c) of Section 3 hereof, together with
all other certificates, shares, securities, properties or moneys as may
from time to time be pledged hereunder pursuant to said clauses (a)
through (c), and the proceeds of and to any such property and, to the
extent related to any such property or such proceeds, all books,
correspondence, credit files, records, invoices and other papers.
"Trademark Collateral" shall mean all Trademarks, whether now
owned or hereafter acquired by any Obligor, including each Trademark
identified in Annex 4 hereto. Notwithstanding the foregoing, the
Trademark Collateral does not and shall not include any Trademark which
would be rendered invalid, abandoned, void or unenforceable by reason
of its being included as part of the Trademark Collateral.
"Trademarks" shall mean all trade names, trademarks and
service marks, logos, trademark and service mark
Security Agreement
<PAGE>
- 5 -
registrations, and applications for trademark and service mark
registrations, including, without limitation, all renewals of trademark
and service mark registrations, all rights corresponding thereto
throughout the world, the right to recover for all past, present and
future infringements thereof, all other rights of any kind whatsoever
accruing thereunder or pertaining thereto, together, in each case, with
the product lines and goodwill of the business connected with the use
of, and symbolized by, each such trade name, trademark and service
mark.
"Uniform Commercial Code" shall mean the Uniform Commercial
Code as in effect from time to time in the State of New York.
Section 2. Representations and Warranties. Each Obligor
represents and warrants to the Lenders and the Agent that:
(a) such Obligor is the sole beneficial owner of the
Collateral in which it purports to grant a security interest pursuant
to Section 3 hereof and no Lien exists or will exist upon any such
Collateral at any time (and, with respect to the Stock Collateral, no
right or option to acquire the same exists in favor of any other
Person), except for Liens permitted under Section 9.06 of the Credit
Agreement and except for the pledge and security interest in favor of
the Agent for the benefit of the Lenders created or provided for
herein, which pledge and security interest constitute a perfected
pledge and security interest in and to all of such Collateral (other
than Intellectual Property registered or otherwise located outside of
the United States of America) subject to no equal or prior Lien except
for Liens permitted under said Section 9.06;
(b) the Pledged Stock evidenced by the certificates identified
under the name of such Obligor in Annex 1 hereto is, and all other
Pledged Stock in which such Obligor shall hereafter grant a security
interest pursuant to Section 3 hereof will be, duly authorized, validly
issued, fully paid and nonassessable and none of such Pledged Stock is
or will be subject to any contractual restriction, or any restriction
under the charter or by-laws of the respective Issuers of such Pledged
Stock, upon the transfer of such Pledged Stock (except for any such
restriction contained herein or in the Credit Agreement);
(c) the Pledged Stock evidenced by the certificates identified
under the name of such Obligor in Annex 1 hereto constitutes all of the
issued and outstanding shares of
Security Agreement
<PAGE>
- 6 -
capital stock of any class of the Issuers beneficially owned by such
Obligor on the date hereof (whether or not registered in the name of
such Obligor) and said Annex 1 correctly identifies, as at the date
hereof, the respective Issuers of such Pledged Stock, the respective
class and par value of the shares comprising such Pledged Stock and the
respective number of shares (and registered owner thereof) evidenced by
each such certificate;
(d) Annexes 2, 3 and 4 hereto, respectively, set forth under
the name of such Obligor a complete and correct list of all Copyrights,
Patents, and Trademarks owned by such Obligor on the date hereof;
except pursuant to licenses and other user agreements entered into by
such Obligor in the ordinary course of business, which are listed in
Annex 5 hereto, such Obligor owns and possesses the right to use, and
has done nothing to authorize or enable any other Person to use, any
Copyright, Patent, or Trademark listed in said Annexes 2, 3 and 4, and
all registrations listed in said Annexes 2, 3 and 4 are valid and in
full force and effect; except as may be set forth in said Annex 5, the
Obligors own and possess the right to use all Copyrights, Patents, and
Trademarks;
(e) Annex 5 hereto sets forth a complete and correct list of
all licenses and other user agreements included in the Intellectual
Property on the date hereof;
(f) to such Obligor's knowledge, (i) except as set forth in
Annex 5 hereto, there is no violation by others of any right of such
Obligor with respect to any Copyright, Patent, or Trademark listed in
Annexes 2, 3 and 4 hereto, respectively, under the name of such Obligor
and (ii) such Obligor is not infringing in any respect upon any
Copyright, Patent, or Trademark of any other Person; and no proceedings
have been instituted or are pending against such Obligor or, to such
Obligor's knowledge, threatened, and no claim against such Obligor has
been received by such Obligor, alleging any such violation, except as
may be set forth in said Annex 5;
(g) such Obligor does not own any Trademarks registered in the
United States of America to which the last sentence of the definition
of Trademark Collateral applies;
(h) the Pledged Notes identified under the name of such
Obligor in Annex 7 hereto constitute all of the Pledged Notes
beneficially owned by such Obligor on the date hereof, and said Annex 7
correctly identifies, as at the date hereof, the respective Makers of
such Pledged Notes and the respective outstanding principal amounts
thereof; and
Security Agreement
<PAGE>
- 7 -
(i) on the date hereof, no Pledged Note is overdue or has been
dishonored or is subject to any defense or adverse claim by any Person.
Section 3. Collateral. Each Obligor hereby pledges and grants
to the Agent, for the benefit of the Lenders as hereinafter provided, a security
interest in all of such Obligor's right, title and interest in the following
property, whether now owned by such Obligor or hereafter acquired and whether
now existing or hereafter coming into existence, and wherever located (all being
collectively referred to herein as "Collateral"), as collateral security for the
prompt payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations owing by such Obligor:
(a) the respective shares of stock of the Issuers evidenced by
the certificates identified in Annex 1 hereto under the name of such
Obligor and all other shares of capital stock of whatever class of the
Issuers, now or hereafter owned by such Obligor, together with in each
case the certificates evidencing the same (collectively, the "Pledged
Stock");
(b) all shares, securities, moneys or property representing a
dividend on any of the Pledged Stock, or representing a distribution or
return of capital upon or in respect of the Pledged Stock, or resulting
from a split-up, revision, reclassification or other like change of the
Pledged Stock or otherwise received in exchange therefor, and any
subscription warrants, rights or options issued to the holders of, or
otherwise in respect of, the Pledged Stock;
(c) without affecting the obligations of such Obligor under
any provision prohibiting such action hereunder or under the Credit
Agreement, in the event of any consolidation or merger in which any
Issuer is not the surviving corporation, all shares of each class of
the capital stock of the successor corporation (unless such successor
corporation is such Obligor itself) formed by or resulting from such
consolidation or merger;
(d) all accounts and general intangibles (each as defined in
the Uniform Commercial Code) of such Obligor constituting any right to
the payment of money, including (but not limited to) (i) all moneys due
and to become due to such Obligor (A) in respect of any loans or
advances, (B) for Inventory or Equipment or other goods sold or leased
or for services rendered, (C) in respect of network affiliation,
programming, retransmission program supplier
Security Agreement
<PAGE>
- 8 -
and other similar contracts and agreements with licensed common
carriers or others relating to the transmission, retransmission or
delivery of programming to others, (D) under any guarantee (including a
letter of credit) of the purchase price of Inventory or Equipment sold
by such Obligor and (E) in respect of the sale, barter or exchange by
any Obligor of advertising or programming time or services and (ii) all
tax refunds (such accounts, general intangibles, moneys due and to
become due and tax refunds being herein called collectively
"Accounts");
(e) all instruments, chattel paper or letters of credit (each
as defined in the Uniform Commercial Code) of such Obligor evidencing,
representing, arising from or existing in respect of, relating to,
securing or otherwise supporting the payment of, any of the Accounts,
including (but not limited to) promissory notes, drafts, bills of
exchange and trade acceptances (herein collectively called
"Instruments");
(f) all inventory (as defined in the Uniform Commercial Code)
of such Obligor, all goods obtained by such Obligor in exchange for
such inventory, and any products made or processed from such inventory
including all substances, if any, commingled therewith or added thereto
(herein collectively called "Inventory");
(g) all Intellectual Property and all other accounts or
general intangibles not constituting Intellectual
Property or Accounts;
(h) all equipment (as defined in the Uniform Commercial Code)
of such Obligor, including, without limitation, all machinery,
amplifiers, transmitters, converters, cables, antennae, earth stations,
towers, cameras, connections, office supplies, fixtures, furniture, all
tangible personal property used in the operation of any television
systems or franchise, all studio transmitter links and other signal
transmission and reception equipment and Motor Vehicles (herein
collectively called "Equipment");
(i) each contract and other agreement of such Obligor relating
to the sale, barter or exchange or other disposition of advertising or
programming time or of Inventory or Equipment, in each case to the
maximum extent assignable;
(j) all documents of title (as defined in the Uniform
Commercial Code) or other receipts of such Obligor covering, evidencing
or representing Inventory or Equipment (herein collectively called
"Documents");
Security Agreement
<PAGE>
- 9 -
(k) all rights, claims and benefits of such Obligor against
any Person arising out of, relating to or in connection with
programming, Inventory or Equipment purchased by such Obligor,
including, without limitation, any such rights, claims or benefits
against any Person storing or transporting such programming, Inventory
or Equipment;
(l) to the maximum extent such rights are assignable without
violating the respective terms thereof, each Obligor's rights under all
present and future network affiliation, syndicated film and feature
agreements, trade or barter agreements, commitments or undertakings,
advertising and other similar contracts, agreements or licenses for
television or radio programming or advertising services;
(m) the balance from time to time in the Collateral Account;
(n) the Pledged Notes and all moneys or property representing
interest thereon;
(o) all agreements, contracts and leases of personal property
now or hereafter in effect between any Obligor and any other party or
parties relating to the business or operations of any of the Stations,
including, without limitation, all agreements, contracts and leases of
personal property set forth and described in Annex 8 hereto;
(p) all Broadcast Licenses, whether now or hereafter granted
to such Obligor, including, without limitation, each of the Broadcast
Licenses listed in Annex 9 hereto, to the extent the security interest
therein granted or purported to be granted by such Obligor under this
Agreement may be validly granted;
(q) all other tangible and intangible personal property and
fixtures of such Obligor, including, without limitation, all proceeds,
products, offspring, rents, profits, income, benefits, accessions,
substitutions and replacements of and to any of the property of such
Obligor described in clauses (a) through (p) above in this Section 3
(including, without limitation, (i) any proceeds of the Broadcast
Licenses referred to in paragraph (p) above, whether or not a security
interest in such Broadcast Licenses granted or purported to be granted
by such Obligor under this Agreement may be validly granted and (ii)
any proceeds of insurance thereon and all causes of action, claims and
warranties now or hereafter held by such Obligor in respect of any of
the items listed above), and, to the
Security Agreement
<PAGE>
- 10 -
extent related to any property described in said clauses or such
proceeds, products and accessions, all books, correspondence, credit
files, records, invoices and other papers, including without limitation
all tapes, cards, computer runs and other papers and documents in the
possession or under the control of such Obligor or any computer bureau
or service company from time to time acting for such Obligor.
Notwithstanding the foregoing clauses (a) through (q) of this Section 3, the
Collateral does not and shall not include (i) the partnership interest of FSF-TV
in the Auburn Tower Partnership, a North Carolina general partnership and (ii)
prior to the termination of the Stock Pledge Agreement dated as of March 27,
1995 between Edwin L. Edwards, Sr., Carolyn C. Smith and Chase, as agent for
certain lenders, any stock acquired from Carolyn C. Smith by any of the Obligors
upon the exercise of the Glencairn Options.
Section 4. Cash Proceeds of Collateral.
---------------------------
4.01 Collateral Account. There is hereby established with the
Agent a cash collateral account (the "Collateral Account") in the name and under
the control of the Agent into which there shall be deposited from time to time
the cash proceeds of any of the Collateral (including proceeds of insurance
thereon) required to be delivered to the Agent pursuant hereto and into which
the Obligors may from time to time deposit any additional amounts which any of
them wishes to pledge to the Agent for the benefit of the Lenders as additional
collateral security hereunder. The balance from time to time in the Collateral
Account shall constitute part of the Collateral hereunder and shall not
constitute payment of the Secured Obligations until applied as hereinafter
provided. Except as expressly provided in the next sentence, the Agent shall
remit the collected balance outstanding to the credit of the Collateral Account
to or upon the order of the Obligors as the Obligors through the Borrower shall
from time to time instruct. However, at any time following the occurrence and
during the continuance of an Event of Default, the Agent may (and, if instructed
by the Lenders as specified in Section 11.03 of the Credit Agreement, shall) in
its (or their) discretion apply or cause to be applied (subject to collection)
the balance from time to time outstanding to the credit of the Collateral
Account to the payment of the Secured Obligations in the manner specified in
Section 5.09 hereof. The balance from time to time in the Collateral Account
shall be subject to withdrawal only as provided herein.
4.02 Proceeds of Accounts. At any time after the occurrence
and during the continuance of an Event of Default,
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each Obligor shall, upon the request of the Agent, instruct all account debtors
and other Persons obligated in respect of all Accounts to make all payments in
respect of the Accounts either (a) directly to the Agent (by instructing that
such payments be remitted to a post office box which shall be in the name and
under the control of the Agent) or (b) to one or more other lenders in the
United States of America (by instructing that such payments be remitted to a
post office box which shall be in the name and under the control of the Agent)
under arrangements, in form and substance satisfactory to the Agent pursuant to
which such Obligor shall have irrevocably instructed such other lender (and such
other bank shall have agreed) to remit all proceeds of such payments directly to
the Agent for deposit into the Collateral Account. All payments made to the
Agent, as provided in the preceding sentence, shall be immediately deposited in
the Collateral Account. In addition to the foregoing, each Obligor agrees that,
at any time after the occurrence and during the continuance of an Event of
Default, if the proceeds of any Collateral hereunder (including the payments
made in respect of Accounts) shall be received by it, such Obligor shall, upon
the request of the Agent, as promptly as possible deposit such proceeds into the
Collateral Account. Until so deposited, all such proceeds shall be held in trust
by such Obligor for and as the property of the Agent and shall not be commingled
with any other funds or property of such Obligor.
4.03 Investment of Balance in Collateral Account. Amounts on
deposit in the Collateral Account shall be invested from time to time in such
Permitted Investments as the Obligors through the Borrower (or, after the
occurrence and during the continuance of a Default, the Agent) shall determine,
which Permitted Investments shall be held in the name and be under the control
of the Agent, provided that (a) at any time after the occurrence and during the
continuance of an Event of Default, the Agent may (and, if instructed by the
Lenders as specified in Section 11.03 of the Credit Agreement, shall) in its (or
their) discretion at any time and from time to time elect to liquidate any such
Permitted Investments and to apply or cause to be applied the proceeds thereof
to the payment of the Secured Obligations in the manner specified in Section
5.09 hereof and (b) if requested by the Obligors through the Borrower, such
Permitted Investments may be held in the name and under the control of one or
more of the Lenders (and in that connection each Lender, pursuant to Section
11.10 of the Credit Agreement) has agreed that such Permitted Investments shall
be held by such Lender as a collateral sub-agent for the Agent hereunder).
Section 5. Further Assurances; Remedies. In furtherance of the
grant of the pledge and security interest
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pursuant to Section 3 hereof, the Obligors hereby jointly and severally agree
with each Lender and the Agent as follows:
5.01 Delivery and Other Perfection. Each Obligor shall:
-----------------------------
(a) if any of the above-described shares, securities, moneys
or property required to be pledged by such Obligor under clauses (a),
(b) and (c) of Section 3 hereof are received by such Obligor, forthwith
either (i) transfer and deliver to the Agent such shares or securities
so received by such Obligor (together with the certificates for any
such shares and securities duly endorsed in blank or accompanied by
undated stock powers or bond powers (as the case may be) duly executed
in blank), all of which thereafter shall be held by the Agent, pursuant
to the terms of this Agreement, as part of the Collateral or (ii) take
such other action as the Agent shall deem necessary or appropriate to
duly record the Lien created hereunder in such shares, securities,
monies or property referred to in said clauses (a), (b) and (c);
(b) deliver and pledge to the Agent any and all Instruments,
endorsed and/or accompanied by such instruments of assignment and
transfer in such form and substance as the Agent may request; provided,
that so long as no Default shall have occurred and be continuing, such
Obligor may retain for collection in the ordinary course any
Instruments received by such Obligor in the ordinary course of business
and the Agent shall, promptly upon request of such Obligor through the
Borrower, make appropriate arrangements for making any Instrument
pledged by such Obligor available to such Obligor for purposes of
presentation, collection or renewal (any such arrangement to be
effected, to the extent deemed appropriate by the Agent, against trust
receipt or like document);
(c) give, execute, deliver, file and/or record any financing
statement, notice, instrument, document, agreement or other papers that
may be necessary or desirable (in the judgment of the Agent) to create,
preserve, perfect or validate the pledge and security interest granted
pursuant hereto or to enable the Agent to exercise and enforce its
rights hereunder with respect to such pledge and security interest,
including, without limitation, causing any or all of the Stock
Collateral to be transferred of record into the name of the Agent or
its nominee (and the Agent agrees that if any Stock Collateral is
transferred into its name or the name of its nominee, the Agent will
thereafter promptly give to the respective Obligor copies of any
notices and communications received by it with respect to the Stock
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Collateral pledged by such Obligor hereunder), provided that notices to
account debtors in respect of any Accounts or Instruments shall be
subject to the provisions of clause (i) below;
(d) without limiting the obligations of such Obligor under
Section 5.04(c) hereof, upon the acquisition after the date hereof by
such Obligor of any Equipment covered by a certificate of title or
ownership, cause the Agent to be listed as the lienholder on such
certificate of title and within 120 days of the acquisition thereof
deliver evidence of the same to the Agent;
(e) keep full and accurate books and records relating to the
Collateral, and stamp or otherwise mark such books and records in such
manner as the Agent may reasonably require in order to reflect the
security interests granted by this Agreement;
(f) furnish to the Agent from time to time (but, unless a
Default shall have occurred and be continuing, no more frequently than
quarterly) statements and schedules further identifying and describing
the Copyright Collateral, the Patent Collateral, and the Trademark
Collateral, respectively, and such other reports in connection with the
Copyright Collateral, the Patent Collateral, and the Trademark
Collateral, as the Agent may reasonably request, all in reasonable
detail;
(g) promptly upon request of the Agent, following receipt by
the Agent of any statements, schedules or reports pursuant to clause
(f) above, modify this Agreement by amending Annexes 2, 3 and/or 4
hereto, as the case may be, to include any Copyright, Patent, or
Trademark which becomes part of the Collateral under this Agreement;
(h) permit representatives of the Agent, upon reasonable
notice, at any time during normal business hours to inspect and make
abstracts from its books and records pertaining to the Collateral, and
permit representatives of the Agent to be present at such Obligor's
place of business to receive copies of all communications and
remittances relating to the Collateral, and forward copies of any
notices or communications received by such Obligor with respect to the
Collateral, all in such manner as the Agent may require; and
(i) upon the occurrence and during the continuance of any
Default, upon request of the Agent, promptly notify (and such Obligor
hereby authorizes the Agent so to notify) each account debtor in
respect of any Accounts or Instruments
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that such Collateral has been assigned to the Agent hereunder, and that
any payments due or to become due in respect of such Collateral are to
be made directly to the Agent.
5.02 Other Financing Statements and Liens. Except as otherwise
permitted under Section 9.06 of the Credit Agreement, without the prior written
consent of the Agent, no Obligor shall file or suffer to be on file, or
authorize or permit to be filed or to be on file, in any jurisdiction, any
financing statement or like instrument with respect to the Collateral in which
the Agent is not named as the sole secured party for the benefit of the Lenders.
5.03 Preservation of Rights. The Agent shall not be required
to take steps necessary to preserve any rights against prior parties to any of
the Collateral.
5.04 Special Provisions Relating to Certain Collateral.
(a) Stock Collateral and Pledged Notes.
(i) The Obligors will cause the Stock Collateral to constitute
at all times 100% of the total number of shares of each class of capital stock
of each Issuer then outstanding.
(ii) So long as no Event of Default shall have occurred and be
continuing, the Obligors shall have the right to exercise all voting, consensual
and other powers of ownership pertaining to the Stock Collateral for all
purposes not inconsistent with the terms of this Agreement, the Credit
Agreement, the Note(s) or any other instrument or agreement referred to herein
or therein, provided that the Obligors jointly and severally agree that (x) they
will not vote the Stock Collateral in any manner that is inconsistent with the
terms of this Agreement, the Credit Agreement, the Note(s) or any such other
instrument or agreement and (y) they will not agree to any amendment, supplement
or other modification to any Pledged Note; and the Agent shall execute and
deliver to the Obligors or cause to be executed and delivered to the Obligors
all such proxies, powers of attorney, dividend and other orders, and all such
instruments, without recourse, as the Obligors may reasonably request for the
purpose of enabling the Obligors to exercise the rights and powers which they
are entitled to exercise pursuant to this Section 5.04(a)(2).
(iii) Unless and until an Event of Default has occurred and is
continuing, the Obligors shall be entitled to receive and retain any dividends
on the Collateral paid in cash out of earned surplus and any cash principal and
interest on the Pledged Notes.
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(iv) If any Event of Default shall have occurred, then so long as
such Event of Default shall continue, and whether or not the Agent or any Lender
exercises any available right to declare any Secured Obligation due and payable
or seeks or pursues any other relief or remedy available to it under applicable
law or under this Agreement, the Credit Agreement, the Note(s) or any other
agreement relating to such Secured Obligation, all dividends and other
distributions on the Collateral shall be paid directly to the Agent and retained
by it in the Collateral Account as part of the Collateral, subject to the terms
of this Agreement, and, if the Agent shall so request in writing, the Obligors
jointly and severally agree to execute and deliver to the Agent appropriate
additional dividend, distribution and other orders and documents to that end,
provided that if such Event of Default is cured, any such dividend or
distribution theretofore paid to the Agent shall, upon request of the Obligors
(except to the extent theretofore applied to the Secured Obligations), be
returned by the Agent to the Obligors.
(b) Intellectual Property.
---------------------
(i) For the purpose of enabling the Agent to exercise rights
and remedies under Section 5.05 hereof at such time as the Agent shall be
lawfully entitled to exercise such rights and remedies, and for no other
purpose, each Obligor hereby grants to the Agent, to the extent assignable, an
irrevocable, non-exclusive license (exercisable without payment of royalty or
other compensation to such Obligor) to use, assign, license or sublicense any of
the Intellectual Property now owned or hereafter acquired by such Obligor,
wherever the same may be located, including in such license reasonable access to
all media in which any of the licensed items may be recorded or stored and to
all computer programs used for the compilation or printout thereof.
(ii) Notwithstanding anything contained herein to the contrary, but
subject to the provisions of Section 9.05 of the Credit Agreement which limit
the right of the Obligors to dispose of their property, so long as no Event of
Default shall have occurred and be continuing, the Obligors will be permitted to
exploit, use, enjoy, protect, license, sublicense, assign, sell, dispose of or
take other actions with respect to the Intellectual Property in the ordinary
course of the business of the Obligors. In furtherance of the foregoing, unless
an Event of Default shall have occurred and be continuing the Agent shall from
time to time, upon the request of the Obligors through the Borrower, execute and
deliver any instruments, certificates or other documents, in the form so
requested, which the Obligors through the Borrower shall have certified are
appropriate (in their judgment) to allow them to take any action permitted above
(including relinquishment of the license provided pursuant to
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clause (i) immediately above as to any specific Intellectual Property). Further,
upon the payment in full of all of the Secured Obligations, cancellation or
termination of the Commitments and Letter of Credit Liabilities and the
termination of all Interest Rate Protection Agreements constituting Other
Indebtedness, or earlier expiration of this Agreement or release of the
Collateral, the Agent shall grant back to the Obligors the license granted
pursuant to clause (i) immediately above. The exercise of rights and remedies
under Section 5.05 hereof by the Agent shall not terminate the rights of the
holders of any licenses or sublicenses theretofore granted by the Obligors in
accordance with the first sentence of this clause (ii).
(c) Motor Vehicles.
--------------
(i) At any time after the occurrence and during the
continuance of an Event of Default, each Obligor shall, upon the request of the
Agent, deliver to the Agent originals of the certificates of title or ownership
for the Motor Vehicles owned by it with the Agent listed as lienholder and take
such other action as the Agent shall deem appropriate to perfect the security
interest created hereunder in such Motor Vehicles.
(ii) Upon the acquisition after the date hereof by any Obligor
of any Motor Vehicle, such Obligor shall deliver to the Agent, at any time after
the occurrence and during the continuance of an Event of Default and upon the
request of the Agent, originals of the certificates of title or ownership for
such Motor Vehicles, together with the manufacturer's statement of origin with
the Agent listed as lienholder; provided, however, if the Motor Vehicle to be
acquired is subject to a purchase money security interest, the Agent shall be
listed as a junior lienholder to the Person holding such purchase money security
interest.
(iii) Without limiting Section 5.10 hereof, each Obligor
hereby appoints the Agent as its attorney-in-fact, effective the date hereof and
terminating upon the termination of this Agreement, for the purpose of (x)
executing on behalf of such Obligor title or ownership applications for filing
with appropriate state agencies to enable Motor Vehicles now owned or hereafter
acquired by such Obligor to be retitled and the Agent listed as lienholder
thereon, (y) filing such applications with such state agencies and (z) executing
such other documents and instruments on behalf of, and taking such other action
in the name of, such Obligor as the Agent may deem necessary or advisable to
accomplish the purposes hereof (including, without limitation, the purpose of
creating in favor of the Agent a perfected lien on the Motor Vehicles and
exercising the rights and remedies of the Agent under Section 5.05 hereof). This
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appointment as attorney-in-fact is irrevocable and coupled with an interest.
(iv) Any certificates of title or ownership delivered pursuant to
the terms hereof shall be accompanied by odometer statements for each Motor
Vehicle covered thereby.
5.05 Events of Default, etc. During the period during which an
Event of Default shall have occurred and be continuing:
(a) each Obligor shall, at the request of the Agent, assemble
the Collateral owned by it at such place or places, reasonably
convenient to both the Agent and such Obligor, designated in its
request;
(b) the Agent may make any reasonable compromise or settlement
deemed desirable with respect to any of the Collateral and may extend
the time of payment, arrange for payment in installments, reduce the
rate of interest or, forgive any amount of principal of or otherwise
modify the terms of, any of the Collateral;
(c) the Agent shall have all of the rights and remedies with
respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not said Code is in effect in the
jurisdiction where the rights and remedies are asserted) and such
additional rights and remedies to which a secured party is entitled
under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted, including, without limitation, the
right, to the maximum extent permitted by law, to exercise all voting,
consensual and other powers of ownership pertaining to the Collateral
as if the Agent were the sole and absolute owner thereof (and each
Obligor agrees to take all such action as may be appropriate to give
effect to such right);
(d) the Agent in its discretion may, in its name or in the
name of the Obligors or otherwise, demand, sue for, collect or receive
any money or property at any time payable or receivable on account of
or in exchange for any of the Collateral, but shall be under no
obligation to do so; and
(e) the Agent may, upon ten Business Days' prior written
notice to the Obligors of the time and place, with respect to the
Collateral or any part thereof which shall then be or shall thereafter
come into the possession, custody or control of the Agent, the Lenders
or any of their respective agents, sell, lease, assign or otherwise
dispose of all or any portion of such Collateral, at such place or
places as the Agent deems best, and for cash or on credit or
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for future delivery (without thereby assuming any credit risk), at
public or private sale, without demand of performance or notice of
intention to effect any such disposition or of the time or place
thereof (except such notice as is required above or by applicable
statute and cannot be waived) and the Agent or any Lender or anyone
else may be the purchaser, lessee, assignee or recipient of any or all
of the Collateral so disposed of at any public sale (or, to the extent
permitted by law, at any private sale), and thereafter hold the same
absolutely, free from any claim or right of whatsoever kind, including
any right or equity of redemption (statutory or otherwise), of the
Obligors, any such demand, notice and right or equity being hereby
expressly waived and released. In the event of any sale, assignment, or
other disposition of any of the Trademark Collateral, the goodwill
connected with and symbolized by the Trademark Collateral subject to
such disposition shall be included, and the Obligors shall supply to
the Agent or its designee, for inclusion in such sale, assignment or
other disposition, all Intellectual Property relating to such Trademark
Collateral. The Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to
time by announcement at the time and place fixed for the sale, and such
sale may be made at any time or place to which the same may be so
adjourned.
The proceeds of each collection, sale or other disposition under this Section
5.05, including by virtue of the exercise of the license granted to the Agent in
Section 5.04(b)(i) hereof, shall be applied in accordance with Section 5.09
hereof.
The Obligors recognize that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws, the Agent may be compelled, with respect to any sale of all or
any part of the Collateral, to limit purchasers to those who will agree, among
other things, to acquire the Collateral for their own account, for investment
and not with a view to the distribution or resale thereof. The Obligors
acknowledge that any such private sales may be at prices and on terms less
favorable to the Agent than those obtainable through a public sale without such
restrictions, and, notwithstanding such circumstances, agree that any such
private sale shall be deemed to have been made in a commercially reasonable
manner and that the Agent shall have no obligation to engage in public sales and
no obligation to delay the sale of any Collateral for the period of time
necessary to permit the respective Issuer or issuer thereof to register it for
public sale.
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5.06 Deficiency. If the proceeds of sale, collection or other
realization of or upon the Collateral pursuant to Section 5.05 hereof are
insufficient to cover the costs and expenses of such realization and the payment
in full of the Secured Obligations, the Obligors shall remain liable for any
deficiency.
5.07 Removals, etc. Without at least 30 days' prior written
notice to the Agent, no Obligor shall (a) maintain any of its books or records
with respect to the Collateral at any office or maintain its chief executive
office or its principal place of business at any place, or permit any Inventory
or Equipment to be located anywhere other than at the address indicated beneath
the signature of the Borrower to the Credit Agreement or at one of the locations
identified in Annex 6 hereto under its name or in transit from one of such
locations to another or (b) change its corporate name, or the name under which
it does business, from the name shown on the signature pages hereto.
5.08 Private Sale. The Agent and the Lenders shall incur no
liability as a result of the sale of the Collateral, or any part thereof, at any
private sale pursuant to Section 5.05 hereof conducted in a commercially
reasonable manner. Each Obligor hereby waives any claims against the Agent or
any Lender arising by reason of the fact that the price at which the Collateral
may have been sold at such a private sale was less than the price which might
have been obtained at a public sale or was less than the aggregate amount of the
Secured Obligations, even if the Agent accepts the first offer received and does
not offer the Collateral to more than one offeree.
5.09 Application of Proceeds. Except as otherwise herein
expressly provided and except as provided below in this Section 5.09, the
proceeds of any collection, sale or other realization of all or any part of the
Collateral pursuant hereto, and any other cash at the time held by the Agent
under Section 4 hereof or this Section 5, shall be applied by the Agent:
First, to the payment of the costs and expenses of such
collection, sale or other realization, including reasonable
out-of-pocket costs and expenses of the Agent and the fees and expenses
of its agents and counsel, and all expenses incurred and advances made
by the Agent in connection therewith;
Next, to the payment in full of the Secured Obligations,
equally and ratably in accordance with the respective amounts thereof
then due and owing or as the Lenders holding the same may otherwise
agree; and
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Finally, to the payment to the respective Obligor, or its
successors or assigns, or as a court of competent jurisdiction may
direct, of any surplus then remaining.
As used in this Section 5, "proceeds" of Collateral shall mean
cash, securities and other property realized in respect of, and distributions in
kind of, Collateral, including any thereof received under any reorganization,
liquidation or adjustment of debt of the Obligors or any issuer of or obligor on
any of the Collateral.
5.10 Attorney-in-Fact. Without limiting any rights or powers
granted by this Agreement to the Agent while no Event of Default has occurred
and is continuing, upon the occurrence and during the continuance of any Event
of Default the Agent is hereby appointed the attorney-in-fact of each Obligor
for the purpose of carrying out the provisions of this Section 5 and taking any
action and executing any instruments which the Agent may deem necessary or
advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable and coupled with an interest. Without limiting
the generality of the foregoing, so long as the Agent shall be entitled under
this Section 5 to make collections in respect of the Collateral, the Agent shall
have the right and power to receive, endorse and collect all checks made payable
to the order of any Obligor representing any dividend, payment, or other
distribution in respect of the Collateral or any part thereof and to give full
discharge for the same.
5.11 Perfection. Prior to or concurrently with the execution
and delivery of this Agreement, each Obligor shall (a) caused to be filed such
financing statements and other documents in such offices as the Agent may
request to perfect the security interests granted by Section 3 of this
Agreement, (b) cause the Agent (to the extent requested by any Lender) to be
listed as the lienholder on all certificates of title or ownership relating to
Motor Vehicles owned by such Obligor and (c) deliver to the Agent (i) all
certificates identified in Annex 1 hereto, accompanied by undated stock powers
duly executed in blank and (ii) all promissory notes identified in Annex 7
hereto, accompanied by undated bond powers duly executed in blank.
5.12 Termination. When all Secured Obligations shall have been
paid in full, the Commitments of the Lenders under the Credit Agreement, all
Letter of Credit Liabilities and the Interest Rate Protection Agreements
constituting Other Indebtedness shall have expired or been terminated, this
Agreement shall terminate, and the Agent shall forthwith cause to be assigned,
transferred and delivered, against receipt but without any recourse, warranty or
representation whatsoever, any remaining Collateral and money received in
respect thereof, to or
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on the order of the respective Obligors and to be released and canceled all
licenses and rights referred to in Section 5.04(b)(i) hereof. The Agent shall
also execute and deliver to the respective Obligors upon such termination such
Uniform Commercial Code termination statements, certificates for terminating the
Liens on the Motor Vehicles and such other documentation as shall be reasonably
requested by the respective Obligors to effect the termination and release of
the Liens on the Collateral.
5.13 Further Assurances. Each Obligor agrees that, from time
to time upon the written request of the Agent, such Obligor will execute and
deliver such further documents and do such other acts and things as the Agent
may reasonably request in order fully to effect the purposes of this Agreement.
5.14 Release of Motor Vehicles. So long as no Default shall
have occurred and be continuing, upon the request of any Obligor, the Agent
shall execute and deliver to such Obligor such instruments as such Obligor shall
reasonably request to remove the notation of the Agent as lienholder on any
certificate of title for any Motor Vehicle; provided that any such instruments
shall be delivered, and the release effective only upon receipt by the Agent of
a certificate from such Obligor stating that the Motor Vehicle the lien on which
is to be released is to be sold or has suffered a casualty loss (with title
thereto passing to the casualty insurance company therefor in settlement of the
claim for such loss).
Section 6. Miscellaneous.
--------------
6.01 No Waiver. No failure on the part of the Agent or any
Lender to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Agent or any Lender of
any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies herein
are cumulative and are not exclusive of any remedies provided by law.
6.02 Notices. All notices, requests, consents and demands
hereunder shall be in writing and telecopied or delivered to the intended
recipient at its "Address for Notices" specified pursuant to Section 12.02 of
the Credit Agreement and shall be deemed to have been given at the times
specified in said Section 12.02.
6.03 Expenses. The Obligors jointly and severally agree to
reimburse each of the Lenders and the Agent for all
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reasonable costs and expenses of the Lenders and the Agent (including, without
limitation, the reasonable fees and expenses of legal counsel) in connection
with (a) any Default and any enforcement or collection proceeding resulting
therefrom, including, without limitation, all manner of participation in or
other involvement with (i) performance by the Agent of any obligations of the
Obligors in respect of the Collateral that the Obligors have failed or refused
to perform, (ii) bankruptcy, insolvency, receivership, foreclosure, winding up
or liquidation proceedings, or any actual or attempted sale, or any exchange,
enforcement, collection, compromise or settlement in respect of any of the
Collateral, and for the care of the Collateral and defending or asserting rights
and claims of the Agent in respect thereof, by litigation or otherwise,
including expenses of insurance, (iii) judicial or regulatory proceedings and
(iv) workout, restructuring or other negotiations or proceedings (whether or not
the workout, restructuring or transaction contemplated thereby is consummated)
and (b) the enforcement of this Section 6.03, and all such costs and expenses
shall be Secured Obligations entitled to the benefits of the collateral security
provided pursuant to Section 3 hereof.
6.04 Amendments, Etc. The terms of this Agreement may be
waived, altered or amended only by an instrument in writing duly executed by
each Obligor and the Agent (with the consent of the Lenders as specified in
Section 11.09 of the Credit Agreement). Any such amendment or waiver shall be
binding upon the Agent and each Lender, each holder of any of the Secured
Obligations and each Obligor.
6.05 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of each
Obligor, the Agent, the Lenders and each holder of any of the Secured
Obligations (provided, however, that no Obligor shall assign or transfer its
rights hereunder without the prior written consent of the Agent).
6.06 Captions. The captions and section headings appearing
herein are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.
6.07 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
6.08 Governing Law; Submission to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the law of the State of
New York. Each Obligor hereby submits to
Security Agreement
<PAGE>
- 23 -
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York state court sitting in New
York City for the purposes of all legal proceedings arising out of or relating
to this Agreement or the transactions contemplated hereby. Each Obligor
irrevocably waives, to the fullest extent permitted by applicable law, any
objection that it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
6.09 Waiver of Jury Trial. EACH OF THE OBLIGORS, THE AGENT AND
THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
6.10 Certain Regulatory Requirements. Any provision contained
herein to the contrary notwithstanding, no action shall be taken hereunder by
the Agent or any Lender with respect to any item of Collateral unless and until
all applicable requirements (if any) of the FCC under the Federal Communications
Act of 1934, as amended, and the respective rules and regulations thereunder and
thereof, as well as any other Federal, state or local laws, rules and
regulations of other regulatory or governmental bodies applicable to or having
jurisdiction over any Obligor (or any entity under the control of such Obligor),
have been satisfied with respect to such action and there have been obtained
such consents, approvals and authorizations (if any) as may be required to be
obtained from the FCC and any other governmental authority under the terms of
any license or similar operating right held by such Obligor (or any entity under
the control of such Obligor). It is the intention of the parties hereto that the
Liens in favor of the Agent on the Collateral shall in all relevant aspects be
subject to and governed by said statutes, rules and regulations and that nothing
in this Agreement shall be construed to diminish the control exercised by the
Obligors except in accordance with the provisions of such statutory
requirements, rules and regulations. Each Obligor agrees that upon request from
time to time by the Agent after the occurrence and during the continuance of an
Event of Default, it will use its best efforts to obtain any governmental,
regulatory or third party consents, approvals or authorizations referred to in
this Section 6.10.
6.11 Agents and Attorneys-in-Fact. The Agent may employ agents
and attorneys-in-fact in connection herewith and shall not be responsible for
the negligence or misconduct of any such agents or attorneys-in-fact selected by
it in good faith.
Security Agreement
<PAGE>
- 24 -
6.12 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Agent and the
Lenders in order to carry out the intentions of the parties hereto as nearly as
may be possible and (b) the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction.
Security Agreement
<PAGE>
- 25 -
IN WITNESS WHEREOF, the parties hereto have caused this
Security Agreement to be duly executed as of the day and year first above
written.
SINCLAIR BROADCAST GROUP, INC.
By___________________________
Name:
Title:
Security Agreement
<PAGE>
- 26 -
SUBSIDIARY GUARANTORS
---------------------
CHESAPEAKE TELEVISION, INC.
KABB, INC.
KDNL, INC.
KDSM, INC.
KSMO, INC.
SCI - INDIANA, INC.
SCI - SACRAMENTO, INC.
SINCLAIR COMMUNICATIONS, INC.
SINCLAIR RADIO OF ALBUQUERQUE, INC.
SINCLAIR RADIO OF BUFFALO, INC.
SINCLAIR RADIO OF GREENVILLE, INC.
SINCLAIR RADIO OF LOS ANGELES, INC . SINCLAIR RADIO OF
MEMPHIS, INC.
SINCLAIR RADIO OF NASHVILLE, INC.
SINCLAIR RADIO OF NEW ORLEANS, INC.
SINCLAIR RADIO OF ST. LOUIS, INC.
SINCLAIR RADIO OF WILKES-BARRE, INC.
TUSCALOOSA BROADCASTING, INC.
WCGV, INC.
WDBB, INC.
WLFL, INC.
WLOS, INC.
WPGH, INC.
WPGH LICENSEE, INC.
WSMH, INC.
WSTR, INC.
WSTR LICENSEE, INC.
WTTE, CHANNEL 28, INC.
WTTE, CHANNEL 28 LICENSEE, INC.
WTTO, INC.
WTVZ, INC.
WTVZ LICENSEE, INC.
WYZZ, INC.
SUPERIOR COMMUNICATIONS OF OKLAHOMA, INC.
By
-------------------------------
Name:
Title:
Security Agreement
<PAGE>
- 27 -
SUBSIDIARY GUARANTORS
---------------------
CHESAPEAKE TELEVISION
LICENSEE, INC.
FSF TV, INC.
KABB LICENSEE, INC.
KDNL LICENSEE, INC.
KDSM LICENSEE, INC.
KSMO LICENSEE, INC.
SCI - INDIANA LICENSEE, INC.
SCI - SACRAMENTO LICENSEE, INC.
SINCLAIR RADIO OF ALBUQUERQUE
LICENSEE, INC.
SINCLAIR RADIO OF BUFFALO
LICENSEE, INC.
SINCLAIR RADIO OF GREENVILLE
LICENSEE, INC.
SINCLAIR RADIO OF LOS ANGELES
LICENSEE, INC.
SINCLAIR RADIO OF MEMPHIS
LICENSEE, INC.
SINCLAIR RADIO OF NASHVILLE
LICENSEE, INC.
SINCLAIR RADIO OF NEW ORLEANS
LICENSEE, INC.
SINCLAIR RADIO OF ST. LOUIS
LICENSEE, INC.
SINCLAIR RADIO OF WILKES-BARRE
LICENSEE, INC.
SUPERIOR COMMUNICATIONS GROUP, INC.
SUPERIOR COMMUNICATIONS OF
KENTUCKY, INC.
SUPERIOR KY LICENSE CORP.
SUPERIOR OK LICENSE CORP.
WCGV LICENSEE, INC.
WLFL LICENSEE, INC.
WLOS LICENSEE, INC.
WSMH LICENSEE, INC.
WTTO LICENSEE, INC.
WYZZ LICENSEE, INC.
By
-------------------------
Name:
Title
Security Agreement
<PAGE>
- 28 -
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Agent
By
--------------------------
Name:
Title:
Security Agreement
<PAGE>
EXHIBIT D
[Form of Affiliate Guarantee and Security Agreement]
SECOND AMENDED AND RESTATED
AFFILIATE GUARANTEE AND SECURITY AGREEMENT
SECOND AMENDED AND RESTATED AFFILIATE GUARANTEE AND SECURITY
AGREEMENT dated as of May 31, 1996 between:
CUNNINGHAM COMMUNICATIONS, INC., a corporation duly organized
and validly existing under the laws of Maryland ("Cunningham");
KEYSER INVESTMENT GROUP, INC., a corporation duly organized
and validly existing under the laws of Maryland ("KIG")
GERSTELL DEVELOPMENT LIMITED PARTNERSHIP, a limited
partnership duly organized and validly existing under the laws of
Maryland ("GDLP"; each of Cunningham, KIG and GDLP being herein
referred to as a "Guarantor" and, collectively, as the "Guarantors");
and
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as agent for
the lenders party to the "Credit Agreement" defined below (in such
capacity, together with its successors in such capacity, the "Agent").
WHEREAS, Sinclair Broadcast Group, Inc. (the "Borrower"),
certain subsidiaries of the Borrower, certain lenders (the "Existing Lenders")
and the Agent are parties to an Amended and Restated Credit Agreement dated as
of May 24, 1994 (as heretofore amended, supplemented and otherwise modified and
in effect on the date hereof before giving effect to the amendment and
restatement thereof contemplated by the Credit Agreement referred to below, the
"Existing Credit Agreement"), and in connection therewith, (a) Cunningham, KIG,
Keyser Communications, Inc. ("KCI"), GDLP and the Agent have executed and
delivered an Amended and Restated Affiliate Guarantee and Security Agreement
dated as of May 24, 1994 (as heretofore amended, supplemented and otherwise
modified and in effect on the date hereof before giving effect to the amendment
and restatement thereof contemplated hereby, the "Existing Affiliate Guarantee
and Security Agreement") pursuant to which Cunningham, KIG, KCI and GDLP
guaranteed the payment of the Guaranteed Obligations therein and granted to the
Agent, for the benefit of the Existing Lenders, a security interest in the
Collateral referred to therein);
WHEREAS, KCI has merged with and into the Borrower;
<PAGE>
- 2 -
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Borrower, certain subsidiaries of the Borrower and certain
lenders (collectively, the "Lenders") and the Agent are entering into an Second
Amended and Restated Credit Agreement dated as of May 31, 1996 (as modified and
supplemented and in effect from time to time (including, without limitation, to
increase to amount of credit to be extended thereunder), the "Credit
Agreement"), providing, subject to the terms and conditions thereof, for the
extension and renewal of the Borrower's indebtedness under the Existing Credit
Agreement and for additional extensions of credit to the Borrower. In addition,
the Borrower may now or hereafter from time to time be obligated to various of
the Lenders in respect of certain Interest Rate Protection Agreements (as
defined in the Credit Agreement) (such obligations being herein referred to as
the "Other Indebtedness").
To induce said Lenders to amend and restate the Existing
Credit Agreement and to extend credit thereunder and to extend credit to the
Borrower which would constitute Other Indebtedness, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor has agreed to hereby amend and restate the Existing
Affiliate Guarantee and Security Agreement in its entirety. Accordingly, the
parties hereto hereby agree that the Affiliate Guarantee and Security Agreement
shall be amended and restated to read as follows (it being understood and agreed
that the security interests hereby created, and the rights and remedies afforded
the Agent hereunder, are in all respects subject and subordinate to the Existing
Liens (as defined in Section 1 below):
Section 1. Definitions. Terms defined in the Credit Agreement
are used herein as defined therein. In addition, as used herein:
"Accounts" shall have the meaning ascribed thereto in Section
4(d) hereof.
"Collateral" shall have the meaning ascribed thereto in
Section 4 hereof.
"Collateral Account" shall have the meaning ascribed thereto
in Section 5.01 hereof.
"Copyright Collateral" shall mean all Copyrights, whether now
owned or hereafter acquired by any Guarantor, including each Copyright
identified in Annex 2 hereto.
<PAGE>
- 3 -
"Copyrights" shall mean all copyrights, copyright
registrations and applications for copyright registrations, including,
without limitation, all renewals and extensions thereof, the right to
recover for all past, present and future infringements thereof, and all
other rights of any kind whatsoever accruing thereunder or pertaining
thereto.
"Documents" shall have the meaning ascribed thereto in Section
4(j) hereof.
"Equipment" shall have the meaning ascribed thereto in Section
4(h) hereof.
"Existing Liens" shall mean the Liens created by the security
agreements, mortgages, indentures, deeds of trust or similar
instruments covering the Properties of the Guarantors on the date
hereof and listed in Annex 7 hereto, as the same may be extended,
renewed or refinanced at any time or from time to time, provided that
no such extension, renewal or refinancing may increase the respective
amounts of the Indebtedness secured by such Liens or extend any such
Lien to cover additional property not theretofore covered by such Lien.
"Guaranteed Obligations" shall have the meaning ascribed
thereto in Section 2.01 hereof.
"Instruments" shall have the meaning ascribed thereto in
Section 4(e) hereof.
"Intellectual Property" shall mean all Copyright Collateral,
all Patent Collateral and all Trademark Collateral, together with (a)
all inventions, processes, production methods, proprietary information,
know-how and trade secrets; (b) all licenses or user or other
agreements granted to any Guarantor with respect to any of the
foregoing, in each case whether now or hereafter owned or used
including, without limitation, the licenses or other agreements with
respect to the Copyright Collateral, the Patent Collateral or the
Trademark Collateral, listed in Annex 5 hereto; (c) all information,
customer lists, identification of suppliers, data, plans, blueprints,
specifications, designs, drawings, recorded knowledge, surveys,
engineering reports, test reports, manuals, materials standards,
processing standards, performance standards, catalogs, computer and
automatic machinery software and programs; (d) all field repair data,
sales data and other information relating to sales or service of
products now or hereafter manufactured; (e) all accounting information
and all media in which or on which any information or knowledge or data
or records may be recorded
<PAGE>
- 4 -
or stored and all computer programs used for the compilation or
printout of such information, knowledge, records or data; (f) all
licenses, consents, permits, variances, certifications and approvals of
governmental agencies now or hereafter held by any Guarantor; and (g)
all causes of action, claims and warranties now or hereafter owned or
acquired by any Guarantor in respect of any of the items listed above.
"Inventory" shall have the meaning ascribed thereto in Section
4(f) hereof.
"Issuers" shall mean, collectively, the respective
corporations identified beneath the names of the Guarantors in Annex I
hereto under the caption "Issuer".
"Lien" shall mean, with respect to any Property, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in
respect of such Property. For purposes of this Agreement, each
Guarantor shall be deemed to own subject to a Lien any Property which
it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title
retention agreement (other than an operating lease) relating to such
Property.
"Motor Vehicles" shall mean motor vehicles, tractors, trailers
and other like property, whether or not the title thereto is governed
by a certificate of title or ownership.
"Net Assets" shall mean, with respect to any Guarantor as at
any date, for purposes of any calculation pursuant to Section 2.07
hereof, an amount equal to the excess of the fair saleable value of the
assets of such Guarantor as at such date (without taking into account
the rights of such Guarantor under Section 2.07 hereof) over the amount
that would be required to pay the probable liabilities of such
Guarantor determined as at such date (excluding the obligations of such
Guarantor under Sections 2.01 and 2.07 hereof) on all of its debts.
"Patent Collateral" shall mean all Patents, whether now owned
or hereafter acquired by any Guarantor, including each Patent
identified in Annex 3 hereto.
"Patents" shall mean all patents and patent applications,
including, without limitation, the inventions and improvements
described and claimed therein together with the reissues, divisions,
continuations, renewals, extensions and continuations-in-part thereof,
all income, royalties, damages and payments now or hereafter due and/or
payable
<PAGE>
- 5 -
under and with respect thereto, including, without limitation, damages
and payments for past or future infringements thereof, the right to sue
for past, present and future infringements thereof, and all rights
corresponding thereto throughout the world.
"Pledged Stock" shall have the meaning ascribed thereto in
Section 4(a) hereof.
"Property" shall mean any right or interest in or to property
of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible.
"Secured Obligations" shall mean, collectively, (a) the
Guaranteed Obligations and (b) all obligations of the Guarantors to the
Lenders and the Agent hereunder.
"Stock Collateral" shall mean, collectively, the Collateral
described in clauses (a) through (c) of Section 4 hereof, together with
all other certificates, shares, securities, properties or moneys as may
from time to time be pledged hereunder pursuant to said clauses (a)
through (c), and the proceeds of and to any such property and, to the
extent related to any such property or such proceeds, all books,
correspondence, credit files, records, invoices and other papers.
"Trademark Collateral" shall mean all Trademarks, whether now
owned or hereafter acquired by any Guarantor, including each Trademark
identified in Annex 4 hereto. Notwithstanding the foregoing, the
Trademark Collateral does not and shall not include any Trademark which
would be rendered invalid, abandoned, void or unenforceable by reason
of its being included as part of the Trademark Collateral.
"Trademarks" shall mean all trade names, trademarks and
service marks, logos, trademark and service mark registrations, and
applications for trademark and service mark registrations, including,
without limitation, all renewals of trademark and service mark
registrations, all rights corresponding thereto throughout the world,
the right to recover for all past, present and future infringements
thereof, all other rights of any kind whatsoever accruing thereunder or
pertaining thereto, together, in each case, with the product lines and
goodwill of the business connected with the use of, and symbolized by,
each such trade name, trademark and service mark.
"Uniform Commercial Code" shall mean the Uniform Commercial
Code as in effect from time to time in the State of New York.
<PAGE>
- 6 -
Section 2. The Guarantee.
2.01 The Guarantee. The Guarantors hereby jointly and
severally guarantee to each Lender and the Agent and their respective successors
and assigns the prompt payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the principal of and interest on the Loans made by
the Lenders to, and the Note(s) held by each Lender of, the Borrower, all
Reimbursement Obligations and interest thereon and all other amounts from time
to time owing to the Lenders or the Agent by the Credit Parties under the Basic
Documents and all Other Indebtedness and interest thereon, in each case strictly
in accordance with the terms thereof (such obligations being herein collectively
called the "Guaranteed Obligations"). The Guarantors hereby further jointly and
severally agree that if any Credit Party shall fail to pay in full when due
(whether at stated maturity, by acceleration or otherwise) any of the Guaranteed
Obligations, the Guarantors will promptly pay the same, without any demand or
notice whatsoever, and that in the case of any extension of time of payment or
renewal of any of the Guaranteed Obligations, the same will be promptly paid in
full when due (whether at extended maturity, by acceleration or otherwise) in
accordance with the terms of such extension or renewal.
2.02 Obligations Unconditional. The obligations of the
Guarantors under Section 2.01 hereof are absolute and unconditional, joint and
several, irrespective of the value, genuineness, validity, regularity or
enforceability of the Credit Agreement, the Notes or any other agreement or
instrument referred to herein or therein, or any substitution, release or
exchange of any other guarantee of or security for any of the Guaranteed
Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 2.02 that the obligations of the Guarantors
hereunder shall be absolute and unconditional, joint and several, under any and
all circumstances. Without limiting the generality of the foregoing, it is
agreed that the occurrence of any one or more of the following shall not affect
the liability of the Guarantors hereunder which shall remain absolute and
unconditional as described above:
(a) at any time or from time to time, without notice to the
Guarantors, the time for any performance of or compliance with any of
the Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
<PAGE>
- 7 -
(b) any of the acts mentioned in any of the provisions of the
Credit Agreement or the Notes or any other agreement or instrument
referred to herein or therein shall be done or omitted;
(c) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under the Credit
Agreement or the Notes or any other agreement or instrument referred to
herein or therein shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with;
(d) any lien or security interest granted to, or in favor of,
the Agent or any Lender or Lenders as security for any of the
Guaranteed Obligations shall fail to be perfected;
(e) any of the Guaranteed Obligations shall be determined to
be void or voidable (including, without limitation, for the benefit of
any creditor of any Credit Party) or shall be subordinated to the
claims of any Person (including, without limitation, any creditor of
any Credit Party);
(f) the Borrower shall be insolvent on the date hereof or
shall become insolvent on the date that any Loan is made; or
(g) the execution and delivery of a Tranche C Term Loan
Activation Notice providing for Tranche C Term Loan Commitments in any
amount.
The Guarantors hereby expressly waive diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement (including, without
limitation, marshalling) that the Agent or any Lender exhaust any right, power
or remedy or proceed against the Borrower under the Credit Agreement or the
Notes or any other agreement or instrument referred to herein or therein, or
against any other Person under any other guarantee of, or security for, any of
the Guaranteed Obligations.
2.03 Reinstatement. The obligations of the Guarantors under
this Section 2 shall be automatically reinstated if and to the extent that for
any reason any payment by or on behalf of the Borrower in respect of the
Guaranteed Obligations is rescinded or must be otherwise restored by any holder
of any of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, and the Guarantors jointly and
<PAGE>
- 8 -
severally agree that they will indemnify the Agent and each Lender on demand for
all reasonable costs and expenses (including, without limitation, fees of
counsel) incurred by the Agent or such Lender in connection with such rescission
or restoration, including any such costs and expenses incurred in defending
against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.
2.04 Subrogation. Each Guarantor hereby waives all rights of
subrogation or contribution, whether arising by contract or operation of law
(including, without limitation, any such right arising under the Bankruptcy
Code) or otherwise by reason of any payment by it pursuant to the provisions of
this Section 2.
2.05 Remedies. The Guarantors jointly and severally agree
that, as between the Guarantors and the Lenders, the obligations of the Borrower
under the Credit Agreement and the Notes may be declared to be forthwith due and
payable as provided in Section 10 of the Credit Agreement (and shall be deemed
to have become automatically due and payable in the circumstances provided in
said Section 10) for purposes of Section 2.01 hereof notwithstanding any stay,
injunction or other prohibition preventing such declaration (or such obligations
from becoming automatically due and payable) as against the Borrower and that,
in the event of such declaration (or such obligations being deemed to have
become automatically due and payable), such obligations (whether or not due and
payable by the Borrower) shall forthwith become due and payable by the
Guarantors for purposes of said Section 2.01.
2.06 Continuing Guarantee. The guarantee in this Section 2 is
a continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.
2.07 Rights of Contribution. The Guarantors hereby agree, as
between themselves, that if any Guarantor (an "Excess Funding Guarantor") shall
pay Guaranteed Obligations in excess of the Excess Funding Guarantor's Pro Rata
Share (as hereinafter defined) of such Guaranteed Obligations, the other
Guarantors shall, on demand (but subject to the next sentence hereof), pay to
the Excess Funding Guarantor an amount equal to their respective Pro Rata Shares
of such Excess Funding Guarantor's payment. The payment obligation of any
Guarantor to any Excess Funding Guarantor under this Section 2.07 shall be
subordinate and subject in right of payment to the prior payment in full of the
obligations of such Guarantor under the other provisions of this Section 2 and
such Excess Funding Guarantor shall not exercise any right or remedy with
respect to such excess until payment and satisfaction in full of all of such
obligations. For
<PAGE>
- 9 -
the purposes hereof, "Pro Rata Share" shall mean, for any Guarantor, a
percentage equal to the percentage that such Guarantor's Net Assets as at
December 31, 1995 is of the aggregate Net Assets of all of the Guarantors as at
such date.
2.08 Limitation on Guarantee Obligations. In any action or
proceeding involving any State corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Guarantor under Section 2.01
hereof would otherwise, taking into account the provisions of Section 2.07
hereof, be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its liability under said Section 2.01, then, notwithstanding any other provision
hereof to the contrary, the amount of such liability shall, without any further
action by such Guarantor, any Lender, the Agent or any other Person, be
automatically limited and reduced to the highest amount which is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.
2.09 Instrument for the Payment of Money. Each Guarantor
hereby acknowledges that the guarantee in this Section 2 constitutes an
instrument for the payment of money, and consents and agrees that any Lender or
the Agent, at its sole option, in the event of a dispute by such Guarantor in
the payment of any moneys due hereunder, shall have the right to bring
motion-action under New York CPLR Section 3213.
Section 3. Representations and Warranties. Each Guarantor
represents and warrants to the Lenders and the Agent that:
3.01 Existence. Such Guarantor: (a) is a corporation or a
limited partnership duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization; (b) has all requisite
corporate or partnership power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry on
its business as now being or as proposed to be conducted; and (c) is qualified
to do business in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary and where failure so to
qualify (either individually or in the aggregate) would have a material adverse
effect on the financial condition, operations, business or prospects of such
Guarantor.
3.02 No Breach. None of the execution and delivery of this
Agreement, the consummation of the transactions herein
<PAGE>
- 10 -
contemplated or compliance with the terms and provisions hereof will conflict
with or result in a breach of, or require any consent under, the charter or
by-laws or the partnership agreement (as the case may be) constituting such
Guarantor, of such Guarantor, or any applicable law or regulation, or any order,
writ, injunction or decree of any court or governmental authority or agency, or
any agreement or instrument to which such Guarantor is a party or by which it is
bound or to which it is subject, or constitute a default under any such
agreement or instrument, or result in the creation or imposition of any Lien
upon any of the revenues or assets of such Guarantor pursuant to the terms of
any such agreement or instrument.
3.03 Action. Such Guarantor has all necessary corporate or
partnership power and authority to execute, deliver and perform its obligations
under this Agreement; the execution, delivery and performance by such Guarantor
of this Agreement have been duly authorized by all necessary corporate or
partnership action on its part (including, without limitation, any required
shareholder approvals); and this Agreement has been duly and validly executed
and delivered by such Guarantor and constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms.
3.04 Approvals. No authorizations, approvals or consents of,
and no filings or registrations with, any governmental or regulatory authority
or agency are necessary for the execution, delivery or performance by such
Guarantor of this Agreement or for the validity or enforceability hereof, except
for filings and recordings in respect of the Liens created pursuant hereto.
3.05 Pledged Collateral.
------------------
(a) Such Guarantor is the sole beneficial owner of the
Collateral in which it purports to grant a security interest pursuant to Section
4 hereof and no Lien exists or will exist upon any such Collateral at any time
(and, with respect to the Stock Collateral, no right or option to acquire the
same exists in favor of any other Person), except for Liens permitted under
Section 6.03 hereof and except for the pledge and security interest in favor of
the Agent for the benefit of the Lenders created or provided for herein, which
pledge and security interest constitute a perfected pledge and security interest
in and to all of such Collateral (other than Intellectual Property registered or
otherwise located outside of the United States of America) subject to no equal
or prior Lien except for the Existing Liens;
(b) The Pledged Stock evidenced by the certificates identified
under the name of such Guarantor in Annex 1 hereto is,
<PAGE>
- 11 -
and all other Pledged Stock in which such Guarantor shall hereafter grant a
security interest pursuant to Section 4 hereof will be, duly authorized, validly
existing, fully paid and non-assessable and none of such Pledged Stock is or
will be subject to any contractual restriction, or any restriction under the
charter or by-laws of the respective Issuer of such Pledged Stock, upon the
transfer of such Pledged Stock (except for any such restriction contained
herein).
(c) The Pledged Stock evidenced by the certificates identified
under the name of such Guarantor in Annex 1 hereto constitutes all of the issued
and outstanding shares of capital stock of any class of the Issuers beneficially
owned by such Guarantor on the date hereof (whether or not registered in the
name of such Guarantor), and said Annex 1 correctly identifies, as at the date
hereof, the respective Issuers of such Pledged Stock, the respective class and
par value of the shares comprising such Pledged Stock and the respective number
of shares (and registered owners thereof) evidenced by each such certificate.
(d) Annexes 2, 3 and 4 hereto, respectively, set forth under
the name of such Guarantor a complete and correct list of all Copyrights,
Patents and Trademarks owned by such Guarantor on the date hereof; except
pursuant to licenses and other user agreements entered into by such Guarantor in
the ordinary course of business, which are listed in Annex 5 hereto, such
Guarantor owns and possesses the right to use, and has done nothing to authorize
or enable any other Person to use, any Copyright, Patent, or Trademark listed in
said Annexes 2, 3 and 4, and all registrations listed in said Annexes 2, 3 and 4
are valid and in full force and effect; except as may be set forth in said Annex
5, the Guarantors own and possess the right to use all Copyrights, Patents, and
Trademarks;
(e) Annex 5 hereto sets forth a complete and correct list of
all licenses and other user agreements included in the Intellectual Property on
the date hereof;
(f) To such Guarantor's knowledge, (i) except as set forth in
Annex 5 hereto, there is no violation by others of any right of such Guarantor
with respect to any Copyright, Patent, or Trademark listed in Annexes 2, 3 and 4
hereto, respectively, under the name of such Guarantor and (ii) such Guarantor
is not infringing in any respect upon any Copyright, Patent, or Trademark of any
other Person; and no proceedings have been instituted or are pending against
such Guarantor or, to such Guarantor's knowledge, threatened, and no claim
against such Guarantor has been received by such Guarantor, alleging any such
violation, except as may be set forth in said Annex 5; and
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(g) Such Guarantor does not own any Trademarks registered in
the United States of America to which the last sentence of the definition of
Trademark Collateral applies.
Section 4. Collateral. Subject to the Existing Liens, each
Guarantor hereby pledges and grants to the Agent, for the benefit of the Lenders
as hereinafter provided, a security interest in all of such Guarantor's right,
title and interest in the following property, whether now owned by such
Guarantor or hereafter acquired and whether now existing or hereafter coming
into existence (all being collectively referred to herein as "Collateral") as
collateral security for the prompt payment in full when due (whether at stated
maturity, by acceleration or otherwise) of the Secured Obligations owing by such
Guarantor:
(a) the shares of stock of the Issuers evidenced by the
certificates identified in Annex 1 hereto under the name of such
Guarantor and all other shares of capital stock of whatever class of
the Issuers, now or hereafter owned by such Guarantor, in each case
together with the certificates evidencing the same (collectively, the
"Pledged Stock");
(b) all shares, securities, moneys or property representing a
dividend on any of the Pledged Stock, or representing a distribution or
return of capital upon or in respect of the Pledged Stock, or resulting
from a split-up, revision, reclassification or other like change of the
Pledged Stock or otherwise received in exchange therefor, and any
subscription warrants, rights or options issued to the holders of, or
otherwise in respect of, the Pledged Stock;
(c) without affecting the obligations of such Guarantor under
any provision prohibiting such action hereunder, in the event of any
consolidation or merger in which any Issuer is not the surviving
corporation, all shares of each class of the capital stock of the
successor corporation (unless such successor corporation is such
Guarantor itself) formed by or resulting from such consolidation or
merger;
(d) all accounts and general intangibles (each as defined in
the Uniform Commercial Code) of such Guarantor constituting any right
to the payment of money, including (but not limited to) all moneys due
and to become due to such Guarantor in respect of any loans or advances
or for Inventory or Equipment or other goods sold or leased or for
services rendered, all moneys due and to become due to such Guarantor
under any guarantee (including a letter of credit) of the purchase
price of Inventory or Equipment sold by such
<PAGE>
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Guarantor and all tax refunds (such accounts, general intangibles and
moneys due and to become due being herein called collectively
"Accounts");
(e) all instruments, chattel paper or letters of credit (each
as defined in the Uniform Commercial Code) of such Guarantor
evidencing, representing, arising from or existing in respect of,
relating to, securing or otherwise supporting the payment of, any of
the Accounts, including (but not limited to) promissory notes, drafts,
bills of exchange and trade acceptances (herein collectively called
"Instruments");
(f) all inventory (as defined in the Uniform Commercial Code)
of such Guarantor, all goods obtained by such Guarantor in exchange for
such inventory, and any products made or processed from such inventory
including all substances, if any, commingled therewith or added thereto
(herein collectively called "Inventory");
(g) all Intellectual Property and all other accounts or
general intangibles not constituting Intellectual Property or Accounts;
(h) all equipment (as defined in the Uniform Commercial Code)
of such Guarantor, including all Motor Vehicles (herein collectively
called "Equipment");
(i) each contract and other agreement of such Guarantor
relating to the sale or other disposition of Inventory or Equipment;
(j) all documents of title (as defined in the Uniform
Commercial Code) or other receipts of such Guarantor covering,
evidencing or representing Inventory or Equipment (herein collectively
called "Documents");
(k) all rights, claims and benefits of such Guarantor against
any Person arising out of, relating to or in connection with Inventory
or Equipment purchased by such Guarantor, including, without
limitation, any such rights, claims or benefits against any Person
storing or transporting such Inventory or Equipment;
(l) the balance from time to time in the Collateral Account;
and
(m) all other tangible and intangible personal property and
fixtures of such Guarantor, including, without limitation, all
proceeds, products, offspring, rents, profits, income, benefits,
accessions, substitutions and
<PAGE>
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replacements of and to any of the property of such Guarantor described
in clauses (a) through (l) above in this Section 4 (including, without
limitation, any proceeds of insurance thereon and all causes of action,
claims and warranties now or hereafter held by any Guarantor in respect
of any of the items listed above), and, to the extent related to any
property described in said clauses or such proceeds, products and
accessions, all books, correspondence, credit files, records, invoices
and other papers, including without limitation all tapes, cards,
computer runs and other papers and documents in the possession or under
the control of such Guarantor or any computer bureau or service company
from time to time acting for such Guarantor.
Section 5. Cash Proceeds of Collateral.
5.01 Collateral Account. There is hereby established with the
Agent a cash collateral account (the "Collateral Account") in the name and under
the control of the Agent into which there shall be deposited from time to time
the cash proceeds of any of the Collateral (including proceeds of insurance
thereon) required to be delivered to the Agent pursuant hereto and into which
the Guarantors may from time to time deposit any additional amounts which any of
them wishes to pledge to the Agent for the benefit of the Lenders as additional
collateral security hereunder. The balance from time to time in the Collateral
Account shall constitute part of the Collateral hereunder and shall not
constitute payment of the Secured Obligations until applied as hereinafter
provided. Except as expressly provided in the next sentence, the Agent shall
remit the collected balance outstanding to the credit of the Collateral Account
to or upon the order of the Guarantors as the Guarantors through the Borrower
shall from time to time instruct. However, at any time following the occurrence
and during the continuance of an Event of Default, the Agent may (and, if
instructed by the Lenders as specified in Section 11.03 of the Credit Agreement,
shall) in its (or their) discretion apply or cause to be applied (subject to
collection) the balance from time to time outstanding to the credit of the
Collateral Account to the payment of the Secured Obligations in the manner
specified in Section 7.09 hereof. The balance from time to time in the
Collateral Account shall be subject to withdrawal only as provided herein.
5.02 Proceeds of Accounts. At any time after the occurrence
and during the continuance of an Event of Default, each Guarantor shall, upon
the request of the Agent, instruct all account debtors and other Persons
obligated in respect of all Accounts to make all payments in respect of the
Accounts either (a) directly to the Agent (by instructing that such payments be
remitted to a post office box which shall be in the name and
<PAGE>
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under the control of the Agent) or (b) to one or more other banks in the United
States of America (by instructing that such payments be remitted to a post
office box which shall be in the name and under the control of the Agent) under
arrangements, in form and substance satisfactory to the Agent pursuant to which
such Guarantor shall have irrevocably instructed such other bank (and such other
bank shall have agreed) to remit all proceeds of such payments directly to the
Agent for deposit into the Collateral Account. All payments made to the Agent,
as provided in the preceding sentence, shall be immediately deposited in the
Collateral Account. In addition to the foregoing, each Guarantor agrees that, at
any time after the occurrence and during the continuance of an Event of Default,
if the proceeds of any Collateral hereunder (including the payments made in
respect of Accounts) shall be received by it, such Guarantor shall, upon the
request of the Agent, as promptly as possible deposit such proceeds into the
Collateral Account. Until so deposited, all such proceeds shall be held in trust
by such Guarantor for and as the property of the Agent and shall not be
commingled with any other funds or property of such Guarantor.
5.03 Investment of Balance in Collateral Account. Amounts on
deposit in the Collateral Account shall be invested from time to time in such
Permitted Investments as the Guarantors through the Borrower (or, after the
occurrence and during the continuance of a Default, the Agent) shall determine,
which Permitted Investments shall be held in the name and be under the control
of the Agent, provided that (a) at any time after the occurrence and during the
continuance of an Event of Default, the Agent may (and, if instructed by the
Lenders as specified in Section 11.03 of the Credit Agreement, shall) in its (or
their) discretion at any time and from time to time elect to liquidate any such
Permitted Investments and to apply or cause to be applied the proceeds thereof
to the payment of the Secured Obligations in the manner specified in Section
7.09 hereof and (b) if requested by the Guarantors through the Borrower, such
Permitted Investments may be held in the name and under the control of one or
more of the Lenders (and in that connection each Lender, pursuant to Section
11.10 of the Credit Agreement) has agreed that such Permitted Investments shall
be held by such Lender as a collateral sub-agent for the Agent hereunder).
Section 6. Covenants. The Guarantors jointly and severally
agree that, until the payment and satisfaction in full of the Secured
Obligations and the expiration or termination of the Commitments and all Letter
of Credit Liabilities of the Lenders under the Credit Agreement:
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6.01 Financial Statements. Each Guarantor shall deliver to
each of the Lenders:
(a) as soon as available and in any event within 45 days after
the end of each of the first three quarterly fiscal periods of each
fiscal year of such Guarantor, statements of income, retained earnings
and changes in financial position (or of cash flow, as the case may be)
of such Guarantor for such period and for the period from the beginning
of the respective fiscal year to the end of such period, and the
related balance sheets as at the end of such period, setting forth in
each case in comparative form the corresponding figures for the
corresponding period in the preceding fiscal year, accompanied by a
certificate of a senior financial officer of such Guarantor or (in the
case of GDLP) of a senior financial officer of the general partner of
such Guarantor, which certificate shall state that said financial
statements present fairly, in all material respects, the financial
condition and results of operations, as the case may be, of such
Guarantor in accordance with generally accepted accounting principles,
consistently applied, as at the end of, and for, such period (subject
to normal year-end audit adjustments);
(b) as soon as available and in any event within 110 days
after the end of each fiscal year of such Guarantor, statements of
income, retained earnings and changes in financial position (or of cash
flow, as the case may be) of such Guarantor for such year and the
related balance sheets as at the end of such year, setting forth in
each case in comparative form the corresponding figures for the
preceding fiscal year, and accompanied by an opinion thereon of
independent certified public accountants of recognized national
standing, which opinion shall state that said financial statements
present fairly, in all material respects, the financial condition and
results of operations of such Guarantor in accordance with generally
accepted accounting principles, consistently applied, as at the end of,
and for, such fiscal year, and a certificate of such accountants
stating that, in making the examination necessary for their opinion,
they obtained no knowledge, except as specifically stated, of any
Default;
(c) promptly upon the mailing thereof to the shareholders of
such Guarantor or (in the case of GDLP) to the partner of such
Guarantor generally, copies of all financial statements, reports and
proxy statements so mailed; and
<PAGE>
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(d) from time to time such other information regarding the
business, affairs or financial condition of such Guarantor as any
Lender or the Agent may reasonably request.
6.02 Existence, Etc. Each Guarantor will:
(a) preserve and maintain its corporate or limited partnership
existence and all of its material rights, privileges and franchises;
(b) comply with the requirements of all applicable laws,
rules, regulations and orders of governmental or regulatory authorities
if failure to comply therewith would (either individually or in the
aggregate) materially and adversely affect the financial condition,
operations, business or prospects taken as a whole of such Guarantor;
(c) pay and discharge all taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any
of its property prior to the date on which penalties attach thereto,
except for any such tax, assessment, charge or levy the payment of
which is being contested in good faith and by proper proceedings and
against which adequate reserves are being maintained;
(d) maintain all of its properties used or useful in its
business in good working order and condition, ordinary wear and tear
excepted;
(e) permit representatives of any Lender or the Agent, during
normal business hours, to examine, copy and make extracts from its
books and records, to inspect its properties, and to discuss its
business and affairs with its officers, all to the extent reasonably
requested by any Lender or the Agent (as the case may be); and
(f) maintain insurance with financially sound and reputable
insurance companies, and with respect to Property and risks of a
character usually maintained by corporations engaged in the same or
similar business similarly situated, against loss, damage or liability
of the kinds and in the amounts customarily maintained by such
corporations and maintain such other insurance as is usually carried by
such corporations.
6.03 Limitation on Liens. Each Guarantor will not create,
incur, assume or suffer to exist any Lien upon any of its Property, whether now
owned or hereafter acquired, except:
(a) Liens created pursuant to the Security Documents;
<PAGE>
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(b) Liens imposed by any governmental authority for taxes,
assessments or charges not yet due or which are being contested in good
faith and by appropriate proceedings if adequate reserves with respect
thereto are maintained on the books of either Guarantor in accordance
with generally accepted accounting principles;
(c) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 30 days or
which are being contested in good faith and by appropriate proceedings
and Liens securing judgments;
(d) pledges or deposits under worker's compensation,
unemployment insurance and other social security legislation;
(e) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(f) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements, licenses,
restrictions on the use of Property or minor imperfections in title
thereto which, in the aggregate, are not material in amount, and which
do not in any case materially detract from the value of the Property
subject thereto or interfere with the ordinary conduct of the business
of any Guarantor;
(g) the Existing Liens; and
(h) any extension, renewal or replacement of the foregoing,
provided, however, that the Liens permitted hereunder shall not be
spread to cover any additional Indebtedness or Property (other than a
substitution of like Property).
6.04 Lines of Business. None of the Guarantors shall engage in
any line of business other than owning, operating and leasing real property and
improvements thereon, located:
(a) in the case of GDLP, at (i) 750 Ivory Avenue, Pittsburgh,
Pennsylvania 15214 and (ii) Hawkeye Drive Extended, Monroeville,
Pennsylvania;
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(b) in the case of KIG, at (i) 2000-2008 W. 41st St.,
Baltimore, Maryland 21211 and (ii) 2010 W. 41st St., Baltimore, MD
21211; and
(c) in the case of Cunningham, at (i) 3500 Parkdale Avenue,
Baltimore, Maryland 21211, (ii) 3520 Parkdale Avenue, Baltimore,
Maryland 21211, (iii) 3521 Parkdale Avenue, Baltimore, Maryland 21211,
(iv) 3523 Parkdale Avenue, Baltimore Maryland 21211, (v) 3525 Parkdale
Avenue, Baltimore, Maryland 21211, (vi) 1200 North Rolling Road,
Baltimore, Maryland 21228 and (vii) 3900 Hooper Avenue, Baltimore,
Maryland 21211.
Section 7. Further Assurances; Remedies. In furtherance of the
grant of the pledge and security interest pursuant to Section 4 hereof, the
Guarantors hereby jointly and severally agree with each Lender and the Agent as
follows:
7.01 Delivery and Other Perfection. Each Guarantor shall:
-----------------------------
(a) if any of the above-described shares, securities, moneys
or property required to be pledged by such Guarantor under clauses (a),
(b) and (c) of Section 4 hereof are received by such Guarantor,
forthwith either (i) transfer and deliver to the Agent such shares or
securities so received by such Guarantor (together with the
certificates for any such shares and securities duly endorsed in blank
or accompanied by undated stock powers duly executed in blank), all of
which thereafter shall be held by the Agent, pursuant to the terms of
this Agreement, as part of the Collateral or (ii) take such other
action as the Agent shall deem necessary or appropriate to duly record
the Lien created hereunder in such shares, securities, moneys or
property referred to in said clauses (a), (b) and (c);
(b) deliver and pledge to the Agent any and all Instruments,
endorsed and/or accompanied by such instruments of assignment and
transfer in such form and substance as the Agent may request; provided,
that so long as no Default shall have occurred and be continuing, such
Guarantor may retain for collection in the ordinary course any
Instruments received by such Guarantor in the ordinary course of
business and the Agent shall, promptly upon request of such Guarantor
through the Borrower, make appropriate arrangements for making any
Instrument pledged by such Guarantor available to such Guarantor for
purposes of presentation, collection or renewal (any such arrangement
to be effected, to the extent deemed appropriate by the Agent, against
trust receipt or like document);
<PAGE>
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(c) give, execute, deliver, file and/or record any financing
statement, notice, instrument, document, agreement or other papers that
may be necessary or desirable (in the judgment of the Agent) to create,
preserve, perfect or validate the pledge and security interest granted
pursuant hereto or to enable the Agent to exercise and enforce its
rights hereunder with respect to such pledge and security interest,
including, without limitation, causing any or all of the Stock
Collateral to be transferred of record into the name of the Agent or
its nominee (and the Agent agrees that if any Stock Collateral is
transferred into its name or the name of its nominee, the Agent will
thereafter promptly give to the respective Guarantor copies of any
notices and communications received by it with respect to the Stock
Collateral pledged by such Guarantor hereunder), provided that notices
to account debtors in respect of any Accounts or Instruments shall be
subject to the provisions of clause (i) below;
(d) without limiting the obligations of such Guarantor under
Section 7.04(c) hereof, upon the acquisition after the date hereof by
such Guarantor of any Equipment covered by a certificate of title or
ownership, cause the Agent to be listed as the lienholder on such
certificate of title and within 120 days of the acquisition thereof
deliver evidence of the same to the Agent;
(e) keep full and accurate books and records relating to the
Collateral, and stamp or otherwise mark such books and records in such
manner as the Agent may reasonably require in order to reflect the
security interests granted by this Agreement;
(f) furnish to the Agent from time to time (but, unless a
Default shall have occurred and be continuing, no more frequently than
quarterly) statements and schedules further identifying and describing
the Copyright Collateral, the Patent Collateral, and the Trademark
Collateral, respectively, and such other reports in connection with the
Copyright Collateral, the Patent Collateral, and the Trademark
Collateral, as the Agent may reasonably request, all in reasonable
detail;
(g) promptly upon request of the Agent, following receipt by
the Agent of any statements, schedules or reports pursuant to clause
(f) above, modify this Agreement by amending Annexes 2, 3 and/or 4
hereto, as the case may be, to include any Copyright, Patent, or
Trademark which becomes part of the Collateral under this Agreement;
<PAGE>
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(h) permit representatives of the Agent, upon reasonable
notice, at any time during normal business hours to inspect and make
abstracts from its books and records pertaining to the Collateral, and
permit representatives of the Agent to be present at such Guarantor's
place of business to receive copies of all communications and
remittances relating to the Collateral, and forward copies of any
notices or communications received by such Guarantor with respect to
the Collateral, all in such manner as the Agent may require; and
(i) upon the occurrence and during the continuance of any
Default, upon request of the Agent, promptly notify (and such Guarantor
hereby authorizes the Agent so to notify) each account debtor in
respect of any Accounts or Instruments that such Collateral has been
assigned to the Agent hereunder, and that any payments due or to become
due in respect of such Collateral are to be made directly to the Agent.
7.02 Other Financing Statements and Liens. Except as otherwise
permitted under Section 6.03 hereof, without the prior written consent of the
Agent, no Guarantor shall file or suffer to be on file, or authorize or permit
to be filed or to be on file, in any jurisdiction, any financing statement or
like instrument with respect to the Collateral in which the Agent is not named
as the sole secured party for the benefit of the Lenders.
7.03 Preservation of Rights. The Agent shall not be required
to take steps necessary to preserve any rights against prior parties to any of
the Collateral.
7.04 Special Provisions Relating to Certain Collateral.
---------------------------------------------------
(a) Stock Collateral.
-----------------
(i) So long as no Event of Default shall have occurred and be
continuing, the Guarantors shall have the right to exercise all voting,
consensual and other powers of ownership pertaining to the Stock Collateral for
all purposes not inconsistent with the terms of this Agreement, the Credit
Agreement, the Note(s) or any other instrument or agreement referred to herein
or therein, provided that the Guarantors jointly and severally agree that they
will not vote the Stock Collateral in any manner that is inconsistent with the
terms of this Agreement, the Credit Agreement, the Note(s) or any such other
instrument or agreement; and the Agent shall execute and deliver to the
Guarantors or cause to be executed and delivered to the Guarantors all such
proxies, powers of attorney, dividend
<PAGE>
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and other orders, and all such instruments, without recourse, as the Guarantors
may reasonably request for the purpose of enabling the Guarantors to exercise
the rights and powers which they are entitled to exercise pursuant to this
Section 7.04(a)(i).
(ii) Unless and until an Event of Default has occurred and is
continuing, the Guarantors shall be entitled to receive and retain any dividends
on the Stock Collateral paid in cash out of earned surplus.
(iii) If any Event of Default shall have occurred, then so long as
such Event of Default shall continue, and whether or not the Agent or any Lender
exercises any available right to declare any Secured Obligation due and payable
or seeks or pursues any other relief or remedy available to it under applicable
law or under this Agreement, the Credit Agreement, the Note(s) or any other
agreement relating to such Secured Obligation, all dividends and other
distributions on the Stock Collateral shall be paid directly to the Agent and
retained by it in the Collateral Account as part of the Stock Collateral,
subject to the terms of this Agreement, and, if the Agent shall so request in
writing, the Guarantors jointly and severally agree to execute and deliver to
the Agent appropriate additional dividend, distribution and other orders and
documents to that end, provided that if such Event of Default is cured, any such
dividend or distribution theretofore paid to the Agent shall, upon request of
the Guarantors (except to the extent theretofore applied to the Secured
Obligations), be returned by the Agent to the Guarantors.
(b) Intellectual Property.
-------------------------
(i) For the purpose of enabling the Agent to exercise rights
and remedies under Section 7.05 hereof at such time as the Agent shall be
lawfully entitled to exercise such rights and remedies, and for no other
purpose, each Guarantor hereby grants to the Agent, to the extent assignable, an
irrevocable, non-exclusive license (exercisable without payment of royalty or
other compensation to such Guarantor) to use, assign, license or sublicense any
of the Intellectual Property now owned or hereafter acquired by such Guarantor,
wherever the same may be located, including in such license reasonable access to
all media in which any of the licensed items may be recorded or stored and to
all computer programs used for the compilation or printout thereof;
(ii) Notwithstanding anything contained herein to the contrary,
dispose of their property, so long as no Event of Default shall have occurred
and be continuing, the Guarantors will be permitted to exploit, use, enjoy,
protect, license, sublicense, assign, sell, dispose of or take other actions
with
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respect to the Intellectual Property in the ordinary course of the business of
the Guarantors. In furtherance of the foregoing, unless an Event of Default
shall have occurred and be continuing the Agent shall from time to time, upon
the request of the Guarantors through the Borrower, execute and deliver any
instruments, certificates or other documents, in the form so requested, which
the Guarantors through the Borrower shall have certified are appropriate (in
their judgment) to allow them to take any action permitted above (including
relinquishment of the license provided pursuant to clause (i) immediately above
as to any specific Intellectual Property). Further, upon the payment in full of
all of the Secured Obligations, the cancellation or termination of the
Commitments and Letter of Credit Liabilities and the termination of all Interest
Rate Protection Agreements constituting Other Indebtedness or earlier expiration
of this Agreement or release of the Collateral, the Agent shall grant back to
the Guarantors the license granted pursuant to clause (i) immediately above. The
exercise of rights and remedies under Section 7.05 hereof by the Agent shall not
terminate the rights of the holders of any licenses or sublicenses theretofore
granted by the Guarantors in accordance with the first sentence of this clause
(ii).
(c) Motor Vehicles.
---------------
(i) At any time after the occurrence and during the
continuance of an Event of Default, each Guarantor shall, upon the request of
the Agent, deliver to the Agent originals of the certificates of title or
ownership for the Motor Vehicles owned by it with the Agent listed as lienholder
and take such other action as the Agent shall deem appropriate to perfect the
security interest created hereunder in such Motor Vehicles.
(ii) Upon the acquisition after the date hereof by any Guarantor of
any Motor Vehicle, such Guarantor shall deliver to the Agent, at any time after
the occurrence and during the continuance of an Event of Default and upon the
request of the Agent, originals of the certificates of title or ownership for
such Motor Vehicles, together with the manufacturer's statement of origin with
the Agent listed as lienholder; provided, however, if the Motor Vehicle to be
acquired is subject to a purchase money security interest, the Agent shall be
listed as a junior lienholder to the Person holding such purchase money security
interest.
(iii) Without limiting Section 7.10 hereof, each Guarantor hereby
appoints the Agent as its attorney-in-fact, effective the date hereof and
terminating upon the termination of this Agreement, for the purpose of (x)
executing on behalf of such Guarantor title or ownership applications for filing
with appropriate state agencies to enable Motor Vehicles now owned or
<PAGE>
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hereafter acquired by such Guarantor to be retitled and the Agent listed as
lienholder thereon, (y) filing such applications with such state agencies and
(z) executing such other documents and instruments on behalf of, and taking such
other action in the name of, such Guarantor as the Agent may deem necessary or
advisable to accomplish the purposes hereof (including, without limitation, the
purpose of creating in favor of the Agent a perfected lien on the Motor Vehicles
and exercising the rights and remedies of the Agent under Section 7.05 hereof).
This appointment as attorney-in-fact is irrevocable and coupled with an
interest.
(iv) Any certificates of title or ownership delivered pursuant to
the terms hereof shall be accompanied by odometer statements for each Motor
Vehicle covered thereby.
7.05 Events of Default, etc. During the period during which an
Event of Default shall have occurred and be continuing:
(a) each Guarantor shall, at the request of the Agent,
assemble the Collateral owned by it at such place or places, reasonably
convenient to both the Agent and such Guarantor, designated in its
request;
(b) the Agent may make any reasonable compromise or settlement
deemed desirable with respect to any of the Collateral and may extend
the time of payment, arrange for payment in installments, or otherwise
modify the terms of, any of the Collateral;
(c) the Agent shall have all of the rights and remedies with
respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not said Code is in effect in the
jurisdiction where the rights and remedies are asserted) and such
additional rights and remedies to which a secured party is entitled
under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted, including, without limitation, the
right, to the maximum extent permitted by law, to exercise all voting,
consensual and other powers of ownership pertaining to the Collateral
as if the Agent were the sole and absolute owner thereof (and each
Guarantor agrees to take all such action as may be appropriate to give
effect to such right);
(d) the Agent in its discretion may, in its name or in the
name of the Guarantors or otherwise, demand, sue for, collect or
receive any money or property at any time payable or receivable on
account of or in exchange for any of the Collateral, but shall be under
no obligation to do so; and
<PAGE>
- 25 -
(e) the Agent may, upon ten Business Days' prior written
notice to the Guarantors of the time and place, with respect to the
Collateral or any part thereof which shall then be or shall thereafter
come into the possession, custody or control of the Agent, the Lenders
or any of their respective agents, sell, lease, assign or otherwise
dispose of all or any portion of such Collateral, at such place or
places as the Agent deems best, and for cash or on credit or for future
delivery (without thereby assuming any credit risk), at public or
private sale, without demand of performance or notice of intention to
effect any such disposition or of the time or place thereof (except
such notice as is required above or by applicable statute and cannot be
waived) and the Agent or any Lender or anyone else may be the
purchaser, lessee, assignee or recipient of any or all of the
Collateral so disposed of at any public sale (or, to the extent
permitted by law, at any private sale), and thereafter hold the same
absolutely, free from any claim or right of whatsoever kind, including
any right or equity of redemption (statutory or otherwise), of the
Guarantors, any such demand, notice and right or equity being hereby
expressly waived and released. In the event of any sale, assignment, or
other disposition of any of the Trademark Collateral, the goodwill
connected with and symbolized by the Trademark Collateral subject to
such disposition shall be included, and the Guarantors shall supply to
the Agent or its designee, for inclusion in such sale, assignment or
other disposition, all Intellectual Property relating to such Trademark
Collateral. The Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to
time by announcement at the time and place fixed for the sale, and such
sale may be made at any time or place to which the same may be so
adjourned.
The proceeds of each collection, sale or other disposition under this Section
7.05, including by virtue of the exercise of the license granted to the Agent in
Section 7.04(b)(i) hereof, shall be applied in accordance with Section 7.09
hereof.
The Guarantors recognize that, by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, and applicable
state securities laws, the Agent may be compelled, with respect to any sale of
all or any part of the Collateral, to limit purchasers to those who will agree,
among other things, to acquire the Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. The
Guarantors acknowledge that any such private sales may be at prices and on terms
less favorable to the Agent than those obtainable through a public sale without
such restrictions, and, notwithstanding such circumstances, agree that any such
private
<PAGE>
- 26 -
sale shall be deemed to have been made in a commercially reasonable manner and
that the Agent shall have no obligation to engage in public sales and no
obligation to delay the sale of any Collateral for the period of time necessary
to permit the respective Issuer or issuer thereof to register it for public
sale.
7.06 Deficiency. If the proceeds of sale, collection or other
realization of or upon the Collateral pursuant to Section 7.05 hereof are
insufficient to cover the costs and expenses of such realization and the payment
in full of the Secured Obligations, the Guarantors shall remain liable for any
deficiency.
7.07 Removals, etc. Without at least 30 days' prior written
notice to the Agent, no Guarantor shall (a) maintain any of its books or records
with respect to the Collateral at any office or maintain its chief executive
office or its principal place of business at any place, or permit any Inventory
or Equipment to be located anywhere other than at the address indicated beneath
the signature of such Guarantor to this Agreement or at one of the locations
identified in Annex 6 hereto under its name or in transit from one of such
locations to another or (b) change its corporate or partnership name, or the
name under which it does business, from the name shown on the signature pages
hereto.
7.08 Private Sale. The Agent and the Lenders shall incur no
liability as a result of the sale of the Collateral, or any part thereof, at any
private sale pursuant to Section 7.05 hereof conducted in a commercially
reasonable manner. Each Guarantor hereby waives any claims against the Agent or
any Lender arising by reason of the fact that the price at which the Collateral
may have been sold at such a private sale was less than the price which might
have been obtained at a public sale or was less than the aggregate amount of the
Secured Obligations, even if the Agent accepts the first offer received and does
not offer the Collateral to more than one offeree.
7.09 Application of Proceeds. Except as otherwise herein
expressly provided and except as provided below in this Section 7.09, the
proceeds of any collection, sale or other realization of all or any part of the
Collateral pursuant hereto, and any other cash at the time held by the Agent
under Section 4 hereof or this Section 7, shall be applied by the Agent:
First, to the payment of the costs and expenses of such
collection, sale or other realization, including reasonable
out-of-pocket costs and expenses of the Agent and the fees and expenses
of its agents and counsel, and all expenses
<PAGE>
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incurred and advances made by the Agent in connection
therewith;
Next, to the payment in full of the Secured Obligations,
equally and ratably in accordance with the respective amounts thereof
then due and owing or as the Lenders holding the same may otherwise
agree; and
Finally, to the payment to the respective Guarantor, or its
successors or assigns, or as a court of competent jurisdiction may
direct, of any surplus then remaining.
As used in this Section 7, "proceeds" of Collateral shall mean
cash, securities and other property realized in respect of, and distributions in
kind of, Collateral, including any thereof received under any reorganization,
liquidation or adjustment of debt of the Guarantors or any issuer of or obligor
on any of the Collateral.
7.10 Attorney-in-Fact. Without limiting any rights or powers
granted by this Agreement to the Agent while no Event of Default has occurred
and is continuing, upon the occurrence and during the continuance of any Event
of Default the Agent is hereby appointed the attorney-in-fact of each Guarantor
for the purpose of carrying out the provisions of this Section 7 and taking any
action and executing any instruments which the Agent may deem necessary or
advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable and coupled with an interest. Without limiting
the generality of the foregoing, so long as the Agent shall be entitled under
this Section 7 to make collections in respect of the Collateral, the Agent shall
have the right and power to receive, endorse and collect all checks made payable
to the order of any Guarantor representing any dividend, payment, or other
distribution in respect of the Collateral or any part thereof and to give full
discharge for the same.
7.11 Perfection. Prior to or concurrently with the execution
and delivery of this Agreement, each Guarantor shall (a) file such financing
statements and other documents in such offices as the Agent may request to
perfect the security interests granted by Section 4 of this Agreement, (b) cause
the Agent (to the extent requested by any Lender) to be listed as the lienholder
on all certificates of title or ownership relating to Motor Vehicles owned by
such Guarantor (c) deliver to the Agent all certificates identified in Annex 1
hereto, accompanied by undated stock powers duly executed in blank.
7.12 Termination. When all Secured Obligations shall have been
paid in full, the Commitments of the Lenders under the Credit Agreement, all
Letter of Credit Liabilities and the
<PAGE>
- 28 -
Interest Rate Protection Agreements constituting Other Indebtedness shall have
expired or been terminated, this Agreement shall terminate, and the Agent shall
forthwith cause to be assigned, transferred and delivered, against receipt but
without any recourse, warranty or representation whatsoever, any remaining
Collateral and money received in respect thereof, to or on the order of the
respective Guarantors and to be released and canceled all licenses and rights
referred to in Section 7.04(b)(i) hereof. The Agent shall also execute and
deliver to the respective Guarantors upon such termination such Uniform
Commercial Code termination statements, certificates for terminating the Liens
on the Motor Vehicles and such other documentation as shall be reasonably
requested by the respective Guarantors to effect the termination and release of
the Liens on the Collateral.
7.13 Further Assurances. Each Guarantor agrees that, from time
to time upon the written request of the Agent, such Guarantor will execute and
deliver such further documents and do such other acts and things as the Agent
may reasonably request in order fully to effect the purposes of this Agreement.
7.14 Release of Motor Vehicles. So long as no Default shall
have occurred and be continuing, upon the request of any Guarantor, the Agent
shall execute and deliver to such Guarantor such instruments as such Guarantor
shall reasonably request to remove the notation of the Agent as lienholder on
any certificate of title for any Motor Vehicle; provided that any such
instruments shall be delivered, and the release effective only upon receipt by
the Agent of a certificate from such Guarantor stating that the Motor Vehicle
the lien on which is to be released is to be sold or has suffered a casualty
loss (with title thereto passing to the casualty insurance company therefor in
settlement of the claim for such loss).
Section 8. Miscellaneous.
-------------
8.01 No Waiver. No failure on the part of the Agent or any
Lender to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Agent or any Lender of
any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies herein
are cumulative and are not exclusive of any remedies provided by law.
8.02 Notices. All notices, requests, consents and demands
hereunder shall be in writing and telecopied or delivered to the intended
recipient at the "Address for Notices" specified
<PAGE>
- 29 -
beneath its name on the signature pages hereof (or, in the case of the Agent, on
the signature pages of the Credit Agreement) or, as to any party, at such other
address as shall be designated by such party in a notice to each other party.
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telecopier or personally
delivered or, in the case of a mailed notice, upon receipt, in each case given
or addressed as aforesaid.
8.03 Expenses. The Guarantors jointly and severally agree to
reimburse each of the Lenders and the Agent for all reasonable costs and
expenses of the Lenders and the Agent (including, without limitation, the
reasonable fees and expenses of legal counsel) in connection with (a) any
Default and any enforcement or collection proceeding resulting therefrom,
including, without limitation, all manner of participation in or other
involvement with (i) performance by the Agent of any obligations of the
Guarantors in respect of the Collateral that the Guarantors have failed or
refused to perform, (ii) bankruptcy, insolvency, receivership, foreclosure,
winding up or liquidation proceedings, or any actual or attempted sale, or any
exchange, enforcement, collection, compromise or settlement in respect of any of
the Collateral, and for the care of the Collateral and defending or asserting
rights and claims of the Agent in respect thereof, by litigation or otherwise,
including expenses of insurance, (iii) judicial or regulatory proceedings and
(iv) workout, restructuring or other negotiations or proceedings (whether or not
the workout, restructuring or transaction contemplated thereby is consummated)
and (b) the enforcement of this Section 6.03, and all such costs and expenses
shall be Secured Obligations entitled to the benefits of the collateral security
provided pursuant to Section 3 hereof.
8.04 Amendments, Etc. The terms of this Agreement may be
waived, altered or amended only by an instrument in writing duly executed by
each Guarantor and the Agent (with the consent of the Lenders as specified in
Section 11.09 of the Credit Agreement). Any such amendment or waiver shall be
binding upon the Agent and each Lender, each holder of any of the Secured
Obligations and each Guarantor.
8.05 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of each
Guarantor, the Agent, the Lenders and each holder of any of the Secured
Obligations (provided, however, that no Guarantor shall assign or transfer its
rights hereunder without the prior written consent of the Agent).
8.06 Captions. The captions and section headings appearing
herein are included solely for convenience of reference
<PAGE>
- 30 -
and are not intended to affect the interpretation of any provision of this
Agreement.
8.07 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
8.08 Governing Law; Submission to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the law of the State of
New York. Each Guarantor hereby submits to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York and of any
New York state court sitting in New York City for the purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. Each Guarantor irrevocably waives, to the fullest extent
permitted by applicable law, any objection that it may now or hereafter have to
the laying of the venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been brought in an
inconvenient forum.
8.09 Waiver of Jury Trial. EACH OF THE GUARANTORS, THE AGENT
AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
8.10 Agents and Attorneys-in-Fact. The Agent may employ agents
and attorneys-in-fact in connection herewith and shall not be responsible for
the negligence or misconduct of any such agents or attorneys-in-fact selected by
it in good faith.
8.11 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Agent and the
Lenders in order to carry out the intentions of the parties hereto as nearly as
may be possible and (b) the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction.
<PAGE>
- 31 -
IN WITNESS WHEREOF, the parties hereto have caused this
Affiliate Guarantee and Security Agreement to be duly executed as of the day and
year first above written.
CUNNINGHAM COMMUNICATIONS, INC.
By
----------------------------
Name:
Title:
Address for Notices:
Cunningham Communications, Inc.
2000 West 41st Street
Baltimore, Maryland 21211
Telecopy: (410) 467-5043
Attention: David Smith
KEYSER INVESTMENT GROUP, INC.
By
----------------------------
Name:
Title:
Address for Notices:
Keyser Investment Group, Inc.
2000 West 41st Street
Baltimore, Maryland 21211
Telecopy: (410) 467-5043
Attention: David Smith
<PAGE>
- 32 -
GERSTELL DEVELOPMENT LIMITED
PARTNERSHIP
By GERSTELL DEVELOPMENT CORPORATION
its General Partner
By
------------------------------
Name:
Title:
Address for Notices:
Gerstell Development Limited
Partnership
2000 West 41st Street
Baltimore, Maryland 21211
Telecopy: (410) 467-5043
Attention: David Smith
<PAGE>
- 33 -
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Agent
By
----------------------------
Name:
Title:
<PAGE>
EXHIBIT E
[Form of GDC Security Agreement]
SECOND AMENDED AND RESTATED GDC SECURITY AGREEMENT
SECOND AMENDED AND RESTATED SECURITY AGREEMENT dated as of May
31, 1996 between:
GERSTELL DEVELOPMENT CORPORATION, a corporation duly organized
and validly existing under the laws of Maryland ("GDC"); and
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as agent for
the lenders party to the "Credit Agreement" defined below (in such
capacity, together with its successors in such capacity, the "Agent").
WHEREAS, Sinclair Broadcast Group, Inc. (the "Borrower"),
certain subsidiaries of the Borrower, certain lenders (the "Existing Lenders")
and the Agent are parties to an Amended and Restated Credit Agreement dated as
of May 24, 1994 (as heretofore amended, supplemented and otherwise modified and
in effect on the date hereof before giving effect to the amendment and
restatement thereof contemplated by the Credit Agreement referred to below, the
"Existing Credit Agreement"), and in connection therewith GDC and the Agent have
executed and delivered an Amended and Restated Security Agreement dated as of
May 24, 1994 (as heretofore amended, supplemented and otherwise modified and in
effect on the date hereof before giving effect to the amendment and restatement
thereof contemplated hereby, the "Existing GDC Security Agreement") pursuant to
which GDC granted to the Agent, for the benefit of the Existing Lenders, a
security interest in the Collateral referred to therein.
WHEREAS, concurrently with the execution and delivery of this
Agreement, the Borrower, certain subsidiaries of the Borrower and certain
lenders (collectively, the "Lenders") and the Agent are entering into a Second
Amended and Restated Credit Agreement dated as of May 31, 1996 (as modified and
supplemented and in effect from time to time (including, without limitation, to
increase the amount of credit to be extended thereunder), the "Credit
Agreement"), providing, subject to the terms and conditions thereof, for the
extension and renewal of the Borrower's indebtedness under the Existing Credit
Agreement and for additional extensions of credit to the Borrower. In addition,
the Borrower may now or hereafter from time to time be obligated to various of
the Lenders in respect of certain Interest Rate Protection Agreements (as
defined in the Credit Agreement) (such obligations being herein referred to as
the "Other Indebtedness").
GDC Security Agreement
<PAGE>
-2-
To induce said Lenders to amend and restate the Existing
Credit Agreement and to extend credit thereunder and to extend credit to the
Borrower which would constitute Other Indebtedness, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, GDC has agreed to amend and restate the Existing GDC Security
Agreement in its entirety. Accordingly, the parties hereto hereby agree that the
Existing GDC Security Agreement shall be amended and restated to read as
follows:
Section 1. Definitions. Terms defined in the Credit Agreement
are used herein as defined therein. In addition, as used herein:
"Collateral" shall have the meaning ascribed thereto in
Section 3.01 hereof.
"Lien" shall mean, with respect to any Property, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in
respect of such Property. For purposes of this Agreement, GDC shall be
deemed to own subject to a Lien any Property which it has acquired or
holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention
agreement (other than an operating lease) relating to such Property.
"Pledged Interests" shall have the meaning ascribed thereto in
Section 3.01(a) hereof.
"Property" shall mean any right or interest in or to property
of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible.
"Secured Obligations" shall mean, collectively, (a) the prompt
payment in full when due (whether at stated maturity, by acceleration
or otherwise) of the principal of and interest on the Loans made by the
Lenders to, and the Note(s) held by each Lender of, the Borrower, all
Reimbursement Obligations and interest thereon and all other amounts
from time to time owing to the Lenders or the Agent by the Credit
Parties under the Basic Documents and all Other Indebtedness and
interest thereon, in each case strictly in accordance with the terms
thereof and (b) all obligations of GDC to the Lenders and the Agent
hereunder; provided that in any action or proceeding involving any
state corporate law, or any state or Federal bankruptcy, insolvency,
reorganization or other law affecting the rights of creditors
generally, if the obligations of GDC hereunder would otherwise be held
or determined to be void, invalid or
GDC Security Agreement
<PAGE>
-3-
unenforceable, or subordinated to the claims of any other creditors, on
account of the amount of its liability hereunder, then, notwithstanding
any other provision hereof to the contrary, the amount of such
liability shall, without any further action by GDC, any Lender, the
Agent or any other Person, be automatically limited and reduced to the
highest amount which is valid and enforceable and not subordinated to
the claims of other creditors as determined in such action or
proceeding.
"Uniform Commercial Code" shall mean the Uniform Commercial
Code as in effect from time to time in the State of New York.
Section 2. Representations and Warranties. GDC represents and
warrants to the Lenders and the Agent that:
2.01 Existence. GDC: (a) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization; (b) has all requisite power, and has all material governmental
licenses, authorizations, consents and approvals, necessary to own its assets
and carry on its business as now being or as proposed to be conducted; and (c)
is qualified to do business in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary and where failure so
to qualify would (either individually or in the aggregate) have a material
adverse effect on the financial condition, operations, business or prospects of
GDC.
2.02 No Breach. None of the execution and delivery of this
Agreement, the consummation of the transactions herein contemplated or
compliance with the terms and provisions hereof will conflict with or result in
a breach of, or require any consent under, the charter or by-laws of GDC, or any
applicable law or regulation, or any order, writ, injunction or decree of any
court or governmental authority or agency, or any agreement or instrument to
which GDC is a party or by which it is bound or to which it is subject, or
constitute a default under any such agreement or instrument, or result in the
creation or imposition of any Lien upon any of the revenues or assets of GDC
pursuant to the terms of any such agreement or instrument.
2.03 Action. GDC has all necessary corporate power and
authority to execute, deliver and perform its obligations under this Agreement;
the execution, delivery and performance by GDC of this Agreement have been duly
authorized by all necessary corporate action (including, without limitation, any
required shareholder approvals); and this Agreement has been duly and validly
executed and delivered by GDC and constitutes its legal,
GDC Security Agreement
<PAGE>
-4-
valid and binding obligation, enforceable in accordance with its terms.
2.04 Approvals. No authorizations, approvals or consents of,
and no filings or registrations with, any governmental or regulatory authority
or agency are necessary for the execution, delivery or performance by GDC of
this Agreement or for the validity or enforceability hereof, except for filings
and recordings in respect of the Liens created pursuant hereto.
2.05 Pledged Collateral.
------------------
(a) GDC is the sole beneficial owner of the Collateral in
which it purports to grant a security interest pursuant to Section 3.01 hereof
and no Lien exists or will exist upon any such Collateral at any time (and no
right or option to acquire the same exists in favor of any other Person), except
for the pledge and security interest in favor of the Agent for the benefit of
the Lenders created or provided for herein, which pledge and security interest
constitutes a first priority perfected pledge and security interest in and to
all of such Collateral;
(b) None of the Collateral in which GDC grants a security
interest pursuant to Section 3.01 hereof is or will be subject to any
contractual restriction, or any restriction under the partnership agreement
constituting GDLP, upon the transfer of such Collateral (except for any such
restriction contained herein).
(c) The percentage of the total ownership interests in GDLP
owned by GDC is 2.00% and the nature of such ownership interests is that of a
general partner.
Section 3. Collateral.
----------
3.01 Collateral. As collateral security for the prompt payment
in full when due (whether at stated maturity, by acceleration or otherwise) of
the Secured Obligations, GDC hereby pledges and grants to the Agent, for the
benefit of the Lenders as hereinafter provided, a security interest in all of
GDC's right, title and interest in the following property, whether now owned by
GDC or hereafter acquired and whether now existing or hereafter coming into
existence (all being collectively referred to herein as "Collateral"):
(a) the partnership interests in GDLP (the "Pledged
Interests");
(b) all shares, securities, moneys or property representing a
dividend on any of the Pledged Interests, or
GDC Security Agreement
<PAGE>
-5-
representing a distribution or return of capital upon or in respect of
the Pledged Interests, or resulting from a split-up, revision,
reclassification or other like change of the Pledged Interests or
otherwise received in exchange therefor, and any subscription warrants,
rights or options issued to the holders of, or otherwise in respect of,
the Pledged Interests; and
(c) all proceeds of and to any of the property of GDC
described in clauses (a) and (b) above in this Section 3.01 and, to the
extent related to any property described in said clauses or such
proceeds, all books, correspondence, credit files, records, invoices
and other papers.
3.02 Obligations Unconditional. The obligations of GDC under
Section 3.01 hereof are absolute and unconditional, irrespective of the value,
genuineness, validity, regularity or enforceability of the Credit Agreement, the
Notes or any other agreement or instrument referred to herein or therein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Secured Obligations, and, to the fullest extent permitted by applicable
law, irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense, it being the intent of
this Section 3.02 that the obligations of GDC hereunder shall be absolute and
unconditional under any and all circumstances. Without limiting the generality
of the foregoing, it is agreed that the occurrence of any one or more of the
following shall not affect the liability of GDC hereunder which shall remain
absolute and unconditional as described above:
(a) at any time or from time to time, without notice to GDC,
the time for any performance of or compliance with any of the Secured
Obligations shall be extended, or such performance or compliance shall
be waived;
(b) any of the acts mentioned in any of the provisions of the
Credit Agreement or the Notes or any other agreement or instrument
referred to herein or therein shall be done or omitted;
(c) the maturity of any of the Secured Obligations shall be
accelerated, or any of the Secured Obligations shall be modified,
supplemented or amended in any respect, or any right under the Credit
Agreement or the Notes or any other agreement or instrument referred to
herein or therein shall be waived or any other guarantee of any of the
Secured Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with;
GDC Security Agreement
<PAGE>
-6-
(d) any lien or security interest granted to, or in favor of,
the Agent or any Lender or Lenders as security for any of the Secured
Obligations shall fail to be perfected;
(e) any of the Secured Obligations shall be determined to be
void or voidable (including, without limitation, for the benefit of any
creditor of any Credit Party) or shall be subordinated to the claims of
any Person (including, without limitation, any creditor of any Credit
Party);
(f) the Borrower shall be insolvent on the date hereof or
shall become insolvent on the date that any Loan is made; or
(g) the execution and delivery of a Tranche C Term Loan
Activation Notice providing for Tranche C Term Loan Commitments in any
amount.
GDC hereby expressly waives diligence, presentment, demand of payment, protest
and all notices whatsoever, and any requirement (including, without limitation,
marshalling) that the Agent or any Lender exhaust any right, power or remedy or
proceed against the Borrower under the Credit Agreement or the Notes or any
other agreement or instrument referred to herein or therein, or against any
other Person under any other guarantee of, or security for, any of the Secured
Obligations.
3.03 Subrogation. GDC hereby waives all rights of subrogation
or contribution, whether arising by contract or operation of law (including,
without limitation, any such right arising under the Bankruptcy Code) or
otherwise by reason of any payment by it pursuant to the provisions of this
Section 3.
Section 4. Further Assurances; Remedies. In furtherance of the
grant of the pledge and security interest pursuant to Section 3.01 hereof, GDC
hereby agrees with each Lender and the Agent as follows:
4.01 Delivery and Other Perfection. GDC shall:
(a) if any of the above-described shares, securities, moneys
or property required to be pledged by GDC under clauses (a) and (b) of
Section 3.01 hereof are received by GDC, forthwith either (i) transfer
and deliver to the Agent such shares or securities so received by GDC
(together with the certificates for any such shares and securities duly
endorsed in blank or accompanied by undated stock powers duly executed
in blank), all of which thereafter shall be held by the Agent, pursuant
to the terms of this Agreement, as part of the Collateral or (ii) take
such other action as the Agent shall deem necessary or appropriate to
duly record
GDC Security Agreement
<PAGE>
-7-
the Lien created hereunder in such shares, securities, moneys or
property referred to in said clauses (a) and (b);
(b) give, execute, deliver, file and/or record any financing
statement, notice, instrument, document, agreement or other papers that
may be necessary or desirable (in the judgment of the Agent) to create,
preserve, perfect or validate the pledge and security interest granted
pursuant hereto or to enable the Agent to exercise and enforce its
rights hereunder with respect to such pledge and security interest,
including, without limitation, causing any or all of the Collateral to
be transferred of record into the name of the Agent or its nominee (and
the Agent agrees that if any Collateral is transferred into its name or
the name of its nominee, the Agent will thereafter promptly give to GDC
copies of any notices and communications received by it with respect to
the Collateral pledged by GDC hereunder); and
(c) permit representatives of the Agent, upon reasonable
notice, at any time during normal business hours to inspect and make
abstracts from its books and records pertaining to the Collateral, and
permit representatives of the Agent to be present at GDC's place of
business to receive copies of all communications and remittances
relating to the Collateral, and forward copies of any notices or
communications received by GDC with respect to the Collateral, all in
such manner as the Agent may require.
4.02 Other Financing Statements and Liens. Without the prior
written consent of the Agent, GDC shall not file or suffer to be on file, or
authorize or permit to be filed or to be on file, in any jurisdiction, any
financing statement or like instrument with respect to the Collateral in which
the Agent is not named as the sole secured party for the benefit of the Lenders.
4.03 Preservation of Rights. The Agent shall not be required
to take steps necessary to preserve any rights against prior parties to any of
the Collateral.
4.04 Special Provisions Relating to Certain Collateral.
(a) GDC will cause the Pledged Interests to constitute at all
times 100% of the partnership interests in GDLP then outstanding, other than
partnership interests in GDLP held by the Smith Brothers.
(b) So long as no Event of Default shall have occurred and be
continuing, GDC shall have the right to exercise all voting, consensual and
other powers of ownership pertaining to the Collateral for all purposes not
inconsistent with the terms
GDC Security Agreement
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of this Agreement, the Credit Agreement, the Note(s) or any other instrument or
agreement referred to herein or therein, provided that GDC agrees that it will
not vote the Collateral in any manner that is inconsistent with the terms of
this Agreement, the Credit Agreement, the Note(s) or any such other instrument
or agreement; and the Agent shall execute and deliver to GDC or cause to be
executed and delivered to GDC all such proxies, powers of attorney, dividend and
other orders, and all such instruments, without recourse, as GDC may reasonably
request for the purpose of enabling GDC to exercise the rights and powers which
they are entitled to exercise pursuant to this Section 4.04(b).
(c) Unless and until an Event of Default has occurred and is
continuing, GDC shall be entitled to receive and retain any dividends or
distributions on the Collateral paid in cash out of earned surplus or profits.
(d) If any Event of Default shall have occurred, then so long
as such Event of Default shall continue, and whether or not the Agent or any
Lender exercises any available right to declare any Secured Obligation due and
payable or seeks or pursues any other relief or remedy available to it under
applicable law or under this Agreement, the Credit Agreement, the Note(s) or any
other agreement relating to such Secured Obligation, all dividends and other
distributions on the Collateral shall be paid directly to the Agent and retained
by it as part of the Collateral, subject to the terms of this Agreement, and, if
the Agent shall so request in writing, GDC agrees to execute and deliver to the
Agent appropriate additional dividend, distribution and other orders and
documents to that end, provided that if such Event of Default is cured, any such
dividend or distribution theretofore paid to the Agent shall, upon request of
GDC (except to the extent theretofore applied to the Secured Obligations), be
returned by the Agent to GDC.
4.05 Events of Default, etc. During the period during which an
Event of Default shall have occurred and be continuing:
(a) the Agent shall have all of the rights and remedies with
respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not said Code is in effect in the
jurisdiction where the rights and remedies are asserted) and such
additional rights and remedies to which a secured party is entitled
under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted, including, without limitation, the
right, to the maximum extent permitted by law, to exercise all voting,
consensual and other powers of ownership pertaining to the Collateral
as if the Agent were the sole and absolute owner thereof (and GDC
agrees to take
GDC Security Agreement
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all such action as may be appropriate to give effect to such right);
(b) the Agent in its discretion may, in its name or in the
name of GDC or otherwise, demand, sue for, collect or receive any money
or property at any time payable or receivable on account of or in
exchange for any of the Collateral, but shall be under no obligation to
do so; and
(c) the Agent may, upon ten Business Days' prior written
notice to GDC of the time and place, with respect to the Collateral or
any part thereof which shall then be or shall thereafter come into the
possession, custody or control of the Agent, the Lenders or any of
their respective agents, sell, lease, assign or otherwise dispose of
all or any portion of such Collateral, at such place or places as the
Agent deems best, and for cash or on credit or for future delivery
(without thereby assuming any credit risk), at public or private sale,
without demand of performance or notice of intention to effect any such
disposition or of the time or place thereof (except such notice as is
required above or by applicable statute and cannot be waived) and the
Agent or any Lender or anyone else may be the purchaser, lessee,
assignee or recipient of any or all of the Collateral so disposed of at
any public sale (or, to the extent permitted by law, at any private
sale), and thereafter hold the same absolutely, free from any claim or
right of whatsoever kind, including any right or equity of redemption
(statutory or otherwise), of GDC, any such demand, notice and right or
equity being hereby expressly waived and released. The Agent may,
without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the
time and place fixed for the sale, and such sale may be made at any
time or place to which the same may be so adjourned.
The proceeds of each collection, sale or other disposition under this Section
4.05 shall be applied in accordance with Section 4.09 hereof.
GDC recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws, the Agent may be compelled, with respect to any sale of all or
any part of the Collateral, to limit purchasers to those who will agree, among
other things, to acquire the Collateral for their own account, for investment
and not with a view to the distribution or resale thereof. GDC acknowledges that
any such private sales may be at prices and on terms less favorable to the Agent
than those obtainable through a public sale without such restrictions, and,
notwithstanding such circumstances, agree that any such private sale shall be
deemed
GDC Security Agreement
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to have been made in a commercially reasonable manner and that the Agent shall
have no obligation to engage in public sales and no obligation to delay the sale
of any Collateral for the period of time necessary to permit the respective
issuer thereof to register it for public sale.
4.06 No Deficiency. The Agent hereby agrees and acknowledges
that if the proceeds of sale, collection or other realization of or upon the
Collateral pursuant to Section 4.05 hereof are insufficient to cover the costs
and expenses of such realization and the payment in full of the Secured
Obligations, GDC shall not remain liable for any deficiency.
4.07 Removals, etc. Without at least 30 days' prior written
notice to the Agent, GDC shall not (a) maintain any of its books or records with
respect to the Collateral at any office or maintain its chief executive office
or its principal place of business at any place or (b) change its corporate
name, or the name under which it does business, from the name shown on the
signature pages hereto.
4.08 Private Sale. The Agent and the Lenders shall incur no
liability as a result of the sale of the Collateral, or any part thereof, at any
private sale pursuant to Section 4.05 hereof conducted in a commercially
reasonable manner. GDC hereby waives any claims against the Agent or any Lender
arising by reason of the fact that the price at which the Collateral may have
been sold at such a private sale was less than the price which might have been
obtained at a public sale or was less than the aggregate amount of the Secured
Obligations, even if the Agent accepts the first offer received and does not
offer the Collateral to more than one offeree.
4.09 Application of Proceeds. Except as otherwise herein
expressly provided and except as provided below in this Section 4.09, the
proceeds of any collection, sale or other realization of all or any part of the
Collateral pursuant hereto, and any other cash at the time held by the Agent
under this Section 4, shall be applied by the Agent:
First, to the payment of the costs and expenses of such
collection, sale or other realization, including reasonable
out-of-pocket costs and expenses of the Agent and the fees and expenses
of its agents and counsel, and all expenses incurred and advances made
by the Agent in connection therewith;
Next, to the payment in full of the Secured Obligations,
equally and ratably in accordance with the respective amounts thereof
then due and owing or as the Lenders holding the same may otherwise
agree; and
GDC Security Agreement
<PAGE>
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Finally, to the payment to GDC, or its successors or assigns,
or as a court of competent jurisdiction may direct, of any surplus then
remaining.
As used in this Section 4, "proceeds" of Collateral shall mean
cash, securities and other property realized in respect of, and distributions in
kind of, Collateral, including any thereof received under any reorganization,
liquidation or adjustment of debt of GDC or any issuer of or obligor on any of
the Collateral.
4.10 Attorney-in-Fact. Without limiting any rights or powers
granted by this Agreement to the Agent while no Event of Default has occurred
and is continuing, upon the occurrence and during the continuance of any Event
of Default the Agent is hereby appointed the attorney-in-fact of GDC for the
purpose of carrying out the provisions of this Section 4 and taking any action
and executing any instruments which the Agent may deem necessary or advisable to
accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest. Without limiting the generality of the
foregoing, so long as the Agent shall be entitled under this Section 4 to make
collections in respect of the Collateral, the Agent shall have the right and
power to receive, endorse and collect all checks made payable to the order of
GDC representing any dividend, payment, or other distribution in respect of the
Collateral or any part thereof and to give full discharge for the same.
4.11 Perfection. Prior to or concurrently with the execution
and delivery of this Agreement, GDC shall file such financing statements and
other documents in such offices as the Agent may request to perfect the security
interests granted by Section 3.01 of this Agreement.
4.12 Termination. When all Secured Obligations shall have been
paid in full, the Commitments of the Lenders under the Credit Agreement, all
Letter of Credit Liabilities and the Interest Rate Protection Agreements
constituting Other Indebtedness shall have expired or been terminated, this
Agreement shall terminate, and the Agent shall forthwith cause to be assigned,
transferred and delivered, against receipt but without any recourse, warranty or
representation whatsoever, any remaining Collateral and money received in
respect thereof, to or on the order of GDC. The Agent shall also execute and
deliver to GDC upon such termination such Uniform Commercial Code termination
statements and such other documentation as shall be reasonably requested by GDC
to effect the termination and release of the Liens on the Collateral.
4.13 Further Assurances. GDC agrees that, from time to time
upon the written request of the Agent, GDC will execute
GDC Security Agreement
<PAGE>
-12-
and deliver such further documents and do such other acts and things as the
Agent may reasonably request in order fully to effect the purposes of this
Agreement.
Section 5. Miscellaneous.
-------------
5.01 No Waiver. No failure on the part of the Agent or any
Lender to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Agent or any Lender of
any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies herein
are cumulative and are not exclusive of any remedies provided by law.
5.02 Notices. All notices, requests, consents and demands
hereunder shall be in writing and telecopied or delivered to the intended
recipient at the "Address for Notices" specified beneath its name on the
signature pages hereof (or, in the case of the Agent, on the signature pages of
the Credit Agreement) or, as to either party, at such other address as shall be
designated by such party in a notice to the other party. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
5.03 Expenses. GDC agrees to reimburse each of the Lenders and
the Agent for all reasonable costs and expenses of the Lenders and the Agent
(including, without limitation, the reasonable fees and expenses of legal
counsel) in connection with (a) any Default and any enforcement or collection
proceeding resulting therefrom, including, without limitation, all manner of
participation in or other involvement with (i) performance by the Agent of any
obligations of GDC in respect of the Collateral that GDC has failed or refused
to perform, (ii) bankruptcy, insolvency, receivership, foreclosure, winding up
or liquidation proceedings, or any actual or attempted sale, or any exchange,
enforcement, collection, compromise or settlement in respect of any of the
Collateral, and for the care of the Collateral and defending or asserting rights
and claims of the Agent in respect thereof, by litigation or otherwise,
including expenses of insurance, (iii) judicial or regulatory proceedings and
(iv) workout, restructuring or other negotiations or proceedings (whether or not
the workout, restructuring or transaction contemplated thereby is consummated)
and (b) the enforcement of this Section 6.03, and all such costs and expenses
shall be Secured Obligations entitled to the benefits of the collateral security
provided pursuant to Section 3.01 hereof.
GDC Security Agreement
<PAGE>
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5.04 Amendments, Etc. The terms of this Agreement may be
waived, altered or amended only by an instrument in writing duly executed by GDC
and the Agent (with the consent of the Lenders as specified in Section 11.09 of
the Credit Agreement). Any such amendment or waiver shall be binding upon the
Agent and each Lender, each holder of any of the Secured Obligations and GDC.
5.05 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of GDC,
the Agent, the Lenders and each holder of any of the Secured Obligations
(provided, however, that GDC shall not assign or transfer its rights hereunder
without the prior written consent of the Agent).
5.06 Captions. The captions and section headings appearing
herein are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.
5.07 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and either of the parties hereto may execute this Agreement by
signing any such counterpart.
5.08 Governing Law; Submission to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the law of the State of
New York. GDC hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
state court sitting in New York City for the purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby. GDC irrevocably waives, to the fullest extent permitted by applicable
law, any objection that it may now or hereafter have to the laying of the venue
of any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum.
5.09 Waiver of Jury Trial. EACH OF GDC, THE AGENT AND THE
LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
5.10 Agents and Attorneys-in-Fact. The Agent may employ agents
and attorneys-in-fact in connection herewith and shall not be responsible for
the negligence or misconduct of any such agents or attorneys-in-fact selected by
it in good faith.
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<PAGE>
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5.11 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Agent and the
Lenders in order to carry out the intentions of the parties hereto as nearly as
may be possible and (b) the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction.
GDC Security Agreement
<PAGE>
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IN WITNESS WHEREOF, the parties hereto have caused this
Security Agreement to be duly executed as of the day and year first above
written.
GERSTELL DEVELOPMENT CORPORATION
By
----------------------------
Name:
Title:
Address for Notices:
Gerstell Development Corporation
2000 West 41st Street
Baltimore, Maryland 21211
Telephone No.: (410) 467-5005
Telecopy No.: (410) 467-5043
Attention: David Smith
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Agent
By
-----------------------------
Name:
Title:
GDC Security Agreement
<PAGE>
EXHIBIT F
[Form of Founders Subordination Agreement]
SECOND AMENDED AND RESTATED FOUNDERS SUBORDINATION AGREEMENT
SECOND AMENDED AND RESTATED FOUNDERS SUBORDINATION AGREEMENT
dated as of May 31, 1996 between CAROLYN C. SMITH, an individual currently
residing at 1343 Ivy Hill Road, Cockeysville, Maryland 21030 (the "Subordinated
Creditor") and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as agent for the
lenders party to the "Credit Agreement" defined to below (in such capacity,
together with its successors in such capacity, the "Agent").
WHEREAS, Sinclair Broadcast Group, Inc. (the "Borrower"),
certain subsidiaries of the Borrower, certain lenders and the Agent are parties
to an Amended and Restated Credit Agreement dated as of May 24, 1994 (as
heretofore amended, supplemented and otherwise modified and in effect on the
date hereof before giving effect to the amendment and restatement thereof
contemplated by the Credit Agreement (as defined below), the "Existing Credit
Agreement"), and in connection therewith the Subordinated Creditor,
individually, and as Co-Personal Representative for the Estate of Julian S.
Smith, Frederick G. Smith, as Co-Personal Representative for the Estate of
Julian S. Smith (collectively, the "Existing Subordinated Creditors"), and the
Agent have executed and delivered an Amended and Restated Founders Subordination
Agreement dated as of May 24, 1994 (as heretofore amended, supplemented and
otherwise modified and in effect on the date hereof before giving effect to the
amendment and restatement contemplated hereby, the "Existing Subordination
Agreement") pursuant to which the Existing Subordinated Creditors agreed to
subordinate certain claims to the prior payment of the Senior Obligations
referred to therein.
WHEREAS, the Estate of Julian S. Smith has been closed and
the promissory note referred to in the clause (b) of the definition of "Junior
Notes" in Section 1 of this Agreement has been assigned to Carolyn C. Smith.
WHEREAS, concurrently with the execution and delivery of
this Agreement, the Borrower, certain subsidiaries of the Borrower and certain
lenders (collectively, the "Lenders") and the Agent are entering into a Second
Amended and Restated Credit Agreement dated as of May 31, 1996 (as modified and
supplemented and in effect from time to time (including without limitation, to
increase the amount of credit to be extended thereunder), the "Credit
Agreement"), providing, subject to the terms and conditions thereof, for the
extension and renewal of the Borrower's indebtedness under the Existing Credit
Agreement and for additional extensions of credit to the Borrower. In
Founders Subordination Agreement
<PAGE>
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addition, the Borrower may now or hereafter from time to time be obligated to
various of the Lenders in respect of certain Interest Rate Protection Agreements
(as defined in the Credit Agreement) (such obligations being herein referred to
as the "Other Indebtedness").
To induce said Lenders to amend and restate the Existing
Credit Agreement and to extend credit thereunder and to extend credit to the
Borrower which would constitute Other Indebtedness, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Subordinated Creditor has agreed that the Existing
Subordination Agreement shall be hereby amended and restated in its entirety.
Accordingly, the parties hereby agree that the Existing Subordination Agreement
shall be amended and restated to read as follows:
Section 1. Definitions. Terms defined in the Credit
Agreement are used herein as defined therein. In addition, as used herein:
"Junior Notes" shall mean (a) the Term Note dated September
30, 1990 payable by the Borrower to Carolyn C. Smith in the original
face amount of $6,700,000 and (b) the Term Note dated September 30,
1990 payable by the Borrower to Julian S. Smith in the original face
amount of $7,515,000 (heretofore assigned to Carolyn C. Smith).
"Obligors" shall mean the Borrower and all Subsidiaries of
the Borrower.
"Senior Obligations" shall mean the principal of and
interest (including Post-Petition Interest (as defined in Section
2.01(a) hereof)) on the Loans made by the Lenders to, and the Note(s)
held by each Lender of, the Borrower, all Reimbursement Obligations
and interest (including Post- Petition Interest (as so defined)
thereon and all other amounts from time to time owing to the Lenders
or the Agent by the Borrower under the Credit Agreement and under the
Notes and all Other Indebtedness and interest thereon.
"Subordinated Claims" shall mean all indebtedness,
liabilities, obligations and other claims, and all security
interests, mortgages and other encumbrances owing or granted to the
Subordinated Creditor by any Obligor, whenever arising, whether
direct or contingent, as primary obligor, guarantor or otherwise, and
howsoever evidenced, including, without limitation, in respect of the
Junior Notes.
Founders Subordination Agreement
<PAGE>
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"Uniform Commercial Code" shall mean the Uniform Commercial
Code as in effect from time to time in the State of New York.
Section 2. Subordination. The Subordinated Creditor agrees
that all payments of Subordinated Claims are subordinated and subject in right
of payment, to the extent and in the manner provided in this Section 2, to the
prior payment in full of the Senior Obligations and the termination or
expiration of the Commitments under the Credit Agreement, all Letter of Credit
Liabilities and the Interest Rate Protection Agreements constituting Other
Indebtedness.
2.01 Liquidation, Etc.
------------------
(a) Upon any payment or distribution of assets of
any Obligor of any kind or character, whether in cash, property or securities,
to creditors upon any dissolution or winding up or total or partial liquidation
or reorganization of any Obligor, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, all Senior
Obligations due or to become due shall first be paid in full in cash before any
payment is made on any Subordinated Claims, and all payments and distribution of
assets of any Obligor of any kind or character, whether in cash, property or
securities, by set-off or otherwise, to which the holders of the Subordinated
Claims would be entitled except for the provisions hereof, shall be paid by such
Obligor or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other person making such payment or distribution, or by the holders of the
Subordinated Claims if received by them, directly to the holders of the Senior
Obligations (pro rata to each such holder on the basis of the respective unpaid
amounts of Senior Obligations held by such holder) or their representatives to
the extent necessary to pay all Senior Obligations in full in cash, after giving
effect to any concurrent prepayment or distribution to or for the benefit of the
holders of Senior Obligations, before any payment or distribution is made to the
holders of the Subordinated Claims. In furtherance of the foregoing, but not by
way of limitation thereof, in the event that any Obligor shall file or have
filed against it a petition under any chapter of the Bankruptcy Code or be
adjudicated a bankrupt thereunder, with the result that such Obligor is excused
from the obligation to pay all or any part of the interest otherwise payable in
respect of the Senior Obligations at the applicable rate set forth in the Credit
Agreement during the period subsequent to the commencement of any proceedings
under the Bankruptcy Code ("Post-Petition Interest"), each holder of any
Subordinated Claims hereby agrees that all or such part of such Post-Petition
Interest, as the case may be, shall be payable
Founders Subordination Agreement
<PAGE>
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out of, and to that extent diminish and be at the expense of, reorganization
dividends or other distributions in respect of such Subordinated Claims.
(b) In the event that any payment or distribution
not permitted by the terms of this Agreement of assets of any Obligor of any
kind or character, whether in cash, property or securities, shall be received by
the holders of any Subordinated Claims (whether arising out of the exercise by
any such holder of set-off, counterclaim or otherwise) before all Senior
Obligations are paid in full, or provision made for such payment in accordance
with its terms, such payment or distribution shall be held in trust for the
benefit of, and shall immediately be paid over or delivered to, the holders of
the Senior Obligations or their representatives, as their respective interests
may appear, for application to the payment of all Senior Obligations remaining
unpaid to the extent necessary to pay all Senior Obligations in full in
accordance with the terms thereof, after giving effect to any concurrent payment
or distribution to or for the holders of the Senior Obligations.
(c) In the event that any Obligor shall file or
have filed against it a petition under any chapter of the Bankruptcy Code, the
Agent may (but shall not be obligated to), and is hereby appointed the lawful
attorney of the Subordinated Creditor to, demand, sue for, collect, receive and
receipt for payments and distributions in respect of Subordinated Claims in such
proceeding which are required to be paid or delivered to the holders of Senior
Obligations as provided herein, and to file and prove all claims therefor and to
execute and deliver all documents in such proceeding in the name of the
Subordinated Creditors or otherwise in respect of such claims, all as the Agent
may determine to be necessary or appropriate to carry out the purposes of this
Agreement.
2.02 Default Under Credit Agreement.
(a) No payment on any Subordinated Claim shall be
made by any Obligor if, at the time of such payment or immediately after giving
effect thereto, there shall exist a Default under the Credit Agreement.
(b) If an Event of Default shall have occurred and
be continuing, the Agent may, by notice to the Subordinated Creditor, terminate
all guarantees, and all security interests, mortgages and other encumbrances,
included in the Subordinated Claims, whereupon, without any further action, such
guarantees, security interests and other encumbrances shall be automatically
terminated and the Subordinated Creditor's sole recourse in respect of the
Subordinated Claims shall be as unsecured
Founders Subordination Agreement
<PAGE>
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creditors of the primary obligors in respect thereof. The Agent agrees that any
termination statements under the Uniform Commercial Code signed by the
Subordinated Creditor and received by it hereunder shall not be filed by it
except to give effect to this Section 2.02(b) at such time, if any, as the Agent
shall exercise its rights under and in accordance with the preceding sentence.
(c) The Agent shall be under no obligation to
furnish to any holder of Subordinated Claims any notice of any Default.
2.03 Standstill. During any period in which a Default shall
have occurred and be continuing, no portion of the Subordinated Claims shall be
due, and the date that any such portion that would otherwise have been due
during such period shall be automatically extended until the date on which all
Defaults shall have been cured. Without limiting the foregoing, the Subordinated
Creditor shall not, whether or not a Default then exists, institute any legal
proceedings or take any non-judicial action to collect any of the Subordinated
Claims, including (without limitation), bringing a lawsuit, filing or joining in
a petition against any Obligor under the Bankruptcy Code or foreclosing or
otherwise realizing upon any collateral.
2.04 Term; Payments in Violation of this Agreement. The
Subordinated Creditor agrees that no payments or distributions will be received
by or on behalf of any holder of a Subordinated Claim in violation of the terms
of this Agreement. Any payment so made or received (excluding any such payment
received by the Subordinated Creditor more than six months before the
Subordinated Creditor receives notice of a Default) shall be held in trust by
the Subordinated Creditor for the benefit of the Lenders and shall be
immediately remitted to the Lenders as a payment or prepayment of the Senior
Obligations. Without limiting the generality of the foregoing, the term
"payment" shall include any proceeds of the liquidation or disposition of any
collateral.
2.05 Appointment as Attorney in Fact. The Subordinated
Creditor hereby authorizes and directs the Agent on behalf of the Subordinated
Creditor to take such action as may be necessary or appropriate to effectuate
the subordination provided for in this Agreement, including, without limitation,
executing termination statements under the Uniform Commercial Code to give
effect to Section 2.02(b) hereof.
2.06 Prepayments. No prepayments of Subordinated Claims
shall be made or accepted except to the extent permitted by Section 9.18 of the
Credit Agreement.
Founders Subordination Agreement
<PAGE>
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2.07 Modification; Amendment; Waiver. The Subordinated
Creditor hereby agrees that no document or instrument evidencing or representing
any Subordinated Claim shall in any way be modified or amended, and no waiver in
connection with any such document shall be given, without the prior written
consent of the Agent.
2.08 Shared Collateral. The Subordinated Creditor
acknowledges that the Obligors have granted and will grant to the Agent for the
benefit of the Lenders security interests in and mortgages on all of their
respective properties. Notwithstanding the time of granting of Liens, or the
time or filing or recording of any financing statements, mortgages, fixture
filings or assignments or other notices under the Uniform Commercial Code or any
other applicable law, the Subordinated Creditor hereby subordinates any Lien the
Subordinated Creditor may have on such properties to such security interests and
mortgages in favor of the Agent and hereby agrees that such security interests
and mortgages in favor of the Agent, now or hereafter created or existing, are
senior and prior to all Liens in favor of the Subordinated Creditor,
irrespective of the time or order of attachment or perfection, and irrespective
of whether such security interests and mortgages in favor of the Agent have been
filed, recorded or otherwise perfected. The Agent is not a fiduciary or agent
for the Subordinated Creditor and shall have no obligation whatsoever to the
Subordinated Creditor in respect of any collateral other than under Section
9-504(1)(c) of the Uniform Commercial Code, and the Subordinated Creditor hereby
agrees that the Agent may, but shall not be obligated to, take or refrain from
taking any action with respect thereto permitted by security agreements and
mortgages covering such collateral to which the Agent is a party.
2.09 Transfer of Subordinated Claims. The Subordinated
Creditor shall not assign or otherwise transfer any Subordinated Claim held by
the Subordinated Creditor other than by operation of law or to a family member
upon death.
Section 3. Representations and Warranties. The Subordinated
Creditor represents and warrants to the Lenders and the Agent that:
3.01 No Breach. None of the execution and delivery of this
Agreement, the consummation of the transactions herein contemplated or
compliance with the terms and provisions hereof will conflict with or result in
a breach of, or require any consent under, any applicable law or regulation, or
any order, writ, injunction or decree of any court or governmental authority or
agency, or any agreement or instrument to which the
Founders Subordination Agreement
<PAGE>
- 7 -
Subordinated Creditor is a party or by which the Subordinated Creditor is bound
or to which the Subordinated Creditor is subject, or constitute a default under
any such agreement or instrument.
3.02 Action. This Agreement has been duly and validly
executed and delivered by the Subordinated Creditor and the legal, valid and
binding obligation of the Subordinated Creditor, enforceable in accordance with
its terms.
3.03 Approvals. No authorizations, approvals or consents of,
and no filings or registrations with, any governmental or regulatory authority
or agency are necessary for the execution, delivery or performance by the
Subordinated Creditor of this Agreement or for the validity or enforceability
hereof.
3.04 Ownership of Subordinated Claims. The Subordinated
Creditor has not transferred any Subordinated Claims owing to the Subordinated
Creditor, except for the pledge and security interest in the Junior Notes
provided for in the Security Agreement dated as of March 27, 1995 between the
Subordinated Creditor and The Chase Manhattan Bank (National Association), as
agent for certain lenders, which pledge and security interest are subject to the
provisions of this Agreement.
Section 4. Obligations Unconditional. The obligations of the
Subordinated Creditor under this Agreement are absolute and unconditional
irrespective of the value, genuineness, validity, regularity or enforceability
of the Credit Agreement, the Notes or any other agreement or instrument referred
to herein or therein, or any substitution, release or exchange of any other
guarantee of or security for any of the Senior Obligations, and, to the fullest
extent permitted by applicable law, irrespective of any other circumstance
whatsoever which might otherwise constitute a legal or equitable discharge or
defense of a surety or guarantor, it being the intent of this Section 4 that the
obligations of the Subordinated Creditor hereunder shall be absolute and
unconditional under any and all circumstances. Without limiting the generality
of the foregoing, it is agreed that the occurrence of any one or more of the
following shall not affect the liability of the Subordinated Creditor hereunder
which shall remain absolute and unconditional as described above:
(a) at any time or from time to time, without notice to the
Subordinated Creditor, the time for any performance of or compliance
with any of the Senior Obligations shall be
Founders Subordination Agreement
<PAGE>
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extended, such performance or compliance shall be waived or the
amount of the Senior Obligations shall be increased;
(b) any of the acts mentioned in any of the provisions of
the Credit Agreement or the Notes or any other agreement or
instrument referred to herein or therein shall be done or omitted;
(c) the maturity of any of the Senior Obligations shall be
accelerated, or any of the Senior Obligations shall be modified,
supplemented or amended in any respect, or any right under the Credit
Agreement or the Notes or any other agreement or instrument referred
to herein or therein shall be waived or any other guarantee of any of
the Senior Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with;
(d) any lien or security interest granted to, or in favor
of, the Agent or any Lender or Lenders as security for any of the
Senior Obligations shall fail to be perfected;
(e) any of the Senior Obligations shall be determined to be
void or voidable (including, without limitation, for the benefit of
any creditor of any Obligor) or shall be subordinated to the claims
of any Person (including, without limitation, any creditor of any
Obligor);
(f) the Borrower shall be insolvent on the date hereof or
shall become insolvent on the date that any Loan is made; or
(g) the execution and delivery of a Tranche C Term Loan
Activation Notice providing for Tranche C Term Loan Commitments in
any amount.
The Subordinated Creditors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement (including,
without limitation, marshalling) that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Obligor under the Credit Agreement or the
Notes or any other agreement or instrument referred to herein or therein, or
against any other Person under any other guarantee of, or security for, any of
the Senior Obligations.
Section 5. Consent and Waiver. The Subordinated Creditor
hereby consents to the execution, delivery and performance by the Obligors of
the Credit Agreement (including, without limitation Section 9.25 thereof), the
Notes and the other
Founders Subordination Agreement
<PAGE>
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agreements and instruments referred to therein, and the borrowings by the
Borrower under the Credit Agreement, and hereby agree that such execution,
delivery, performance and borrowings shall not be deemed to breach, conflict
with or otherwise contravene, or constitute a default under, any agreement or
instrument relating to any Subordinated Claim. The Subordinated Creditor hereby
further waives any right the Subordinated Creditor may have to require that any
License Subsidiary Guarantee or otherwise be or become obligated or liable for
any Subordinated Claim and, without limiting the generality of the foregoing,
hereby releases any Lien they may have on or after the date hereof on any
Broadcast License held by any License Subsidiary or on any rights that any
License Subsidiary may have under any management agreement.
Section 6. Further Assurances. The Subordinated Creditor
agrees that, from time to time upon the written request of the Agent, the
Subordinated Creditor will execute and deliver such further documents and do
such other acts and things as the Agent may reasonably request in order fully to
effect the purposes of this Agreement.
Section 7. Miscellaneous.
--------------
7.01 No Waiver. No failure on the part of the Agent or any
Lender to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Agent or any Lender of
any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies herein
are cumulative and are not exclusive of any remedies provided by law.
7.02 Notices. All notices, requests, consents and demands
hereunder shall be in writing and telecopied or delivered to the intended
recipient at the "Address for Notices" specified beneath its (or her, as the
case may be) name on the signature pages hereof (or, in the case of the Agent,
on the signature pages of the Credit Agreement) or, as to any party, at such
other address as shall be designated by such party in a notice to each other
party. Except as otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given when transmitted by telecopier or
personally delivered or, in the case of a mailed notice, upon receipt, in each
case given or addressed as aforesaid.
Founders Subordination Agreement
<PAGE>
- 10 -
7.03 Amendments, Etc. The terms of this Agreement may be
waived, altered or amended only by an instrument in writing duly executed by the
Subordinated Creditor and the Agent (with the consent of the Lenders as
specified in Section 11.09 of the Credit Agreement). Any such amendment or
waiver shall be binding upon the Agent and each Lender, each holder of any of
the Secured Obligations and the Subordinated Creditor.
7.04 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective heirs, executors,
administrators, successors and assigns of the Subordinated Creditor, the Agent,
the Lenders and each holder of any of the Secured Obligations (provided,
however, that the Subordinated Creditor shall not assign or transfer her rights
hereunder without the prior written consent of the Agent).
7.05 Captions. The captions and section headings appearing
herein are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.
7.06 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
7.07 Governing Law; Submission to Jurisdiction. This
Agreement shall be governed by, and construed in accordance with, the law of the
State of New York. The Subordinated Creditor hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York state court sitting in New York City for the
purposes of all legal proceedings arising out of or relating to this Agreement
or the transactions contemplated hereby. The Subordinated Creditor irrevocably
waives, to the fullest extent permitted by applicable law, any objection that
the Subordinated Creditor may now or hereafter have to the laying of the venue
of any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum.
7.08 Waiver of Jury Trial. EACH OF THE SUBORDINATED
CREDITOR, THE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
Founders Subordination Agreement
<PAGE>
- 11 -
7.09 Agents and Attorneys-in-Fact. The Agent may employ
agents and attorneys-in-fact in connection herewith and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it in good faith.
7.10 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Agent and the
Lenders in order to carry out the intentions of the parties hereto as nearly as
may be possible and (b) the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction.
Founders Subordination Agreement
<PAGE>
- 12 -
IN WITNESS WHEREOF, the parties hereto have caused this
Subordination Agreement to be duly executed as of the day and year first above
written.
---------------------------------
CAROLYN C. SMITH
Address for Notices:
1343 Ivy Hill Road
Baltimore, Maryland 21030
With a copy to:
Thomas & Libowitz, P.A.
100 Light Street, Suite 1100
Baltimore, MD 21202
Telephone No.: (410) 752-2468
Telecopy No.: (410) 752-2046
Attention: Steven A. Thomas
Founders Subordination Agreement
<PAGE>
- 13 -
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Agent
By
-----------------------------
Name:
Title:
Acknowledged and Agreed:
SINCLAIR BROADCAST GROUP, INC.
By
---------------------------------
Name:
Title:
Founders Subordination Agreement
<PAGE>
- 14 -
Acknowledged and Agreed:
SUBSIDIARY GUARANTORS
- ---------------------
CHESAPEAKE TELEVISION, INC.
KABB, INC.
KDNL, INC.
KDSM, INC.
KSMO, INC.
SCI - INDIANA, INC.
SCI - SACRAMENTO, INC.
SINCLAIR COMMUNICATIONS, INC.
SINCLAIR RADIO OF ALBUQUERQUE, INC.
SINCLAIR RADIO OF BUFFALO, INC.
SINCLAIR RADIO OF GREENVILLE, INC.
SINCLAIR RADIO OF LOS ANGELES, INC.
SINCLAIR RADIO OF MEMPHIS, INC.
SINCLAIR RADIO OF NASHVILLE, INC.
SINCLAIR RADIO OF NEW ORLEANS, INC.
SINCLAIR RADIO OF ST. LOUIS, INC.
SINCLAIR RADIO OF WILKES-BARRE,
INC.
TUSCALOOSA BROADCASTING, INC.
WCGV, INC.
WDBB, INC.
WLFL, INC.
WLOS, INC.
WPGH, INC.
WPGH LICENSEE, INC.
WSMH, INC.
WSTR, INC.
WSTR LICENSEE, INC.
WTTE, CHANNEL 28, INC.
WTTE, CHANNEL 28 LICENSEE, INC.
WTTO, INC.
WTVZ, INC.
WTVZ LICENSEE, INC.
WYZZ, INC.
SUPERIOR COMMUNICATIONS OF
OKLAHOMA, INC.
By
------------------------------------
Name:
Title:
Founders Subordination Agreement
<PAGE>
- 15 -
Acknowledged and Agreed:
SUBSIDIARY GUARANTORS
- ---------------------
CHESAPEAKE TELEVISION
LICENSEE, INC.
FSF TV, INC.
KABB LICENSEE, INC.
KDNL LICENSEE, INC.
KDSM LICENSEE, INC.
KSMO LICENSEE, INC.
SCI - INDIANA LICENSEE, INC.
SCI - SACRAMENTO LICENSEE, INC.
SINCLAIR RADIO OF ALBUQUERQUE
LICENSEE, INC.
SINCLAIR RADIO OF BUFFALO
LICENSEE, INC.
SINCLAIR RADIO OF GREENVILLE
LICENSEE, INC.
SINCLAIR RADIO OF LOS ANGELES
LICENSEE, INC.
SINCLAIR RADIO OF MEMPHIS
LICENSEE, INC.
SINCLAIR RADIO OF NASHVILLE
LICENSEE, INC.
SINCLAIR RADIO OF NEW ORLEANS
LICENSEE, INC.
SINCLAIR RADIO OF ST. LOUIS
LICENSEE, INC.
SINCLAIR RADIO OF WILKES-BARRE
LICENSEE, INC.
SUPERIOR COMMUNICATIONS GROUP, INC.
SUPERIOR COMMUNICATIONS OF
KENTUCKY, INC.
SUPERIOR KY LICENSE CORP.
SUPERIOR OK LICENSE CORP.
WCGV LICENSEE, INC.
WLFL LICENSEE, INC.
WLOS LICENSEE, INC.
WSMH LICENSEE, INC.
WTTO LICENSEE, INC.
WYZZ LICENSEE, INC.
By
----------------------------------
Name:
Title:
Founders Subordination Agreement
<PAGE>
- 16 -
STATE OF MARYLAND )
) ss:
COUNTY OF __________ )
On this __ day of _________, 1996, before me, the
undersigned officer, personally appeared Carolyn C. Smith, known to me (or
satisfactorily proven) to be the person whose name Carolyn C. Smith subscribed
to the within instrument and acknowledged that he executed the same for the
purposes therein contained.
In witness whereof I hereunto set my hand and official seal.
-----------------------------
NOTARY PUBLIC in and for the
State of Maryland.
My Commission expires:
Founders Subordination Agreement
<PAGE>
EXHIBIT G
[Form of Asset Use and Operating Agreement]
ASSET USE AND OPERATING AGREEMENT
ASSET USE AND OPERATING AGREEMENT dated as of _______, 199_
between_________________, a ____________ corporation (the "License Holder"), and
_________________, a ______________ corporation (the "Operator").
WHEREAS, the License Holder holds the licenses (the
"Licenses") issued by the Federal Communications Commission (the "FCC") to
operate the [television/radio] station (the "Station") identified on Annex 1
hereto;
WHEREAS, the Operator, the owner of all of the capital stock
of the License Holder, owns all of the assets (not including Licenses) and
facilities (the "Facilities") used or useful in the operation of the Station;
WHEREAS, Sinclair Broadcast Group, Inc. (the "Borrower"),
the Operator, the License Holder and certain other subsidiary guarantors,
certain lenders (the "Lenders") and The Chase Manhattan Bank (National
Association), as agent for the Lenders (in such capacity, the "Agent"), entered
into a Second Amended and Restated Credit Agreement dated as of May 31, 1996
pursuant to which the Borrower borrowed money from the Lenders to finance, inter
alia, the acquisition of the Facilities and the Licenses;
WHEREAS, the License Holder and the Operator wish to enter
into this Agreement to ensure that the Operator manages Station operations in
accordance with the Communications Act of 1934, as amended, and the rules and
regulations promulgated by the FCC thereunder;
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
Section 1. The Operator's Duties. Subject to the provisions
of Section 2 hereof, the Operator shall manage and direct the day-to-day
operations of the Station, including, but not limited to, providing staffing,
determining the Station's programming schedule, selling advertising time,
operating and maintaining the Facilities, and assuring compliance with FCC
requirements. The Operator shall maintain such facilities and equipment and hire
and supervise such employees as are necessary to the fulfillment of its
responsibilities hereunder. It is
Asset Use and Operating Agreement
<PAGE>
- 2 -
understood that all expenses and capital costs incurred in operating the Station
shall be paid by the Operator and all advertising and other receipts collected
in operating the Station shall be retained by the Operator. The Operator shall
not be entitled to any compensation for services rendered hereunder.
Section 2. Control By the License Holder. The License Holder
shall have the right at all times and may exercise ultimate control over the
programming, personnel, operations and policies of the Station, and the Operator
shall operate the Station in compliance therewith. The Operator shall provide
the License Holder with such books of account, records and reports, including
quarterly programming schedules and reports, as the License Holder may
reasonably request from time to time. Without limiting the foregoing and to
assure compliance with FCC policies and rules, the License Holder shall have the
right throughout the term of this Agreement (a) to require the Operator to
delete any program if its transmission would be contrary to the public interest,
(b) to require the Operator to transmit any program if its transmission would
serve the public interest, and (c) to cause the Operator to relieve any person
of his or her duties at the Station if his or her conduct is inconsistent with
the policies or rules of the License Holder or the FCC or is otherwise
inconsistent with the public interest. This paragraph shall be construed so as
to vest in the License Holder such powers which may be necessary for discharge
of its responsibilities as a licensee under the Communications Act of 1934, as
amended, and the policies and the rules promulgated thereunder by the FCC.
Section 3. Compliance with Law. The Operator shall at all
times operate the Station in compliance with the Communications Act of 1934, as
amended, and all rules, regulations and policies of the FCC and any other
governmental agency with authority over the Station, as such laws, rules,
regulations and policies are in effect from time to time.
Section 4. Modification of Facilities. The Operator may, at
its discretion, modify the Station's Facilities from time to time, at its
expense, subject to the License Holder's approval of the modifications. If prior
FCC approval of such modifications is required, the Operator shall prepare an
appropriate application for the License Holder to sign and file with the FCC,
and no such change shall be implemented prior to the grant of FCC consent. Any
application for a license to cover any construction permit shall similarly be
prepared by the Operator for signature and filing by the License Holder.
Section 5. FCC Filings. The Operator shall cooperate with
the License Holder in furnishing any information which may
Asset Use and Operating Agreement
<PAGE>
- 3 -
be requested by the FCC in connection with the operation of the Station,
including, but not limited to, any technical and/or engineering information. The
Operator shall prepare, for the License Holder's signature and filing with the
FCC, an appropriate license renewal application and such other reports,
documents, and filings as may be necessary from time to time to keep in force
and effect an FCC authorization for operating the Station. The License Holder
shall cooperate with the Operator in signing and filing such license renewal
applications and other reports, documents, and filings as the Operator shall
from time to time prepare and submit to the License Holder.
Section 6. Notices. All notices hereunder shall be given in
writing by first class United States mail, postage prepaid, addressed as
follows, or to such other address as either party may specify from time to time:
If to the License Holder:
-----------------------
-----------------------
-----------------------
If to the Operator:
-----------------------
-----------------------
-----------------------
Section 7. Term. The term of this Agreement shall begin on
the date hereof and shall terminate upon the occurrence of any of the following
events (unless earlier terminated pursuant to the provisions of Section 8
hereof):
(a) revocation or expiration without renewal of the Licenses
held by the License Holder to operate the Station; or
(b) mutual agreement of the parties to terminate this
Agreement.
Section 8. Termination. The License Holder shall have the
right to terminate this Agreement by written notice to the Operator at any time
during the term hereof upon the occurrence of any of the following events:
(a) any material failure by the Operator to perform any of
its obligations under this Agreement;
Asset Use and Operating Agreement
<PAGE>
- 4 -
(b) the insolvency of the Operator, appointment of a
receiver of the property of the Operator, or any assignment for the
benefit of creditors of the Operator;
(c) the filing of a voluntary or involuntary petition by or
against the Operator under Bankruptcy laws of the United States; or
(d) the foreclosure (other than by the Agent) of any lien or
security interest in, or the placement or issuance of any levy, writ
of attachment, writ of garnishment, writ of execution or similar
process against, the Operator or any property of the Operator or
securities representing an ownership interest in the Operator.
Section 9. Assignment. The Operator shall not assign this
Agreement or any of the Operator's rights or obligations under this Agreement or
sell or transfer the Facilities without the prior written consent of the License
Holder, and any attempted assignment, sale or transfer by the Operator not in
compliance with this provision shall, at the License Holder's option, be null
and void; provided, however, that the Operator may replace portions of the
Facilities from time to time provided that such replacements do not impair
Station operations. Nothing herein shall be interpreted to prevent the Operator
from granting a mortgage on or other security interest in any of the Facilities.
This Agreement shall bind and inure to the benefit of the permitted successors
and assigns of the parties. The parties agree that, in the event of assignment,
transfer of control or sale of the Station to any third party, the Licenses and
the Facilities shall, to the extent required by law (including the regulations
of the FCC), be assigned or control thereof transferred to such third party
together, and not separately, after all requisite FCC consents therefor have
been obtained.
Section 10. Governing Law. This Agreement shall be governed
by and construed in accordance with the law of the State of New York.
Section 11. Construction. It is the intent of the parties
that operation of the Station under this Agreement comply with the rules and
regulations of the FCC, and all provisions of this Agreement shall be so
construed.
Section 12. Severability. If any provision of this Agreement
shall be declared void or invalid by any governmental authority with
jurisdiction thereof, then the remainder of this Agreement shall remain in full
force and effect without the
Asset Use and Operating Agreement
<PAGE>
- 5 -
offending provision, provided that such remainder substantially reflects the
original agreement of the parties.
Section 13. Amendments. This Agreement represents the entire
understanding of the parties hereto with respect to the subject matter hereof
and may be amended only by a writing signed by both parties.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
[NAME OF LICENSE HOLDER] [NAME OF OPERATOR]
By_________________________ By_______________________
Title: Title:
Asset Use and Operating Agreement
<PAGE>
Exhibit H
[Form of Consent and Agreement]
CONSENT AND AGREEMENT (this "Consent and Agreement") dated as
of ___________, 1996 by [NAME OF CONSENTING PARTY], a corporation duly organized
and validly existing under the laws of the State of __________ (the "Consenting
Party").
Sinclair Broadcast Group, Inc., a Maryland corporation (the
"Company1"), the subsidiaries of the Company party as Subsidiary Guarantors to
the Credit Agreement referred to below (collectively the "Subsidiary
Guarantors"), including without limitation _____________, a ____________
corporation (the "Contract Counterparty"), the financial institutions named
therein (the "Lenders") and The Chase Manhattan Bank (National Association) as
agent for the Lenders (in such capacity, together with its successors in such
capacity, the "Agent") are parties to a Credit Agreement dated as of
____________, 1996 (as modified and supplemented and in effect from time to
time, the "Credit Agreement"), providing, subject to the terms and conditions
thereof, for loans to be made by the Lenders in an aggregate principal amount
not exceeding $_______________.
The Company, the Subsidiary Guarantors and the Agent are
parties to a Security Agreement dated as of __________, 1996 (as modified and
supplemented and in effect from time to time, the "Security Agreement") pursuant
to which the Company and each Subsidiary Guarantor, including without
limitation, the Contract Counterparty, agreed to pledge and grant a security
interest in the Assigned Agreements (as defined below) as security for the
Secured Obligations (as defined in the Security Agreement). Accordingly, the
parties hereto agree as follows:
Section 1. Definitions. Each capitalized term used herein and
not otherwise defined herein shall have the meaning assigned to such term in the
Credit Agreement. As used in this Consent and Agreement, the following term
shall have the following meaning:
"Assigned Agreements" shall mean the agreements listed in
Annex 1 hereto.
"Contract Default" shall mean a default by the Contract
Counterparty or any other Person in the performance of any
- ------------
1 Will be defined as the "Contract Counterparty" in the form of this
Consent and Agreement relating to Assigned Agreements to which Sinclair
Broadcast Group, Inc. is a party.
Consent and Agreement
<PAGE>
- 2 -
of its obligations under any Assigned Agreement, or the occurrence or
non-occurrence of any event or condition under the Assigned Agreements
which would immediately or with the passage of time or the giving of
notice, or both (including, without limitation, the failure to give a
notice of extension), enable the Consenting Party to exercise any right
or remedy under the Assigned Agreements or result in the termination or
any of the Contract Counterparty's rights under any Assigned Agreement.
"Monetary Default" shall mean, with respect to any Station,
the failure by the Contract Counterparty to pay when due, after the
lapse of any applicable grace period, any amount owing by it under an
Assigned Agreement relating to such Station or to cure after the lapse
of any applicable grace period any other Contract Default that can be
cured solely by the payment of money.
"Station" shall mean a radio or television broadcasting
station that is the subject of an Assigned Agreement.
Section 2. Representations and Warranties. The Consenting
Party hereby represents and warrants that this Consent and Agreement has been
duly executed and delivered by the Consenting Party and constitutes the legal,
valid and binding obligation of the Consenting Party enforceable against the
Consenting Party in accordance with its terms, except as the enforceability
thereof may be limited by (i) bankruptcy, insolvency, moratorium and other
similar laws affecting the enforcement of creditors' rights generally and (ii)
the application of equitable principles (whether considered in a court of law or
a proceeding in equity).
Section 3. Consent.
-------
Section 3.01. Consent to Assignments, etc. The Consenting
Party hereby:
(a) consents to the assignment by the Contract Counterparty to
the Agent pursuant to the Security Agreement of all of the Contract
Counterparty's right, title and interest in, to and under the Assigned
Agreements as collateral security for the Secured Obligations;
(b) acknowledges the right of the Agent in the exercise of its
rights and remedies under the Security Agreement and at the times
provided for therein to make all requests and demands, give all
notices, take all actions and exercise any and all rights and remedies
of the Contract Counterparty (whether or not the Contract Counterparty
has
Consent and Agreement
<PAGE>
- 3 -
then been dissolved, liquidated or wound-up) under each Assigned
Agreement, and agrees that in such event, unless and until such
Assigned Agreement is terminated as permitted by Section 3.01(f)
hereof, the Consenting Party shall continue to perform its obligations
under, and in respect of, such Assigned Agreement and the Agent or its
designee shall have the full right and power to enforce directly
against the Consenting Party all such obligations of the Consenting
Party under such Assigned Agreement;
(c) agrees that if (i) the Agent shall notify the Consenting
Party that the Agent has elected to exercise its rights under the
Security Agreement to have itself or its designee substituted for the
Contract Counterparty with respect to the Contract Counterparty's
rights under an Assigned Agreement relating to any Station (whether or
not the Contract Counterparty has then been dissolved, liquidated or
wound-up) and (ii) no Monetary Default shall have occurred and be
continuing with respect to such Station, then the Agent or its
designee, as the case may be, shall be substituted for, and shall
assume and be directly liable for the obligations of, the Contract
Counterparty under such Assigned Agreement with respect to such
Station, and agrees that in such event the Consenting Party shall
continue to perform its obligations under, and in respect of, such
Assigned Agreement with respect to such Station and the Agent or its
designee shall have the full right and power to enforce directly
against the Consenting Party all obligations of the Consenting Party
under such Assigned Agreement with respect to such Station;
(d) agrees that if (i) the Agent shall sell or assign any
portion of an Assigned Agreement relating to any Station pursuant to
the Security Agreement (whether through judicial foreclosure,
deed-in-lieu of foreclosure, or otherwise) and (ii) no Monetary Default
shall have occurred and be continuing with respect to such Station, the
purchaser or assignee of such portion of such Assigned Agreement may be
substituted for the Contract Counterparty with respect to such portion
of such Assigned Agreement (whether or not the Contract Counterparty
has then been dissolved, liquidated or wound-up), and assume and be
directly liable for the obligations of, the Contract Counterparty under
such Assigned Agreement, and agrees that in such event the Consenting
Party will continue to perform its obligations under, and in respect
of, such Assigned Agreement.
(e) agrees that neither the Agent, nor its designee, shall be
subject to any duty or obligation under the Assigned Agreements, nor
shall the grant of a security
Consent and Agreement
<PAGE>
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interest in the Assigned Agreements by the Company and the Subsidiary
Guarantors to the Agent pursuant to the Security Agreement, give rise
to any duty or obligation on the part of the Agent to the Consenting
Party unless and until the Agent shall have notified the Consenting
Party in writing that the Agent has elected to exercise its rights
pursuant to the Security Agreement to have itself or its designee
substituted for the Contract Counterparty under an Assigned Agreement
relating to a Station, whereupon the sole obligation of the Agent or
such designee, as the case may be, with respect to claims of the
Consenting Party against the Contract Counterparty arising from the
Contract Counterparty's failure to perform during any period prior to
the Agent's or such designee's substitution shall be limited to the
obligation to cure any Monetary Default relating to such Station,
provided that neither the Agent nor its designee shall become liable to
the Consenting Party solely as a result of foreclosing upon and taking
temporary title to all or any portion of any Assigned Agreement;
(f) agrees that, in the event of a Contract Default, the
Consenting Party will continue to perform its obligations under, and in
respect of, the Assigned Agreements and will not exercise any right or
remedy provided for in the Assigned Agreements, until it first gives
prompt written notice of such Contract Default to the Agent or its
designee and affords the Agent or its designee a period of at least
ninety (90) days (or, unless such Contract Default is a Monetary
Default or such Contract Default has a materially adverse effect on the
Consenting Party, such longer period as the Agent reasonably requests
so long as the Agent or its designee has commenced and is diligently
pursuing appropriate action to cure such Contract Default) from receipt
of such notice to cure such Contract Default.
(g) agrees that the Agent or its designee shall have the
right, but not the obligation, to exercise the rights to cure set forth
in Section 3.01(f) above; and
(h) agrees that, in the event that any Assigned Agreement (i)
is terminated in whole or in part by reason of the bankruptcy of the
Contract Counterparty or the Consenting Party or by reason of the
rejection by the Contract Counterparty, the Consenting Party or any
trustee for the Contract Counterparty or the Consenting Party of such
Assigned Agreement in connection with any bankruptcy case, or pursuant
to any order of the FCC, or (ii) becomes or is determined to be void or
unenforceable in whole or in part, the Consenting Party will, upon
notice from the Agent,
Consent and Agreement
<PAGE>
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enter into a new agreement with the Agent or its designee, which shall
be for the remaining term under the original Assigned Agreement (or, if
applicable, the affected portion thereof) and shall contain the same
terms and conditions as such original Assigned Agreement (excluding any
requirement to pay consideration that has theretofore been paid) with
such modifications and additional terms and conditions as may be
reasonably necessary to reflect materially changed circumstances
resulting from, arising out of or relating to the rejection or
termination of the original Assigned Agreement and the substitution of
the new contracting party (whereupon references in this Consent and
Agreement to such "Assigned Agreement" shall be deemed to refer to such
new Assigned Agreement).
Section 3.02. Payment of Assigned Sums. After receipt of
notice from the Agent instructing it to do so, the Consenting Party shall pay
all monies that are due and payable to the Contract Counterparty under the
Assigned Agreements directly to the Agent at account number ____________
maintained by the Agent with Chase at the Principal Office in immediately
available funds not later than _____ on the date such monies are due. The
Contract Counterparty hereby releases and agrees to hold the Consenting Party
harmless from all liability for making payments to the Agent in accordance with
the requirements of this Section 3.02.
Section 3.03. Reinstatement. This Consent and Agreement shall
continue to be effective or be reinstated, as the case may be, if at any time
any amount received by the Agent in respect of the Secured Obligations is
rescinded or must otherwise be restored or returned by the Agent, whether as a
result of any proceedings in bankruptcy or reorganization or otherwise, as
though such payments had not been made.
Section 3.04. Modifications to Basic Documents. The Consenting
Party agrees that no modification or supplement to any of the Basic Documents
(including, without limitation, any modification or supplement that increases
the amount or extends the maturity of any credit extended under the Credit
Agreement) shall affect its obligations hereunder.
Section 3.05. No Subrogation. The Consenting Party agrees that
it shall in no event be, and hereby waives any right that it might otherwise
have to be, subrogated to the rights of the Lenders and the Agent with respect
to the Secured Obligations.
Section 3.06. Waiver of Bankruptcy Code Protection. The
Consenting Party intends that its obligations under the
Consent and Agreement
<PAGE>
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Assigned Agreements not be a contract to which Section 365(c)(1) or Section
365(c)(2) or Section 365(e)(2) of the Bankruptcy Code applies in a cause
involving the Contract Counterparty as a debtor under the Bankruptcy Code and,
to the extent it may be determined that such Sections are applicable (except as
provided in the following sentence), the Consenting Party (a) waives, to the
fullest extent permitted by law, its rights under, and the benefits of, such
Sections with respect to such case, (b) consents to the assumption of the
Assigned Agreements by the trustee in bankruptcy in such case and (c) agrees to
reconfirm the waiver contained in clause (a) above and the consent contained in
clause (b) above to the trustee in bankruptcy in any such case at any time
requested by the Agent. The Consenting Party shall not be bound by clause (a),
(b) or (c) of the preceding sentence with respect to any Assigned Contract (or
portion thereof) under which a Contract Default exists unless, as provided by
the Bankruptcy Code, the trustee in bankruptcy (i) cures, or provides adequate
assurance that such trustee will promptly cure, such Contract Default, (ii)
compensates, or provides adequate assurance that the trustee will promptly
compensate, the Consenting Party for any actual pecuniary loss to the Consenting
Party resulting from such Contract Default and (iii) provides adequate assurance
of future performance under such Assigned Agreement (or portion thereof).
Section 3.07. Survival of Contract Counterparty's Obligations.
Nothing contained herein shall be deemed to relieve the Contract Counterparty of
(i) any liability to the Consenting Party for any Contract Default by the
Contract Counterparty that is not cured by the Agent or its designee or by any
purchaser or assignee of any portion of an Assigned Agreement or (ii) any
liability to the Consenting Party for damages arising out of any Contract
Default by the Contract Counterparty to the extent that such damages relate to a
period prior to the cure of such Contract Default by the Agent or its designee
or by any purchaser or assignee of any portion of an Assigned Agreement.
Section 3.08. Obligations and Rights under Assigned Agreements
of Substitute for Contract Counterparty. Nothing contained herein shall be
deemed to limit the rights or remedies of the Consenting Party under any
Assigned Agreement in respect of any Contract Default by the Agent or its
designee or by any purchaser or assignee of any portion of an Assigned Agreement
after the Agent, such designee or such purchaser, as the case may be (an
"Assignee"), is substituted for the Contract Counterparty as provided in Section
3.01 hereof in respect of the portion of such Assigned Agreement under which
such Contract Default occurred. No Assignee shall, by virtue of any such
substitution in respect of a portion of an Assigned Agreement, acquire greater
rights under such Assigned Agreement with respect to such portion
Consent and Agreement
<PAGE>
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than a permitted assignee of the Contract Counterparty would acquire under such
Assigned Agreement with respect to such portion.
[Section 3.09. Subordination. The Agent agrees that, as
between the Agent and the Cure Right Agreement Agent (as defined below), the
rights and remedies of the Agent under this Agreement shall be subject and
subordinate to the rights and remedies of The Chase Manhattan Bank (National
Association), as agent (in such capacity, together with its successors in such
capacity, the "Cure Right Agreement Agent") for the lenders to [Glencairn/the
River City Sellers], under the __________________ Agreement dated as of
____________ (the "Cure Right Agreement") between the Cure Right Agreement Agent
and the Consenting Party for so long as the Cure Right Agreement shall be in
effect. Without limiting the generality of the foregoing, the Agent shall not
exercise any right or remedy hereunder (other than the rights to cure set forth
in Section 3.01(f) hereof, which rights shall be subject and subordinate to the
rights and remedies of the Cure Right Agreement Agent as aforesaid) without the
prior written consent of the Cure Right Agreement Agent for so long as the Cure
Right Agreement shall be in effect.]2
Section 4. Miscellaneous.
-------------
Section 4.01. _____ Termination. Subject to Section 3.03
hereof, when all Secured Obligations shall have been paid in full and the
Commitments of the Lenders (and the Letters of Credit) under the Credit
Agreement shall have expired or been terminated and the Interest Rate Protection
Agreements shall have expired or been terminated, this Consent and Agreement
shall terminate. The Agent shall notify the Consenting Party when such
termination has occurred. In addition, subject to Section 3.01(h) hereof, this
Agreement shall terminate with respect to any Assigned Agreement that has
terminated in accordance with its terms and as permitted by Section 3.01(f)
hereof and with respect to any portion of an Assigned Agreement that has been
fully and finally performed, including, without limitation, any option under any
Assigned Agreement that has been exercised and for which the closing has
occurred.
Section 4.02. Notices. All notices and other communications
hereunder shall be in writing, shall be sent by first class mail, by personal
delivery, by a nationally recognized courier service, or by telecopy and shall
be directed
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2 To be inserted if the Consenting Party is Glencairn (or any of its
Subsidiaries) or River City (or any of its Subsidiaries).
Consent and Agreement
<PAGE>
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to the addresses and telephone numbers listed on the signature page hereto or to
such other address or addressee as a party may designate by notice given
pursuant hereto.
Section 4.03. Separate Counterparts; Amendments, Waiver. This
Consent and Agreement may be executed in separate counterparts, each of which
when so executed and delivered shall be an original, and all of which taken
together shall constitute one and the same instrument. Neither this Consent and
Agreement nor any of the terms hereof may be terminated, amended, supplemented,
waived or modified except by an instrument in writing signed by the Agent and by
any other party against whom any such amendment, supplement, waiver or
modification is to be enforced. Notwithstanding the foregoing sentence, the
Agent may terminate this Consent and Agreement at any time by providing a notice
to the Consenting Party in accordance with Section 4.02.
Section 4.04. Severability of Provisions. Any provision of
this Consent and Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 4.05. Successors and Assigns. This Consent and
Agreement shall be binding upon each of the Consenting Party and the Contract
Counterparty, and on the permitted successors and assigns of each of them, and
shall inure to the benefit of the Agent (for its own benefit and for the benefit
of the financial institutions and other lenders from time to time party to the
Credit Agreement or to any Successor Credit Agreement (as defined below) and its
successors and permitted assigns; provided that (i) the Consenting Party shall
not transfer or assign all or any portion of its obligations under this Consent
and Agreement or the Assigned Agreements without the prior written consent of
the Agent and (ii) the Agent shall not transfer or assign all or any portion of
its rights or obligations hereunder except to a successor agent for the Lenders
under the Credit Agreement or to an agent for the financial institutions and
other lenders from time to time party to any Successor Credit Agreement. For
purposes of this Section 4.05, "Successor Credit Agreement" shall mean any
credit or loan agreement providing for loans to be made by a syndicate of
lenders that have appointed a commercial bank to act as their agent thereunder,
where all or a portion of the proceeds of such loans are used to refinance or
refund the indebtedness of the Company under the Credit Agreement. From and
after the date any Successor Credit Agreement is entered into and the proceeds
of any borrowing thereunder are used to pay all
Consent and Agreement
<PAGE>
- 9 -
obligations of the Company under the predecessor Credit Agreement then
outstanding (and the commitments of the lenders thereunder to provide further
credit shall have expired or been terminated and either any letters of credit
issued thereunder shall have expired or been terminated or the Company's
obligations with respect to any such letters of credit shall have been released
thereunder and reinstated under such Successor Credit Agreement), such Successor
Credit Agreement shall be deemed to be the Credit Agreement for all purposes
hereof.
Section 4.06. Headings Descriptive. The headings of the
several sections of this Consent and Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provisions of
this Consent and Agreement.
Section 4.07. Further Assurances. Upon the request of the
Contract Counterparty or the Agent, in connection with the provisions of and the
transactions contemplated by the Assigned Agreements, the Consenting Party shall
execute and deliver such further instruments and agreements relating to such
provisions and transactions as may reasonably be requested by the Contract
Counterparty to further document and carry out the intent and purpose of such
provisions and transactions.
Section 4.08. GOVERNING LAW, SUBMISSION TO JURISDICTION,
WAIVER OF JURY TRIAL.
(a) This Consent and Agreement shall be governed by, and
construed in accordance with, the law of the State of New York. Each of the
parties hereto hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
state court sitting in New York County for the purposes of all legal proceedings
arising out of or relating to this Consent and Agreement or the transactions
contemplated hereby. Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, any objection that it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum.
(b) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS CONSENT AND AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
Section 4.09. Waiver. No failure on the part of the Agent to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or privilege under this
Consent and Agreement
<PAGE>
- 10 -
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege under this Agreement preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The remedies provided herein are cumulative and not exclusive of any
remedies provided by law.
Consent and Agreement
<PAGE>
- 11 -
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement and Consent to be executed by its duly authorized officer as of the
date first above written.
[NAME OF CONSENTING PARTY]
By_________________________
Title:
Address for Notices:
Attention:
Telecopier No.:
Telephone No.:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Agent
By_________________________
Title:
Address for Notices:
Attention:
Telecopier No.:
Telephone No.:
Consent and Agreement
<PAGE>
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SINCLAIR BROADCAST GROUP, INC.
By_________________________
Title:
Address for Notices:
Attention:
Telecopier No.:
Telephone No.:
Consent and Agreement
<PAGE>
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[ACKNOWLEDGED:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Cure Right Agreement Agent
By_________________________
Title:]
Consent and Agreement
<PAGE>
EXHIBIT I
[Form of Assignment and Acceptance]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Second Amended and Restated Credit
Agreement dated as of May 31, 1996 (as modified and supplemented and in effect
from time to time, the "Credit Agreement"), between Sinclair Broadcast Group,
Inc., a Maryland corporation (the "Borrower"), the Subsidiary Guarantors party
thereto, the lenders named therein, and The Chase Manhattan Bank (National
Association), as agent for such lenders. Terms defined in the Credit Agreement
are used herein as defined therein.
____________________ (the "Assignor") and
____________________ (the "Assignee") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the
Assignee without recourse to the Assignor, and the Assignee hereby irrevocably
purchases and assumes from the Assignor without recourse to the Assignor, as of
the Effective Date as set forth in Schedule 1 hereto (the "Effective Date"), an
interest (the "Assigned Interest") in and to the Assignor's rights and
obligations under the Credit Agreement with respect to those credit facilities
contained in the Credit Agreement as are set forth on Schedule 1 (individually,
an "Assigned Facility"; collectively, the "Assigned Facilities"), in a principal
amount and percentage for each Assigned Facility as set forth on Schedule 1.
2. The Assignor (i) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement, any other
Basic Document or any other instrument or document furnished pursuant thereto,
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement, any other Basic Document or any other
instrument or document furnished pursuant thereto, other than that it has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, any of its Subsidiaries or any other
obligation or the performance or observance by the Borrower, any of its
Subsidiaries or any other obligor of any of their respective obligations under
the Credit Agreement or any other Basic Document or any other instrument or
document furnished pursuant hereto or thereto; and (iii) attaches the Note(s)
held by it evidencing the Assigned Facilities and requests that the Agent
exchange such Note(s) for a new Note or
Assignment and Acceptance
<PAGE>
- 2 -
Notes payable to the Assignor (if the Assignor has retained any interest in the
Assigned Facility) and a new Note or Notes payable to the Assignee in the
respective amounts which reflect the assignment being made hereby (and after
giving effect to any other assignments which have become effective on the
Effective Date).
3. The Assignee (i) represents and warrants that it is
legally authorized to enter into this Assignment and Acceptance; (ii) confirms
that it has received a copy of the Credit Agreement, together with copies of the
financial statements referred to in Section 8.02 thereof, the financial
statements delivered pursuant to Section 9.01 thereof, if any, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (iii) agrees
that it will, independently and without reliance upon the Assignor, the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement, the other Basic Documents or any
other instrument or document furnished pursuant hereto or thereto; (iv) appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under the Credit Agreement, the other Basic
Documents or any other instrument or document furnished pursuant hereto or
thereto as are delegated to the Agent by the terms thereof, together with such
powers as are incidental thereto; and (v) agrees that it will be bound by the
provisions of the Credit Agreement and will perform in accordance with its terms
all the obligations which by the terms of the Credit Agreement are required to
be performed by it as a Lender.
4. Following the execution of this Assignment and
Acceptance, it will be delivered to the Agent for acceptance by the Agent
pursuant to Section 12.06(b) of the Credit Agreement and, if the Loans being
assigned hereby are Registered Loans, recording by the Agent pursuant to Section
12.06(g) of the Credit Agreement, effective as of the Effective Date (which date
shall not, unless otherwise agreed to by the Agent, be earlier than five
Business Days after the date of such acceptance by the Agent and, if the Loans
being assigned hereby are Registered Loans, shall in no event be earlier than
the date the information contained herein is recorded in the Register pursuant
to Section 12.06(g) of the Credit Agreement).
5. Upon such acceptance and (if applicable) recording, from
and after the Effective Date, the Agent shall make all payments in respect of
the Assigned Interest (including payments
Assignment and Acceptance
<PAGE>
- 3 -
of principal, interest, fees and other amounts) to the Assignee which accrue
subsequent to the Effective Date.
6. From and after the Effective Date, (i) the Assignee shall
be a party to the Credit Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the other Basic Documents and shall be bound by the
provisions thereof and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement except as provided in Section 12.07 of
the Credit Agreement.
7. This Assignment and Acceptance shall be governed by and
construed in accordance with the law of the State of New York.
8. This Assignment and Acceptance may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Assignment and
Acceptance by signing any such counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed as of the date first above written by
their respective duly authorized officers on Schedule 1 hereto.
Assignment and Acceptance
<PAGE>
Schedule 1 to
Assignment and Acceptance
relating to the Second Amended and Restated
Credit Agreement dated as of May 31, 1996,
between Sinclair Broadcast Group, Inc.,
the Subsidiary Guarantors party thereto
the lenders named therein and
The Chase Manhattan Bank (National Association),
as agent for the Lenders
(in such capacity, the Agent")
Name of Assignor:
Name of Assignee:
Effective Date of Assignment:
Credit Principal Percentage
Facility Assigned Amount Assigned Assigned
----------------- --------------- --------
[ASSIGNEE] [ASSIGNOR]
By:___________________________ By:__________________________
Title: Title:
Accepted:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION), as
Agent
By:__________________________
Title:
[Consented to:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION), as
Issuing Bank
By:__________________________
Title:]
Assignment and Acceptance
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of April 10, 1996 (this "Agreement"),
between Sinclair Broadcast Group, Inc., a Maryland corporation ("Sinclair"), and
Barry Baker ("Executive").
WHEREAS, Sinclair and River City Broadcasting, L.P., a
Delaware limited partnership ("RCB") have entered into an Asset Purchase
Agreement (the "Purchase Agreement") dated as of even date herewith, pursuant to
which RCB has agreed to sell, and Sinclair has agreed to purchase, certain
non-license assets used or held for use by RCB in connection with the operation
of substantially all of RCB's owned and operated radio and television stations
(the "River City Acquisition");
WHEREAS, Sinclair, RCB and River City License Partnership, a
Missouri general partnership ("RCLP"), have entered into an Option Agreement
(the "Option Agreement"), dated as of even date herewith, pursuant to which RCB
and RCLP have granted Sinclair options to acquire certain assets used or held
for use by RCB and RCLP in connection with the operation of its Columbus, Ohio
television station and license assets used or held for use by RCB and RCLP in
connection with the operation of all of its owned or operated radio and
television stations (the"RCB Stations");
WHEREAS, on or prior to September 30, 1996 (the "SCI Transfer
Date"), Sinclair will contribute substantially all of the stock and assets
related to its broadcasting subsidiaries to a newly formed Maryland corporation
and wholly owned subsidiary, Sinclair Communications, Inc. ("SCI");
WHEREAS, SCI will execute a counterpart of, and become a party
to, this Agreement on or prior to the Effective Date (as hereinafter defined);
WHEREAS, Sinclair wishes to secure the services of Executive
as President and Chief Executive Officer of SCI, Executive Vice President of
Sinclair, and a member of the Board of Directors of each of Sinclair and SCI for
an extended period of time beginning on the Effective Date (as defined herein);
WHEREAS, Sinclair desires to enter into this Agreement, and
commence certain obligations to Executive hereunder, as of the date hereof, to
assure itself of Executive's availability as of the Effective Date;
WHEREAS, the Board of Directors, and the Compensation
Committee of the Board of Directors, of Sinclair has approved this Agreement in
all respects;
WHEREAS, stockholders of Sinclair holding a majority of the
voting stock of Sinclair have entered into a Voting Agreement pursuant to which
they have agreed to approve all aspects of this Agreement requiring stockholder
approval, including, without limitation, the 1996 LTIP (as hereinafter defined);
and
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<PAGE>
WHEREAS, the Executive is willing to enter into this Agreement
upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and obligations contained herein, the parties agree, intending
to be legally bound, as follows:
1. Employment; Term.
1.1 Sinclair and SCI shall employ Executive, and
Executive shall serve as President and Chief Executive Officer of SCI and
Executive Vice President of Sinclair, during the Employment Term (as defined in
Section 1.2). During the entire Employment Term, Executive shall be a member of
the Board of Directors of Sinclair and SCI. In addition, Executive shall serve
as the President, Chief Executive Officer and as a member of the Board of
Directors of such direct or indirect subsidiaries of SCI as Executive shall from
time to time determine.
1.2 The term of this Agreement (the "Agreement
Term"), shall commence on the date hereof and terminate on the fifth anniversary
of the Closing (as defined in the Purchase Agreement and hereinafter referred to
as the "First Closing"), unless extended as provided in Section 8 or sooner
terminated pursuant to the provisions of Section 9 or Section 10; provided,
however, that Executive shall not be an employee, officer or director of
Sinclair, SCI or any of their subsidiaries until the Effective Date (as
hereinafter defined). Executive's status as an employee, officer and director
under this Agreement shall commence on the Effective Date and shall terminate on
the termination of the Agreement Term (the "Employment Term"). Notwithstanding
anything to the contrary, this Agreement shall be void and of no force and
effect if the Purchase Agreement is terminated in accordance with its terms. For
the purposes of this Agreement, "Effective Date" shall mean the earlier to occur
of: (a) the date on which Executive no longer has an attributable ownership
interest, within the meaning of the rules and regulations of the Federal
Communications Commission (the "FCC"), in RCB or RCLP; or (b) the first date on
which all of the following have occurred: (i) the closing of the sale of the
license assets related to WFBC, Anderson, South Carolina by RCB and RCLP to a
party other than Sinclair or any of its subsidiaries or affiliates; (ii) the
divestiture of the license assets related to WTTE-TV, Columbus, Ohio, by
Sinclair; and (iii) the elimination of the attributable ownership interest,
within the meaning of the rules and regulations of the FCC, in Channel 63, Inc.
by David D. Smith, Frederick G. Smith, J. Duncan Smith and Robert E. Smith.
2. Duties and Authority.
2.1 During the Employment Term, as CEO and President
of SCI, under the direction and subject to the control of the Board of Directors
of SCI (which direction shall be such as is customarily exercised over a chief
executive officer), Executive shall be responsible for the business, affairs,
properties and operations of SCI and shall have general executive charge,
management and control of SCI, with all such powers and authority with respect
to such business, affairs, properties and operations as may be reasonably
incident to such duties and responsibilities. With respect to the matters
expressly addressed in Exhibit A, during the Employment Term,
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<PAGE>
Executive shall have the powers and authority, and shall be subject to the
limitations on powers and authority, set forth in Exhibit A. Exhibit A shall be
strictly construed and shall be deemed to expand or restrict Executive's power
and authority as granted in the first sentence of this Section 2.1 only with
respect to the matters expressly addressed therein.
2.2 During the Employment Term, as Executive Vice
President of Sinclair, Executive shall perform such duties that are consistent
with his status set forth in this Section 2.2 as may reasonably be assigned to
him by the Chief Executive Officer of Sinclair or by the Board of Directors of
Sinclair. Throughout the Employment Term, (a) Sinclair shall not confer upon any
other officer or employee of Sinclair (other than David D. Smith, the President
and Chief Executive Officer of Sinclair) the title of President or Chief
Executive Officer, or power or authority superior to that of Executive, and (b)
Sinclair shall not confer upon any other officer or employee of Sinclair the
title of Executive Vice President of Sinclair, or power or authority equal to
that of Executive; provided, however, that (x) in the event of the death or
Disability (as hereinafter defined in Section 10.2 hereof) of David D. Smith,
Sinclair may confer upon one other person the title of President and Chief
Executive Officer and (y) in the event that Sinclair (i) employs a person who
contemporaneously with the commencement of such employment makes a personal
investment in Sinclair common equity in an amount equal to or greater than the
fair market value (as defined in Section 8.2.5 with respect to Outstanding
Voting Securities) of the direct or indirect investment by Executive in any
securities of Sinclair or its affiliates, measured at the time such new person
becomes an employee and (ii) such new employee is to have management
responsibility for a subsidiary or division of Sinclair with a cash flow
projected by the Board of Directors of Sinclair for the immediately succeeding
12-month period to be equal to or greater than 125% of the cash flow projected
by the Board of Directors of Sinclair for the same period with respect to the
business then managed by Executive, then Sinclair may confer upon such person
the title of Executive Vice President of Sinclair, and power and authority equal
(but not superior) to that of Executive.
2.3 After the SCI Transfer Date, all business,
affairs, properties and operations of Sinclair or its direct or indirect
subsidiaries reasonably related to the ownership or operation of television or
radio stations (including, for example, ancillary businesses, such as the
national representation business, the travel and entertainment business, station
fair and marketing events, and investments in programming made in the form of
percentages of programming obtained in connection with the clearance of
programming on stations owned or operated by SCI) shall be conducted by SCI or
one of its direct or indirect subsidiaries. Unless otherwise agreed, the
creation of programming and investments in the creation of programming (other
than as expressly noted above in this Section 2.3) shall not be deemed to be an
ancillary business within the meaning of this Section 2.3.
2.4 Throughout the Employment Term, Executive will be
a member of any executive or finance committee, if any, of Sinclair and SCI.
2.5 During the Agreement Term it shall not be a
violation of this Agreement for Executive to (a) serve on corporate, civic or
charitable boards or committees, (b) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (c) manage
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personal investments, so long as in the case of (a), (b) and (c) above such
activities do not significantly interfere with the performance of Executive's
responsibilities as an employee of Sinclair and SCI in accordance with this
Agreement.
3. Location.
During the Employment Term, Executive's services under this
Agreement shall be performed principally in Baltimore, Maryland. The parties,
however, acknowledge and agree that the nature of Executive's duties hereunder
shall require reasonable travel from time to time.
4. Cash Compensation.
4.1 Base Salary. During the Agreement Term, Sinclair
or SCI shall pay to Executive, in monthly or more frequent installments in
accordance with SCI's regular payroll practices for senior executives, a base
salary of not less than $1,055,952.34 per annum; provided, however, that such
minimum base salary shall be adjusted upward, as of January 1, 1997, and as of
each successive January 1 to the end of the Agreement Term, by 7 1/2% (as so
adjusted, including pursuant to the next sentence, the "Base Salary"). It is
understood that SCI or Sinclair may, at any time, in the discretion of their
respective Boards of Directors, increase, but not decrease, Executive's Base
Salary.
4.2 Bonus.
4.2.1 In addition to his Base Salary, Executive shall
be entitled to receive with respect to each calendar year (or portion thereof)
during the Agreement Term, a bonus ("Bonus") equal to 2% of the amount by which
the Broadcast Cash Flow (as defined below) of SCI (including, in the event that
Sinclair or any affiliate of Sinclair (other than SCI) owns, or provides program
services with respect to, a television or radio station, the Broadcast Cash Flow
of such stations) for such year exceeds the Broadcast Cash Flow (as defined
below) for the immediately preceding year. For the year ended December 31, 1995,
"Broadcast Cash Flow" shall mean $223,836,000. The calculation of Broadcast Cash
Flow for the year ended December 31, 1995, is set forth on Schedule A.
4.2.2 If in any year after the closing of the River
City Acquisition, Sinclair or SCI, directly or indirectly, shall acquire, or
shall commence to provide programming services with respect to, one or more
television or radio stations (including pursuant to local marketing, time
brokerage or similar management services agreements), for purposes of
calculating the Bonus with respect to the year in which such acquisition has
occurred, the Broadcast Cash Flow of the immediately preceding year shall be
increased to reflect such acquisition, or if in any year Sinclair or SCI
directly or indirectly shall dispose of, or shall cease to provide programming
services with respect to, one or more television or radio stations, for purposes
of calculating the Bonus with respect to the year in which such disposition has
occurred, the Broadcast Cash Flow of the immediately preceding year shall be
decreased to reflect such disposition, by an amount equal to the Average
Broadcast Cash Flow (as defined below), calculated as of the date of the
acquisition or disposition, of the television or radio station (or stations) so
acquired or disposed of, multiplied by a fraction, (a) the numerator of which is
the number of days remaining in such year following such acquisition or
disposition and (b) the
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denominator of which is 365. If the purchase by Sinclair of any RCB Stations
results in the elimination of fees payable pursuant to local marketing, time
brokerage or similar agreements in effect immediately prior to such purchase,
the Broadcast Cash Flow for the immediately preceding year shall be decreased by
the amount of any such fees.
4.2.3 As used in this Section 4.2, the term
"Broadcast Cash Flow" shall mean, for any period, operating income (from the
ownership of or provisions of program services to television or radio stations)
plus (a) non-cash expenses, including depreciation and amortization expense,
programming amortization expense, barter expenses and deferred compensation
expense, plus (b) corporate expense (including special bonuses paid to executive
officers), less (c) film contract payments, cash payments on deferred
compensation and non-cash broadcast revenue, in each case as such items shall be
determined in accordance with generally accepted accounting principles; and
"Average Broadcast Cash Flow" shall mean the average annual Broadcast Cash Flow
of a television or radio station for the three full calendar years of such
television or radio station prior to acquisition or disposition by Sinclair or
SCI.
4.2.4 The Bonus shall be paid to Executive as soon as
practicable, but in no event later than March 31 following the end of each
calendar year. The amount of the Bonus payable with respect to any period of
less than an entire year shall be determined by multiplying the Bonus that would
have been payable with respect to the whole such year (using actual results for
such year and assuming that the Agreement had been in effect the entire such
year) by a fraction, the numerator of which is the number of days of such year
included in the Agreement Term and the denominator of which is 365.
4.3 Stock Options.
4.3.1 As additional consideration for Executive
entering into this Agreement, Executive shall be granted, on the date hereof,
stock options on 3.33% of the common equity of Sinclair determined on a fully
diluted basis (including without limitation after taking into account the River
City Acquisition, the financings related thereto and all possible issuances of
stock under the several stock option and stock incentive plans of Sinclair and
SCI, including, without limitation, the 1996 Long-Term Incentive Plan of
Sinclair Broadcast Group, Inc. (the "1996 LTIP")). Such options shall have a per
share strike price equal to the fair market value on the date hereof of one
share of Class A Common Stock, par value $0.01 per share of Sinclair ("Class A
Common Stock"), but not in any event less than $21.00 per share. As used in this
Section 4.3, "fair market value" as of the date hereof means the average of the
closing share prices of the Class A Common Stock as reported on the NASDAQ
National Market for the 21 trading days consisting of such date and each of the
ten trading days immediately prior to such date and each of the ten trading days
immediately following such date. Sinclair shall not (a) purchase, or take any
actions designed or intended to influence the price of, Class A Common Stock
during such period, (b) permit any Smith Family Member (hereinafter defined) to
purchase, or take any actions designed or intended to influence the price of,
Class A Common Stock during such period, or (c) ask or encourage any of its
affiliates, associates or any other person to purchase, or take any action
designed or intended to influence the price of, Class A Common Stock during such
period; provided, however, that nothing contained in this Section 4.3.1 shall be
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deemed to prohibit Sinclair from acting in the normal course of business to
communicate with financial analysts or otherwise educate the market on the terms
of the River City Acquisition. In addition, such options shall have a term of
ten years, which ten-year term shall not expire notwithstanding any earlier
termination of the Agreement Term or the Employment Term, to the extent such
options are vested at the time of such termination, and such options shall, to
the extent that a prior termination of the Agreement Term under Section 9 or
10.3.3 has not occurred, vest 50% immediately on the First Closing, an
additional 25% on the first anniversary of the First Closing and an additional
25% on the second anniversary of the First Closing. For purposes of this
Agreement, "Smith Family Member" means David D. Smith, Frederick G. Smith, J.
Duncan Smith and Robert E. Smith and any of their respective parents,
grandparents, children, grandchildren, aunts, uncles, nephews, nieces or first
cousins and any trust or other entity which any such person individually, or
collectively with another person or persons, controls.
4.3.2 In addition, there shall be reserved for
nonqualified stock option grants to employees of SCI and its direct and indirect
subsidiaries (the "SCI Team") to be selected by Executive, during the Agreement
Term, at least 1.67% of the common equity of Sinclair determined on a fully
diluted basis (including without limitation after taking into account the River
City Acquisition, the financings related thereto and all possible issuances of
stock under the several stock option and stock incentive plans of Sinclair and
SCI, including, without limitation, the 1996 LTIP). Of the common equity
reserved for nonqualified stock option grants to the SCI Team, contemporaneously
with the grant of the stock options to Executive described in Section 4.3.1,
there shall be granted stock options to certain corporate employees of SCI as
described on Exhibit A to that certain letter agreement of even date herewith,
between RCB and Sinclair, regarding certain employee matters (the "Employee
Letter Agreement"). Such options shall have a per share strike price equal to
the fair market value on the date hereof of one share of Class A Common Stock,
but not in any event less than $21.00 per share. In addition, such stock options
shall have a term of ten years, which ten-year term shall not expire
notwithstanding any earlier termination of employment by the grantee with
Sinclair or SCI, to the extent such options are vested at the time of such
termination, and such options shall vest 25% on First Closing, an additional 25%
on the first anniversary of the First Closing, an additional 25% on the second
anniversary of the First Closing and an additional 25% on the third anniversary
of the First Closing.
4.3.3 Stock options granted to Executive and the SCI
Team in accordance with Sections 4.3.1 and 4.3.2 shall be pursuant to the 1996
LTIP. Sinclair represents that the Plan has been adopted by the Board of
Directors of Sinclair and the Compensation Committee thereof. Sinclair agrees to
recommend approval and to solicit proxies for the approval of the Plan by
stockholders at the next meeting of Sinclair's stockholders, to be held no later
than June 30, 1996, such that upon such approval, grants of options under the
Plan will be treated as exempt purchases under Rule 16b-3 issued by the
Securities Exchange Commission pursuant to Section 16 of the Securities Exchange
Act of 1934, as amended ("Exchange Act"). Sinclair shall comply with all federal
and state securities laws, rules and regulations applicable to the issuance of
the stock options referred to in this Section 4.3 and the securities issuable
upon exercise of such options. Sinclair shall cause the securities issuable upon
exercise of such options to be registered pursuant to the Securities Act of
1933, as amended, and all other applicable federal
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securities laws and state securities or blue sky laws, shall cause such
securities to be approved for quotation on the NASDAQ National Market, and shall
bear all expenses in connection with such registration, quotation and
compliance.
4.3.4 The parties agree that the stock options
granted and shares reserved therefor pursuant to or in connection with Sections
4.3.1 and 4.3.2 of this Agreement shall be in addition to, and not in lieu of,
the options that may be granted pursuant to the Sinclair Broadcast Group, Inc.
Incentive Stock Option Plan (the "Incentive Plan") for the acquisition of up to
400,000 shares of Class A Common Stock (which 400,000 shares shall continue to
be available to, and shall hereby be dedicated for issuance at the direction of
Executive, during the Agreement Term, to, the certain station employees of SCI
and its direct and indirect subsidiaries pursuant to the Plan); provided that
such number of shares, at any given time, will be reduced by the outstanding
stock option grants granted on the First Closing and described on Exhibits A and
B to the Employee Letter Agreement. Such Incentive Plan options shall have a per
share stock price equal to the closing share price of Class A Common Stock on
the NASDAQ National Market (the "Market Price") on the date of grant. In
addition, such stock options shall have a term of ten years. Such options will
fully vest on the third anniversary of their date of grant (the "Vesting Date");
provided that if the holder is terminated "without cause" or due to death or
disability prior to the Vesting Date, the vesting of such options will be
accelerated to (a) 1/3 of such options, if such termination occurs after the
first anniversary, but prior to the second anniversary, of the grant date and
(b) 2/3 of such options, if such termination occurs after the second
anniversary, but prior to the third anniversary, of the grant date.
5. Expenses.
In addition to the compensation provided in Section
4, Sinclair or SCI shall pay or reimburse Executive for all reasonable business
expenses actually incurred or paid by him during the Employment Term in the
performance of his services hereunder upon presentation of expense statements,
vouchers, or such other supporting information as Sinclair or SCI, as is
appropriate, may customarily require of its senior executives.
6. Additional Benefits.
6.1 During the Employment Term:
(a) Executive shall be entitled to
reasonable annual vacation periods, not less than an aggregate of four weeks in
each calendar year, with full pay and benefits.
(b) Executive shall be eligible for sick
leave in accordance with SCI's customary practice for senior executives.
(c) Executive shall be entitled to
participate in any insurance, pension, profit-sharing, stock option, stock
purchase or other benefit plan of SCI or Sinclair now existing or hereafter
adopted for the benefit of the employees generally or of the executives of SCI
or Sinclair.
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(d) Executive shall be entitled to receive
such additional benefits as may be granted to him from time to time by the Board
of Directors of Sinclair or SCI.
6.2 During the Agreement Term:
(a) Sinclair or SCI shall pay both
initiation and periodic fees and dues for Executive's membership in Cave's
Valley Country Club. Upon the expiration of the Agreement Term, membership in
such country club shall belong to Executive.
(b) Sinclair or SCI shall pay both
initiation and periodic fees and dues for Executive's membership in any health
or athletic club selected by Executive.
(c) Sinclair or SCI shall furnish and bear
(or reimburse Executive promptly upon request for) all business expenses of
operation of a Seven Series BMW car for the use by Executive, including mobile
phone.
(d) The parties contemplate that Executive
may not relocate his primary residence to Baltimore for some time, and until the
date which is 90 days after the commencement of the Employment Term (or, if
earlier, the date of such residence relocation), Sinclair or SCI shall pay or
provide all first class travel expenses that Executive may incur for himself and
for both for his wife and stepchild, in commuting from his present principal
residence, which is located in St. Louis, Missouri, to Baltimore. In addition,
Sinclair or SCI shall pay or reimburse Executive for (i) temporary housing
between the date of this Agreement and the foregoing date, which housing shall
be in the Baltimore area and shall be of a type suitable for an individual with
Executive's position with Sinclair and SCI and (ii) all expenses of moving
Executive's immediate family's home furnishings to Baltimore. Sinclair or SCI
shall also pay to Executive an amount in cash so that Executive's after-tax
position with respect to the amounts described in this Section 6.1(i) is no less
favorable than it would have been had the expenses described not been incurred
and/or reimbursed or borne by Sinclair or SCI.
(e) Executive shall be entitled to (i)
coverage under a disability insurance arrangement providing for payments of 60%
of Executive's Base Salary under Section 4.1 in the event of his disability and
continuing until the earlier of his recovery from such disability or attainment
of age 65 and (ii) life insurance coverage equal to $11,000,000, in each case
without any cost to Executive; provided, however, that Executive shall be
entitled to designate the beneficiary or beneficiaries of such life insurance
only with respect to 50% of the proceeds of such life insurance.
(f) In the event that, in the good faith
determination of Executive, Sinclair or SCI does not provide Executive with
reasonable access to Sinclair or SCI leased airplanes, Executive shall
thereafter be entitled to lease or designate a company (including a company
affiliated with Executive) to lease to Sinclair or SCI an aircraft substantially
equivalent to the best airplane then leased by Sinclair or SCI for use by
Executive in connection with Sinclair or SCI business on then competitive terms
and conditions as determined by Executive in his reasonable and good faith
discretion. Additionally, to the extent that a company
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affiliated with Executive is the lessor, Executive may use existing leases by
Sinclair of comparable airplanes as the basis for determining then competitive
terms and conditions.
6.3 Contemporaneously with the execution of this
Agreement:
(a) Sinclair and Executive are entering into
a Directors' and Officers' Indemnification Agreement, effective upon
commencement of the Employment Term. In addition, Sinclair agrees, prior to the
Effective Date, to obtain a directors' and officers' liability insurance policy
covering the Executive and to continue and maintain such policy. The terms of
the policy, including the amount of such coverage, shall be reasonably
acceptable to Executive.
(b) Sinclair and Executive are entering into
a Consulting Agreement (the "Consulting Agreement") with respect to the period
commencing on the date hereof and terminating upon the earlier of the
commencement of the Employment Term or the termination of the Agreement Term.
(c) Sinclair and Executive are entering into
a Stock Option Agreement relating to the stock options described in Section
4.3.1 hereof.
(d) Sinclair, Executive and other parties
thereto are entering into a Registration Rights Agreement covering, among other
things, Class A Common Stock issuable upon the exercise of the stock options
granted to Executive under Section 4.3 hereof.
6.4 No payment or benefit made or provided under this
Agreement shall be deemed to constitute payment to Executive, his legal
representatives or beneficiaries in lieu of, or in reduction of, any benefit or
payment under an insurance, pension, profit-sharing or other benefit plan, and
no payment under any such plan shall reduce any payment or benefit due under
this Agreement.
7. Certain Additional Payments by Sinclair or SCI.
7.1 Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment,
distribution or transfer by Sinclair, SCI or any affiliate or any other person
or other event occurring with respect to Executive and Sinclair or SCI for
Executive's benefit (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise (including pursuant to any
of Sinclair or SCI's benefit plans)), determined without regard to any
additional payment required under this Section 7 (a "Payment") would be subject
to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986,
as amended (and any successor provision and any similar provision of state or
local income tax law) (collectively, "Section 4999"), or any interest or penalty
is incurred by the Executive with respect to such excise tax (such excise tax,
together with any such interest or penalty, hereinafter collectively to be
referred to as the "Excise Tax"), then the Executive shall be entitled to
receive or have paid to the Internal Revenue Service or other appropriate
authority (and any relevant state or local authority) ("IRS") on his behalf an
additional payment (a "Gross- Up Payment") in an amount equal to the sum of (a)
the Excise Tax plus (b) all other taxes,
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penalties and interest (including any excise tax imposed by Section 4999) paid
or payable by Executive on account of the operation of this Section 7, such
that, after payment by Executive of all such other taxes (including any interest
or penalty imposed with respect to such taxes) and any Excise Tax imposed upon
the Gross-Up Payment, Executive shall be in the same position as he would have
been had no Excise Tax been imposed upon the Payments.
7.1.1 Subject to the provisions of Section 7.3, all
determinations required to be made under this Section 7, including whether and
when a Gross-Up Payment is required, the amount of such Gross-Up Payment, and
the assumptions to be utilized in arriving at such determination, shall be made
by Arthur Andersen LLP or any other nationally recognized accounting firm (the
"Accounting Firm") that shall be Sinclair's outside auditors at the time of such
determination, which Accounting Firm shall provide detailed supporting
calculations to Executive, Sinclair and SCI within 15 business days of the
receipt of notice from Sinclair, SCI or Executive that there has been a Payment
that the person giving notice believes may be subject to the Excise Tax, or such
earlier time as shall be requested by Sinclair and SCI. All fees and expenses of
the Accounting Firm shall be borne solely by Sinclair and SCI. Any Gross-Up
Payment, as determined pursuant to this Section 7, shall be paid by Sinclair or
SCI to the IRS on Executive's behalf within ten business days after the receipt
of the Accounting Firm's determination. If the Accounting Firm shall determine
that no Excise Tax is payable by Executive, it shall furnish to Executive
written advice that failure to report the Excise Tax on Executive's applicable
federal income tax return would not be reasonably likely to result in the
imposition of a penalty for fraud, negligence, or disregard of rules or
regulations. Any determination by the Accounting Firm shall be binding upon
Sinclair, SCI and Executive in determining whether a Gross-Up Payment is
required or the amount thereof (subject to Section 7.1.2 and 7.2), in the
absence of material mathematical or legal error.
7.1.2 As a result of uncertainty in the application
of Section 4999 of the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated thereunder (the "Code"), that may exist at
the time of the initial determination by the Accounting Firm, it may be possible
that in making the calculations required to be made hereunder, the Accounting
Firm shall determine that a Gross-Up Payment need not be made that properly
should be made ("Underpayment") or that a Gross-Up Payment not properly needed
to be made should be made ("Overpayment"). In the event that Sinclair or SCI
shall exhaust or fail to adequately pursue its remedies pursuant to Section 7.2,
and the Executive thereafter shall be required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that
occurred, and Sinclair or SCI shall promptly pay the amount thereof to the IRS
on Executive's behalf. In the event that the Accounting Firm shall determine
that an Overpayment was made, any such Overpayment shall be treated for all
purposes as a loan to the Executive with interest at the applicable Federal rate
provided for in Section 1274(d) of the Code; provided, however, that the amount
to be repaid by the Executive to Sinclair or SCI shall be reduced to the extent
that any portion of the Overpayment to be repaid will not be offset by a
corresponding reduction in tax by reason of such repayment of the Overpayment.
7.2 Executive shall give Sinclair written notice of
any claim by the IRS that, if successful, would require the payment by Sinclair
or SCI of a Gross-Up Payment. Executive shall give such notice within ten
business days after Executive shall be informed in
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writing of such claim, provided that failure by Executive to provide such notice
shall not result in a waiver or forfeiture of any rights of Executive under this
Section 7 except to the extent of actual damages suffered by Sinclair or SCI as
a result of such failure; provided further that if such failure prevents the
contest of such claim, no payment shall be required with respect to such claim
by Sinclair or SCI under this Section 7. Executive shall not pay such claim
prior to the expiration of 15 days following the date on which Executive gives
such notice to Sinclair or SCI. If Sinclair or SCI shall notify Executive in
writing prior to the expiration of such 15-day period that Sinclair or SCI
desires to contest such claim, Executive shall:
(a) give Sinclair or SCI any information
reasonably requested by Sinclair or SCI relating to such claim,
(b) take such action in connection with
contesting such claim as Sinclair or SCI shall reasonably request in writing
from time to time, including, without limitation, accepting legal representation
with respect to such claim by an attorney selected by Sinclair or SCI and
reasonably acceptable to Executive,
(c) cooperate in good faith with Sinclair or
SCI's contest of such claim, and
(d) permit Sinclair or SCI to control any
proceedings to the extent relating to such claim; provided, however, that
Sinclair or SCI shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold Executive harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with respect thereto)
imposed in relation to such claim, including all costs and expenses. Without
limiting the foregoing provisions of this Section 7.2, and to the extent its
actions do not unreasonably interfere or prejudice Executive's disputes with the
IRS as to other issues, Sinclair or SCI shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
IRS in respect of such claim and may, at its sole option, either direct
Executive to pay the tax claimed and sue for a refund or contest the claim in
any permissible manner, and Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as Sinclair or SCI shall
determine; provided, however, that if Sinclair or SCI shall direct Executive to
pay such claim and sue for a refund, Sinclair or SCI shall advance the amount of
such payment to Executive, on an interest-free basis, and shall indemnify and
hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance,
and further provided that any extension of the statute of limitations relating
to taxes for Executive's taxable year with respect to which such contested
amount shall be claimed to be due shall be limited solely to such claim.
Furthermore, Sinclair's or SCI's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder, and
Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the IRS to the extent that such settlement or contest would not
be reasonably likely to have a material adverse effect on the issues with
respect to the Gross-Up Payment.
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7.3 If, after Executive's receipt of an amount
advanced by Sinclair or SCI pursuant to Section 7.2, Executive shall become
entitled to receive any refund with respect to such claim, Executive shall
promptly pay to Sinclair or SCI the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after
Executive's receipt of an amount advanced by Sinclair or SCI pursuant to Section
7.2, a determination shall be made that Executive shall not be entitled to any
refund with respect to such claim, and Sinclair or SCI shall not notify
Executive in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after Sinclair or SCI shall receive notice of such
determination, then such advance shall be forgiven and shall not be required to
be repaid, and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.
7.4 This Section 7 shall remain in full force and
effect following the termination of the Agreement Term for any reason until the
expiration of the statute of limitations on the assessment of taxes applicable
to Executive for all periods in which Executive may incur a liability for taxes
(including Excise Taxes), interest or penalties arising out of the operation of
this Agreement.
8. Change in Control; Extension of Term; Certain
Employment Terminations.
8.1 Notwithstanding anything to the contrary in this
Agreement, if a Change in Control (as defined in Section 8.2 hereof) shall occur
during the Agreement Term, and the Agreement Term shall not have previously
terminated for any reason (other than in connection with or as a result of a
Change in Control), the Agreement Term shall automatically be extended to the
third anniversary of such Change in Control, if, pursuant to Section 1.2, the
Agreement Term otherwise might have terminated before such third anniversary.
8.2 For the purposes of this Agreement, a "Change in
Control" shall mean:
8.2.1 The acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act)
(a "Person"), other than Permitted Holders (as defined in the Indenture (as
defined below)), of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act ("Rule 13d-3"), except that a Person shall be
deemed to have beneficial ownership of all shares that such Person has a right
to acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of 40% or more of the combined voting
power of the then outstanding voting securities of Sinclair entitled to vote
generally in the election of directors (the "Outstanding Voting Securities");
provided that the following acquisitions shall not constitute a Change in
Control: (a) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by Sinclair or any corporation controlled by Sinclair;
or (b) any acquisition by any corporation pursuant to a reorganization, merger
or consolidation, if, following such reorganization, merger or consolidation,
the conditions described in clauses (a), (b), (c) and (d) of Section 8.2.3 are
satisfied; or
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8.2.2 Individuals who, as of the date hereof,
constitute the Board of Directors of Sinclair (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board of Directors of
Sinclair; provided, however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election by the
stockholders of Sinclair, shall be recommended by a vote of at least a majority
of the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board; or
8.2.3 Approval by the stockholders of Sinclair of a
reorganization, merger or consolidation, in each case, unless, following such
reorganization, merger or consolidation: (a) more than an 85% of the combined
voting power of the then outstanding voting securities of the corporation
resulting from such reorganization, merger, or consolidation, which may be
Sinclair (the "Resulting Corporation"), entitled to vote generally in the
election of directors (the "Resulting Corporation Voting Securities") shall then
be owned beneficially, directly or indirectly, by all or substantially all of
the Persons who were the beneficial owners of Outstanding Voting Securities
immediately prior to such reorganization, merger, or consolidation, in
substantially the same proportions as their respective ownerships of Outstanding
Voting Securities immediately prior to such reorganization, merger or
consolidation; (b) no Person (excluding Sinclair, any employee benefit plan (or
related trust) of Sinclair, the Resulting Corporation, and any Person
beneficially owning, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 40% or more of the combined voting power
of Outstanding Voting Securities) shall own beneficially, directly or
indirectly, 40% or more of the combined voting power of the Resulting
Corporation Voting Securities; (c) at least a majority of the members of the
board of directors of the Resulting Corporation shall have been members of the
Incumbent Board at the time of the execution of the initial agreement providing
for such reorganization, merger or consolidation and (d) David D. Smith shall
serve as President and Chief Executive Officer of the Resulting Corporation
(unless David D. Smith shall fail to serve as a result of his death or
Disability); or
8.2.4 Approval by the stockholders of Sinclair of (a)
a complete liquidation or dissolution of Sinclair or (b) the sale or other
disposition of all or substantially all of the assets of Sinclair or (c) the
sale or other disposition of SCI or a significant portion of the assets of SCI
by Sinclair, SCI and their affiliates without the express written consent of
Executive, other than to a corporation (the "Buyer") with respect to which (i)
following such sale or other disposition, more than 85% of the combined voting
power of securities of Buyer entitled to vote generally in the election of
directors ("Buyer Voting Securities"), shall be owned beneficially, directly or
indirectly, by all or substantially all of the Persons (hereinafter defined) who
were the beneficial owners of the Outstanding Voting Securities immediately
prior to such sale or other disposition, in substantially the same proportion as
their respective ownership of Outstanding Voting Securities, immediately prior
to such sale or other disposition; (ii) no Person (excluding Sinclair and any
employee benefit plan (or related trust) of Sinclair or Buyer and any Person
that shall immediately prior to such sale or other disposition own beneficially,
directly or
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indirectly, 40% or more of the combined voting power of Outstanding Voting
Securities) shall own beneficially, directly or indirectly, 40% or more of the
combined voting power of, Buyer Voting Securities; (iii) at least a majority of
the members of the board of directors of Buyer shall have been members of the
Incumbent Board at the time of the execution of the initial agreement or action
of the Board providing for such sale or other disposition of assets of Sinclair;
and (iv) David D. Smith shall serve as President and Chief Executive Officer of
the Buyer (unless David D. Smith shall fail to serve as a result of his death or
Disability). For purposes of this Agreement, "Persons" shall mean any
individual, corporation, partnership, limited liability company, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
8.2.5 The beneficial ownership (within the meaning of
Rule 13d-3) by David D. Smith of less than 5% of the Outstanding Voting
Securities of Sinclair but assuming, in the calculation thereof, that each share
of Class B Common Stock has only one vote in the election of directors; provided
such ownership below 5% shall not constitute a Change of Control at any time
that the aggregate of such outstanding voting securities beneficially owned by
David Smith, without taking into account any control premium, has a fair market
value equal to or in excess of $100 million. As used in this Section, the "fair
market value" of a share of any Outstanding Voting Securities means, as of a
particular date, (a) if such security is listed on a national securities
exchange, the mean between the highest and lowest sales price per share of such
security on the consolidated transaction reporting system for the principal
national securities exchange on which such shares are listed on that date, or,
if there shall have been no such sale so reported on that date, on the last
preceding date on which such a sale was so reported, (b) if such security is not
so listed but is quoted on the NASDAQ National Market, the mean between the
highest and lowest sales price per share of such security reported by the NASDAQ
National Market on that date, or, if there shall have been no such sale so
reported on that date, on the last preceding date on which such a sale was so
reported, (c) if such security is not so listed or quoted, the mean between the
closing bid and asked price on that date, or, if there are no quotations
available for such date, on the last preceding date on which such quotations
shall be available, as reported by the NASDAQ Stock Market, or, if not reported
by the NASDAQ Stock Market, by the National Quotation Bureau Incorporated, or,
if not reported by the National Quotation Bureau Incorporated, the fair market
value of such security as determined in good faith by independent appraisers
jointly selected by Executive and Sinclair; provided, however, that the fair
market value of Class B Common Stock shall for purposes of this Section 8.2.5 be
deemed to be the fair market value of Class A Common Stock.
8.2.6 If David D. Smith ceases for any reason to be
the President and Chief Executive Officer and Chairman of the Board of Sinclair
(unless David D. Smith shall fail to serve as a result of his death or
Disability).
9. Termination of Agreement for Cause.
Sinclair or SCI may terminate the Agreement Term "for
cause" upon 30 days' written notice, and all of Sinclair's and SCI's obligations
under this Agreement shall terminate except (a) their obligation to pay to
Executive amounts accrued, earned or required to be paid for periods up to the
date of termination, including, without limitation, under Sections
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4.1 and 4.2 hereof, (b) their obligations under Section 7, (c) their obligations
with respect to vested stock options granted as described in Section 4.3, which
vested stock options shall remain exercisable for not less than their original
term, (d) their obligations under Section 6.3(a) and (e) their obligations under
Section 16.7. As used in this Agreement, the term "for cause" shall mean and be
limited to the following events: (x) during the Agreement Term, Executive's
conviction (which conviction, through lapse of time or otherwise, is not subject
to appeal) in a court of law of a felony involving moral turpitude; or (y)
during the Employment Term, Executive's serious willful gross misconduct or
serious gross neglect of duties, which in either case has resulted, or in all
probability will result, in material economic damage to Sinclair, but in no
event shall an action constitute "cause" pursuant to this clause (y) if
Executive believed in good faith that such action or failure to act was in the
best interest of Sinclair or SCI; provided however, that the Agreement Term may
not be terminated for cause under the immediately preceding clause (y), unless
Executive shall have first received written notice from the Board of Directors
of Sinclair advising him of the specific acts or omissions alleged to constitute
a failure or refusal to perform his duties, and such failure or refusal to
perform his duties continues after Executive shall have had a reasonable
opportunity to correct the acts or omissions cited in such notice. In no event
shall the alleged mediocre or poor performance of Executive in his duties
hereunder be deemed grounds for termination of this Agreement for cause. Upon a
termination for cause, all of Executive's obligations under this Agreement
(other than under Section 11) shall terminate.
10. Termination Other Than for Cause.
10.1 Death. If Executive shall die during the
Agreement Term, the Agreement Term shall end, and all of Sinclair's and SCI's
obligations hereunder shall terminate, except that (a) Sinclair shall pay to
Executive's estate: (i) within 30 days after his death, the Base Salary with
respect to the then current year that would have been payable to Executive under
Section 4.1 had the Agreement Term ended on the last day of the month in which
his death occurred; (ii) at the same time as salary is paid to other executive
employees of Sinclair, the Base Salary that would have been payable to Executive
pursuant to Section 4.1 had the Agreement Term continued uninterrupted for an
additional 12-month period immediately following the end of the month in which
Executive's death occurred; (iii) as soon as is practicable, but in no event
later than March 31 of the year immediately following the year in which
Executive's death occurs, the Bonus that would have been payable to Executive
for the entire year in which Executive's death occurs (using actual results for
such year and assuming that the Agreement Term included the entire such year);
(iv) as soon as is practicable, but in no event later than March 31 of the
second year immediately following the year in which Executive's death occurs,
the Bonus that would have been payable to Executive for the entire year
immediately following the year in which Executive's death occurs (using actual
results for such year and assuming that the Agreement Term included the entire
such year), multiplied by a fraction, the numerator of which is the number of
full and partial months in the Agreement Term in the year of Executive's death
and the denominator of which is 12; (b) all the stock options previously granted
by either Sinclair or SCI to Executive shall be immediately vested and fully
exercisable and remain exercisable for not less than their original term, (c)
the obligations under Section 6.3(a) shall continue, (d) the obligations under
Section 7 shall continue, (e) the obligations under Section 15 shall continue
and (f) the obligations under Section 16.7 shall continue.
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10.2 Disability. If, during the Agreement Term,
Executive shall become disabled so that he shall be unable substantially to
perform his services hereunder or, prior to the Effective Date, under the
Consulting Agreement (a) for a period of six consecutive months or (b) for an
aggregate of six months within any period of 12 consecutive months (a
"Disability") then the Board of Directors of Sinclair may, at any time during
the continuance of such Disability, terminate the Agreement Term under this
Section 10.2 on 30 days' prior written notice to Executive. After such
termination, Executive shall have no further obligation to perform services for
SCI pursuant to Section 2, and all of Sinclair's and SCI's obligations under
this Agreement shall terminate, except that (a) Sinclair shall pay to Executive,
(i) within 30 days after such termination, the Base Salary with respect to the
then current year that would have been payable to Executive under Section 4.1
had the Agreement Term ended on the last day of the month in which the Agreement
Term was terminated pursuant to this Section 10.2; (ii) at the same time as
salary is paid to other executive employees of Sinclair, the Base Salary that
would have been payable to Executive pursuant to Section 4.1 had the Agreement
Term continued uninterrupted for an additional 12-month period immediately
following the end of the month in which the Agreement Term was terminated
pursuant to this Section 10.2; (iii) as soon as is practicable, but in no event
later than March 31 of the year immediately following the year in which the
Agreement Term was terminated pursuant to this Section 10.2, the Bonus that
would have been payable to Executive for the entire year in which the Agreement
Term was terminated pursuant to this Section 10.2 (using actual results for such
year and assuming the Agreement Term included the entire such year); (iv) as
soon as is practicable, but in no event later than March 31 of the second year
immediately following the year in which the Agreement Term was terminated
pursuant to this Section 10.2, the Bonus that would have been payable to
Executive for the entire year immediately following the year in which the
Agreement Term was terminated pursuant to this Section 10.2 (using actual
results for such year and assuming that Executive had worked the entire such
year), multiplied by a fraction, the numerator of which is the number of full
and partial months in the Agreement Term in the year in which the Agreement Term
was terminated pursuant to this Section 10.2 and the denominator of which is 12;
(b) all the stock options previously granted by either Sinclair or SCI to
Executive shall be immediately vested and fully exercisable and remain
exercisable for not less than their original term, (c) the obligations under
Section 6.3(a) shall continue, (d) the obligations under Section 7 shall
continue, (e) the obligations under Section 15 shall continue and (f) the
obligations under Section 16.7 shall continue. Executive shall have no
obligation to accept any employment offered to him by others in order to
minimize, or to be set off against, the amounts to which he is entitled pursuant
to this Section 10.2; provided, however, that (x) if Executive shall accept
employment offered to him by others during the period referred to in clause
(a)(ii) above, the Base Salary referred to in clause (a) (ii) above shall be
reduced by the amounts received by Executive with respect to such employment
during the period of time referred to in such clause(a) (ii), and (y) if
Executive shall receive payments in respect of disability insurance provided
pursuant to Section 6.1(c)(i), the Base Salary referred to in clause (a) (ii)
above shall be reduced by the amounts received by Executive in respect of such
disability insurance for the period of time referred to in such clause (a)(ii).
Neither SCI nor Sinclair shall interpose any defense against payment of such
amounts based on refusal of Executive to seek or accept other employment.
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10.3 Termination by Executive.
10.3.1 Executive may (but shall not be obligated to)
terminate the Agreement Term on 60 days' prior written notice given at any time
within 180 days following a Change in Control or, if during the Agreement Term,
(a) Executive shall not be elected (and continued) as a director of Sinclair or
SCI, as President and Chief Executive Officer of SCI, and as Executive Vice
President of Sinclair, or Executive shall be removed from any such board or
office; or (b) Sinclair or SCI shall fail to cure a material breach of this
Agreement within a reasonable period of time after notice not to exceed 30 days
(provided, however, if the breach is unintentional and not susceptible of cure
within 30 days but is susceptible of cure within an additional 60 days, and if
Sinclair in good faith has made material efforts to cure such breach within such
30-day period, Sinclair, upon written notice to Executive, shall have an
additional period of time to cure such breach, but not in any event to exceed an
additional 60 days); or (c) there shall have been a material diminution in the
authority or responsibilities contemplated in Section 2 (including Exhibit A);
or (d) any benefit to which Executive is entitled pursuant to Section 6.1 shall
have been materially reduced without an effective economic substitute therefor
being provided to Executive; or (e) Executive shall be required to perform his
principal services under this Agreement at a place other than that set forth in
Section 3; or (f) Sinclair or SCI shall fail to comply with the provisions of
Section 16.4 hereof relating to specific assumptions of the duties and
obligations of SCI and Sinclair under this Agreement or (g) the Effective Date
shall not have occurred by August 31, 1997, unless such failure is solely due to
actions or failure to take actions on the part of Executive (other than the
failure of Executive to eliminate his attributable ownership interest in RCB and
RCLP). Such right to terminate the Agreement Term shall be Executive's exclusive
remedy in the event of the occurrence of any of the events described in this
Section 10.3.1. For purposes of clause (c) of the preceding sentence, there
shall be deemed to have been a material diminution in the authority or
responsibilities contemplated in Section 2 (including Schedule A) if there shall
occur any demotion or any material reduction in the scope, level or nature of
Executive's employment hereunder, or of the duties contemplated in Section 2, or
if Executive is assigned duties inconsistent with Executive's position
hereunder.
10.3.2 If Executive shall elect to terminate the
Agreement Term upon the occurrence of any event described in Section 10.3.1, or
if Sinclair or SCI shall terminate the Agreement Term other than for cause,
death or Disability pursuant to Sections 9 and 10 hereof, then Executive shall
have no further obligation to perform services for Sinclair or SCI pursuant to
Section 2, but he shall be entitled to receive from Sinclair or SCI, within 30
days after the date of termination of the Agreement Term, in lieu of the amounts
that would otherwise be payable hereunder, a lump sum in cash of an amount equal
to the sum of (a) the aggregate of Base Salary that would have been payable each
year to Executive pursuant to Section 4.1 for the period beginning on the date
of such termination and running through the day on which the Agreement Term
would have ended (as extended, if theretofore extended) if not terminated
pursuant to this Section 10 (the "Cutoff Date"), and (b) an amount equal to the
average Bonus earned or paid under Section 4.2 in the previous three full
calendar years of SCI immediately preceding termination of employment,
multiplied by the number of whole and partial years (rounded to the nearest
100th (.01)) remaining until the Cutoff Date; provided, however, that if
termination of employment shall occur prior to January 1, 1997, an amount equal
to $500,000 shall be deemed the highest Bonus earned or paid under Section 4.2.
In addition, until the Cutoff
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Date, Sinclair shall maintain, at its expense, all insurance coverages and
medical and health benefits in respect of Executive that shall have been in
effect with respect to him prior to the occurrence of the event entitling
Executive to terminate this Agreement. Further, (a) all of the stock options
previously granted by Sinclair or SCI to Executive shall be immediately vested
and fully exercisable and remain exercisable for not less than their original
term, (b) the obligations under Section 6.3(a) shall continue, (c) the
obligations under Section 7 shall continue, (d) the obligations under Section 15
shall continue and (e) the obligations under Section 16.7 shall continue.
10.3.3 Executive may terminate the Agreement Term for
any reason upon 90 days' written notice, and all of Sinclair's and SCI's
obligations under this Agreement shall terminate except (a) their obligation to
pay to Executive amounts accrued, earned or required to be paid for periods up
to the date of termination, including, without limitation, under Sections 4.1
and 4.2 hereof (b) their obligations under Section 7, (c) their obligations with
respect to vested stock options granted as described in Section 4.3, which
vested stock options shall remain exercisable for not less than their original
term, (d) their obligations under Section 6.3(a) and (e) their obligations under
Section 16.7. Upon a termination by Executive under this Section 10.3.3, all of
Executive's obligations under this Agreement (other than under Section 11) shall
terminate.
10.4 Broadcast Option.
10.4.1 As further inducement for Executive to enter
into this Agreement, and for Executive, in his status as Chief Executive Officer
of the general partner of RCB, to consent to the River City Acquisition, the
parties agree that if Executive shall elect to terminate the Agreement Term upon
the occurrence of any event described in Section 10.3.1, or if Sinclair or SCI
shall ever terminate this Agreement other than for cause, death or Disability
pursuant to Sections 9 and 10 hereof, then, in addition to the other rights of
Executive, Executive shall have the right, within 180 days of termination of
employment, to exercise the "Broadcast Option". The "Broadcast Option" is an
option of Executive to require Sinclair and SCI to sell and assign to Executive,
or any one or more persons or entities designated by Executive (collectively,
the "Transferee"), free and clear of any and all Indebtedness and Liens (other
than Permitted Liens (as hereinafter defined)), for an aggregate purchase price
in cash equal to the fair market value thereof, at the option of Executive,
either (but not both of) (a) (i) all (and not less than all) radio and/or
television broadcasting stations (including all broadcasting assets, licenses,
permits and programming contracts) then owned or held directly or indirectly by
Sinclair or SCI (or their affiliates), at the option of Executive, in or
substantially serving either (but not both of) the St. Louis, Missouri or the
Greenville-Spartanburg, South Carolina Designated Market Areas and (ii) all (and
not less than all) rights of Sinclair, SCI or any of their affiliates to provide
programming services with respect to all television or radio stations in such
selected Designated Marketing Area, including all local marketing, time
brokerage or similar management services agreements, for an aggregate purchase
price equal to the fair market value thereof, or (b)(i) all (and not less than
all) radio broadcasting stations (including all radio broadcasting assets,
licenses, permits and programming contracts) then owned directly or indirectly
by Sinclair or SCI (or their affiliates) and (ii) all (and not less than all)
rights of Sinclair, SCI or any of their affiliates to provide
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programming services with respect to radio stations, including all local
marketing, time brokerage or similar management services agreements. As used
herein, the terms "Indebtedness" and "Liens" shall have the respective meanings
given such terms in that certain Indenture, dated as of August 28, 1995 (the
"Indenture"), relating to the issuance by Sinclair of $300,000,000 aggregate
principal amount of its 10% Senior Subordinated notes due 2005. As used herein,
the term "Permitted Lien" shall mean any lien permitted by Section 1012(b) of
the Indenture and the term "Designated Marketing Area" shall mean an area
comprised of all counties wherein the combined share of audience for home market
commercial station(s) is larger than the combined share of audience for any
station(s) assigned to another home market.
10.4.2 Executive may exercise the Broadcast Option by
providing Sinclair and SCI, within the 180-day period referred to above, written
notice of Executive's intent to do so and a statement as to whether Executive
elects to proceed under clause (a) or (b) of Section 10.4.1 and, in the case of
an exercise of the Broadcast Option under clause (a) of Section 10.4.1, the
Designated Market Area to which it applies. The parties shall meet within 15
days of the exercise of the Broadcast Option to discuss and agree upon the fair
market value of the broadcast stations to which it applies, a mutually agreeable
closing date and such other matters as are necessary or desirable to effect the
closing of the sale of the broadcasting stations as contemplated by this Section
10.4.
10.4.3 The parties acknowledge that the consummation
of the Broadcast Option shall require the parties to agree upon and take many
actions beyond those specified herein. The parties agree in good faith to enter
into agreements and to take all actions necessary or desirable (including
without limitation refinancings and effecting releases of Liens), and to cause
all other parties in good faith to enter into agreements to take all actions
necessary or reasonably desirable, to effect the intentions of the parties set
forth in this Section 10.4, so that Executive or his designee is able to obtain
on the closing of the Broadcast Option the benefits of ownership and operation
of the broadcast stations subject to the Broadcast Option free and clear of all
Indebtedness and Liens other than Permitted Liens. All documentation related in
any way to the Broadcast Option shall be in form and substance on customary
terms, and shall contain customary representations and warranties and
post-closing remedies. Executive shall be entitled to elect whether to exercise
his option as a purchase of assets or stock, but the form of purchase shall be
taken into account together with all other relevant matters in the calculation
of the fair market value purchase price.
10.4.4 If Executive exercises the Broadcast Option
under clause (b) of Section 10.4.1 (generally with respect to all radio stations
owned or operated by Sinclair or SCI), certain radio stations may share studio,
office and other space and transmission facilities and towers with television
broadcasting stations retained by Sinclair. Without limiting the generality of
the provisions of Section 10.4.3, the parties agree the Transferee shall be
permitted to continue for no less than ten years to operate the radio station
business and operations at such jointly-used facilities, and the Transferee and
Sinclair shall in good faith negotiate and enter into agreements providing for
the lease of such facilities and the furnishing of utilities and such other
services (all at market rates) as is reasonably necessary or desirable to give
effect to the intentions of the parties set forth in this Section 10.4.
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10.4.5 During the period of time commencing with the
exercise of the Broadcast Option and ending on the closing of the Broadcast
Option, the broadcast stations subject to the option shall be operated only in
the ordinary course of business for the account of Sinclair and SCI, except as
may be necessary or reasonably desirable to effect the intentions of the parties
expressed in this Section 10.4.
10.4.6 If within 30 days of the delivery of the
exercise notice the parties have not agreed on a closing date, the closing date
shall be, unless agreed otherwise subsequently between Executive and Sinclair,
the later of (a) five business days after receipt of all necessary FCC
approvals, and (b) the first business day 120 days after the date of notice. If
within 30 days of the delivery of the exercise notice the parties have not
agreed on the fair market value of the broadcasting stations subject to the SCI
Option, the fair market value shall be conclusively determined as follows:
(a) Each of Sinclair and Executive will within five
business days select one appraiser experienced and qualified in the broadcast
industry to value the broadcast stations to which the Broadcast Option applies,
and the fair market value will be determined by the two appraisers.
(b) In the event that the appraisers cannot agree on
the fair market value within 30 calendar days, then they will select, within
five business days, another qualified appraiser with the experience and
qualifications in the broadcast industry to value the broadcast stations to
which the Broadcast Option applies, who will, within 30 calendar days, calculate
the fair market value, and fair market value will be the average of the two
values arrived at by the appraisers that are closest to each other in amount.
(c) If the appraisers cannot agree as to whom the
additional appraiser will be, any party may refer the selection of the third
appraiser to arbitration in accordance with the Commercial Rules of the American
Arbitration Association then in effect and the Federal Arbitration Act, 9 U.S.C.
ss. 1 et seq.
10.4.7 Notwithstanding anything else to the contrary,
until the exercise of the Broadcast Option, the provisions of this Section 10.4
shall not constitute an encumbrance of any kind with respect to the properties
or assets of Sinclair or SCI, who may take any actions they deem desirable with
respect to any and all of its broadcast stations, including the sale or
placement of Liens thereon.
10.4.8 The parties hereto acknowledge that Sinclair's
and SCI's agreements in this Section 10 are of a special, unique, unusual,
extraordinary and intellectual character, which cannot be reasonably or
adequately compensated in an action at law for damages, and that a breach by
Sinclair or SCI of the terms hereof will cause Executive irreparable injury.
Sinclair or SCI agree that Executive is entitled to injunctive and other
equitable relief to prevent a breach or threatened breach of this Section 10,
which shall be in addition to any other rights or remedies to which Executive
may be entitled.
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11. Protection of Confidential Information.
11.1 Executive agrees that, in view of the fact that
his work for Sinclair or SCI will bring him into close contact with many
confidential affairs of Sinclair or SCI not readily available to the public, he
will not disclose during the Agreement Term and for a period of two years
thereafter, to any person, firm, corporation, partnership or other entity
whatsoever (except Sinclair or SCI or any of their subsidiaries or affiliates,
or any officer, director, stockholder, partner, associate, employee, agent or
representative thereof) any confidential information secrets of Sinclair or SCI
which may come into his possession during the Agreement Term (the "Confidential
Materials"). The term "Confidential Materials" does not include information
which (a) at the time of disclosure or thereafter is generally available to or
known by the public otherwise than by reason of Executive's disclosure thereof
in violation of this Agreement, (b) is, was or becomes available to Executive on
a nonconfidential basis from a source other than Sinclair or SCI, provided that
Executive has no reason to believe that such source is or was bound by a
confidentiality agreement with Sinclair or SCI, (c) has been made available, or
is made available, on a non-confidential basis to a third party by Sinclair or
SCI, by an individual authorized to do so, or (d) is known by Executive prior to
its disclosure to Executive. Executive may use and disclose Confidential
Materials to the extent necessary to assert any right or defend against any
claim arising under this Agreement or pertaining to Confidential Materials or
their use, to the extent necessary to comply with any applicable statute,
constitution, treaty, rule, regulation, ordinance or order, whether of the
United States, any state thereof, or any other jurisdiction applicable to
Executive, or if Executive receives a request to disclose all or any part of the
information contained in the Confidential Materials under the terms of a
subpoena, order, civil investigative demand or similar process issued by a court
of competent jurisdiction or by a governmental body or agency, whether of the
United States or any state thereof, or any other jurisdiction applicable to
Executive.
11.2 In the event that Executive (but not Sinclair)
prior to the end of the Agreement Term terminates Executive's employment
pursuant to Section 10.3.3, then for a period of one year from the date of such
termination, Executive shall not be employed by, or own an equity interest in,
any entity that owns or operates (a) any radio or television broadcasting
station in any Designated Marketing Area in which Sinclair immediately prior to
such termination owns or operates a radio station or (b) any television station
in any Designated Marketing Area in which Sinclair immediately prior to such
termination owns or operates a television station; provided, however, that
nothing in this Agreement shall prohibit or limit Executive from being employed
by, or owning equity interests in, any network or any provider of program
services on a national basis, regardless of whether such entity owns or provides
services to radio or television stations in any metro survey area in which
Sinclair owns or operates radio or television stations. Notwithstanding anything
else contained in this Section 11.2, Executive may: (a) own, for investment
purposes only, up to five percent of the stock of any publicly-held corporation
whose stock is either listed on a national stock exchange or on the NASDAQ
National Market and (b) continue as an officer, director and stockholder of the
general partner of RCB and RCLP.
11.3 The parties hereto acknowledge that a breach by
Executive of the terms of this Section 11 will cause Sinclair or SCI irreparable
injury. Executive agrees that Sinclair or SCI is entitled to injunctive and
other equitable relief to prevent a breach or threatened
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breach of this Section 11, which shall be in addition to any other rights or
remedies to which Sinclair or SCI may be entitled.
12. Notices.
All notices, requests, consents and other
communications, required or permitted to be given hereunder, shall be in writing
and shall be deemed to have been duly given (a) if delivered personally, when
delivered; (b) if delivered by overnight carrier, on the first business day
following such delivery; (c) if delivered by registered or certified mail,
return receipt requested, on the third business day after having been mailed. In
any case, each such notice, request, or consent or other communication shall be
addressed as follows or to such other address as either party shall designate by
notice in writing to the other in accordance herewith.
12.1 If to Sinclair or SCI:
David D. Smith
Sinclair Broadcast Group, Inc.
2000 West 41st Street
Baltimore, Maryland 21211
with a copy to:
Steven A. Thomas, Esq.
Thomas & Libowitz, P.A.
The USF&G Tower
100 Light Street
Suite 1100
Baltimore, Maryland 21202-1053
12.2 If to Executive:
Barry Baker
River City Broadcasting, L.P.
1215 Cole Street
St. Louis, Missouri 63106-3897
with a copy to:
Andrew M. Baker, Esq.
Baker & Botts, L.L.P.
2001 Ross Avenue
Dallas, Texas 75201
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13. SCI.
On or prior to the First Closing, unless otherwise
agreed to by Executive, SCI shall have been formed by Sinclair. On or prior to
the Effective Date, unless otherwise agreed to by Executive, the charter and
bylaws of SCI shall be, at all times during the Employment Term, in the form
Exhibit B and Exhibit C, respectively. On or prior to September 30, 1996,
Sinclair will contribute substantially all of the stock and assets related to
its broadcasting subsidiaries to SCI and SCI will execute a counterpart of, and
become a party to, this Agreement.
14. Status.
Prior to the Effective Date, this Agreement is not
intended to and does not make Executive and Executive agrees that he will not
hold himself out as, the agent, employee or legal representative of Sinclair or
SCI for any purpose whatsoever. Prior to the Effective Date, this Agreement is
not intended to and does not confer upon Executive, and Executive agrees that he
will have no, management or decision making authority within Sinclair or SCI or
with respect to any employee of Sinclair or SCI.
15. Trigger Event.
15.1 Upon the occurrence of a Trigger Event (as
defined below), Executive shall be entitled to receive quarterly payments
("Quarterly Payments") in cash, or at Sinclair's option, in shares of Class A
Common Stock (valued at the then current Market Price), or a combination
thereof, on the last day of March, June, September and December in each year
(each such date being referred to herein as a "Quarterly Payment Date"),
commencing on the first Quarterly Payment Date after the occurrence of the
Trigger Event. The Quarterly Payments (a) commencing on the first Quarterly
Payment Date after the occurrence of the Trigger Event, will be in an amount
equal to 3.75% of the Market Price (as of the date of payment) of all stock
options and common stock issued pursuant to exercise of such stock options or
pursuant to this Section 15 (the "Subject Securities") then held by Executive
or, if applicable, his estate and (b) thereafter, will be in an amount equal to
5.00% of the Market Price of all Subject Securities then held by Executive or
his estate, as the case may be. For purposes of this Section, the Market Price
of stock options will be the Market Price of the underlying security less the
then applicable strike price of the stock option. A "Trigger Event" means the
termination of the original term of the Agreement Term for any reason other than
a termination by Sinclair pursuant to Section 9 hereof or by Executive pursuant
to Section 10.3.3 hereof.
15.2 At any time after the occurrence of a Trigger
Event, Sinclair shall have the right, subject to the final sentence of this
Section 15.2, to purchase (the "Call") all of the Subject Securities then held
by Executive at the Market Price of the Subject Securities on the trading date
immediately preceding the closing of such purchase. If Sinclair elects to
exercise its right to repurchase pursuant to this Section, Sinclair shall fix
the date for redemption and shall give notice (the "Call Notice") of such
redemption not less than 30 nor more than 60 days prior to the date fixed for
redemption. Executive or the representative of his estate, as applicable, has
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the right, within ten business days of receiving the Call Notice, to reject the
Call, but in so doing will forfeit any future right to Quarterly Payments.
16. General.
16.1 This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Maryland
applicable to agreements made and to be performed entirely in Maryland.
16.2 The Section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
16.3 This Agreement together with the documents
listed on Exhibit D (the "Ancillary Documents") sets forth the entire agreement
and understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, between the parties.
16.4 This Agreement and the benefits hereunder are
personal to Sinclair and SCI and are not assignable or transferable, nor may the
services to be performed hereunder be assigned by Sinclair or SCI to any person,
firm or corporation; provided, however, that this Agreement and the benefits
hereunder may be assigned by Sinclair or SCI to any corporation acquiring all or
substantially all of the assets of Sinclair or SCI or to any corporation into
which Sinclair or SCI may be merged or consolidated, and this Agreement and the
benefits hereunder will automatically be deemed assigned to any such
corporation, subject, however, to Executive's right to terminate the Agreement
Term to the extent provided in Section 10.3. In the event of any assignment of
this Agreement to any corporation acquiring all or substantially all of the
assets of Sinclair or SCI or to any other corporation into which Sinclair or SCI
may be merged or consolidated, the responsibilities and duties assigned to
Executive by such successor corporation shall be the responsibilities and duties
of, and compatible with the status of, the chief executive officer and a member
of the board of directors of SCI and an executive vice president and a member of
the board of directors of Sinclair. Sinclair and SCI shall require that any
successor to SCI or Sinclair agree to assume in writing the obligations of
Sinclair and SCI pursuant to this Agreement and the failure to secure such
assumption on or prior to the closing of any transaction described in Section 8
shall constitute a breach of Sinclair's and SCI's duties under this Agreement
and permit termination of the Agreement Term by Executive pursuant to Section
10.3.1.
16.5 Whenever this Agreement provides for any payment
to Executive's estate, such payment may be made instead to such beneficiary or
beneficiaries as Executive may have designated by written notice to Sinclair;
provided, however, that neither Sinclair nor SCI shall have any liability to
Executive's estate for the payment of estate taxes, local inheritance taxes or
otherwise, provided it has actually made payment to such beneficiary or
beneficiaries. Executive shall have the right to revoke any such designation and
to redesignate a beneficiary or beneficiaries by written notice to Sinclair to
such effect.
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16.6 This Agreement may be amended, modified,
superseded, canceled, renewed or extended and the terms or covenants hereof may
be waived, only by a written instrument executed by all of the parties hereto,
or in the case of a waiver, by the party waiving compliance. The failure of
either party at any time or times to require performance of any provision hereof
shall in no manner affect the right at a later time to enforce the same. No
waiver by any party of the breach of any term or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such
breach, or a waiver of the breach of any other term or covenant contained in
this Agreement.
16.7 If any dispute or disagreement arising hereunder
or related hereto shall result in legal action between Sinclair or SCI and
Executive, Executive shall be entitled to recover from Sinclair or SCI any
reasonable expenses for attorney's fees and disbursements incurred by him in
connection with Executive's good faith maintenance or defense of such action, on
an after-tax basis, unless Executive does not prevail in such action.
16.8 Nothing in this Agreement, expressed or implied,
is intended to confer on any person other than the parties hereto or their
respective successors and permitted assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
SINCLAIR BROADCAST GROUP, INC.
By: /s/ David D. Smith
---------------------------
Name: David D. Smith
Title: Executive Vice President
BARRY BAKER
By: /s/ Barry Baker
---------------------------
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<PAGE>
EXHIBIT A
TO
EMPLOYMENT AGREEMENT AMONG SINCLAIR
AND BARRY BAKER
I. With respect to the specific matters relating to SCI's business set
forth below, during the Employment Term, Executive shall have the
following authority:
A. Executive may select his own management team, including
financial, budgeting, accounting and legal; provided,
without the consent of the CEO of Sinclair, Executive shall
not replace David Amy during the first 12 months after the
First Closing or any of Steve Marks, Alan Frank, John
Quigley or Dell Parks during the first six months after the
First Closing. Executive may, after consulting with the CEO
of Sinclair, (i) hire outside financial advisors and
consultants on a project basis and (ii) after the first six
months following the First Closing (provided Executive has
determined in his judgment that outside legal counsel is
non- responsive or not satisfactory), engage other outside
legal counsel.
B. Executive shall have the authority to select investment
bankers on acquisitions and dispositions, but shall consult
with the CEO of Sinclair on all such matters. The CEO of
Sinclair shall consult with Executive prior to selecting
investment bankers and commercial bankers on financing
matters.
C. Executive shall have responsibility and control over all
programming (and investments in programming in the form of
percentages of programming obtained in connection with the
clearing of programming on stations owned or operated by
SCI), management compensation policies and philosophies (but
not with respect to Executive), sales of station inventory
and (to the extent that Executive's decisions with respect
to such matters are not inconsistent with generally accepted
practices of traditional network affiliates in the industry)
all matters relating to station network affiliations. At the
request of Sinclair's CEO made from time to time, Executive
will consult with Sinclair's CEO on major operating issues
and decisions.
D. Executive may participate in any and all "road shows"
conducted by or on behalf of either Sinclair or SCI.
II. The following actions by SCI will require approval and discussion of
the SCI and Sinclair Board of Directors:
A. Establishing or amending the five-year strategic plan
applicable to SCI and its subsidiaries.
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B. Establishing or amending the annual budget (and, if
different, the annual operating plan) and capital plan of
SCI and its subsidiaries (the first year operating plan for
the corporate staff having been approved by Executive,
Sinclair and SCI prior to execution of this Agreement).
C. Effecting any capital investment or series of related
capital investments in excess of $1,000,000.
D. Issuing any security of SCI or of any direct or indirect
subsidiary (including but not limited to any "phantom stock"
or similar rights).
E. Selling or buying any station.
F. Establishing or amending any employee benefit plan,
compensation plan, employment policies or employment
agreement standards; provided, however, that Executive shall
(i) (a) recommend for approval by the Board of Directors
specific compensation practices for persons holding
positions as officers (as defined in Section 16(b) of the
Exchange Act) and (b) determine specific compensation levels
for persons holding other positions and (ii) throughout the
Agreement Term, be delegated, by the Compensation Committee
of the Board of Directors of Sinclair, the exclusive right
to grant (and establish terms thereof consistent with the
1996 LTIP) available stock options under the 1996 LTIP and
shall have the same right with respect to stock options for
400,000 shares (less any outstanding stock options issued
under such plan at the time of the First Closing) to be
issued under the Incentive Plan; provided that the exercise
price of stock options granted pursuant to the 1996 LTIP
plan shall not be less than 90% of the fair market value (as
defined in Section 4.3.1 of the Employment Agreement) as of
the date of grant.
G. Incurring, guaranteeing, amending the terms of, or prepaying
any indebtedness, other than indebtedness to any direct or
indirect wholly owned subsidiary (including but not limited
to sale/leaseback and factoring transactions), or
guaranteeing any performance of any person or entity (other
than a wholly owned subsidiary).
A-2
SINCLAIR BROADCAST GROUP, INC.
INDEMNIFICATION AGREEMENT
THIS AGREEMENT is entered into as of April 10, 1996
("Agreement"), between Sinclair Broadcast Group, Inc., a Maryland corporation
(the "Company"), and Barry Baker ("Indemnitee").
Background Statement and Recitals
Highly competent and experienced persons are becoming more
reluctant to serve corporations as directors or in other capacities unless they
are provided with adequate protection through insurance and adequate
indemnification against inordinate risks of claims and actions against them
arising out of their service to and activities on behalf of the corporation.
The Board of Directors of the Company (the "Board") has
determined that the inability to attract and retain such persons would be
detrimental to the best interests of the Company and its stockholders and that
the Company should act to assure such persons that there will be increased
certainty of such protection in the future.
The Board has also determined that it is reasonable, prudent
and necessary for the Company, in addition to purchasing and maintaining
directors' and officers' liability insurance (or otherwise providing for
adequate arrangements of self-insurance), contractually to obligate itself to
indemnify such persons to the fullest extent permitted by applicable law so that
they will serve or continue to serve the Company free from undue concern that
they will not be so indemnified.
Upon the commencement of the Employment Term under the
Employment Agreement dated of even date herewith among the Company and
Indemnitee (the "Employment Agreement"), Indemnitee is willing to serve as (i)
the President and Chief Executive Officer of Sinclair Communications, Inc.
("SCI"), (ii) the Executive Vice President of the Company, (iii) a member of the
Board of Directors of the Company and SCI and (iv) the President, Chief
Executive Officer and as a member of the Board of Directors of such direct or
indirect subsidiaries of SCI as Indemnitee shall from time to time determine and
to take on additional service for or on behalf of the Company on the condition
that he be so indemnified.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants herein contained, and other good and valuable consideration,
the sufficiency and receipt of which are hereby acknowledged, the parties hereby
agree as follows:
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ARTICLE I
CERTAIN DEFINITIONS
As used herein, the following words and terms shall have the
following respective meanings:
"Change in Control" shall have the meaning ascribed to such
term in the Employment Agreement.
"Claim" means an actual or threatened claim or request for
relief.
"Corporate Status" means the status of a person who is or was
a director, nominee for director, officer, employee, agent or fiduciary of the
Company or of any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise which such person is or was serving at the
request of the Company.
"Disinterested Director," with respect to any request by
Indemnitee for indemnification hereunder, means a director of the Company who is
not, at the time of determination, a party to the Proceeding or subject to a
Claim, issue or matter in respect of which indemnification is sought by
Indemnitee.
"Employment Term" shall have the meaning ascribed to such term
in the Employment Agreement.
"Expenses" means all attorneys' fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees and all other disbursements or expenses of the types customarily incurred
in connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, or participating in
(including on appeal), a Proceeding.
"MGCL" means the Maryland General Corporation Law and any
successor statute thereto as either of them may be amended from time to time.
"person" shall have the meaning ascribed to such term in
Sections 13(d) and 14(d) of the Exchange Act.
"Proceeding" means any threatened, pending or completed
action, suit, arbitration, alternate dispute resolution mechanism,
administrative hearing or any other proceeding, whether civil, criminal,
administrative or investigative and whether or not based upon events occurring,
or actions taken, before the date hereof (except any of the foregoing initiated
by Indemnitee pursuant to Article VI or Section 7.8 to enforce his rights under
this Agreement), and any
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<PAGE>
inquiry or investigation that could lead to, and any appeal in or related to,
any such action, suit, arbitration, alternative dispute resolution mechanism,
hearing or proceeding.
"Special Legal Counsel" means a law firm, or a member of a law
firm, that is experienced in matters of corporation law and neither
contemporaneously is, nor in the five years theretofore has been, retained to
represent (a) the Company or Indemnitee in any matter material to either such
party, (b) any other party to the Proceeding giving rise to a claim for
indemnification hereunder or (c) the beneficial owner, directly or indirectly,
of securities of the Company representing 20% or more of the combined voting
power of the Company's then outstanding voting securities (other than, in each
such case, with respect to matters concerning the rights of Indemnitee under
this Agreement, or of other indemnitees under similar indemnification
agreements). Notwithstanding the foregoing, the term "Special Legal Counsel"
shall not include any person who, under the applicable standards of professional
conduct then prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine Indemnitee's rights
under this Agreement.
ARTICLE II
SERVICES BY INDEMNITEE
Section 2.1 Services. Upon the commencement of the Employment
Term, Indemnitee agrees to serve as (i) the President and Chief Executive
Officer of SCI, (ii) the Executive Vice President of the Company, (iii) a
director of the Company and SCI and (iv) the President, Chief Executive Officer
and as a director of such direct or indirect subsidiaries of SCI as Indemnitee
shall from time to time determine. In addition, Indemnitee agrees to serve, as
the Company may request from time to time, as a director, officer, employee,
agent or fiduciary of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise. Indemnitee and the Company each
acknowledge that they have entered into this Agreement as a means of inducing
Indemnitee to serve the Company in such capacities. Indemnitee may at any time
and for any reason resign from such position or positions (subject to any other
contractual obligation or any obligation imposed by operation of law). The
Company shall have no obligation under this Agreement to continue Indemnitee in
any such position or positions.
ARTICLE III
INDEMNIFICATION
Section 3.1 General. The Company shall indemnify, and advance
Expenses to, Indemnitee to the fullest extent permitted by applicable law in
effect on the date hereof and to such greater extent as applicable law may
thereafter from time to time permit. The rights of Indemnitee provided under the
preceding sentence shall include, but shall not be limited to, the right to be
indemnified and to have Expenses advanced in all Proceedings to the fullest
extent permitted by Section 2-418 of the MGCL. The provisions set forth in this
Agreement are
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<PAGE>
provided in addition to and as a means of furtherance and implementation of, and
not in limitation of, the obligations expressed in this Article III.
Section 3.2 Proceedings Other Than by or in Right of the
Company. Indemnitee shall be entitled to indemnification pursuant to this
Section 3.2 if, by reason of his Corporate Status, he was, is or is threatened
to be made, a party to any Proceeding, other than a Proceeding by or in the
right of the Company. Pursuant to this Section 3.2, the Company shall indemnify
Indemnitee against Expenses, judgments, penalties, fines and amounts paid in
settlement (including all interest, assessments and other charges paid or
payable in connection with any such Expenses, judgments, penalties, fines and
amounts paid in settlement) actually and reasonably incurred by him or on his
behalf in connection with such Proceeding or any Claim, issue or matter therein,
unless it is established that (a) the act or omission of the Indemnitee was
material to the matter giving rise to the Proceeding and (i) was committed by
the Indemnitee in bad faith or (ii) was the result of active and deliberate
dishonesty; or (b) the Indemnitee actually received an improper personal benefit
in money, property or services; or (c) in the case of any criminal Proceeding,
the Indemnitee had reasonable cause to believe that the act or omission was
unlawful. Nothing in this Section 3.2 shall limit the benefits of Section 3.1 or
any other provision of this Agreement.
Section 3.3 Proceedings by or in Right of the Company.
Indemnitee shall be entitled to indemnification pursuant to this Section 3.3 if,
by reason of his Corporate Status, he was, is or is threatened to be made, a
party to any Proceeding brought by or in the right of the Company to procure a
judgment in its favor. Pursuant to this Section 3.3, the Company shall indemnify
Indemnitee against Expenses actually and reasonably incurred by him or on his
behalf in connection with such Proceeding or any Claim, issue or matter therein,
unless it is established that (a) the act or omission of the Indemnitee was
material to the matter giving rise to the Proceeding and (i) was committed by
the Indemnitee in bad faith or (ii) was the result of active and deliberate
dishonesty; or (b) the Indemnitee actually received an improper personal benefit
in money, property or services; or (c) in the case of any criminal Proceeding,
the Indemnitee had reasonable cause to believe that the act or omission was
unlawful. Notwithstanding the foregoing, no indemnification against such
Expenses shall be made in respect of any Claim, issue or matter in such
Proceeding as to which Indemnitee shall have been adjudged to be liable to the
Company if applicable law prohibits such indemnification; provided, however,
that, if applicable law so permits, indemnification against such Expenses shall
nevertheless be made by the Company in such event if and only to the extent that
a court of competent jurisdiction (the "Court"), or the court in which such
Proceeding shall have been brought or is pending, shall so determine. Nothing in
this Section 3.3 shall limit the benefits of Section 3.1 or any other provision
of this Agreement.
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ARTICLE IV
EXPENSES
Section 4.1 Expenses of a Party Who Is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement to the
contrary (except as set forth in Section 7.2(c) or 7.6), and without a
requirement for any determination described in Section 5.2, the Company shall
indemnify Indemnitee against all Expenses actually and reasonably incurred by
him or on his behalf in connection with any Proceeding to which Indemnitee was
or is a party by reason of his Corporate Status and in which Indemnitee is
successful, on the merits or otherwise. If Indemnitee is not wholly successful,
on the merits or otherwise, in a Proceeding but is successful, on the merits or
otherwise, as to any Claim, issue or matter in such Proceeding, the Company
shall indemnify Indemnitee against all Expenses actually and reasonably incurred
by him or on his behalf relating to each successfully resolved Claim, issue or
matter. For purposes of this Section 4.1 and without limitation, the termination
of a Claim, issue or matter in a Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such Claim, issue or
matter.
Section 4.2 Expenses of a Witness or Non-Party.
Notwithstanding any other provision of this Agreement to the contrary, to the
extent that Indemnitee is, by reason of his Corporate Status, a witness or
otherwise participates in any Proceeding at a time when he is not a party in the
Proceeding, the Company shall indemnify him against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith.
Section 4.3 Advancement of Expenses. The Company shall pay all
reasonable Expenses incurred by or on behalf of Indemnitee in connection with
any Proceeding, whether brought by or in the right of the Company or otherwise,
in advance of any determination with respect to entitlement to indemnification
pursuant to Article V within 15 days after the receipt by the Company of a
written request from Indemnitee requesting such payment or payments from time to
time, whether prior to or after final disposition of such Proceeding. Such
statement or statements shall reasonably evidence the Expenses incurred by
Indemnitee and, if delivered prior to the final disposition of the Proceeding,
contain a written affirmation of Indemnitee's good faith belief that he is
entitled to indemnification by the Company hereunder or pursuant to the relevant
provisions of the MGCL. Indemnitee hereby undertakes and agrees that he will
reimburse and repay the Company for any Expenses so advanced to the extent that
it shall ultimately be determined (in a final adjudication by a court from which
there is no further right of appeal or in a final adjudication of an arbitration
pursuant to Section 6.1 if Indemnitee elects to seek such arbitration) that
Indemnitee is not entitled to be indemnified by the Company against such
Expenses.
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ARTICLE V
PROCEDURE FOR DETERMINATION OF ENTITLEMENT
TO INDEMNIFICATION
Section 5.1 Request by Indemnitee. To obtain indemnification
under this Agreement, Indemnitee shall submit to the Company a written request,
including therein or therewith such documentation and information as is
reasonably available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to indemnification. The
Secretary or an Assistant Secretary of the Company shall, promptly upon receipt
of such a request for indemnification, advise the members of the Board in
writing that Indemnitee has requested indemnification.
Section 5.2 Determination of Request. Upon written request by
Indemnitee for indemnification pursuant to Section 5.1, a determination, if
required by applicable law, with respect to Indemnitee's entitlement thereto
shall be made in the specific case as follows:
(a) If a Change in Control shall have occurred, by
Special Legal Counsel in a written opinion to the Board, a copy of
which shall be delivered to Indemnitee unless Indemnitee shall request
that such determination be made by the Disinterested Directors, in
which case in the manner provided for in clause (i) of paragraph (b)
below;
(b) If a Change in Control shall not have occurred,
(i) by a majority vote of a quorum of the Board consisting of
Disinterested Directors, or (ii) if such a quorum cannot be obtained,
by a majority vote of a committee of the Board consisting solely of two
or more Disinterested Directors who were designated to act in the
matter by a majority vote of the full Board, or (iii) if there are no
Disinterested Directors, or if such Disinterested Directors so direct,
by Special Legal Counsel, or (iv) if Indemnitee and the Company
mutually agree, by the stockholders of the Company; or
(c) As provided in Section 5.4(b).
If it is so determined that Indemnitee is entitled to indemnification hereunder,
payment to Indemnitee shall be made within 15 days after such determination.
Indemnitee shall cooperate with the person or persons making such determination
with respect to Indemnitee's entitlement to indemnification, including providing
to such person upon reasonable advance request any documentation or information
that is not privileged or otherwise protected from disclosure and that is
reasonably available to Indemnitee and reasonably necessary for such
determination. Any costs or expenses (including attorneys' fees and
disbursements) incurred by Indemnitee in so cooperating with the person or
persons making such determination shall be borne by the Company (irrespective of
the determination as to Indemnitee's entitlement to indemnification), and the
Company shall indemnify and hold harmless Indemnitee therefrom.
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Section 5.3 Special Legal Counsel. If a Change in Control
shall not have occurred and the determination of entitlement to indemnification
is to be made by Special Legal Counsel, the Special Legal Counsel shall be
selected by (a) a majority vote of a quorum of the Board consisting of
Disinterested Directors, or (b) if such a quorum cannot be obtained, by a
majority vote of a committee of the Board consisting solely of two or more
Disinterested Directors who were designated to act in the matter by a majority
vote of the full Board, or (c) if the quorum referred to in Section 5.3(a)
cannot be obtained and the committee referred to in Section 5.3(b) cannot be
established, by a majority vote of the Board, and the Company shall give written
notice to Indemnitee, within ten days after receipt by the Company of
Indemnitee's request for indemnification, specifying the identity and address of
the Special Legal Counsel so selected. If a Change in Control shall have
occurred and the determination of entitlement to indemnification is to be made
by Special Legal Counsel, the Special Legal Counsel shall be selected by
Indemnitee, and Indemnitee shall give written notice to the Company, within ten
days after submission of Indemnitee's request for indemnification, specifying
the identity and address of the Special Legal Counsel so selected (unless
Indemnitee shall request that such selection be made by the Disinterested
Directors, in which event the Company shall give written notice to Indemnitee,
within ten days after receipt of Indemnitee's request for the Disinterested
Directors to make such selection, specifying the identity and address of the
Special Legal Counsel so selected). In either event, (i) such notice to
Indemnitee or the Company, as the case may be, shall be accompanied by a written
affirmation of the Special Legal Counsel so selected that it satisfies the
requirements of the definition of "Special Legal Counsel" in Article I and that
it agrees to serve in such capacity and (ii) Indemnitee or the Company, as the
case may be, may, within seven days after such written notice of selection shall
have been given, deliver to the Company or to Indemnitee, as the case may be, a
written objection to such selection. Any objection to selection of Special Legal
Counsel pursuant to this Section 5.3 may be asserted only on the ground that the
Special Legal Counsel so selected does not meet the requirements of the
definition of "Special Legal Counsel" in Article I, and the objection shall set
forth with particularity the factual basis of such assertion. If such written
objection is timely made, the Special Legal Counsel so selected may not serve as
Special Legal Counsel unless and until the Court has determined that such
objection is without merit. In the event of a timely written objection to a
choice of Special Legal Counsel, the party originally selecting the Special
Legal Counsel shall have seven days to make an alternate selection of Special
Legal Counsel and to give written notice of such selection to the other party,
after which time such other party shall have five days to make a written
objection to such alternate selection. If, within 30 days after submission of
Indemnitee's request for indemnification pursuant to Section 5.1, no Special
Legal Counsel shall have been selected and not objected to, either the Company
or Indemnitee may petition the Court for resolution of any objection that shall
have been made by the Company or Indemnitee to the other's selection of Special
Legal Counsel and/or for the appointment as Special Legal Counsel of a person
selected by the Court or by such other person as the Court shall designate, and
the person with respect to whom an objection is so resolved or the person so
appointed shall act as Special Legal Counsel under Section 5.2. The Company
shall pay any and all reasonable fees and expenses incurred by such Special
Legal Counsel in connection with acting pursuant to Section 5.2, and the Company
shall pay all reasonable fees and expenses incident to the procedures of this
Section 5.3, regardless of the manner in which such Special
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Legal Counsel was selected or appointed. Upon the due commencement of any
judicial proceeding or arbitration pursuant to Section 6.1, Special Legal
Counsel shall be discharged and relieved of any further responsibility in such
capacity (subject to the applicable standards of professional conduct then
prevailing).
Section 5.4 Presumptions and Effect of Certain Proceedings.
(a) Indemnitee shall be presumed to be entitled to
indemnification under this Agreement upon submission of a request for
indemnification pursuant to Section 5.1, and the Company shall have the
burden of proof in overcoming that presumption in reaching a
determination contrary to that presumption. Such presumption shall be
used by Special Legal Counsel (or other person or persons determining
entitlement to indemnification) as a basis for a determination of
entitlement to indemnification unless the Company provides information
sufficient to overcome such presumption by clear and convincing
evidence.
(b) If the person or persons empowered or selected
under this Article V to determine whether Indemnitee is entitled to
indemnification shall not have made a determination within 60 days
after receipt by the Company of Indemnitee's request for
indemnification, the requisite determination of entitlement to
indemnification shall be deemed to have been made and Indemnitee shall
be entitled to such indemnification, absent (i) a knowing misstatement
by Indemnitee of a material fact, or knowing omission of a material
fact necessary to make Indemnitee's statement not materially
misleading, in connection with Indemnitee's request for
indemnification, or (ii) a prohibition of such indemnification under
applicable law; provided, however, that such 60-day period may be
extended for a reasonable time, not to exceed an additional 30 days, if
the person making the determination with respect to entitlement to
indemnification in good faith requires such additional time for the
obtaining or evaluating of documentation and/or information relating to
such determination; provided further, that the 60-day limitation set
forth in this Section 5.4(b) shall not apply and such period shall be
extended as necessary (i) if within 30 days after receipt by the
Company of Indemnitee's request for indemnification under Section 5.1
Indemnitee and the Company have agreed, and the Board has resolved, to
submit such determination to the stockholders of the Company pursuant
to Section 5.2(b) for their consideration at an annual meeting of
stockholders to be held within 90 days after such agreement and such
determination is made thereat, or a special meeting of stockholders for
the purpose of making such determination to be held within 60 days
after such agreement and such determination is made thereat, or (ii) if
the determination of entitlement to indemnification is to be made by
Special Legal Counsel, in which case the applicable period shall be as
set forth in clause (c) of Section 6.1.
(c) The termination of any Proceeding or of any
Claim, issue or matter by judgment, order or settlement (whether with
or without court approval) shall not by itself adversely affect the
rights of Indemnitee to indemnification or create a presumption
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<PAGE>
that the act or omission of the Indemnitee was material to the matter
giving rise to the Proceeding and was committed by the Indemnitee in
bad faith or was the result of active and deliberate dishonesty or that
the Indemnitee actually received an improper personal benefit in money,
property or services or in the case of any criminal Proceeding, the
Indemnitee had reasonable cause to believe that the act or omission was
unlawful. The termination of any Proceeding or of any Claim, issue or
matter by conviction, or a plea of nolo contendere or its equivalent or
an entry of an order of probation prior to judgment, shall create a
rebuttable presumption that the Indemnitee did not meet the requisite
standard of conduct set forth in this Section 5.4(c). Indemnitee shall
be deemed to have been found liable in respect of any Claim, issue or
matter only after he shall have been so adjudged by the Court after
exhaustion of all appeals therefrom.
ARTICLE VI
CERTAIN REMEDIES OF INDEMNITEE
Section 6.1 Indemnitee Entitled to Adjudication in an
Appropriate Court. If (a) a determination is made pursuant to Article V that
Indemnitee is not entitled to indemnification under this Agreement, (b) there
has been any failure by the Company to make timely payment or advancement of any
amounts due hereunder, or (c) the determination of entitlement to
indemnification is to be made by Special Legal Counsel and such determination
shall not have been made and delivered in a written opinion within 90 days after
the latest of (i) such Special Legal Counsel's being appointed, (ii) the
overruling by the Court of objections to such counsel's selection or (iii)
expiration of all periods for the Company or Indemnitee to object to such
counsel's selection, Indemnitee shall be entitled to commence an action seeking
an adjudication in the Court of his entitlement to such indemnification or
advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an
award in arbitration to be conducted by a single arbitrator pursuant to the
commercial arbitration rules of the American Arbitration Association. Indemnitee
shall commence such action seeking an adjudication or an award in arbitration
within 180 days following the date on which Indemnitee first has the right to
commence such action pursuant to this Section 6.1, or such right shall expire.
The Company shall not oppose Indemnitee's right to seek any such adjudication or
award in arbitration.
Section 6.2 Adverse Determination Not to Affect any Judicial
Proceeding. If a determination shall have been made pursuant to Article V that
Indemnitee is not entitled to indemnification under this Agreement, any judicial
proceeding or arbitration commenced pursuant to this Article VI shall be
conducted in all respects as a de novo trial or arbitration on the merits, and
Indemnitee shall not be prejudiced by reason of such initial adverse
determination. In any judicial proceeding or arbitration commenced pursuant to
this Article VI, Indemnitee shall be presumed to be entitled to indemnification
or advancement of Expenses, as the case may be, under this Agreement and the
Company shall have the burden of proof in overcoming such presumption and to
show by clear and convincing evidence that Indemnitee is not entitled to
indemnification or advancement of Expenses, as the case may be.
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Section 6.3 Company Bound by Determination Favorable to
Indemnitee in any Judicial Proceeding or Arbitration. If a determination shall
have been made or deemed to have been made pursuant to Article V that Indemnitee
is entitled to indemnification, the Company shall be irrevocably bound by such
determination in any judicial proceeding or arbitration commenced pursuant to
this Article VI and shall be precluded from asserting that such determination
has not been made or that the procedure by which such determination was made is
not valid, binding and enforceable, in each such case absent (a) a knowing
misstatement by Indemnitee of a material fact, or a knowing omission of a
material fact necessary to make a statement by Indemnitee not materially
misleading, in connection with Indemnitee's request for indemnification or (b) a
prohibition of such indemnification under applicable law.
Section 6.4 Company Bound by the Agreement. The Company shall
be precluded from asserting in any judicial proceeding or arbitration commenced
pursuant to this Article VI that the procedures and presumptions of this
Agreement are not valid, binding and enforceable and shall stipulate in any such
court or before any such arbitrator that the Company is bound by all the
provisions of this Agreement.
Section 6.5 Indemnitee Entitled to Expenses of Judicial
Proceeding. If Indemnitee seeks a judicial adjudication of or an award in
arbitration to enforce his rights under, or to recover damages for breach of,
this Agreement, Indemnitee shall be entitled to recover from the Company, and
the Company shall indemnify Indemnitee against, any and all expenses (of the
types described in the definition of Expenses in Article I) actually and
reasonably incurred by him in such judicial adjudication or arbitration but only
if Indemnitee prevails therein. If it shall be determined in such judicial
adjudication or arbitration that Indemnitee is entitled to receive part but not
all of the indemnification or advancement of expenses or other benefit sought,
the expenses incurred by Indemnitee in connection with such judicial
adjudication or arbitration shall be equitably allocated between the Company and
Indemnitee. Notwithstanding the foregoing, if a Change in Control shall have
occurred, Indemnitee shall be entitled to indemnification under this Section 6.5
regardless of whether Indemnitee ultimately prevails in such judicial
adjudication or arbitration.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Non-Exclusivity. The rights of Indemnitee to
receive indemnification and advancement of Expenses under this Agreement shall
not be deemed exclusive of any other rights to which Indemnitee may at any time
be entitled under applicable law, the Charter or Bylaws of the Company, any
other agreement, a resolution of stockholders or directors, or otherwise. No
amendment or alteration of the Charter or Bylaws of the Company or any provision
thereof shall adversely affect Indemnitee's rights hereunder and such rights
shall be in addition to any rights Indemnitee may have under the Company's
Charter, Bylaws and the MGCL or otherwise. To the extent that there is a change
in the MGCL or other applicable law (whether by statute or judicial decision)
that allows greater indemnification by
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<PAGE>
agreement than would be afforded currently under the Company's Charter or Bylaws
and this Agreement, it is the intent of the parties hereto that the Indemnitee
shall enjoy by virtue of this Agreement the greater benefit so afforded by such
change.
Section 7.2 Insurance and Subrogation.
(a) To the extent the Company maintains an insurance
policy or policies providing liability insurance for directors,
officers, employees, agents or fiduciaries of the Company or of any
other corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise that such person serves at the request of the
Company, Indemnitee shall be covered by such policy or policies in
accordance with its or their terms to the maximum extent of the
coverage available for any such director, officer, employee, agent or
fiduciary under such policy or policies.
(b) In the event of any payment by the Company under
this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of Indemnitee, who shall
execute all papers required and take all action necessary to secure
such rights, including execution of such documents as are necessary to
enable the Company to bring suit to enforce such rights.
(c) The Company shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable
hereunder if and to the extent that Indemnitee has otherwise actually
received such payment under the Company's Charter or Bylaws or any
insurance policy, contract, agreement or otherwise.
Section 7.3 Certain Settlement Provisions. The Company shall
have no obligation to indemnify Indemnitee under this Agreement for amounts paid
in settlement of a Proceeding or Claim without the Company's prior written
consent. The Company shall not settle any Proceeding or Claim in any manner that
would impose any fine or other obligation on Indemnitee without Indemnitee's
prior written consent. Neither the Company nor Indemnitee shall unreasonably
withhold their consent to any proposed settlement.
Section 7.4 Duration of Agreement. This Agreement shall
continue for so long as Indemnitee serves as a director, nominee for director,
officer, employee, agent or fiduciary of the Company or, at the request of the
Company, as a director, nominee for director, officer, employee, agent or
fiduciary of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, and thereafter shall survive until and
terminate upon the latest to occur of (a) the expiration of ten years after the
latest date that Indemnitee shall have ceased to serve in any such capacity; (b)
the final termination of all pending Proceedings in respect of which Indemnitee
is granted rights of indemnification or advancement of Expenses hereunder and of
any proceeding commenced by Indemnitee pursuant to Article VI relating thereto;
or (c) the expiration of all statutes of limitation applicable to possible
Claims arising out of Indemnitee's Corporate Status.
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<PAGE>
Section 7.5 Notice by Each Party. Indemnitee shall promptly
notify the Company in writing upon being served with any summons, citation,
subpoena, complaint, indictment, information or other document or communication
relating to any Proceeding or Claim for which Indemnitee may be entitled to
indemnification or advancement of Expenses hereunder; provided, however, that
any failure of Indemnitee to so notify the Company shall not adversely affect
Indemnitee's rights under this Agreement except to the extent the Company shall
have been materially prejudiced as a direct result of such failure. The Company
shall notify promptly Indemnitee in writing as to the pendency of any Proceeding
or Claim that may involve a claim against the Indemnitee for which Indemnitee
may be entitled to indemnification or advancement of Expenses hereunder.
Section 7.6 Certain Persons Not Entitled to Indemnification.
Notwithstanding any other provision of this Agreement to the contrary,
Indemnitee shall not be entitled to indemnification or advancement of Expenses
hereunder with respect to any Proceeding or any Claim, issue or matter therein,
brought or made by Indemnitee against the Company or any affiliate of the
Company, except as specifically provided in Article V or Article VI.
Section 7.7 Indemnification for Negligence, Gross Negligence,
etc. Without limiting the generality of any other provision hereunder, it is the
express intent of this Agreement that Indemnitee be indemnified and Expenses be
advanced regardless of Indemnitee's acts of negligence, gross negligence or
intentional or willful misconduct to the extent that indemnification and
advancement of Expenses is allowed pursuant to the terms of this Agreement and
under applicable law.
Section 7.8 Enforcement. The Company agrees that its execution
of this Agreement shall constitute a stipulation by which it shall be
irrevocably bound in any court or arbitration in which a proceeding by
Indemnitee for enforcement of his rights hereunder shall have been commenced,
continued or appealed, that its obligations set forth in this Agreement are
unique and special, and that failure of the Company to comply with the
provisions of this Agreement will cause irreparable and irremediable injury to
Indemnitee, for which a remedy at law will be inadequate. As a result, in
addition to any other right or remedy he may have at law or in equity with
respect to breach of this Agreement, Indemnitee shall be entitled to injunctive
or mandatory relief directing specific performance by the Company of its
obligations under this Agreement.
Section 7.9 Successors and Assigns. All of the terms and
provisions of this Agreement shall be binding upon, shall inure to the benefit
of and shall be enforceable by the parties hereto and their respective
successors, assigns, heirs, executors, administrators and legal representatives.
The Company shall require and cause any direct or indirect successor (whether by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of the Company, by written agreement in form and substance
reasonably satisfactory to Indemnitee, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform if no such succession had taken place.
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<PAGE>
Section 7.10 Amendment. This Agreement may not be modified or
amended except by a written instrument executed by or on behalf of each of the
parties hereto.
Section 7.11 Waivers. The observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively) by the party entitled to enforce such term only
by a writing signed by the party against which such waiver is to be asserted.
Unless otherwise expressly provided herein, no delay on the part of any party
hereto in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party hereto of any
right, power or privilege hereunder operate as a waiver of any other right,
power or privilege hereunder nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder.
Section 7.12 Entire Agreement. This Agreement and the
documents expressly referred to herein constitute the entire agreement between
the parties hereto with respect to the matters covered hereby, and any other
prior or contemporaneous oral or written understandings or agreements with
respect to the matters covered hereby are expressly superseded by this
Agreement.
Section 7.13 Severability. If any provision of this Agreement
(including any provision within a single section, paragraph or sentence) or the
application of such provision to any person or circumstance, shall be judicially
declared to be invalid, unenforceable or void, such decision will not have the
effect of invalidating or voiding the remainder of this Agreement or affect the
application of such provision to other persons or circumstances, it being the
intent and agreement of the parties that this Agreement shall be deemed amended
by modifying such provision to the extent necessary to render it valid, legal
and enforceable while preserving its intent, or if such modification is not
possible, by substituting therefor another provision that is valid, legal and
unenforceable and that achieves the same objective. Any such finding of
invalidity or unenforceability shall not prevent the enforcement of such
provision in any other jurisdiction to the maximum extent permitted by
applicable law.
Section 7.14 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given upon (a) transmitter's
confirmation of a receipt of a facsimile transmission, (b) confirmed delivery of
a standard overnight courier or when delivered by hand or (c) the expiration of
five business days after the date mailed by certified or registered mail (return
receipt requested), postage prepaid, to the parties at the following addresses
(or at such other addresses for a party as shall be specified by like notice):
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<PAGE>
If to the Company, to:
Sinclair Broadcast Group, Inc.
2000 West 41st Street
Baltimore, Maryland 21211
Attention: Chief Executive Officer
Facsimile: (410) 467-5043
with a copy to:
Thomas & Libowitz, P.A.
The USF&G Tower
100 Light Street
Suite 1100
Baltimore, Maryland 21202
Attention: Steven A. Thomas
Facsimile: (410) 752-2046
If to Indemnitee, to:
Indemnitee, at his address set forth
on the personnel records of the
Company
with a copy to:
Baker & Botts, L.L.P.
2001 Ross Avenue
Dallas, Texas 75201
Attention: Andrew M. Baker
Facsimile: (214) 953-6503
Section 7.15 Certain Construction Rules.
(a) The article and section headings contained in
this Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement. As used in
this Agreement, unless otherwise provided to the contrary, (i) all
references to days shall be deemed references to calendar days and (ii)
any reference to a "Section" or "Article" shall be deemed to refer to a
section or article of this Agreement. The words "hereof," "herein" and
"hereunder" and words of similar import referring to this Agreement
refer to this Agreement as a whole and not to any particular provision
of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." Unless otherwise
specifically provided for herein, the term
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<PAGE>
"or" shall not be deemed to be exclusive. Whenever the context may
require, any pronoun used in this Agreement shall include the
corresponding masculine, feminine or neuter forms, and the singular
form of nouns, pronouns and verbs shall include the plural and vice
versa.
(b) For purposes of this Agreement, references to
"other enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan; references to "serving at the
request of the Company" shall include any service as a director,
nominee for director, officer, employee or agent of the Company which
imposes duties on, or involves services by, such director, nominee,
officer, employee or agent with respect to an employee benefit plan,
its participants or beneficiaries; and an action taken or omitted by a
person with respect to an employee benefit plan in the performance of
his duties for a purpose he reasonably believed to be in the interest
of the participants and beneficiaries of the plan shall be deemed to be
for a purpose which is to not opposed to the best interests of the
Company.
Section 7.16 Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Maryland, without
giving effect to the conflicts of laws principles thereof.
Section 7.17 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an original and
all of which together shall be deemed to be one and the same instrument,
notwithstanding that both parties are not signatories to the original or same
counterpart.
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<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered to be effective as of the date first above written.
SINCLAIR BROADCAST GROUP, INC.
By: /s/ David D. Smith
------------------------------
Name: David D. Smith
Title: Chief Executive Officer
INDEMNITEE
/s/ Barry Baker
------------------------------
Barry Baker
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Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions, marked by a * and [ ], have been
separately filed with the Commission.
TIME BROKERAGE AGREEMENT
This TIME BROKERAGE AGREEMENT (the "Agreement") is entered into on this
31st day of May, 1996, by and among Sinclair Communications, Inc., a Maryland
corporation ("Programmer"), River City Broadcasting, L.P., a Delaware limited
partnership, River City License Partnership, a Missouri general partnership
(collectively, "Owner"), and, for the limited purposes stated herein, Sinclair
Broadcast Group, Inc., a Maryland corporation ("SBG").
RECITALS:
WHEREAS, River City License Partnership is the licensee, pursuant to
authorizations issued by the Federal Communications Commission ("FCC"), of the
television and radio stations listed on Attachment A hereto (collectively, the
"Stations" and each individually, the "Station");
WHEREAS, River City Broadcasting, L.P. owns certain assets used in
connection with the business and operations of the Stations and is a general
partner of River City License Partnership;
WHEREAS, pursuant to an Amended and Restated Asset Purchase Agreement
dated as of April 10, 1996, as Amended and Restated as of May 31, 1996 (the
"Asset Purchase Agreement"), Programmer purchased certain assets of River City
Broadcasting, L.P.;
<PAGE>
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WHEREAS, on this date, Programmer and Owner have entered into the Group
I Option Agreement pursuant to which Owner has granted to Programmer an option
to acquire certain of the assets and the FCC licenses held by Owner in
connection with its ownership and operation of the Stations;
WHEREAS, Programmer is experienced in broadcast ownership and
operation;
WHEREAS, during the term of this Agreement, Owner wishes to retain
Programmer to provide programming and related services for the Stations, all in
conformity with Station policies and procedures, FCC rules and policies for time
brokerage arrangements, and the provisions hereof;
WHEREAS, Programmer agrees to use the Stations to broadcast such
programming of its selection that is in conformity with all rules, regulations
and policies of the FCC, subject to Owner's full authority to manage and control
the operation of the Stations; and
WHEREAS, Programmer and Owner agree to cooperate to make this
Agreement work to the benefit of the public and both parties and as contemplated
by the terms set forth herein.
AGREEMENT:
NOW, THEREFORE, in consideration of the above recitals, and mutual
promises and covenants contained herein, the parties intending to be legally
bound, agree as follows:
SECTION 1 USE OF STATION AIR TIME.
1.1 Scope. During the term of this Agreement, Owner shall make
available to Programmer broadcast time on the Station as set forth in this
Agreement. Programmer shall deliver such programming, at its expense, to the
Station's transmitter or other authorized remote control point designated by
Owner. Subject to the provisions of Section 4.8 hereof, Programmer
<PAGE>
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shall provide such programming of Programmer's selection complete with
commercial matter, news, public service announcements and other suitable
programming to the Station for at least one hundred and sixty-six (166) hours
per week. Except as otherwise provided in this Agreement, Owner agrees to
broadcast such programming in its entirety, including commercials at the times
specified, on the facilities of the Station without interruption, deletion, or
addition of any kind. Owner may use such time as it may require up to two (2)
hours per week, for the broadcast of its own regularly-scheduled news, public
affairs, and other non-entertainment programming on the Station. Owner may elect
to set aside additional air time (up to two (2) hours per week) (the "Additional
Time") to be scheduled at a mutually agreeable time, for the broadcast of
specific non-entertainment programming on issues of importance to the local
community. Owner shall provide Programmer with as much notice as possible, but
in no event less than three (3) weeks' notice, of its intention to set aside
such Additional Time. All program time not reserved by or designated for Owner
shall be available for use by Programmer. Owner agrees that Programmer may sell,
or engage a third party to sell, commercial time during the programming provided
by Programmer to the Station for Programmer's account.
1.2 Consideration. As consideration for the air time made available
hereunder and the other agreements of the parties made hereunder, Programmer
agrees to pay Owner the payments set forth in Attachment 1.2 hereto.
Notwithstanding any provision of this Agreement to the contrary, in the event of
a preemption by Owner of Programmer's programming under Sections 1.1, with
respect to the Additional Time only, 3.2, 4.1 or 4.2 of this Agreement, the
Monthly Payment as defined in Attachment 1.2 shall be reduced by an amount equal
to (a) the amount of the Monthly Payment multiplied by (b) a fraction the
numerator of which is the
<PAGE>
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number of minutes of Programmer's programming preempted by Owner during such
month and the denominator of which is the total number of minutes of programming
provided by Programmer for the Station for such month.
1.3 Term. This Agreement shall commence for all Stations on May 31,
1996 (the "Effective Date"), and end with respect to any one Station on the date
of consummation of the purchase of the License Assets of such Station, as
defined by and contemplated under the Group I Option Agreement (the "Term"),
unless terminated earlier pursuant to any of the provisions of Section 5 hereof.
SECTION 2 STATION OPERATIONS.
2.1 Owner Control Over Station Operations.
(a) Owner shall retain full authority, power and control over
the management and operations of the Stations during the Term of this Agreement,
including specifically control over its personnel, programming and finances.
(b) Subject to Owner's full authority, power and control over
the management and operations of the Stations, Programmer agrees to provide
programming and related services to the Stations. Such related services shall
include: (i) the sale of advertising time on the Stations; (ii) coordination of
traffic and billing functions; (iii) maintenance, repair and replacement of the
Station's transmitting or studio equipment and the other License Assets,
provided, however, that Programmer shall not make any modifications to or
replace any material items of the License Assets without Owner's prior written
authorization; and (iv) other administrative or operational functions as Owner
may from time to time assign to Programmer consistent with FCC rules and
regulations relating to time brokerage agreements. Programmer
<PAGE>
-5-
shall provide and perform its obligations hereunder, including all related
services, diligently and in a manner consistent with broadcast industry
practices.
(c) Owner shall employ at the Station's main studio location,
at Owner's expense, at least two full-time employees, including a Station
Manager and a staff level employee, who will direct the day-to-day operations of
the Station, and who will report to and be accountable to Owner.
(d) When on the Owner's premises, all employees of Programmer
used to provide Programmer's programming or other services to the Stations shall
be subject to the overall supervision of Owner's management personnel.
2.2 Station Expenses.
(a) During the Term of this Agreement, and subject to timely
receipt of the Monthly Payment specified in Attachment 1.2, Owner shall be
responsible for and pay in a timely manner all operating, capital and other
expenses of the Stations, including but not limited to those expenses set forth
in Attachment 2.2(a).
(b) During the Term of this Agreement, Programmer shall be
responsible for and pay in a timely manner all costs incurred by Programmer in
the performance of its obligations hereunder, including but not limited to those
expenses set forth in Attachment 2.2(b).
SECTION 3 STATION PUBLIC INTEREST OBLIGATIONS.
3.1 Owner Authority. Owner shall be responsible for the Station's
compliance with all applicable provisions of the Communications Act of 1934, as
amended (the "Act"), the rules, regulations and policies of the FCC and all
other applicable laws. Programmer shall cooperate with Owner, at Programmer's
expense, in taking such actions as Owner may reasonably request
<PAGE>
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to assist Owner in maintaining the Station's compliance with the Act, rules,
regulations and policies of the FCC and all other applicable laws.
Notwithstanding any other provision of this Agreement, Programmer recognizes
that Owner has certain obligations to operate the Stations in the public
interest, and to broadcast programming to meet the needs and interests of the
Station's community of license, the Station's service area and with respect to
Owner's television Stations, the educational and informational needs of
children. From time to time Owner shall air, or if Owner requests, Programmer
shall air, programming on issues of importance to the local community and, with
respect to Owner's television Stations, educational and informational
programming for children aged 16 years and younger. Nothing in this Agreement
shall abrogate or limit the unrestricted authority of Owner to discharge its
obligations to the public and to comply with the Act and the rules, regulations
and policies of the FCC and Owner shall have no liability or obligation to
Programmer, except as set forth in Section 1.2, for taking any action that it
deems necessary or appropriate to discharge such obligations or comply with such
laws, rules, regulations or policies.
3.2 Additional Owner Obligations. Although both Owner and Programmer
shall cooperate in the broadcast of emergency information over the Station,
Owner shall retain the right, without any liability or obligation to Programmer,
to interrupt Programmer's programming in case of an emergency or for programming
which, in the good faith judgment of Owner, is of greater local or national
public importance. Owner shall coordinate with Programmer the Station's hourly
station identification and any other announcements required to be aired by FCC
rules or regulations. Owner shall (i) continue to maintain and staff a main
studio, as that term is defined by the FCC, for the Station within the Station's
principal community contour, (ii)
<PAGE>
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maintain the Station's local public inspection file within the Station's
community of license, and (iii) prepare and place in such inspection file in a
timely manner all material required by Section 73.3526 of the FCC's Rules,
including without limitation the Station's quarterly issues and program lists,
and with respect to Owner's television Stations, information concerning the
broadcast of children's educational and informational programming and
documentation of compliance with commercial limits applicable to certain
children's television programming. Programmer shall, upon request by Owner,
promptly provide Owner with such information concerning Programmer's programs
and advertising as is necessary to assist Owner in the preparation of such
information or to enable Owner to verify independently each television Station's
compliance with the Children's Television Act and the Station's compliance with
any other laws, rules, regulations or policies applicable to the Station's
operation. Owner shall also maintain the station logs, receive and respond to
telephone inquiries, and control and oversee any remote control point for the
Station.
SECTION 4 STATION PROGRAMMING POLICIES.
4.1 Broadcast Station Programming Policy Statement. Owner has adopted a
Broadcast Station Programming Policy Statement (the "Policy Statement"), a copy
of which appears as Attachment 4.1 hereto and which may be amended from time to
time by Owner upon notice to Programmer. Programmer agrees and covenants to
comply in all material respects with the Policy Statement, with all rules and
regulations of the FCC, and with all changes subsequently made by Owner or the
FCC. Programmer shall furnish or cause to be furnished the artistic personnel
and material for the programs as provided by this Agreement and all programs
shall be prepared and presented in conformity with the rules, regulations and
policies of the FCC
<PAGE>
-8-
and with the Policy Statement. All advertising spots and promotional material or
announcements shall comply with all applicable federal, state and local
regulations and policies and the Policy Statement, and shall be produced in
accordance with quality standards established by Programmer. If Owner determines
that a program, commercial announcement or promotional material supplied by
Programmer is for any reason, in Owner's sole discretion, unsatisfactory or
unsuitable or contrary to the public interest, or does not comply with the
Policy Statement it may, upon written notice to Programmer (to the extent time
permits such notice), and without any liability or obligation to Programmer,
except as set forth in Section 1.2, suspend or cancel such program, commercial
announcement or promotional material and substitute its own programming or, if
Owner requests, Programmer shall provide promptly suitable programming,
commercial announcement or other announcement or promotional material.
4.2 Owner Control of Station Programming. Notwithstanding any contrary
provision contained in this Agreement, and consistent with Owner's obligations
pursuant to the Act and the rules and regulations of the FCC, Owner shall have
the right, without any liability or obligation to Programmer, except as set
forth in Section 1.2, to delete any material contained in any programming or
commercial matter furnished by Programmer for broadcast over the Station that
Owner determines is unsuitable for broadcast or the broadcast of which Owner
believes would be contrary to the public interest. Owner shall have the right,
without any liability or obligation to Programmer, except as set forth in
Section 1.2 to broadcast Owner's own programming in place of such deleted
material.
4.3 Political Advertising. Owner shall oversee and shall take ultimate
responsibility for the Station's compliance with the political broadcasting
rules of the FCC and Sections 312
<PAGE>
-9-
and 315 of the Act, including but not limited to, the provision of equal
opportunities, compliance with lowest unit charge requirements, and the
provision of reasonable access to federal political candidates. Programmer shall
cooperate with Owner, at Programmer's expense, to assist Owner in complying with
the political broadcasting rules of the FCC. Programmer shall supply such
information promptly to Owner as may be necessary to comply with the lowest unit
charge and other applicable political broadcast requirements of federal law. To
the extent that Owner deems necessary or appropriate, Programmer shall release
advertising availabilities to Owner to permit Owner to comply with the political
broadcasting rules of the FCC and Sections 312 and 315 of the Act. Programmer
shall be entitled to all revenues received by Owner for such advertising.
4.4 Advertising of Credit Terms. To the extent prohibited by the rules
of the Federal Trade Commission, no advertising of credit terms shall be made
over broadcast material supplied hereunder by Programmer beyond mention of the
fact that credit terms are available.
4.5 Payola/Plugola. In order to enable Owner to fulfill its obligations
under Section 317 of the Act, Programmer, in compliance with Section 507 of the
Act, will, in advance of any scheduled broadcast by a Station, disclose to Owner
any information of which Programmer has knowledge or which has been disclosed to
Programmer as to any money, service, or other valuable consideration that any
person has paid or accepted, or has agreed to pay or to accept, for the
inclusion of any matter as a part of the programming or commercial matter to be
supplied to Owner pursuant to this Agreement. Programmer will cooperate with
Owner, at Programmer's expense, as necessary to ensure compliance with this
provision. Commercial matter with obvious sponsorship identifications shall not
require disclosure in addition to that contained in the commercial copy.
<PAGE>
-10-
4.6 Children's Television Advertising. Programmer agrees that it will
not broadcast on any television Station advertising in programs originally
designed for children aged 12 years and under in excess of the amounts permitted
under applicable FCC rules.
4.7 Programmer Compliance with Copyright Act. Programmer represents and
warrants that Programmer will have full authority to broadcast the programming
on the Stations, and that Programmer shall not broadcast any material in
violation of the Copyright Act. The performing rights to all music contained in
broadcast material supplied hereunder by Programmer are licensed by BMI, ASCAP,
or SESAC, are in the public domain, are controlled by Programmer, or are cleared
at the source by Programmer.
4.8 Owner Programming Agreements. Notwithstanding any provision of this
Agreement to the contrary, Programmer agrees to broadcast on the Station, at the
times required, the programs that Owner is required to air on the Station
pursuant to its obligations under the agreements listed on Attachment 4.8
hereto. The broadcast of such programs by Programmer shall not reduce in any
manner (a) any of the broadcast time on the Station reserved by Owner, pursuant
to Section 1.1 hereof for the broadcast of Owner's non-entertainment programming
or (b) the Monthly Payment owed to Owner under the provisions of Attachment 1.2.
SECTION 5 TERMINATION.
5.1 Termination by Programmer. Unless terminated pursuant to the
provisions of Section 1.3, this Agreement may be terminated by Programmer with
respect to any Station or all Stations, by written notice to Owner, if
Programmer is not then in material default or breach hereof, upon the occurrence
of any of the following:
<PAGE>
-11-
(a) upon termination by Programmer of the Option for such
Station under the Group I Option Agreement, provided that in such event, the
termination of this Agreement shall be effective as of the date that is three
(3) months following termination of said Option;
(b) Owner is in material breach of its material obligations
hereunder or under the Group I Option Agreement and has failed to cure such
breach within thirty (30) days of notice from Programmer; or
(c) the mutual consent of both parties.
5.2 Termination by Owner. Unless terminated pursuant to the provisions
of Section 1.3, this Agreement may be terminated by Owner with respect to any
Station or all Stations, by written notice to Programmer, if Owner is not then
in material default or breach hereof, upon the occurrence of any of the
following:
(a) upon the date of termination by Owner of the Option for
such Station under the Group I Option Agreement;
(b) Programmer is in material breach of its material
obligations hereunder or under the Group I Option Agreement and has failed to
cure such breach within thirty (30) days of notice from Owner;
(c) Programmer is in material breach of its obligations under
the Group I Option Agreement and its then existing senior credit facility and
has failed to cure such breach within ninety (90) days of notice from Owner; or
(d) the mutual consent of both parties.
5.3 Termination for All Stations. This Agreement will terminate with
respect to all Stations, upon the occurrence of any of the following:
<PAGE>
-12-
(a) this Agreement is declared invalid or illegal in whole or
substantial part by an order or decree of an administrative agency or court of
competent jurisdiction and such order or decree has become final and no longer
subject to further administrative or judicial review; or
(b) there has been a material change in FCC rules or policies
that would cause this Agreement to be in violation thereof and such change is in
effect and not the subject of an appeal or further administrative review,
provided that in such event the parties shall first negotiate in good faith and
attempt to agree on an amendment to this Agreement that will provide the parties
with a valid, binding and enforceable agreement that conforms to the new FCC
rules, policies or precedent.
5.4 Expiration of Option. Notwithstanding the provisions of Sections
5.1 and 5.2 hereof, this Agreement shall terminate with respect to a Station
immediately upon the expiration of the Exercise Period, as defined in the Group
I Option Agreement, if the Option relating to such Station has not been
exercised within the Exercise Period.
5.5 Continuation of Agreement. Notwithstanding any termination of this
Agreement with respect to a Station under Sections 5.1, 5.2, or 5.4, this
Agreement shall continue in full force and effect for all Stations for which
such termination is not effective.
5.6 Severability. It is the intent of the parties hereto that the
transactions contemplated hereunder comply in all respects with the Act and all
applicable rules, regulations, and policies of the FCC. If any provision of this
Agreement shall be declared void, illegal, or invalid by any governmental
authority with jurisdiction thereof, the remainder of this Agreement shall
remain in full force and effect without such offending provision so long as such
remainder substantially reflects the original agreement of the parties
hereunder. Furthermore, in such
<PAGE>
-13-
event, the parties shall use their commercially reasonable efforts to reach
agreement promptly on lawful substitute provisions in place of said offending
provision so as to effectuate more closely their intent as expressed hereunder.
If any governmental authority grants to any other entity or individual rights
which are not contained in this Agreement, then the parties shall use their
commercially reasonable efforts to amend this Agreement to provide the parties
hereto such lawful provisions which comport with any rules, regulations and
policies adopted after the date of this Agreement.
5.7 Force Majeure. Any failure or impairment of the License Assets or
any delay or interruption in the broadcast of programs, or failure at any time
to furnish facilities, in whole or in part, for broadcast, due to Acts of God,
strikes, lockouts, material or labor restrictions by any governmental authority,
civil riot, floods or any other cause not reasonably within the control of
Owner, shall not constitute a breach of this Agreement and Owner will not be
liable to Programmer for any liability or obligation with respect thereto,
including without limitation, any reimbursement obligation.
5.8 Insurance; Risk of Loss.
(a) During the Term of this Agreement, Owner shall maintain
insurance with respect to the License Assets as provided in Section 5.1 of the
Group I Option Agreement and shall cause Programmer to be named as an additional
insured on Owner's policies as required in Section 5.1 of the Group I Option
Agreement. The risk of any loss, damage, impairment, confiscation, or
condemnation of any equipment or other personal property owned and used by Owner
in the business and operations of the Station shall be borne by Owner at all
times during the Term of this Agreement, to the extent of, but solely to
<PAGE>
-14-
the extent of, Owner's receipt of insurance proceeds in respect thereof and in
no event shall Owner have any liability or obligation to Programmer in respect
of any such loss, damage, impairment, confiscation or condemnation. Owner shall
use such proceeds of insurance to repair or replace any such equipment or such
other personal property of Owner to the extent of such proceeds. At Owner's
request and subject to Owner's supervision and direction, Programmer shall
effect in a timely fashion any repairs to or replacement of any of Owner's
damaged equipment or property.
(b) During the Term of this Agreement, Programmer shall
maintain with reputable insurance companies reasonably acceptable to Owner,
insurance in such amounts and with respect to such risks, as reasonably
requested by Owner, and Programmer shall comply with the provisions of Section
6.5 of the Group I Option Agreement. The risk of any loss, damage, impairment,
confiscation, or condemnation of any equipment or other personal property owned
or leased and used by Programmer in the performance of its obligations hereunder
shall be borne by Programmer at all times during the Term of this Agreement.
SECTION 6 INDEMNIFICATION.
6.1 Indemnification by Programmer. Programmer shall indemnify and hold
harmless Owner from and against any and all claims, losses, costs, liabilities,
damages, expenses, including any FCC fines or forfeitures (including reasonable
legal fees and other expenses incidental thereto), of every kind, nature and
description (collectively "Damages") arising or resulting from or relating to
(a) Programmer's breach of any covenant, agreement or other obligation of
Programmer contained in this Agreement, (b) any action taken by Programmer or
its employees and agents with respect to the Stations, or any failure by
Programmer or its
<PAGE>
-15-
employees and agents to take any action with respect to the Stations, including,
without limitation, Damages relating to violations of the Act, or any rule,
regulation or policy of the FCC, slander, defamation or other claims relating to
programming provided by Programmer or Programmer's broadcast and sale of
advertising time on the Stations, or (c) the business or operations of the
Stations (except where the Damages are caused by Owner's gross negligence,
willful misconduct, or a breach of its obligations under this Agreement) from
and after the date of this Agreement.
6.2 Indemnification by Owner. Owner shall indemnify and hold harmless
Programmer from and against any and all claims, losses, costs, liabilities,
damages, expenses, including any FCC fines or forfeitures (including reasonable
legal fees and other expenses incidental thereto), of every kind, nature and
description, arising out of Owner's breach of its obligations under this
Agreement or its ownership of the Station.
6.3 Indemnification Procedure. Neither Owner nor Programmer shall be
entitled to indemnification pursuant to this Section unless such claim for
indemnification is asserted in writing delivered to the other party, together
with a statement as to the factual basis for the claim and the amount of the
claim. The party making the claim (the "Claimant") shall make available to the
other party (the "Indemnitor") the information relied upon by the Claimant to
substantiate the claim. The Indemnitor under this Section 6.3 shall have the
right to conduct and control through counsel of its own choosing the defense of
any third party claim, action or suit (and the Claimant shall cooperate fully
with the Indemnitor), but the Claimant may, at its election, participate in the
defense of any such claim, action or suit at its sole cost and expense provided
that, if the Indemnitor shall fail to defend any such claim, action or suit,
then the
<PAGE>
-16-
Claimant may defend through counsel of its own choosing such claim, action or
suit, and (so long as it gives the Indemnitor at least fifteen (15) days' notice
of the terms of the proposed settlement thereof and permits the Indemnitor to
then undertake the defense thereof) settle such claim, action or suit, and to
recover from the Indemnitor the amount of such settlement or of any judgment and
the costs and expenses of such defense. The Indemnitor shall not compromise or
settle any third party claim, action or suit without the prior written consent
of the Claimant, which consent will not be unreasonably withheld or delayed.
6.4 Arbitration. To the fullest extent not prohibited by law, any
controversy, claim or dispute arising out of or relating to Section 6 of this
Agreement, including the determination of the scope or applicability of this
Agreement to arbitrate, shall be settled by final and binding arbitration in
accordance with the rules then in effect of the American Arbitration Association
("AAA"), as modified or supplemented under this section, and subject to the
Federal Arbitration Act, 9 U.S.C. ss.ss. 1-16. The decision of the arbitrators
shall be final and binding provided that, where a remedy for breach is
prescribed hereunder or limitations on remedies are prescribed, the arbitrators
shall be bound by such restrictions, and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.
If any series of claims arising out of the same or related transactions
shall involve claims which are arbitrable under the preceding paragraph and
claims which are not, the arbitrable claims shall first be finally determined
before suit may be instituted upon the others and the parties will take such
action as may be necessary to toll any statutes of limitations, or
<PAGE>
-17-
defenses based upon the passage of time, that are applicable to such
non-arbitrable claims during the period in which the arbitrable claims are being
determined.
In the event of any controversy, claim or dispute that is subject to
arbitration under this Section 6.4, any party thereto may commence arbitration
hereunder by delivering notice to the other party or parties thereto. The
arbitration panel shall consist of three (3) arbitrators, appointed in
accordance with the procedures set forth in this paragraph. Within ten (10)
business days of delivery of the notice of commencement of arbitration referred
to above, Owner, on the one hand, and Programmer, on the other hand, shall each
appoint one arbitrator, and the two arbitrators so appointed shall within ten
(10) business days of their appointment mutually agree upon and appoint one
additional arbitrator (or, if such arbitrators cannot agree on an additional
arbitrator, the additional arbitrator shall be appointed by the AAA as provided
under its rules); provided, that persons eligible to be selected as arbitrators
shall be limited to attorneys at law who (i) are on the AAA's Large, Complex
Case Panel, (ii) have practiced law for at least fifteen (15) years as an
attorney specializing in either general commercial litigation or general
corporate and commercial matters, and (iii) are experienced in matters involving
the broadcasting industry.
The arbitration hearing shall commence no later than thirty (30)
business days after the completion of the selection of the arbitrators.
Consistent with the intent of the parties hereto that the arbitration be
conducted as expeditiously as possible, the parties agree that (i) discovery
shall be limited to the production of such documents and the taking of such
depositions as the arbitrators determine are reasonably necessary to the
resolution of the controversy, claim or dispute and (ii) the arbitrators shall
limit the presentation of evidence by
<PAGE>
-18-
each side in such arbitration to not more than ten (10) full days' (or the
equivalent thereof) or such shorter period as the arbitrators shall determine to
be necessary in order to resolve the controversy, claim or dispute. The
arbitrators shall be instructed to render a decision within ten (10) business
days of the close of the arbitration hearing. If arbitration has not been
completed within ninety (90) days of the commencement of such arbitration, any
party to the arbitration may initiate litigation upon ten (10) days' written
notice to the other party(ies); provided, however, that if one party has
requested the other to participate in an arbitration and the other has failed to
participate, the requesting party may initiate litigation before the expiration
of such ninety-day period; and provided further, that if any party to the
arbitration fails to meet any of the time limits set forth in this Section 6.4
or set by the arbitrators in the arbitration, any other party may provide ten
(10) days' written notice of its intent to institute litigation with respect to
the controversy, claim or dispute without the need to continue or complete the
arbitration and without awaiting the expiration of such ninety-day period. The
parties hereto further agree that if any of the rules of the AAA are contrary to
or conflict with any of the time periods provided for hereunder, or with any
other aspect of the matters set forth in this Section 6.4, that such rules shall
be modified in all respects necessary to accord with the provisions of this
Section 6.4 (and the arbitrators shall be so instructed by the parties).
The arbitrators shall base their decision on the terms of this
Agreement and applicable law and judicial precedent which a United States
District Court sitting in the District of Maryland (Southern Division) would
apply in the event the dispute were litigated in such court, and shall render
their decision in writing and include in such decision a statement of
<PAGE>
-19-
the findings of fact and conclusions of law upon which the decision is based.
Each party agrees to cooperate fully with the arbitrator(s) to resolve any
controversy, claim or dispute. The arbitrators shall not be empowered to award
punitive damages or damages in excess of actual damages. The venue for all
arbitration proceedings shall be Rockville, Maryland.
6.5 Damages; Specific Performance. In the event of a material breach by
either party of its obligations hereunder, the non-breaching party shall be
entitled to seek monetary damages against the party in breach. The parties
recognize that given the unique nature of the Station and this Agreement,
monetary damages alone will not be adequate to compensate Programmer for any
injury resulting from Owner's breach. Programmer shall therefore be entitled, in
addition to a right to seek and collect monetary damages, to obtain specific
performance of the terms of this Agreement. If any action is brought by
Programmer to enforce this Agreement, Owner shall waive the defense that there
is an adequate remedy at law.
SECTION 7 MISCELLANEOUS.
7.1 Assignment. This Agreement shall not be assigned by any party
hereto without the prior written consent of the other party, which consent shall
not be unreasonably withheld, except that Programmer may assign its rights and
interests hereunder (a) to any party that is qualified to be an owner of the
License Assets and the Stations under the Act and the existing rules,
regulations and policies of the FCC or (b) a direct or indirect wholly-owned
subsidiary of Programmer provided that (1) Programmer gives Owner written notice
of any such assignment; (2) such assignment shall not relieve Programmer of any
of its obligations or liabilities hereunder; and (3) such assignment would not
violate any applicable laws, rules, regulations or policies of any applicable
governmental authority. It is understood and agreed that nothing
<PAGE>
-20-
herein shall be deemed to expand the rights granted hereunder to any permitted
assignee, which rights shall be in combination with, and not in addition to, the
rights of Programmer. This Agreement shall be binding on the parties' respective
heirs and assigns.
7.2 Entire Agreement; Amendments. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and, except for the Asset Purchase Agreement, the Group I Option Agreement and
to the extent applicable, the Modification Agreement dated May 10, 1996 between
River City Broadcasting, L.P. and SBG, and the letter dated May 10, 1996 from
the parties' counsel to the Department of Justice in connection therewith, and
documents delivered pursuant thereto, supersedes any and all prior agreements,
broadcasting commitments, or any other understandings between Programmer and
Owner with respect to such subject matter. No provision of this Agreement shall
be changed or modified, nor shall this Agreement be discharged in whole or in
part, except by an agreement in writing signed by the party against whom the
change, modification, or discharge is claimed or sought to be enforced, nor
shall any waiver of any of the conditions or provisions of this Agreement be
effective and binding unless such waiver shall be in writing and signed by the
party against whom the waiver is asserted, and no waiver of any provision of
this Agreement shall be deemed to be a waiver of any preceding or succeeding
breach of the same or any other provision.
7.3 Further Assurances. Owner and Programmer shall use commercially
reasonable best efforts in the performance and fulfillment of the terms and
conditions of this Agreement in effectuating the intent of such parties as
expressed under this Agreement. From time to time, without further
consideration, Owner and Programmer shall execute and deliver such other
<PAGE>
-21-
documents and take such other actions as either party hereto reasonably may
request to effectuate such intent.
7.4 Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures to each such counterpart
were upon the same instrument.
7.5 Notices. All notices, demands and other communications which may or
are required to be given hereunder or with respect hereto shall be in writing,
shall be delivered personally or sent by nationally recognized overnight
delivery service, charges prepaid, or by registered or certified mail,
return-receipt requested, or by facsimile transmission, and shall be deemed to
have been given or made when personally delivered, the next business day after
delivery to such overnight delivery service, when dispatched by facsimile
transmission, five (5) days after deposited in the mail, first class postage
prepaid, addressed as follows:
(a) If to Owner:
River City Broadcasting, L.P.
1215 Cole Street
St. Louis, Missouri 63106-3897
Attn.: Mr. Barry Baker and Mr. Larry D. Marcus
Telecopier: (314) 259-5709
with a copy to:
Dow, Lohnes & Albertson A Professional
Limited Liability Company 1200 New Hampshire
Ave., N.W.
Suite 800
Washington, D.C. 20036-6802
Attn.: Kevin F. Reed, Esq.
Telecopier: (202) 776-2222
and
<PAGE>
-22-
Baker & Botts
800 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201-2916
Attn.: Andrew M. Baker, Esq.
Telecopier: (214) 953-6503
or to such other address as Owner may from time to time designate.
(b) If to Programmer or SBG:
Sinclair Broadcast Group, Inc.
Sinclair Communications, Inc.
2000 W. 41st Street
Baltimore, Maryland 21211
Attn.: Mr. David D. Smith
Telecopier: (410) 467-5043
with a copy to:
Thomas & Libowitz, P.A.
The USF&G Tower
100 Light Street
Suite 1100
Baltimore, Maryland 21202-1053
Attn.: Steven A. Thomas, Esq.
Telecopier: (410) 752-2046
and
Fisher Wayland Cooper Leader & Zaragoza, LLP
2001 Pennsylvania Avenue, N.W.
Suite 400
Washington, D.C. 20006-1851
Attn.: Martin R. Leader, Esq.
Telecopier: (202) 296-6518
or to such other address as Programmer may from time to time designate.
7.6 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Maryland, without regard to its choice
of law rules.
<PAGE>
-23-
7.7 Taxes. Owner and Programmer shall each pay its own ad valorem
taxes, if any, which may be assessed on such party's personal property for the
periods that such items are owned by such party. Programmer shall pay all taxes,
if any, to which the consideration specified in Section 1.2 herein is subject,
provided that Owner shall be responsible for payment of its own income taxes.
7.8 No Joint Venture or Partnership. Programmer shall act as an
independent contractor in rendering its services hereunder. Programmer shall
have no power or authority to act for or on behalf of Owner or to bind Owner in
any manner whatsoever, except as and to the extent expressly provided for in
this Agreement. The parties hereto agree that nothing herein shall constitute a
joint venture or partnership between them.
7.9 Headings. The headings in this Agreement are for convenience only
and will not affect or control the meaning or construction of the provisions of
this Agreement.
7.10 Guaranty.
(a) By its signature below, for value received and in
consideration of Owner entering into this Agreement, SBG (referred to in this
Section 7.10 as the "Guarantor") hereby unconditionally guarantees to Owner the
full amount and prompt performance by Programmer of all of Programmer's
obligations under this Agreement. This guaranty is a guaranty of payment and/or
performance, as the case may be. The Guarantor hereby waives demand,
presentment, protest and notice of acceptance of this guaranty. Upon any default
by Programmer in the performance of any of its obligations under this Agreement,
the liability of Guarantor shall be effective immediately and payment or
performance shall be made by Guarantor on demand without suit or action against
Programmer. No delay or omission by Owner in exercising any
<PAGE>
-24-
right under this guaranty shall operate as a waiver of such right or any other
right. All costs incurred by Owner in connection with enforcing this guaranty
(including reasonable attorneys' fees) shall be payable by Guarantor.
(b) Guarantor represents and warrants to Owner that: (i)
Guarantor and the party executing this Agreement on behalf of the Guarantor have
the requisite corporate power and authority to execute and deliver this
Agreement and to perform its obligations under this Agreement; (ii) all
requisite corporate actions and proceedings necessary to be taken on the part of
Guarantor in connection with the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby and necessary to make
the same effective have been duly and validly taken; and (iii) this Agreement
has been duly and validly authorized, executed and delivered by Guarantor and
constitutes its valid and binding agreement, enforceable in accordance with its
terms, except as limited by laws affecting the enforcement of creditors' rights
or contractual obligations generally and by application of general principles of
equity.
<PAGE>
-25-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
OWNER:
RIVER CITY LICENSE PARTNERSHIP
By: River City Broadcasting, L.P., its General Partner
By: Better Communications, Inc., its General Partner
By: /s/ Larry D Marcus
--------------------------------------------------
Name: Larry D. Marcus
Title: Vice President
RIVER CITY BROADCASTING, L.P.
By: Better Communications, Inc., its General Partner
By: /s/ Larry D Marcus
--------------------------------------------------
Name: Larry D. Marcus
Title: Vice President
PROGRAMMER:
SINCLAIR COMMUNICATIONS, INC.
By: /s/ David B. Amy
--------------------------------------------------
Name: David B. Amy
Title: Chief Financial Officer
SINCLAIR BROADCAST GROUP, INC.
By: /s/ David B. Amy
--------------------------------------------------
Name: David B. Amy
Title: Chief Financial Officer
<PAGE>
Attachment A
------------
Stations
--------
Station City of License Service
- ------- --------------- -------
KDNL-TV St. Louis, Missouri TV
KOVR(TV) Stockton, California TV
KABB(TV) San Antonio, Texas TV
KDSM-TV Des Moines, Iowa TV
WLOS(TV) Asheville, North Carolina TV
WTTV(TV) Bloomington, Indiana TV
WTTK(TV) Kokomo, Indiana TV
WFBC(TV) Anderson, South Carolina TV
WVRV-FM East St. Louis, Illinois FM
KPNT(FM) Ste. Genevieve, Missouri FM
KBLA(AM) Santa Monica, California AM
WJCE-FM Russellville, Kentucky FM
WSMB(AM) New Orleans, Louisiana AM
WWL(AM) New Orleans, Louisiana AM
WLMG(FM) New Orleans, Louisiana FM
KMEZ(FM) Belle Chasse, Louisiana FM
WBEN(AM) Buffalo, New York AM
WMJQ(FM) Buffalo, New York FM
WWKB(AM) Buffalo, New York FM
WKSE(FM) Niagara Falls, New York FM
WGBI(AM) Scranton, Pennsylvania AM
WGGY(FM) Scranton, Pennsylvania FM
WILK(AM) Wilkes-Barre, Pennsylvania AM
WKRZ(FM) Wilkes-Barre, Pennsylvania FM
WJCE(AM) Memphis, Tennessee AM
WRVR-FM Memphis, Tennessee FM
WLAC(AM) Nashville, Tennessee AM
WLAC-FM Nashville, Tennessee FM
WOGY-FM Germantown, Tennessee FM
<PAGE>
Attachment 1.2
--------------
Consideration
-------------
During the Term of this Agreement, Programmer shall pay to
Owner by the first day of each month the payments set forth in Schedule I hereto
(collectively, the "Monthly Payment"). The Monthly Payment shall include those
amounts necessary to reimburse Owner for Owner's expenses set forth on
Attachment 2.2(a). The Monthly Payment shall be adjusted from time to time upon
written notice from Owner to Programmer, which notice shall specify in
reasonable detail the changes in Station expenses, to reflect any changes in
Station operating expenses that are the responsibility of Owner under this
Agreement. Notwithstanding any provision to the contrary herein, it is expressly
agreed by Owner and Programmer that any network compensation paid to or received
by Owner directly or indirectly shall be immediately paid to Programmer, or at
Owner's option, credited against the Monthly Payment to Owner.
<PAGE>
The information below marked by * and [ ], has been omitted pursuant to a
request for confidential treatment. The omitted portions have been separately
filed with the Commission.
<TABLE>
<CAPTION>
Schedule I
River City Broadcasting
Monthly Estimated Owner Expenses
Employee Repair & Property Public Svce
Station Costs Maintenance Utility Insurance Tax Prod. Costs Other Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
KDNL [*******] [*******] [******] [******] [******] [******] [******]
KABB [*******] [*******] [******] [******] [******] [******] [******]
KDSM [*******] [*******] [******] [******] [******] [******] [******]
WTTV/ [*******] [*******] [******] [******] [******] [******] [******]
WTTK
KOVR [*******] [*******] [******] [******] [******] [******] [******]
WLOS [*******] [*******] [******] [******] [******] [******] [******]
WFBC [*******] [*******] [******] [******] [******] [******] [******]
Keymarket [*******] [*******] [******] [******] [******] [******] [******]
Total [*******] [*******] [******] [******] [******] [******] 304,999
</TABLE>
<PAGE>
Attachment 2.2(a)
Owner Expenses
1. Expenses incurred by Owner, to the extent not paid directly by
Programmer pursuant to its obligations under Section 2.1(b),
including any capital expenditures, relating to the maintenance,
repair and replacement of the Station's transmitting and studio
equipment and other License Assets.
2. Tower, transmitter building, studio and office lease payments.
3. Utility costs.
4. Insurance as provided in Section 5.8(a) of this Agreement.
5. Salaries, benefits and taxes for all Station personnel employed by
Owner at the Station.
6. Expenditures incurred by Owner in maintaining its corporate offices
and personnel.
7. Costs incurred by Owner in airing its own non-entertainment
programming on the Station.
8. Payments made by Owner to third parties under the programming
agreements listed on Attachment 4.8 less any compensation received
by Owner under such agreements.
9. Miscellaneous Station expenses.
<PAGE>
Attachment 2.2(b)
Programmer Expenses
1. All costs associated with Programmer's provision of programming to
the Station, maintenance, repair and replacement of Programmer's
assets related to the operation of the Station, the sale of
commercial advertising time on the Station, Programmer's
coordination of traffic and billing functions and the performance
of any other administrative or operational duties assigned by Owner
to Programmer.
2. Salaries, benefits and taxes for all personnel employed by
Programmer and used by Programmer in the performance of its
obligations hereunder.
3. Insurance as provided in Section 5.8(b) of this Agreement..
<PAGE>
Attachment 4.1
Broadcast Station Programming Policy Statement
Programmer agrees to cooperate with Owner in the broadcasting
of programs of the highest possible standard of excellence and for this purpose
to observe the following regulations in the preparation, writing and
broadcasting of its programs.
I. No Plugola or Payola. Except for commercial messages aired in
compliance with 47 C.F.R.ss.73.1212, Programmer shall not receive
any consideration in money, goods, services, or otherwise, directly
or indirectly (including to relatives) from any persons or company
for the presentation of any programming over the Station without
reporting the same to Licensee's general manager. The commercial
mention of any business activity or "plug" for any commercial,
professional, or other related endeavor, except where contained in
an actual commercial message of a sponsor, is prohibited.
II. No Lotteries. Announcements giving any information about lotteries
or games prohibited by federal or state law or regulation are
prohibited.
III. Election Procedures. At least fifteen (15) days before the start of
any primary or election campaign, Programmer will clear with
Owner's Station Manager the rates Programmer will charge for the
time to be sold to candidates for the public office and/or their
supporters to make certain that the rates charged are in
conformance with applicable law and Station policy.
IV. Required Announcements. Programmer shall broadcast (i) an
announcement in a form satisfactory to Owner at the beginning of
each hour
<PAGE>
to identify the Station and (ii) any other announcements that may
be required by law, regulation, or Owner policy.
V. No Illegal Announcements. No announcements or promotion prohibited
by federal or state law or regulation shall be made over the
Station. Any game, contest, or promotion relating to or to be
presented over the Station must be fully stated and explained in
advance to Owner, which reserves the right in its sole discretion
to reject any game, contest, or promotion.
VI. Owner Discretion Paramount. In accordance with the Owner's
responsibility under the Communications Act of 1934, as amended,
and the Rules and Regulations of the Federal Communications
Commission, Owner reserves the right to reject or terminate any
advertising proposed to be presented or being presented over the
Station which is in conflict with Station policy or which in
Owner's or its Station Manager's sole judgment would not serve the
public interest.
Owner may waive any of the foregoing regulations in specific
instances, if, in its opinion, the Station will remain in compliance with all
applicable laws, rules, regulations and policies and broadcasting in the public
interest is served. In any case where questions of policy or interpretation
arise, Programmer should submit the same to Owner for decision before making any
commitments in connection therewith.
<PAGE>
Attachment 4.8
Programming Agreements
1. KDSM-TV - Fox: Station Affiliation Agreement, dated as of June 11,
1992, as amended as of June 11, 1992 and December 2, 1992, by and
between River City Broadcasting, L.P. ("RCB") and Fox Broadcasting
Company.
2. KDSM-TV - Paramount: Paramount License Agreement, dated as of November
16, 1993, by and between Paramount Pictures Corporation and RCB on
behalf of River City License Partnership.
3. KABB-TV - Fox: Station Affiliation Agreement, dated as November 18,
1994, by and between RCB and Fox Broadcasting Company.
4. KOVR-TV - CBS: Affiliation Agreement, dated as of December 9, 1994, by
and between RCB and CBS Television Network.
5. WLOS-TV - ABC: Primary Television Affiliation Agreement, dated as of
April 13, 1990, between WLOS-TV, Inc. and American Broadcasting
Companies, Inc. ("ABC"), as assumed by RCB as of September 8, 1994.
6. WLOS-TV: RCB has negotiated a new agreement with ABC which is currently
not executed. 1/
7. WFBC-TV - ABC: Satellite Television Affiliation Agreement, dated as of
September 8, 1994, by and between RCB and American Broadcasting
Companies, Inc. 2/
- ----------
1/ Note that this agreement is not executed. No representation or warranty is
made by RCB regarding the effectiveness or noneffectiveness of this agreement.
To the extent RCB has any post-Effective Date rights and obligations under any
affiliation agreement on this schedule, RCB transfers such rights and
obligations to Programmer, but without any admission by RCB that RCB has any
rights or obligations thereunder. In addition to requiring consent to transfer
this agreement to a third party, the current draft of this agreement presently
requires that the consent of ABC be obtained by RCB prior to entering into any
local marketing or time brokerage agreement whereby another television station
provides programming to RCB's station.
2/ During the term of this agreement, WFBC-TV became an independent station
and no longer rebroadcasts ABC programming. As a result, this agreement may no
longer be in force and effect however, to the extent RCB has any rights or
obligations thereunder, they are incorporated into this schedule by this
reference.
<PAGE>
8. WTTV-TV/WTTK-TV - Paramount: Station Affiliation Agreement, dated as of
November 16, 1993, by and between Parmount Pictures Corporation and RCB
on behalf of River City License Partnership.
9. KDNL-TV - Paramount: Paramount License Agreement, dated as of November
16, 1993, by and between Paramount Pictures Corporations and RCB on
behalf of River City License Partnership.
10. KDNL-TV: RCB is negotiating an affiliation agreement with ABC. 3/
- --------
3/ Note that this agreement is not executed. No representation or warranty is
made by RCB regarding the effectiveness or noneffectiveness of this agreement.
To the extent RCB has any post-Effective Date rights and obligations under any
affiliation agreement on this schedule, RCB transfers such rights and
obligations to Programmer, but without any admission by RCB that RCB has any
rights or obligations thereunder. In addition to requiring consent to transfer
this agreement to a third party, the current draft of this agreement presently
requires that the consent of ABC be obtained by RCB prior to entering into any
local marketing or time brokerage agreement whereby another television station
provides programming to RCB's station.
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into
as of May 31, 1996, by and among SINCLAIR BROADCAST GROUP, INC., a Maryland
corporation (the "Company"), RIVER CITY BROADCASTING, L.P., a Delaware limited
partnership ("River City"), and such other persons and entities who shall have
executed this Agreement and whose names appear on the Schedule of Registration
Rights Holders attached hereto as Exhibit A, as such Schedule may be amended
from time to time to reflect permitted additional Holders (as hereinafter
defined).
RECITALS
WHEREAS, the Company and River City have entered into that certain
Asset Purchase Agreement, dated as of April 10, 1996, as amended and restated as
of May 31, 1996 (the "Asset Purchase Agreement"), pursuant to which, in
pertinent part, the parties thereto agreed that the Company is to purchase all
of River City's right, title and interest in certain of River City's assets;
WHEREAS, pursuant to the terms of the Asset Purchase Agreement, River
City will receive a portion of the purchase price in shares of the Company's
Series A Exchangeable Preferred Stock, par value $.01 per share, which will be
exchanged for and converted into shares of Series B Convertible Preferred Stock,
par value $.01 per share (the "Series B Convertible Preferred Stock"), which
will be convertible into shares of Class A Common Stock, par value $.01 per
share (the "Common Stock");
WHEREAS, the Company and Barry Baker ("Baker") have entered into that
certain Employment Agreement (the "Employment Agreement") and Stock Option
Agreement (the "Stock Option Agreement"), each dated as of April 10, 1996,
pursuant to which Baker has been granted stock options to purchase shares of
Common Stock; and
WHEREAS, pursuant to the terms of the Asset Purchase Agreement, the
Employment Agreement and the Stock Option Agreement, the Company has agreed to
register the shares of Common Stock received by the Holders (hereinafter defined
pursuant to the terms and conditions set forth herein).
AGREEMENTS
NOW THEREFORE, in consideration of the foregoing recitals and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
<PAGE>
I.
DEFINITIONS
1. "Commission" means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
2. "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.
3. "Governmental Authority" means any nation or government, any state
or other political subdivision thereof and any court, panel, judge, board,
bureau, commission, agency or other entity, body or other Person exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
4. "Holders" shall mean and include River City and any other person or
persons or entity or entities who have executed this Agreement and whose names
appear on the Schedule of Registration Rights Holders including any transferee
permitted pursuant to Section VII(d) of this Agreement.
5. "Person" means an individual or corporation, partnership, trust,
unincorporated organization, association or other entity and includes any
Governmental Authority.
6. "Registrable Securities" means, collectively, (i) shares of Common
Stock issuable upon conversion of the Series B Convertible Preferred Stock
issued to River City under the Asset Purchase Agreement, (ii) shares of Common
Stock issued or issuable upon conversion of any shares of Series B Convertible
Preferred Stock that are issued in payment of the dividend preference with
respect to any of the shares of Series B Convertible Preferred Stock described
in the preceding clause (i) (and without regard to whether or not such shares of
Series B Convertible Preferred Stock are then held by River City), (iii)
securities issued or issuable with respect to any of the shares of Common Stock
referred to in clauses (i) and (ii) above, upon any stock split, stock dividend,
recapitalization or similar event, (iv) shares of Common Stock issued or
issuable upon exercise of options granted to Barry Baker pursuant to the Stock
Option Agreement, and (v) shares of Common Stock otherwise issuable pursuant to
the terms of the Employment Agreement. Any Registrable Security will cease to be
a Registrable Security when (i) such Registrable Security has been transferred
pursuant to an effective registration statement under the Securities Act
covering such Registrable Security (but not including any transfer exempt from
registration under the Securities Act), (ii) such Registrable Security is no
longer held of record by River City or any of the Holders or their successors or
assigns, or (iii) the holder of such Registrable Security is then able to use
Rule 144 promulgated under the Securities Act (or any successor provision) to
transfer such Registrable Security without regard to any restrictions pursuant
to Rule 144(k).
- 2 -
<PAGE>
7. "Securities Act" means the Securities Act of 1933, as amended, or
any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
II.
REGISTRATION STATEMENT
(a) As soon as practicable following the closing of the Asset Purchase
Agreement, the Company shall file with the Commission a registration statement
on Form S-3 (or such other form as may be appropriate) (the "Registration
Statement"), with respect to the sale of all of the Registrable Securities
issued and outstanding at the time of such filing plus such other Registrable
Securities (that are not issued and outstanding at such time) as may properly be
registered at such time. As soon as practicable following the issuance of
additional Registrable Securities, the Company shall cause the registration
(through amendment of an existing Registration Statement or filing of an
additional Registration Statement) with respect to such Registrable Securities
not previously registered. The Company shall use its best efforts to have the
Registration Statement declared effective by the Commission under the Securities
Act as soon as reasonably practicable, and to keep the Registration Statement
effective as long as there are Registrable Securities issued or issuable. The
Company further agrees to supplement or make amendments to the Registration
Statement if required by the registration form used by the Company for the
Registration Statement or by the instructions applicable to such registration
form or by the Securities Act, and to comply with all other requirements of the
Securities Act applicable to the Company with respect to the registration of all
Registrable Shares covered by the Registration Statement and in accordance with
the intended methods of disposition by the Holders.
(b) The Company shall have the right to postpone for up to ninety (90)
days the sales of any Registrable Securities pursuant to the Registration
Statement if the Company reasonably believes that such sales will have a
material adverse effect on any proposal or plan by the Company or any of its
subsidiaries to engage in any financing, acquisition of assets (other than in
the ordinary course of business) or any merger, consolidation, tender offer or
other significant transaction; provided that the Company shall have the right to
so postpone such filing or effectiveness only one (1) time during any period of
twelve (12) consecutive months.
III.
REGISTRATION PROCEDURES
(a) COMPANY OBLIGATIONS. Following the closing of the Asset Purchase
Agreement, the Company will as expeditiously as possible:
- 3 -
<PAGE>
(1) furnish to the Holders, prior to the filing of the
Registration Statement (or any prospectus, amendment or supplement thereto),
copies of the Registration Statement as proposed to be filed, which documents
will be subject to the reasonable review and comments of the Holders (and their
respective attorneys), and the Company will not file any registration statement,
any prospectus or any amendment or supplement thereto (or any such documents
incorporated by reference) to which the Holders shall reasonably object in
writing; and thereafter furnish to the Holders such number of copies of the
Registration Statement, each amendment and supplement thereto (including any
exhibits thereto), the prospectus included in the Registration Statement
(including each preliminary prospectus) and such other documents as any Holder
may reasonably request in writing in order to facilitate the disposition of the
Registrable Securities; provided, however, that the obligation of the Company to
deliver copies of prospectuses or preliminary prospectuses to any Holder shall
be subject to the receipt by the Company of reasonable assurances from such
Holder that such Holder will comply with the applicable provisions of the
Securities Act and of such other securities or blue sky laws as may be
applicable in connection with any use of such prospectuses or preliminary
prospectuses;
(2) use its best efforts to register or qualify the
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as a Holder may reasonably request and do any and all other acts
and things which may be reasonably necessary to enable the Holder to consummate
the disposition in such jurisdictions of the Registrable Securities; provided,
however, that the Company will not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this subsection, (ii) subject itself to taxation in any such
jurisdiction, or (iii) consent to general service of process in any such
jurisdiction;
(3) apply, prior to or concurrently with the filing of the
Registration Statement, to the Nasdaq National Market System for the listing of
the Registrable Securities and use its best efforts to obtain approval for
listing of such stock;
(4) notify the Holders in writing at any time when a
prospectus relating to the Registrable Securities is required to be delivered
under the Securities Act, of the occurrence of an event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of the Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading and promptly prepare, file with the Commission
and make available to the Holders any such supplement or amendment;
(5) make available for inspection by the Holders and any
attorney, accountant or other professional retained thereby (collectively, the
"Inspectors"), all financial and other records, pertinent corporate documents
and properties of the Company (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any such Inspectors in connection
with the Registration Statement. Records that the Company determines, in good
faith, to be confidential and which
- 4 -
<PAGE>
it notifies the Inspectors are confidential shall not be disclosed by the
Inspectors unless (i) in the judgment of counsel to the Company the disclosure
of such Records is necessary to avoid or correct a misstatement or omission in
the Registration Statement, (ii) the release of such Records is ordered pursuant
to a subpoena or other order from a court of competent jurisdiction, or (iii)
the information in such Records is generally available to the public. The
Holders agree that information obtained by them as a result of such inspections
shall be deemed confidential and shall not be used by them as the basis for any
market transactions in the securities of the Company unless and until such
information is made generally available to the public. The Holders further agree
that they will, upon learning that disclosure of such Records is sought in a
court of competent jurisdiction, give notice to the Company and allow the
Company, at its expense, to undertake appropriate action to prevent disclosure
of the Records deemed confidential; and
(6) obtain a "cold comfort" letter from its independent public
accountants in customary form and covering such matters of the type customarily
covered by "cold comfort" letters as the Holders or the managing underwriter of
any underwritten offering of Registrable Securities reasonably request;
(7) obtain an opinion or opinions from its counsel in
customary form and reasonably satisfactory to the Holders and their respective
legal counsel;
(8) make generally available to the Holders earnings
statements, which need not be audited, satisfying the provisions of Section
11(a) of the Securities Act no later than forty-five days after the end of the
twelve-month period beginning with the first month of the first fiscal quarter
commencing after the effective date of the Registration Statement, which
earnings statements shall cover said twelve-month period;
(9) promptly notify each Holder of the issuance or threatened
issuance of any stop order or other order suspending the effectiveness of the
Registration Statement or preventing or suspending the use of any preliminary
prospectus, prospectus or prospectus supplement, use reasonable efforts to
prevent the issuance of any such threatened stop order or other order, and, if
any such order is issued, use its best efforts to obtain the lifting or
withdrawal of such order at the earliest possible moment and promptly notify
each Holder of any such lifting or withdrawal;
(10) if requested by any Holder, the Company will promptly
incorporate in a prospectus supplement or post-effective amendment to the
Registration Statement such information concerning such Holder and such Holder's
intended method of distribution as such Holder reasonably requests to be
included therein (and which is not inappropriate, in the reasonable judgment of
the Company, after consultation with its outside legal counsel), including,
without limitation, with respect to any change in the intended method of
distribution, the amount or kind of Registrable Shares being offered by such
Holder, the offering price for such Registrable Shares or any other terms of the
offering or distribution of the Registrable Shares, and the Company will make
all required filings of such prospectus supplement or post-effective amendment
as soon as possible after being notified of the matters to be incorporated in
such prospectus supplement or post-effective amendment;
(11) as promptly as practicable after the filing with the SEC
of any document which is incorporated by reference into a registration
statement, notify each Holder of such filing and deliver a copy of such document
to each Holder;
(12) cooperate with the Holders to facilitate the timely
preparation and delivery of certificates, not bearing any restrictive legends,
unless otherwise required by the Holders, representing the Registrable Shares to
be sold under the Registration Statement, and enable such Registrable Shares to
be in such denominations and registered in such names as such Holders may
request;
(13) cooperate with the Holders, their respective legal
counsel and any other interested party (including any interested broker-dealer)
in making any filings or submissions required to be made, and the furnishing of
all appropriate information in connection therewith, with the NASD;
(14) cause its subsidiaries to take all action necessary to
effect the registration of the Registrable Shares contemplated hereby, including
preparing and filing any required financial or other information;
(15) make available to the transfer agent for each class or
series of Registrable Shares a supply of certificates or other instruments
evidencing or constituting such Registrable Shares which shall be in a form
complying with the requirements of such transfer agent, promptly after a
registration thereof; and
(16) use its best efforts to keep each such registration or
qualification effective, including through new filings, amendments or renewals,
during the period the Registration Statement is required to be kept effective
and do any and all other acts or thing reasonably necessary or advisable in
connection with such registration or qualifications in all jurisdictions in
which qualification or registration is necessary.
(b) INFORMATION FROM HOLDERS. The Company may require the Holders to
promptly furnish in writing to the Company such information regarding the
distribution of the Registrable Securities as it may from time to time
reasonably request and such other information as may be legally required in
connection with such registration.
(c) SUSPENSION OF SALES. The Holders agree that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
subsection III(a)(4) hereof, they will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement until they receive
copies of the supplemented or amended prospectus contemplated by subsection
III(a)(4) hereof, and, if so directed by the Company, the Holders will deliver
to the Company all copies, other than permanent file copies then in their
possession,
- 5 -
<PAGE>
of the most recent prospectus (including any prospectus supplement) covering
such Registrable Securities at the time of receipt of such notice.
(d) UNDERWRITTEN OFFERINGS. To the extent that any Holders (including
River City) seeking to offer at least 1,000,000 shares of Registrable
Securities, whether or not issued, in the aggregate (as adjusted for any stock
split or reverse stock split) propose to distribute their Registrable Securities
through an underwritten offering, the Company shall enter into an underwriting
agreement in customary form with a managing underwriter of nationally recognized
standing selected for such underwriting by the requesting Holders holding a
majority of the Registrable Securities proposed to be registered and otherwise
approved by the Company, which approval shall not be unreasonably withheld or
delayed; provided, that the Company shall not be required to enter into such an
agreement or take the other actions required by it pursuant to this paragraph
more often than once in any six month period. All Holders proposing to
distribute their securities through such underwriting shall (together with the
Company) enter into an underwriting agreement in customary form with the
managing underwriter selected for such underwriting pursuant to this Article
III. Notwithstanding any other provision of this Article III, if the managing
underwriter determines that marketing factors require a limitation of the number
of shares to be underwritten, the underwriter may exclude some or all
Registrable Securities from such registration and underwriting. The Company
shall so advise all Holders distributing their securities through such
underwriting of any such limitation, and the number of shares of Registrable
Securities held by Holders that may be included in the underwriting shall be
allocated among the requesting Holders in proportion, as nearly as practicable,
to the respective amounts of Registrable Securities requested to be registered
and held by all such requesting Holders at the time of filing the Registration
Statement. If any Holder disapproves of the terms of any such underwriting, such
Holder may elect to withdraw therefrom by written notice to the Company and the
managing underwriter. In the event of any such underwritten public offering, the
Company shall perform its obligations under the underwriting agreement, in usual
and customary form, with the managing underwriter of such offering including, if
required, filing a new registration statement or an amendment to an existing
registration statement. In connection with any underwritten offering permitted
pursuant to this Article III(d), the Company shall make its senior officers
reasonably available to participate in "road show" presentations with respect to
the sale of the securities covered by the Registration Statement. In connection
with any underwritten offering pursuant to this Article III(d), the Company
shall, to the extent requested by the underwriters for such offering, agree to
refrain from the issuance or sale in any public offering of any shares of Common
Stock of the Company for a period of up to 90 days following the date of the
underwriting agreement entered into with respect to such underwritten offering.
(e) "PIGGY-BACK" REGISTRATIONS. (i) If, at any time after the closing
of the Asset Purchase Agreement, either the Company or the Holders propose to
sell any Class A Common Stock in an underwritten public offering, then in each
such case the Company or the Holders, as appropriate, shall, not later than 15
days prior to the execution of an underwriting agreement with respect to such
offering, give written notice thereof to each Holder or the Company, as
appropriate. Such notice shall specify, at a minimum, the number and class of
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<PAGE>
shares or equity securities so proposed to be sold, the estimated date of the
underwriting agreement, any proposed means of distribution of the shares, the
proposed managing underwriter or underwriters of such shares and a good faith
estimate of the proposed maximum offering price thereof. Upon the written
direction of any Holder or the Company, as appropriate, given within 10 days of
the receipt by such Holder or the Company, as appropriate, of any such written
notice (which direction shall specify the number of Registrable Securities
intended to be disposed of by such Holder or the Company and the intended method
of distribution thereof), the Company or the Holder shall include in the
offering any or all of the Registrable Securities then owned by such Holder
requesting such inclusion or the Company (a "Requesting Shareholder"), to the
extent necessary to permit the sale or other disposition of the shares
constituting such number of Registrable Securities as such Requesting
Shareholder shall have so directed the Company, or the Company shall have
directed the Holders, to be so included. Any Requesting Shareholder shall have
the right to withdraw such direction by giving written notice to the Company or
the Holders, as appropriate, to such effect within 5 days after giving such
direction.
(ii) If any managing underwriter of an offering shall advise
the Company and the Holders in writing that the inclusion in the offering of
some or all of the Registrable Securities sought to be registered by the
Requesting Shareholders creates a significant risk that the price per share the
Company (in the case of an offering initially proposed by the Company) or the
Holders (in the case of an offering initially proposed by the Holders) will
derive from such offering will be adversely affected or that the number of
shares or securities sought to be offered is too large a number to be reasonably
sold, then the Company or the Holder, as appropriate, will include in such
offering such number of shares or securities as the Company and such Holders are
so advised can be sold in such offering without such an effect (the "Maximum
Number"), in the following order of priority: (i) first, such number of shares
or securities as the Company (in the case of an offering initially proposed by
the Company) or the Holders (in the case of an offering initially proposed by
the Holders) shall have set forth in the notice of its intent to offer and (ii)
second, if the number of shares or securities to be offered under clause (i) is
less than the Maximum Number, such number of Registrable Securities of each
Requesting Shareholder pro rata in proportion to the number of shares or
securities sought to be offered by the Requesting Shareholders which, when added
to the number of shares or other equity securities to be offered by the Company
(in the case of an offering initially proposed by the Company) or the Holders
(in the case of an offering initially proposed by the Holders), equals the
Maximum Number.
IV.
REGISTRATION EXPENSES
All fees and expenses incident to the Company's performance of or
compliance with this Agreement shall be borne by the Company, including, without
limitation, the following fees and expenses: (a) all SEC, National Association
of Securities Dealers, Inc., stock exchange or other
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<PAGE>
registration and filing fees and listing fees; (b) the fees and expenses of the
Company's compliance with securities or blue sky laws (including reasonable fees
and disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities); (c) printing expenses; (d) the fees and disbursements
of counsel for the Company and the fees and expenses for independent certified
public accountants (including the expenses of any annual audit, special audit,
if necessary, and "cold comfort" letters required by or incident to the
performance of any agreement with the underwriters of any underwritten offering
of Registrable Securities) underwriters and other persons retained by the
Company in connection with such registration; (e) fees of transfer agents and
registrars; and (f) messenger and delivery expenses. In addition, the Company
shall pay its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any annual audit or quarterly review, the expense of any
liability insurance obtained by the Company, the expenses of one counsel for all
of the Holders with respect to the initial registration and with respect to each
underwritten offering pursuant to Article III, and the expenses and fees for
listing or authorizing for quotation the securities to be registered on each
securities exchange on which any shares of the Common Stock are then listed or
quoted.
V.
INDEMNIFICATION; CONTRIBUTION
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless each Holder, each of such Holder's officers and
directors and partners, and each of such Holder's legal counsel and independent
accountants, if any, and each person controlling any such persons within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
with respect to which registration, qualification or compliance has been
effected pursuant to this Agreement, and each underwriter, if any, and each
person who controls any underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs of
investigation, any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such claim, loss,
damage, liability or action, and any of the foregoing incurred in settlement of
any litigation, commenced or threatened) arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or prospectus contained therein or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or any violation by the Company of any rule or regulation promulgated under the
Securities Act or any state securities laws applicable to the Company and
relating to action or inaction by the Company in connection with any
registration, qualification or compliance required hereunder or arising out of
or based upon the Company's breach of any representation, warranty, covenant or
agreement contained in this Agreement; provided, however, that the Company shall
not be liable in any such case to the extent any of such losses, claims,
damages, liabilities or expenses arise out of, or are based upon, any such
untrue statement or omission or allegation thereof
- 8 -
<PAGE>
based upon information furnished in writing to the Company by such Holder, as
appropriate, expressly for use therein.
(b) INDEMNIFICATION BY HOLDERS. Each Holder severally agrees
to indemnify and hold harmless the Company, its directors and officers and each
person, if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company set forth above in (a), but only with
respect to information furnished in writing by such Holder, or on its behalf
expressly for use in the Registration Statement or prospectus relating to the
Registrable Securities, any amendment or supplement thereto or any preliminary
prospectus, under the heading "Selling Shareholders" and "Distribution" and
provided that the obligation of each Holder to indemnify will be several and not
joint. In case any action or proceeding shall be brought against the Company or
its directors or officers, or any such controlling person, in respect of which
indemnity may be sought against the Holder, the Holder shall have the rights and
duties given to the Company, and the Company or its directors or officers or
such controlling person shall have the rights and duties given to the Holder, by
the preceding subsection (a) hereof.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any action or
proceeding (including any governmental investigation) shall be brought or
asserted against any person entitled to indemnification under subsections (a) or
(b) above (an "Indemnified Party") in respect of which indemnity may be sought
from any party who has agreed to provide such indemnification (an "Indemnifying
Party"), the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to such Indemnified Party, and
shall assume the payment of all expenses. Such Indemnified Party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party unless (i) the Indemnifying Party has agreed
to pay such fees and expenses, or (ii) such Indemnified Party shall have been
advised by counsel that there is an actual or potential material conflict of
interest on the part of counsel employed by the Indemnifying Party to represent
such Indemnified Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that Indemnified Party elects to employ separate
counsel at the expense of the Indemnifying Party, the Indemnifying Party shall
not have the right to assume the defense of such action or proceeding on behalf
of such Indemnified Party; it being understood, however, that the Indemnifying
Party shall not, in connection with any one cause action or proceeding or
separate but substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for all such Indemnified
Parties, which firm shall be designated in writing by such Indemnified Parties).
The Indemnifying Party shall not be liable for any settlement of any such action
or proceeding or any threatened action or proceeding effected without its
written consent, but if settled with its written consent or if there be a final
judgment of the plaintiff in any such action or proceedings, the Indemnifying
Party shall indemnify and hold harmless such Indemnified Parties from and
against any loss or liability (to the extent stated above) by reason of such
settlement or judgment. The
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<PAGE>
failure of any Indemnified Party to give prompt notice of a claim for
indemnification hereunder shall not relieve the Indemnifying Party of its
obligations under this Agreement, unless such failure is prejudicial to the
ability of the Indemnifying Party to defend the action. No Indemnifying Party,
in the defense of any such claim or litigation, shall, except with the consent
of each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 5 is unavailable to the Indemnified Parties in respect of any losses,
claims, damages, liabilities or judgment referred to herein, then such
Indemnifying Party, in lieu of Indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, liabilities and judgments in the following
manner: as between the Company on the one hand and any Indemnified Party
entitled to indemnification under Section V(b) on the other, in such proportion
as is appropriate to reflect the relative fault of the Company on the one hand
and any Indemnified Party entitled to indemnification under Section V(b) on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative fault of the Company on the one hand and
of any Indemnified Party entitled to indemnification under Section V(b) on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such party,
and the party's relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. No person guilty
of fraudulent misrepresentation (within the means of subsection 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
(e) SURVIVAL. The indemnity and contribution agreements
contained in this Section 5 shall remain operative and in full force and effect
with respect to any sales of Registrable Securities made pursuant to the
Registration Statement regardless of (i) any termination of this Agreement, (ii)
any investigation made by or on behalf of any Indemnified Party or by or on
behalf of the Company, and (iii) the consummation of the sale or successive
resale of the Registrable Securities.
VI.
EXCHANGE RIGHTS
The Company shall give notice (the "Trigger Event Notice") to the
Holders of a Trigger Event (as defined in the Articles Supplementary to the
Charter of the Company adopted on _____ ___, 1996 (the "Articles
Supplementary")) within 30 days after the occurrence of such Trigger Event in
such form as the Articles Supplementary require that notice be given to holders
of Series B Preferred Stock. Thereafter, each Holder of shares of Class A Common
Stock issued upon conversion of such Holder's Series B Preferred Stock prior to
a Trigger Event shall
- 10 -
<PAGE>
have the right (the "Exchange Right") to exchange such Common Shares back into
the number of shares of Series B Preferred Stock for which such shares of Common
Stock were exchanged. Each Holder shall exercise the Exchange Right by giving a
notice (an "Exchange Notice") to the Company within 30 days following receipt of
the Trigger Event Notice, accompanied by certificates for the shares to be
exchanged. Within five business days after receipt of an Exchange Notice and
share certificates, the Company shall issue to the shareholder certificates
representing the number of shares of Series B Preferred Stock for which such
shares of Class A Common Stock represented by the certificates surrendered were
exchanged, together with such dividend payments or accruals as would have been
paid or accrued on such shares if they had been outstanding since the date of
the Trigger Event and such notices as were delivered to holders of Series B
Preferred Stock since the Trigger Event.
VII.
MISCELLANEOUS
(a) RULES 144 AND 144A. The Company covenants that following
the registration of Registrable Shares it will file any reports required to be
filed by it under the Securities Act and the Exchange Act so as to enable
Holders holding Registrable Shares to sell such Registrable Shares without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rules 144 and 144A under the Securities Act, as each such Rule
may be amended from time to time, or (ii) any similar rule or rules hereafter
adopted by the SEC. Upon the request of any such Holder, the Company will
forthwith deliver to such Holder a written statement as to whether it has
complied with such requirements.
(b) AMENDMENTS AND WAIVERS. The provision of this Agreement
may not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given other than as mutually
agreed upon in writing by the Company and the Holders of a majority of the
Registrable Securities.
(c) NOTICES. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand delivery, regular mail,
registered first-class mail, telex, fax or air courier guaranteeing overnight
delivery:
(i) if to the Company:
Sinclair Broadcast Group, Inc.
2000 W. 41st Street
Baltimore, Maryland 21211
Fax Number: (410) 467-5043
Attn: David B. Amy
- 11 -
<PAGE>
with copies to:
Thomas & Libowitz, P.A.
100 Light Street, Suite 1100
Baltimore, Maryland 21202
Fax Number: (410) 752-2046
Attn: Steven A. Thomas, Esq.
and
Wilmer, Cutler & Pickering
100 Light Street
Baltimore, Maryland 21202
Fax Number: (410) 986-2828
Attn: George P. Stamas, Esq. or John B. Watkins, Esq.
(ii) if to River City:
River City Broadcasting, L.P.
1215 Cole Street
St. Louis, Missouri 63106-3897
Fax Number: (314) 259-5709
Attn: Barry Baker
with a copy to:
Dow, Lohnes & Albertson
A Professional Limited Liability Company
1205 New Hampshire Avenue
Suite 800
Washington, D.C. 20036-6802
Fax Number: (202) 776-2222
Attn: John Byrnes
and
Baker & Botts, L.L.P.
2001 Ross Avenue
Dallas, Texas 75201
Fax Number: (214) 953-6503
Attn: Andrew Baker
- 12 -
<PAGE>
(iii) if to the other Holders, to their respective
addresses and fax numbers listed on the
signature pages hereto.
(d) SUCCESSORS AND ASSIGNS. No Holder may assign any rights or
benefits under this Agreement without prior written consent of the Company;
provided, that (i) River City may transfer Registrable Securities to its
partners (and the general partner of River City may further transfer Registrable
Securities to its stockholders), (ii) any Holder may transfer Registrable
Securities to any entity controlling, controlled by, or under common control
with such Holder, and (iii) any individual may transfer Registrable Securities
to any member of his immediate family (i.e., a spouse, child, stepchild, parent
or sibling), or to his or her heirs, executors or estate pursuant to the laws of
descent and distribution, and any such transferee shall retain the rights of the
transferor under this Agreement provided such transferee executes and becomes
bound by the terms of this Agreement, and each such transferee shall become a
Holder hereunder. The Company may not assign any rights or benefits under this
Agreement without prior written consent of the Holders of a majority of the
Registrable Securities. This Agreement shall inure to the benefit of and be
binding upon the permitted successors and assigns of the Company, River City and
the other Holders.
(e) COUNTERPARTS. This Agreement may be executed in a number
of identical counterparts and it shall not be necessary for the Company, River
City and the Partners to execute each of such counterparts, but when each has
executed and delivered one or more of such counterparts, the several parts, when
taken together, shall be deemed to constitute one and the same instrument,
enforceable against each in accordance with its terms. In making proof of this
Agreement, it shall not be necessary to produce or account for more than one
such counterpart executed by the party against whom enforcement of this
Agreement is sought.
(f) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAW.
(h) SEVERABILITY. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under present or further laws effective
during the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement.
- 13 -
<PAGE>
(i) ENTIRE AGREEMENT. This Agreement and the Asset Purchase
Agreement are intended by the Company and the Holders as final expression of
their agreement and is intended to be a complete and exclusive statement of
their agreement and understanding in respect of the subject matter contained
herein. This Agreement supersedes all prior agreements and understandings
between the Company, and Holders with respect to such subject matter.
(j) THIRD PARTY BENEFICIARIES. Other than Indemnified Parties
not a party hereto, this Agreement is intended for the benefit of the Company,
the Holders and their respective successors and assigns and is not for the
benefit of, nor may any provision hereof be enforced by, any other person or
entity.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
THE COMPANY:
SINCLAIR BROADCAST GROUP, INC.
By: /s/ David B. Amy
------------------------------
Name: David B. Amy
Title: Chief Financial Officer
RIVER CITY BROADCASTING, L.P.
By: Better Communications, Inc.,
its General Partner
By: /s/ Robert G. Quicksilver, VI
-------------------------------
Name: Robert G. Quicksilver
Title: Vice President
Signature Lines, Names, Addresses and Fax Numbers of other Holders To Appear
in Exhibit A, to be amended as provided herein.]
- 14 -
<PAGE>
EXHIBIT A
Schedule of Registration Rights Holders
- 15 -
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment. The omitted portions, marked by an * and [ ], have been
separately filed with the Commission.
TIME BROKERAGE AGREEMENT
for
KRRT (TV), KERRVILLE, TEXAS
Between
KRRT, INC.
and
RIVER CITY BROADCASTING, L.P.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
PAGE
<S> <C>
TIME BROKERAGE AGREEMENT..........................................................................................2
Section 1 Lease of Station Air Time......................................................................2
1.1 Representations. ......................................................................2
1.2 Term...................................................................................2
1.3 Scope..................................................................................2
1.4 Option to Renew........................................................................2
1.5 Consideration..........................................................................3
1.6 Licensee Operation of Station. ........................................................3
1.7 Licensee Representations, Warranties and Covenants. ...................................5
1.8 Programmer Responsibility..............................................................6
1.9 Contracts..............................................................................6
1.10 Use of Station's Studios...............................................................7
Section 2 Station Public Service Obligations.............................................................7
2.1 Licensee Authority.....................................................................7
2.2 Additional Licensee Obligations........................................................7
2.3 Regulatory Disputes....................................................................9
2.4 Responsibility for Employees and Expenses..............................................9
Section 3 Station Programming Policies..................................................................11
3.1 Broadcast Station Programming Policy Statement........................................11
3.2 Licensee Control of Programming.......................................................12
3.3 Programmer Compliance with Copyright Act..............................................12
3.4 Sales. ...............................................................................12
3.5 Children's Television Advertising.....................................................13
3.6 Payola. ..............................................................................13
3.7 Cooperation on Programming............................................................13
Section 4 Indemnification...............................................................................14
4.1 Programmer's Indemnification..........................................................14
4.2 Licensee's Indemnification............................................................15
4.3 Procedure.............................................................................15
4.4 Time Brokerage Challenge..............................................................15
Section 5 Access to Programmer Materials and Correspondence.............................................16
5.1 Confidential Review...................................................................16
5.2 Political Advertising.................................................................16
Section 6 Termination and Remedies Upon Default.........................................................17
6.1 Right of Termination..................................................................17
6.2 Termination Requirements and Procedures...............................................18
6.3 Force Majeure.........................................................................18
Section 7 Miscellaneous.................................................................................19
7.1 Assignment. .........................................................................19
i
<PAGE>
7.2 Call Letters. .......................................................................19
7.3 Counterparts. ........................................................................19
7.4 Entire Agreement......................................................................19
7.5 Taxes.................................................................................19
7.6 Headings. ............................................................................20
7.7 Governing Law. .......................................................................20
7.8 Notices. .............................................................................20
7.9 Invalidity. ..........................................................................22
7.10 Mandatory Carriage/Retransmission Consent Election. ..................................22
ii
</TABLE>
<PAGE>
Table of Attachments
--------------------
Attachment 1.5 Schedule of Operating Expenses and Other
Payments by Programmer
Attachment 1.9 Programming Contracts Assumed
Attachment 3.1 Broadcast Station Programming Policy
Statement
Attachment 3.6 Payola Affidavit
iii
<PAGE>
TIME BROKERAGE AGREEMENT
------------------------
TIME BROKERAGE AGREEMENT, made this 3 day of August, 1995, by and between
KRRT, Inc., a Texas corporation (the "Licensee") and River City Broadcasting,
L.P., a Delaware limited partnership (the "Programmer").
WHEREAS Licensee has acquired Television Station KRRT(TV) , Kerrville,
Texas (the "Station") from Paramount Stations Group of Kerrville Inc. and
Paramount Stations Group Inc.;
WHEREAS Programmer is experienced in television station ownership and
operation and is the licensee of Television Station KABB(TV), San Antonio,
Texas;
WHEREAS Licensee wishes to retain Programmer to provide programming for the
Station that is in conformity with Station policies and procedures, Federal
Communications Commission ("FCC") policies for time brokerage arrangements, and
the provisions hereof;
WHEREAS Programmer agrees to use the Station exclusively to broadcast such
programming of its selection that is in conformity with all rules, regulations
and policies of the FCC, subject to Licensee's full authority to manage and
control the operation of the Station; and
WHEREAS Programmer and Licensee agree to cooperate to make this Time
Brokerage Agreement work to the benefit of the public and both parties and as
contemplated in this Agreement;
<PAGE>
NOW, THEREFORE, in consideration of the above recitals and mutual promises
and covenants contained herein, the parties, intending to be legally bound,
agree as follows:
Section 1
---------
Lease of Station Air Time
1.1 Representations. Both Licensee and Programmer represent
that they are legally qualified, empowered and able to enter into this
Agreement.
1.2 Term. This Agreement shall be in force from and after the
date hereof for a period of five (5) years unless otherwise extended or
terminated as set forth below.
1.3 Scope. During the term of this Agreement and any renewal
thereof, Licensee shall make available to Programmer time on the Station as set
forth in this Agreement. Programmer shall deliver such programming, at its
expense, to the Station's transmitter facilities or other authorized remote
control points as reasonably designated by Licensee. Subject to Licensee's
reasonable approval, as set forth in this Agreement, and subject to Sections
2.1, 2.2, 3.1 and 3.2 hereof, Programmer shall provide programming of its
selection complete with commercial matter, news, public service announcements
and other suitable programming to the Licensee up to one hundred sixty-two hours
per week. Notwithstanding the foregoing, the Licensee may use such time as it
may need to serve the public interest through the broadcast of its own regularly
scheduled programming. The schedule of broadcast time reserved by Licensee may
vary on a weekly basis and will be established by mutual agreement between
Licensee and Programmer.
1.4 Option to Renew. Subject to the rights of Licensee and
Programmer to terminate this Agreement pursuant to Section 6 hereof, Programmer
shall have the right to extend the initial term of this Agreement for one
additional term of five years upon sixty (60) days' written notice to Licensee
prior to the expiration of such term.
2
<PAGE>
1.5 Consideration. As consideration for the air time made
available during the term hereof and any renewal periods, Programmer shall make
payments to Licensee as set forth in Attachment 1.5.
1.6 Licensee Operation of Station. Licensee will have full
authority, power and control over the management and operations of the Station
during the initial term of this Agreement and during any renewal of such term.
Licensee will bear all responsibility for Station's compliance with all
applicable provisions of the Communications Act of 1934, as amended ("the Act"),
the rules, regulations and policies of the FCC and all other applicable laws.
Licensee shall be solely responsible for and pay in a timely manner all
operating costs of the Station, including but not limited to the expenses listed
on Attachment 1.5, which shall include the costs of maintenance of the studio
and transmitting facility and costs of electricity, provided that Programmer
shall be responsible for the costs of its programming as provided in Sections
1.8 and 2.3 hereof. Licensee shall employ at its expense management level or
other employees consisting of, at a minimum, a General Manager and another
employee, who will direct the day-to-day operations of the Station, and who will
report to and be accountable to the Licensee. Licensee shall be responsible for
the salaries, taxes, insurance and related costs for all personnel employed by
Licensee and shall maintain its eligibility for insurance satisfactory to
Programmer covering the Station's studios, offices and transmission facilities.
During the initial term of the Agreement and any renewal hereof, Programmer
agrees to perform, without charge, routine monitoring of the Station's
transmitter performance and tower lighting, if and when requested by Licensee.
3
<PAGE>
1.7 Licensee Representations, Warranties and Covenants.
Licensee represents and warrants as follows:
(a) During the term of this Agreement and any renewal
thereof, Licensee will hold all licenses and other permits and authorizations
necessary for the operation of the Station, and such licenses, permits and
authorizations are and will be in full force and effect throughout the term of
this Agreement and any renewal thereof. There is not pending, or to Licensee's
best knowledge, threatened, any action by the FCC or by any other party to
revoke, cancel, suspend, refuse to renew or modify adversely any of such
licenses, permits or authorizations. To the best of Licensee's knowledge,
Licensee is not in violation of any statute, ordinance, rule, regulation,
policy, order or decree of any federal, state or local entity, court or
authority having jurisdiction over it or the Station, which would have an
adverse effect upon the Licensee, its assets, the Station or upon Licensee's
ability to perform this Agreement. Licensee shall not take any action or omit to
take any action which would have an adverse impact upon the Licensee, its
assets, the Station or upon Licensee's ability to perform this Agreement. All
reports and applications required to be filed with the FCC or any other
governmental body during the course of the initial term of this Agreement or any
renewal thereof, will be filed in a timely and complete manner. The facilities
of the Station will be maintained in accordance with good engineering practice
and will comply in all material respects with the engineering requirements set
forth in the FCC authorizations, permits and licenses for the Station, and
Licensee will ensure that the Station broadcasts a high quality signal to its
service area (except at such time where reduction of power is required for
routine or emergency maintenance). Licensee, throughout the term of this
Agreement and any renewal thereof, will maintain good and marketable title to
all of the assets and properties used and useful in the operation of the
Station. During the term of this Agreement and any renewal thereof, Licensee
shall not dispose of, transfer, assign or pledge any of such assets and
properties except with the prior written consent of the Programmer, if such
action would adversely affect Licensee's performance hereunder or the business
and
4
<PAGE>
operations of Licensee or the Station permitted hereby.
(b) Licensee shall pay, in a timely fashion, all of the
expenses incurred in operating the Station including lease payments, utilities,
taxes, etc., as set forth in Attachment 1.5, and shall provide Programmer with a
certificate of such timely payment within thirty (30) days of the end of each
month.
1.8 Programmer Responsibility. Programmer shall be solely
responsible for all expenses attributable to its programming on the Station,
including but not limited to any expenses incurred in the origination and/or
delivery of programming from any remote location and for any publicity or
promotional expenses incurred by Programmer, including, without limitation,
ASCAP, BMI and SESAC music license fees for all programming provided by
Programmer. Such payments by Programmer shall be in addition to any other
payments to be made by Programmer under this Agreement, including those required
to be made pursuant to Attachment 1.5.
1.9 Contracts. Programmer will assume Licensee's rights and
obligations under the contracts listed on Attachment 1.9 hereto. Programmer will
not assume any of Licensee's other contracts or leases. Programmer will enter
into no third-party contracts, leases or agreements which will bind Licensee in
any way except with Licensee's prior written approval.
1.10 Use of Station's Studios. Subject to Licensee's own
programming needs, Licensee agrees to provide Programmer with access to the
Station's complete facilities including the studios and broadcast equipment for
use by Programmer, if it so desires, in providing programming for the Station.
Subject to the overall supervision by Licensee and its employees, Programmer
shall and may peacefully and quietly have the full use of and enjoy the use of
the Station's facilities, studios and equipment free from any hindrance from any
person or persons whomsoever claiming by, through or under Licensee. Unless
otherwise permitted by the Licensee and subject to the overall supervision of
Licensee, Programmer shall use the studios and equipment only for the purpose of
producing
5
<PAGE>
programming for the Station.
Section 2
---------
Station Public Service Obligations
2.1 Licensee Authority. Notwithstanding any other provision of
this Agreement, Programmer recognizes that Licensee has certain obligations to
operate the Station in the public interest, and to broadcast programming to meet
the needs and interests of its community of license, the Station's service area
and the educational and informational needs of children. From time to time the
Licensee shall air, or shall require Programmer to air, programming on issues of
importance to the local community and educational and informational programming
for children aged 16 years and younger. Nothing in this Agreement shall abrogate
the unrestricted authority of the Licensee to discharge its obligations to the
public and to comply with the Act and the rules and policies of the FCC.
2.2 Additional Licensee Obligations.
(a) Although both parties shall cooperate in the
broadcast of emergency information over the Station, Licensee shall also retain
the right to interrupt Programmer's programming in case of an emergency or for
programming which, in the good faith judgment of Licensee, is of greater local
or national public importance.
(b) Licensee shall also coordinate with Programmer the
Station's hourly station identification and any other announcements required to
be aired by FCC rules.
(c) Licensee and Programmer shall cooperate in ensuring
compliance with the FCC's rules and requirements governing uses of the Station's
facilities by legally qualified candidates for public office, including
Licensee's obligation to provide reasonable access to legally qualified federal
candidates. Programmer will provide Licensee with copies of any material setting
forth terms and/or conditions for the availability of political advertising time
on the Station in advance of public dissemination of such material so that
Licensee may provide its input as to such material.
6
<PAGE>
(d) Licensee shall (i) continue to maintain and staff a
main studio, as that term is defined by the FCC, within the Station's principal
community contour, (ii) maintain its local public inspection file within
Kerrville, Texas, and (iii) prepare and place in such inspection file or files
in a timely manner all material required by Section 73.3526 of the FCC's Rules,
including without limitation the Station's quarterly issues and program lists;
information concerning the broadcast of children's educational and informational
programming; and documentation of compliance with commercial limits applicable
to certain children's television programming. Programmer shall, upon request by
Licensee, provide Licensee with such information concerning Programmer's
programs and advertising as is necessary to assist Licensee in the preparation
of such information or to enable Licensee to verify independently the Station's
compliance with the Children's Television Act or any other laws, rules,
regulations or policies applicable to the Station's operation.
(e) Programmer agrees to provide to Licensee such
information as Licensee may request concerning Programmer's recruitment, hiring
or employment practices in connection with Programmer's provision of programming
to the Station.
(f) Licensee shall also maintain the station logs,
receive and respond to telephone inquiries, control and oversee any remote
control point for the Station.
2.3 Regulatory Disputes. In the event of a dispute between
Licensee and Programmer as to whether any aspect of the Station's operation
violates the Communications Act of 1934, as amended, or any applicable rule,
regulation or policy of the FCC, Licensee and Programmer will jointly select one
or more persons qualified to mediate the dispute. Programmer and Licensee will
pay for the fees of a communications attorney and/or engineer to advise the
mediator, if such services are necessary. Programmer and Licensee recognize that
the views of any such mediator are merely advisory, that Licensee retains the
ultimate decision making authority over regulatory compliance matters, and that
Licensee has the right to require that Programmer cure any violation of the
Communications Act of 1934,
7
<PAGE>
as amended, or the rules, regulations and policies of the FCC at the earliest
practical opportunity.
2.4 Responsibility for Employees and Expenses. Programmer
shall employ and be solely responsible for the salaries, taxes, insurance and
related costs for all personnel used in the sale of commercial advertising time
and the production of Programmer's programming (including salespeople, traffic
personnel, board operators and programming staff). Licensee will provide and be
responsible for the Station personnel necessary for the broadcast transmission
of Programmer's programs (including, without limitation, the Station's General
Manager and other employee), and will be responsible for the salaries, taxes,
insurance and related costs for all the Station personnel used in the broadcast
transmission of Programmer's programs and necessary to
8
<PAGE>
other aspects of Station operation. Whenever on the Station's premises, all
employees of Programmer shall be subject to the overall supervision of
Licensee's General Manager and/or other employee.
Section 3
---------
Station Programming Policies
3.1 Broadcast Station Programming Policy Statement. Licensee
has adopted a Broadcast Station Programming Policy Statement (the "Policy
Statement"), a copy of which appears as Attachment 3.1 hereto and which may be
amended from time to time by Licensee upon notice to Programmer. Programmer
agrees and covenants to comply in all material respects with the Policy
Statement, with all rules and regulations of the FCC, and with all changes
subsequently made by Licensee or the FCC. Programmer shall furnish or cause to
be furnished the artistic personnel and material for the programs as provided by
this Agreement and all programs shall be prepared and presented in conformity
with the rules, regulations and policies of the FCC and with Policy Statement
set forth in Attachment 3.1 hereto. All advertising spots and promotional
material or announcements shall comply with applicable federal, state and local
regulations and policies and the Policy Statement, and shall be produced in
accordance with quality standards established by Programmer. If Licensee
determines that a program, commercial announcement or promotional material
supplied by Programmer is for any reason, with Licensee's sole discretion,
unsatisfactory or unsuitable or contrary to the public interest, or does not
comply with the Policy Statement it may, upon written notice to Programmer (to
the extent time permits such notice), suspend or cancel such program, commercial
announcement or
9
<PAGE>
promotional material and substitute its own programming or require Programmer to
provide suitable programming, commercial announcement or other announcement or
promotional material.
3.2 Licensee Control of Programming. Programmer recognizes
that Licensee has full authority to control the operation of the Station. The
parties agree that Licensee's authority includes but is not limited to the right
to reject or refuse such portions of the Programmer's programming which Licensee
believes to be contrary to the public interest. Programmer shall have the right
to change the programming supplied to Licensee and shall give Licensee at least
twenty-four (24) hours notice of substantial and material changes in such
programming. Licensee and Programmer will cooperate in an effort to avoid
conflicts regarding programming on the Station.
3.3 Programmer Compliance with Copyright Act. Programmer
represents and warrants to Licensee that Programmer has full authority to
broadcast its programming on the Station and that Programmer shall not broadcast
any material in violation of the Copyright Act. All music supplied by Programmer
shall be: (i) licensed by ASCAP, SESAC or BMI; (ii) in the public domain; or
(iii) cleared at the source by Programmer. Licensee will maintain ASCAP, BMI and
SESAC licenses as necessary. The right to use the programming and to authorize
its use in any manner shall be and remain vested in Programmer.
3.4 Sales. Programmer shall retain all of the Station's
network compensation revenues, any promotion-related revenues received from any
network or program supplier with respect to affiliation or any particular
program, retransmission consent revenues and all revenues from the sale of
advertising time within the programming it provides to the Licensee. Programmer
may sell advertising on the Station in combination with any other broadcast
stations of its choosing. Programmer shall be responsible for payment of the
commissions due to any national sales representative engaged by it for the
purpose of selling national advertising which is carried during the programming
it provides to Licensee. Unless otherwise agreed between the parties, Licensee
shall retain all revenues from the sale of Station's
10
<PAGE>
advertising during its own programming, with the exception provided for certain
political advertising as set forth in Section 5.2 herein. Licensee and
Programmer each shall have the right, at their own expense, to seek copyright
royalty payments for their own programming.
3.5 Children's Television Advertising. Programmer agrees that
it will not broadcast advertising in programs originally designed for children
aged 12 years and under in excess of the amounts permitted under applicable FCC
rules.
3.6 Payola. Programmer agrees that it will not accept, and
will not permit any of its employees to accept, any consideration, compensation,
gift or gratuity of any kind whatsoever, regardless of its value or form,
including, but not limited to, a commission, discount, bonus, material, supplies
or other merchandise, services or labor (collectively "Consideration"), whether
or not pursuant to written contracts or agreements between Programmer and
merchants or advertisers, unless the payer is identified in the program for
which Consideration was provided as having paid for or furnished such
Consideration, in accordance with the Act and FCC requirements. Programmer
agrees to annually, or more frequently at the request of the Licensee, execute
and provide Licensee with a Payola Affidavit, substantially in the form attached
hereto as Attachment 3.6.
3.7 Cooperation on Programming. Programmer and Licensee
mutually acknowledge their interest in ensuring that the Station serves the
needs and interests of the residents of Kerrville, Texas and the surrounding
service area and agree to cooperate in doing so. Licensee shall, on a regular
basis, assess the issues of concern to residents of Kerrville and the
surrounding area and address those issues in its public service programming.
Licensee shall describe those issues and responsive programming and place
issues/programs lists in the Station's public inspection file as required by FCC
rules. Further, Licensee may request, and Programmer shall provide, information
concerning such of Programmer's programs as are responsive to community issues
so as to assist Licensee in the satisfaction of its public service programming
obligations. Licensee shall also evaluate the local need for children's
educational
11
<PAGE>
and informational programming and shall inform Programmer of its conclusions in
that regard. Licensee, in cooperation with Programmer, will ensure that
educational and informational programming for children aged 16 years and younger
is broadcast over Station in compliance with applicable FCC requirements.
Programmer shall also provide Licensee upon request such other information
necessary to enable Licensee to prepare records and reports required by the
Commission or other local, state or federal government entities.
Section 4
---------
Indemnification
4.1 Programmer's Indemnification. Programmer shall indemnify
and hold harmless Licensee from and against any and all claims, losses, costs,
liabilities, damages, expenses, including any FCC fines or forfeitures
(including reasonable legal fees and other expenses incidental thereto) of every
kind, nature and description, including but not limited to, slander or
defamation or otherwise arising out of Programmer's broadcasts and sale of
advertising time under this Agreement and the actions and conduct of
Programmer's employees acting under this Agreement and financing agreements with
Programmer's lenders to the extent permitted by law.
4.2 Licensee's Indemnification. Licensee shall indemnify and
hold harmless Programmer from and against any and all claims, losses, costs,
liabilities, damages, expenses, including any FCC fines or forfeitures
(including reasonable legal fees and other expenses incidental thereto) of every
kind, nature and description, arising out of broadcasts originated by Licensee
pursuant to this Agreement (except insofar as such liability arises from
Programmer's gross negligence or willful misconduct) to the extent permitted by
law.
4.3 Procedure. Neither Licensee nor Programmer shall be
entitled to indemnification pursuant to this section unless such claim for
indemnification is asserted in writing delivered to the other party, together
with a statement as to the factual basis for the claim and the amount of the
claim. The
12
<PAGE>
party making the claim (the "Claimant") shall make available to the other party
(the "Indemnitor") the information relied upon by the Claimant to substantiate
the claim. With respect to any claim by a third party as to which the Claimant
is entitled to seek indemnification hereunder, the Indemnitor shall have the
right at its own expense to participate in or assume control of the defense of
the claim, and the Claimant shall cooperate fully with the Indemnitor, subject
to reimbursement for actual out-of-pocket expenses incurred by the Claimant at
the request of the Indemnitor. If the Indemnitor does not elect to assume
control or participate in the defense of any third party claim, it shall be
bound by the results obtained by the Claimant with respect to the claim.
4.4 Time Brokerage Challenge. If this Agreement is challenged
at the FCC or in another administrative or judicial forum, whether or not in
connection with the Station's license renewal application, counsel for the
Licensee and counsel for the Programmer shall jointly defend the Agreement and
the parties, performance thereunder throughout all such proceedings. If portions
of this Agreement do not receive the approval of the FCC Staff, then the parties
shall reform the Agreement as necessary to satisfy the FCC Staff's concerns or
seek reversal of the Staff's decision and approval from the full Commission on
appeal.
Section 5
---------
Access to Programmer Materials and Correspondence
5.1 Confidential Review. Prior to the broadcast of any
programming by Programmer on the Station under this Agreement, Programmer shall
acquaint Licensee, upon request, with the nature and type of the programming to
be provided. Licensee shall be entitled to review at its discretion from time to
time on a confidential basis any of Programmer's programming material it may
reasonably request. Programmer shall promptly provide Licensee with copies of
all correspondence and complaints received from the public (including any
telephone logs of complaints called in), copies of all program logs and
promotional materials. However, nothing in this section shall entitle Licensee
to review the
13
<PAGE>
internal corporate or financial records of Programmer.
5.2 Political Advertising. Programmer shall cooperate with
Licensee to assist Licensee in complying with all rules of the FCC regarding
political broadcasting. Licensee shall promptly supply to Programmer, and
Programmer shall promptly supply to Licensee, such information, including all
inquiries concerning the broadcast of political advertising, as may be necessary
to comply with FCC rules and policies, including the lowest unit rate, equal
opportunities, reasonable access, political file and related requirements of
federal law. Licensee, in consultation with Programmer, shall develop a
statement which discloses its political broadcasting policies to political
candidates, and Programmer shall follow those policies in the sale of political
programming and advertising. In the event that Programmer fails to satisfy the
political broadcasting requirements under the Act and the rules and regulations
of the FCC and such failure inhibits Licensee in its compliance with the
political broadcasting requirements of the FCC, then to the extent reasonably
necessary to assure such compliance, Programmer shall either provide rebates to
political advertisers or release advertising availabilities to Licensee.
Section 6
---------
Termination and Remedies Upon Default
6.1 Right of Termination. In addition to other remedies
available at law or equity, and subject to the requirements of Section 6.2, this
Agreement may be terminated as set forth below by either Licensee or Programmer
by written notice to the other if the party seeking to terminate is not then in
material default or breach hereof, upon the occurrence of any of the following:
(a) by either party upon six (6) months, written
notice to the other party;
(b) this Agreement is declared invalid or illegal in
whole or substantial part by an order or decree of an administrative agency or
court of competent jurisdiction and such order or decree has become final and no
longer subject to further administrative or judicial review;
(c) the other party is in material breach of its
obligations hereunder and has
14
<PAGE>
failed to cure such breach within thirty (30) days of notice from the
non-breaching party;
(d) the mutual consent of both parties; or
(e) there has been a material change in FCC rules,
policies or precedent that would cause this Agreement to be in violation thereof
and such change is in effect and not the subject of an appeal or further
administrative review, provided that in such event the parties shall first
negotiate in good faith and attempt to agree on an amendment to this Agreement
that will provide the parties with a valid, binding and enforceable agreement
that conforms to the new FCC rules, policies or precedent.
6.2 Termination Requirements and Procedures.
(a) If either party exercises its termination right
under Section 6.1(a), such party shall pay the other party on the effective date
of termination the sum of One Million Dollars ($1,000,000).
(b) Subject to Section 6.1(a), and unless otherwise
mutually agreed by Programmer and Licensee, any termination of this Agreement
shall become effective sixty (60) days after notice of termination is provided
by Programmer or Licensee pursuant to Section 6.1.
6.3 Force Majeure. Any failure or impairment of the Station's
facilities or any delay or interruption in the broadcast of programs, or failure
at any time to furnish facilities, in whole or in part, for broadcast, due to
Acts of God, strikes, lockouts, material or labor restrictions by any
governmental authority, civil riot, floods and any other cause not reasonably
within the control of Licensee, shall not constitute a breach of this Agreement
and Licensee will not be liable to Programmer.
Section 7
---------
Miscellaneous
7.1 Assignment. This Agreement shall be binding upon and inure
to the benefit of the parties hereto, their successors and assigns. Neither
party may assign its rights and obligations under this Agreement without the
prior written consent of the other party, such consent not to be unreasonably
15
<PAGE>
withheld. In the event of such an assignment or succession in accordance with
this Agreement, all references herein to Programmer or Licensee, as the case may
be, shall be deemed to refer to such assignee or successor.
7.2 Call Letters. Licensee will consider any reasonable
request by Programmer to change the call letters of the Station, it being
understood and agreed that Licensee will be responsible for paying all costs
associated with any such change in call letters.
7.3 Counterparts. This Agreement may be executed in one or
more counterparts, each of which will be deemed an original but all of which
together will constitute one and the same instrument.
7.4 Entire Agreement. This Agreement and the Attachments
hereto embody the entire agreement and understanding of the parties and
supersede any and all prior agreements, arrangements and understandings relating
to matters provided for herein. No amendment, waiver of compliance with any
provision or condition hereof, or consent pursuant to this Agreement will be
effective unless evidenced by an instrument in writing signed by the parties.
7.5 Taxes. Licensee and Programmer shall each pay their own ad
valorem taxes, if any, which may be assessed on such party's respective personal
property for the periods that such items are owned by such party, provided that
such ad valorem taxes assessed on Licensee's personal property used for the
operation of the Station shall be included on Attachment 1.6. Programmer shall
pay all taxes, if any, to which the consideration specified in Section 1.5
herein is subject, provided that Licensee is responsible for payment of its own
income taxes.
7.6 Headings. The headings are for convenience only and will
not control or affect the meaning or construction of the provisions of this
Agreement.
7.7 Governing Law. The obligations of Licensee and Programmer
are subject to
16
<PAGE>
applicable federal, state and local law, rules and regulations, including, but
not limited to, the Act and the Rules and Regulations of the FCC. The
construction and Performance of the Agreement will be governed by the laws of
the State of Texas.
7.8 Notices. Any notice, demand or request required or
permitted to be given under the provisions of the Agreement shall be in writing
and shall be deemed to have been duly delivered on the date of personal delivery
or on the date of receipt if mailed by registered or certified mail, postage
prepaid and return receipt requested, or if delivered by overnight courier, and
shall be deemed to have been received on the date of personal delivery or on the
date set forth on the return receipt, to the following addresses, or to such
other address as any party may request, in the case of Licensee, by notifying
Programmer, and in the case of Programmer, by notifying Licensee.
To Programmer:
--------------
River City Broadcasting, L.P.
1215 Cole Street
St. Louis, Missouri 63106
Attention: Mr. Larry Marcus
Copy to:
--------
Dow, Lohnes & Albertson
1255 23rd Street, N.W. Suite 500
Washington, DC 20037
Attention: Kevin F. Reed, Esq.
To Licensee:
------------
KRRT, Inc.
Station WJET-TV
8455 Peach Street
Erie, Pennsylvania 16509
Attention: John Kanzius
17
<PAGE>
Copies to:
----------
Reddy, Begley & Martin
1001 22nd Street, N.W.
Washington, D.C. 20037
Attention: Dennis F. Begley
7.9 Invalidity. If any provision of this Agreement or the
application thereof to any person or circumstances shall be held invalid or
unenforceable to any extent, the parties shall negotiate in good faith and
attempt to agree on an amendment to this Agreement that will provide the parties
with substantially the same rights and obligations, to the greatest extent
possible, as the original Agreement in valid, binding and enforceable form.
7.10 Mandatory Carriage/Retransmission Consent Election.
Licensee shall consult with Programmer prior to making any election of mandatory
carriage rights or retransmission consent pursuant to Section 76.64 of the FCC's
Rules and the provisions of the Cable Television Consumer Protection and
Competition Act of 1992.
18
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement the day and year first above written.
LICENSEE:
---------
By: /s/ Marvin Jones
------------------------
Marvin Jones
CEO
PROGRAMMER:
-----------
RIVER CITY BROADCASTING, L.P.
By: BETTER COMMUNICATIONS, INC., General Partner
By: /s/ Larry D. Marcus
-----------------------------
Larry D. Marcus
Vice President
19
<PAGE>
The informaion, below marked by * and [ ], has been omitted pursuant to a
request for confidential treatment. The omitted portions have been separately
filed with the Commission.
ATTACHMENT 1.5
During the term of the Time Brokerage Agreement and any renewal
thereof, programmer will pay to Licensee a monthly payment (the "LMA Payment")
equal to the sum of: (i) an amount (the "Base Payment") representing the
estimated cost (as per Schedule A attached hereto) to Licensee of operating the
Station for the month following the month in which the LMA Payment is due, and
(ii) the amount (the "Loan Payment") of principal and/or interest due by
Licensee to Bank of Montreal, as Agent, under the terms of that certain Credit
Agreement dated as of August 3. 1995 between Licensee and the Lenders thereto,
which amount is estimated per Schedule B attached hereto, The initial LMA
Payment of [*******] per Schedule A and Schedule B shall be made on the date of
execution hereof, Thereafter, the LMA Payment, together with the Licensee Fee,
as hereinafter defined, if applicable, shall be made on or before the last
business day of each month commencing August 31, 1995. The Base Payment shall be
adjusted periodically by the parties in good faith to reflect: (i) changes in
the Station's operating costs, and (ii) capital expenditures reasonably
necessary for the continuation of the Station's broadcast signal, so that
Licensee will recover all of its expenses and capital expenditures relating to
operations of the Station.
In addition to the LMA Payment, during the initial 18 months of the
term of the Time Brokerage Agreement, Programmer will pay to Licensee an advance
monthly payment (the "Licensee Fee") of Fifty- Five Thousand Five Hundred
Fifty-Five Dollars ($55,555). During the renewal period the Licensee Fee will be
Eight Thousand Three Hundred Thirty-Four Dollars ($8,334) per month, The
Licensee Fee shall be payable on the same dates that the LMA Payments are due,
commencing the date hereof.
Notwithstanding anything in the Time Brokerage Agreement or this
Attachment 1.5 to the contrary, Programmer's obligation to pay the Licensee Fee
to Licensee shall survive the termination of the Time Brokerage Agreement by
Programmer pursuant to Section 6,1(a) thereof or by Licensee pursuant to Section
6.1(c) thereof, but shall cease upon any other termination of the Time Brokerage
Agreement.
This compensation schedule is based upon the Programmer having
exclusive rights to provide programming on the Station for the entirety of the
airtime not reserved for Licensee pursuant to Section 1.3.
20
<PAGE>
The information, below marked by * and [ ], has been omitted pursuant to a
request for confidential treatment. The omitted portions have been separately
filed with the Commission.
River City Broadcasting
KRRT LMA
Attachment 1.5 Schedule A
LMA Payment Schedule
<TABLE>
<CAPTION>
Expenses Category 1st Pmt Estimated Estimated
Amount Aug-Dec 1995 Jan-Dec 1996 Jan-Dec 1997
-------- ------------ ------------ ---------
<S> <C> <C> <C> <C>
Salaries [*****] [*****] [*****] [*****]
Payroll Taxes [*****] [*****] [*****] [*****]
Employee Benefits [*****] [*****] [*****] [*****]
Transmitter R & M [*****] [*****] [*****] [*****]
Legal & Accounting [*****] [*****] [*****] [*****]
Insurance [*****] [*****] [*****] [*****]
FCC License Fee [*****] [*****] [*****] [*****]
Utilities [*****] [*****] [*****] [*****]
Studio rental [*****] [*****] [*****] [*****]
Office / Entertainment Expenses [*****] [*****] [*****] [*****]
Rating Service [*****] [*****] [*****] [*****]
Program Payments* [*****] [*****] [*****] [*****]
Total Operating LMA Payment [*****] [*****] [*****] [*****]
Interest Payments [*****] [*****] [*****] [*****]
Principal Payments [*****] [*****] [*****] [*****]
JJK Licensee Fee [*****] [*****] [*****] [*****]
Total LMA Payments $ 128,213 1,565,912 6,353,584 7,131,770
</TABLE>
<TABLE>
<CAPTION>
Expenses Category Estimated Estimated Estimated
(continued) Jan-Dec 1998 Jan-Dec 1999 Jan-Dec 2000
------------ ------------ ---------
<S> <C> <C> <C>
Salaries [*****] [*****] [*****]
Payroll Taxes [*****] [*****] [*****]
Employee Benefits [*****] [*****] [*****]
Transmitter R & M [*****] [*****] [*****]
Legal & Accounting [*****] [*****] [*****]
Insurance [*****] [*****] [*****]
FCC License Fee [*****] [*****] [*****]
Utilities [*****] [*****] [*****]
Studio rental [*****] [*****] [*****]
Office / Entertainment Expenses [*****] [*****] [*****]
Rating Service [*****] [*****] [*****]
Program Payments* [*****] [*****] [*****]
Total Operating LMA Payment [*****] [*****] [*****]
Interest Payments [*****] [*****] [*****]
Principal Payments [*****] [*****] [*****]
JJK Licensee Fee [*****] [*****] [*****]
Total LMA Payments $ 7,487,069 7,767,350 5,594,589
</TABLE>
* May be adjusted to the extent in which existing program contracts are assigned
to RCB.
21
<PAGE>
River City Broadcasting
Attachment 1.5 Schedule B
KRRT, Inc.
21,000,000 Principal @ 8.5% Interest
Monthly Amortization and Interest Payments
<TABLE>
<CAPTION>
Year Jan Feb Mar Apr May Jun Jul
- -------- ------------- --------------- ------------ ------------ ----------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
0 Aug 3-Dec
95
Int @ 8.5%
1 Jan-Dec 96
Debt Amort 166,667 166,667 166,667 166,667 166,667 166,667 166,667
Int @ 8.5% 148,750 147,569 146,369 145,206 144,028 142,847 141,667
--------------- ------------ ------------ ----------- ------------ ----------- -----------
Total Pays 315,417 314,238 313,056 311,875 310,694 309,514 308,333
2 Jan-Dec 97
Debt Amort 333,333 333,333 333,333 333,333 333,333 333,333 333,333
Int @ 8.5% 134,583 132,222 129,861 127,500 125,778 122,778 120,417
--------------- ------------ ------------ ----------- ------------ ----------- -----------
Total Pays 467,917 465,556 463,194 460,833 458,472 456,111 453,750
3 Jan-Dec 98
Debt Amort 416,667 416,667 416,667 416,667 416,667 416,667 416,667
Int @ 8.5% 106,250 103,229 100,347 97,444 94,444 91,493 88,542
--------------- ------------ ------------ ----------- ------------ ----------- -----------
4 Jan-Dec 99
Debt Amort 483,333 483,333 483,333 483,333 483,333 483,333 483,333
Int @ 8.5% 70,833 67,410 63,986 60,583 57,139 53,715 50,292
--------------- ------------ ------------ ----------- ------------ ----------- -----------
Total 554,167 550,743 547,319 543,896 540,472 537,049 533,625
5 Jan-Dec 00
Debt Amort 350,000 350,000 350,000 350,000 350,000 350,000 350,000
Int @ 8.5% 29,750 27,271 24,792 22,313 19,833 17,354 14,875
--------------- ------------ ------------ ----------- ------------ ----------- -----------
Total Pays 379,750 377,271 374,792 372,313 309,833 367,354 384,875
</TABLE>
<TABLE>
<CAPTION>
Year Aug Sep Oct Nov Dec Annual
- -------- ----------- ----------- ----------- ----------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
0 Aug 3-Dec
95 139,153 148,750 148,750 148,750 148,750 734,153
Int @ 8.5%
1 Jan-Dec 96
Debt Amort 166,667 166,667 166,667 166,667 166,667 2,000,000
Int @ 8.5% 140,466 139,306 138,125 136,944 135,764 1,707,083
----------- ----------- ----------- ----------- ---------- ------------
Total Pays 307,153 304,972 304,792 303,611 302,431 3,707,083
2 Jan-Dec 97
Debt Amort 333,333 333,333 333,333 333,333 333,333 4,000,000
Int @ 8.5% 118,056 115,084 113,333 110,972 108,611 1,459,167
----------- ----------- ----------- ----------- ---------- ------------
Total Pays 451,389 449,028 446,667 444,306 441,944 5,459,167
3 Jan-Dec 98
Debt Amort 416,667 416,667 416,667 416,667 416,667 5,000,000
Int @ 8.5% 85,590 82,639 79,666 76,736 73,785 1,080,208
----------- ----------- ----------- ----------- ---------- ------------
4 Jan-Dec 99
Debt Amort 483,333 483,333 483,333 483,333 483,333 5,800,000
Int @ 8.5% 46,868 43,444 40,021 36,597 33,174 624,042
----------- ----------- ----------- ----------- ---------- ------------
Total 530,201 528,778 523,354 519,931 516,507 6,424,042
5 Jan-Dec 00
Debt Amort 350,000 350,000 350,000 350,000 350,000 4,200,000
Int @ 8.5% 12,396 9,917 7,437 4,958 2,479 193,375
----------- ----------- ----------- ----------- ---------- ------------
Total Pays 382,396 359,917 357,438 354,958 352,479 4,393,375
Total Amortization of Monies 21,000,000
Total Interest Payments 5,063,875
Total Payments 26,063,875
</TABLE>
22
<PAGE>
ATTACHMENT 1.9
--------------
Programming Contracts Assumed
23
<PAGE>
ATTACHMENT 3.1
--------------
Broadcast Station Programming Policy Statement
Programmer agrees to cooperate with Licensee in the broadcasting of
programs of the highest possible standard of excellence and for this purpose to
observe the following regulations in the preparation, writing and broadcasting
of its programs.
I. No Plugola or Payola. Except for commercial messages
aired in compliance with 47 C.F.R.ss.73.1212, Programmer shall
not receive any consideration in money, goods, services, or
otherwise, directly or indirectly (including to relatives)
from any persons or company for the presentation of any
programming over the Station without reporting the same to
Licensee's general manager. The commercial mention of any
business activity or "plug" for any commercial, professional,
or other related endeavor, except where contained in actual
commercial message of a sponsor, is prohibited.
II. No Lotteries. Announcements giving any information
about lotteries or games prohibited by federal or state law or
regulation are prohibited.
III. Election Procedures. At least fifteen 915) days
before the start of any primary or election campaign,
Programmer will clear with Licensee's general manager the
rates Programmer will charge for the time to be sole to
candidates for the public office and/or their suporters to
make certain that the rates charged are
24
<PAGE>
in conformance with applicable law and Station policy.
IV. Required Announcements. Programmer shall broadcast
(i) an announcement in a form satisfactory to Licensee at the
beginning of each hour to identify KRRT and (ii) any other
announcements that may be required by law, regulation, or
Licensee policy.
V. No Illegal Announcements. No announcements or
promotion prohibited by federal or state law or regulation
shall be made over to the Station. Any game, contest, or
promotion relating to or to be presented over the Station must
be fully stated and explained in advance to Licensee, which
reserves the right in its sole discretion to reject any game,
contest, or promotion.
VI. Licensee Discretion Paramount. In accordance with the
Licensee's responsibility under the Communications Act of
1934, as amended, and the Rules and Regulations of the Federal
Communications Commission, Licensee reserves the right to
reject or terminate any advertising proposed to be presented
or being presented over the Station which is in conflict with
Station policy or which in Licensee's or its general manger's
sole judgment would not serve the public interest.
Licensee may waive any of the foregoing regulations in specific
instances, it, in its
25
<PAGE>
opinion, the Station will remain in compliance with all applicable laws, rules,
regulations and policies and broadcasting in the public interest is served. In
any case where questions of policy or interpretation arise, Programmer should
submit the same to Licensee for decision before making any commitments in
connection therewith.
26
<PAGE>
ATTACHMENT 3.6
--------------
FORM OF PAYOLA AFFIDAVIT
City of ____________________________________)
)
County of __________________________________) SS:
)
State of ___________________________________)
ANTI-PAYOLA/PLUGOLA AFFIDAVIT
__________________________, being first duly sworn, deposes and says as follows:
1. He is _________________________ for __________________________________.
Position
2. He has acted in the above capacity since _____________________________.
3. No matter has been broadcast by Station KRRT for which service, money
or other valuable consideration has been directly or indirectly paid,
or promised to, or charged, or accepted, by him from any person, which
matter at the time so broadcast has not been announced or otherwise
indicated as paid for or furnished by such person.
4. So far as he is aware, no matter has been broadcast by Station KRRT for
which service, money, or other valuable consideration has been directly
or indirectly paid, or promised to, or charged, or accepted by Station
KRRT for by any independent contractor engaged by Station in in
furnishing programs, from any person, which amtter at the time so
broadcast has not been announced or otherwise indicated as paid for or
furnished by such person.
------------------------------------
Affiant
Subscribed and sworn to before me
this _____ day of _______________, 19_____.
- --------------------------------------
Notary Public
My Commission expires:_____________________________.
27
<PAGE>
K R R T
PROGRAM LICENSE AGREEMENTS
AS OF JULY 1, 1995
------------------
<TABLE>
<CAPTION>
CONTRACT TERMS
NO. OF LICENSE RUNS
DISTRIBUTOR PRODUCT START DATE PAYMENTS END DATE LICENSED AVAILABLE
- -------------------------------------------------------------------------------------------------------------------------
SYNDICATED PROGRAMS - CURRENT
- -----------------------------
<S> <C> <C> <C> <C> <C> <C>
MCA MUNSTERS TODAY 09/01/91 48 09/30/95 576 576
20TH CENTURY SMALL WONDER 01/01/92 42 09/30/95 764 497
20TH CENTURY M*A*S*H* 01/01/92 60 09/02/91 3060 1096
LORIMAR PERFECT STRANGERS-1 09/01/91 42 02/28/97 800 325
LORIMAR PERFECT STRANGERS-2 09/23/91 6 02/28/97 160 64
WARNER PERFECT STRANGERS-3 09/01/92 6 02/28/97 192 131
WARNER PERFECT STRANGERS-4 09/20/93 6 09/19/98 48 31
BUENA VISTA GOLDEN GIRLS 09/01/90 66 09/01/90 1440 187
MCA OUT OF THIS WORLD 03/01/92 48 09/30/96 768 253
TURNER WONDER YEARS 09/21/92 60 09/20/97 1300 394
TWENTIETH TV COPS II & III 09/13/93 24 09/12/95 520 50
PARAMOUNT DEAR JOHN 10/01/93 51 09/30/98 720 298
WARNER FRESH PRINCE 09/01/94 42 02/28/98 990 669
GENESIS HWY PATROL-REN 09/21/94 12 09/10/95 260 17
MCA KNIGHT RIDER 03/01/92 48 09/30/96 720 0
CANNELL WISEGUY 09/01/92 36 08/31/95 300 90
WORLDVISION BEVERLY HILLS 90210 09/01/94 48 09/01/96 520 291
WARNER HOGAN FAMILY 09/10/90 42 09/07/95 776 2
WARNER HOGAN FAMILY (2) 10/01/91 6 09/07/95 104 39
MULTIMEDIA YOUNG PEOPLES SPC 01/01/93 24 09/30/96 200 UNLIMITED
CANNELL 21 JUMP STREET 01/01/92 36 12/31/95 624 2
</TABLE>
UNPAID
DISTRIBUTOR PRODUCT LIABILITY ASSIGNABILITY
- --------------------------------------------------------------------------------
SYNDICATED PROGRAMS - CURRENT
- -----------------------------
MCA MUNSTERS TODAY 12,000 W/CONSENT
20TH CENTURY SMALL WONDER -- W/CONSENT
20TH CENTURY M*A*S*H* 306,000 W/CONSENT
LORIMAR PERFECT STRANGERS-1 -- W/CONSENT
LORIMAR PERFECT STRANGERS-2 55,000 W/CONSENT
WARNER PERFECT STRANGERS-3 198,000 W/CONSENT
WARNER PERFECT STRANGERS-4 49,500 W/CONSENT
BUENA VISTA GOLDEN GIRLS 208,000 W/CONSENT
MCA OUT OF THIS WORLD 28,000 W/CONSENT
TURNER WONDER YEARS 225,356 W/CONSENT
TWENTIETH TV COPS II & III 26,000 W/CONSENT
PARAMOUNT DEAR JOHN 332.638 W/CONSENT
WARNER FRESH PRINCE 245,140 W/CONSENT
GENESIS HWY PATROL-REN 18,000 W/CONSENT
MCA KNIGHT RIDER 18,000 W/CONSENT
CANNELL WISEGUY 6,250 W/CONSENT
WORLDVISION BEVERLY HILLS 90210 230,850 W/CONSENT
WARNER HOGAN FAMILY -- W/CONSENT
WARNER HOGAN FAMILY (2) -- W/CONSENT
MULTIMEDIA YOUNG PEOPLES SPC -- W/CONSENT
CANNELL 21 JUMP STREET -- W/CONSENT
28
<PAGE>
K R R T
PROGRAM LICENSE AGREEMENTS
AS OF JULY 1, 1995
<TABLE>
<CAPTION>
CONTRACT TERMS
NO. OF LICENSE RUNS
DISTRIBUTOR PRODUCT START DATE PAYMENTS END DATE LICENSED AVAILABLE
- ------------------------------------------------------------------------------------------------------------------------------------
FEATURE PACKAGES - CURRENT
- --------------------------
<S> <C> <C> <C> <C> <C>
COLUMBIA SHOWCASE II 01/01/92 40 150 118
COLUMBIA GOLD 01/01/93 48 150 130
JCS SYND SVCS CITY HEAT 09/01/93 36 75 61
TELEFLM SLES FEATURES II 09/01/93 24 140 126
VIACOM EXPLOITABLES 4 11/01/93 48 210 179
VIACOM BLACK MAGIC 11/01/93 48 144 135
VIACOM FEATURES X 11/01/93 48 152 145
ITC FEATURES (CP) 10/01/93 24 50 30
ENTERVISION FISTS OF FURY 11/01/93 36 203 203
WORLDVISION CARLOCO & WVIII 12/01/93 198 208 201
PARAMOUNT PORT XIII-B 08/01/91 48 144 82
PARAMOUNT PORTFOLIO XV 01/01/94 96 156 138
PARAMOUNT PREVIEW V 05/01/93 48 120 102
COLUMBIA COL/V-B 06/01/91 0 88 2
COLUMBIA COL/VI-B 05/01/91 0 72 9
DISNEY DIS/MGI 11/12/90 0 92 1
FOX FOX/PRM2 07/01/90 0 210 7
MCA MCA/DBIII 12/01/89 0 248 79
MCA MCA/DEB 11/01/91 0 40 5
MCA MCA/DEB 09/01/91 0 264 22
MGM MGM/CP 08/01/94 0 40 9
ORB ORB/CCI 06/01/91 0 120 10
ORB ORB/CCII 09/30/91 0 90 50
</TABLE>
UNPAID
DISTRIBUTOR PRODUCT LIABILITY ASSIGNABILITY
- --------------------------------------------------------------------------------
FEATURE PACKAGES - CURRENT
- --------------------------
COLUMBIA SHOWCASE II 25,000 W/CONSENT
COLUMBIA GOLD 29,792 W/CONSENT
JCS SYND SVCS CITY HEAT 5,824 W/CONSENT
TELEFLM SLES FEATURES II 1,250 W/CONSENT
VIACOM EXPLOITABLES 4 16,800 W/CONSENT
VIACOM BLACK MAGIC 15,288 W/CONSENT
ITC FEATURES (CP) 1,667 W/CONSENT
ENTERVISION FISTS OF FURY 15,467 SILENT
WORLDVISION CARLOCO & WVIII 71,838 W/CONSENT
PARAMOUNT PORT XIII-B 39,000 W/CONSENT
PARAMOUNT PORTFOLIO XV 126.750 W/CONSENT
PARAMOUNT PREVIEW V 27,500 W/CONSENT
COLUMBIA COL/V-B -- W/CONSENT
COLUMBIA COL/VI-B -- W/CONSENT
DISNEY DIS/MGI -- W/CONSENT
FOX FOX/PRM2 -- W/CONSENT
MCA MCA/DBIII -- W/CONSENT
MCA MCA/DEB -- W/CONSENT
MCA MCA/DEB -- W/CONSENT
MGM MGM/CP -- W/CONSENT
ORB ORB/CCI -- W/CONSENT
ORB ORB/CCII -- W/CONSENT
29
<PAGE>
<TABLE>
<CAPTION>
K R R T
PROGRAM LICENSE AGREEMENTS
AS OF JULY 1, 1995
------------------
CONTRACT TERMS
NO. OF LICENSE RUNS
DISTRIBUTOR PRODUCT START DATE PAYMENTS END DATE LICENSED AVAILABLE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PARAMOUNT PAR/PRIV 06/01/90 0 144 53
PARAMOUNT PAR/SEII 06/01/90 0 440 228
PARAMOUNT PAR/XI 01/01/91 0 112 17
PARAMOUNT PAR/XII 07/01/91 0 208 17
PARAMOUNT PAR/XIII-A 02/01/91 0 72 19
VES VES/EOT 02/13/90 0 152 5
VES VES/FSIM 05/01/90 0 88 25
VIACOM VIA/FEII 01/01/87 0 232 7
VIACOM VIA/FEIX 12/01/88 0 332 4
VIACOM VIA/FEXI 07/01/90 0 230 69
VIACOM FIA/Y&R 07/01/89 0 174 18
SYNDICATED PRODUCT - FUTURE
WARNER BROS FAMILY MATTERS 09/18/95 48 960 960
WARNER BROS FRESH PRINCE94-95* 09/01/95 6 240 240
WARNER BROS FRESH PRINCE95-96* 09/01/96 6 240 240
WARNER BROS FRESH PRINCE96-97* 09/01/97 6 240 240
PARAMOUNT DEEP SPACE 9 09/01/96 48 576 576
ALL AMERICAN BAYWATCH STRIP 09/25/95 24 520 520
PARAMOUNT UNTOUCHABLES 09/01/96 48 252 252
</TABLE>
UNPAID
DISTRIBUTOR PRODUCT LIABILITY ASSIGNABILITY
- ---------------------------------------------------------------------------
PARAMOUNT PAR/PRIV -- W/CONSENT
PARAMOUNT PAR/SEII -- W/CONSENT
PARAMOUNT PAR/XI -- W/CONSENT
PARAMOUNT PAR/XII -- W/CONSENT
PARAMOUNT PAR/XIII-A -- W/CONSENT
VES VES/EOT -- W/CONSENT
VES VES/FSIM -- W/CONSENT
VIACOM VIA/FEII -- W/CONSENT
VIACOM VIA/FEIX -- W/CONSENT
VIACOM VIA/FEXI -- W/CONSENT
VIACOM FIA/Y&R -- W/CONSENT
SYNDICATED PRODUCT - FUTURE
WARNER BROS FAMILY MATTERS 225,000 W/CONSENT
WARNER BROS FRESH PRINCE94-95* 81,900 W/CONSENT
WARNER BROS FRESH PRINCE95-96* 81,900 W/CONSENT
WARNER BROS FRESH PRINCE96-97* 81,900 W/CONSENT
PARAMOUNT DEEP SPACE 9 315,000 W/CONSENT
ALL AMERICAN BAYWATCH STRIP 83,200 W/CONSENT
PARAMOUNT UNTOUCHABLES 189,000 W/CONSENT
*Estimated
30
<PAGE>
ASSIGNMENT AND ASSUMPTION ON AGREEMENT
--------------------------------------
THIS AGREEMENT is made this 31 day of May, 1996, by and among KABB,
Inc., a Maryland corporation (hereinafter referred to as "Programmer"), KRRT,
Inc., a Texas corporation (hereinafter referred to as "Licensee"), KRRT License
Corp., a Texas corporation (hereinafter referred to as "License Corp."), and
River City Broadcasting, L.P., a Delaware limited partnership (hereinafter
referred to as "RCB").
Recitals
--------
A. WHEREAS, RCB and SBG are parties to an Asset Purchase Agreement of
even date herewith (the "RCB Purchase Agreement"); and
B. WHEREAS, KRRT and SBG are parties to an Asset Purchase Agreement of
even date herewith (the "KRRT Purchase Agreement"); and
C. WHEREAS, the KRRT Purchase Agreement has been assigned by SBG to
Programmer; and
D. WHEREAS, RCB and KRRT are parties to a Time Brokerage Agreement
dated August 3, 1995 (the "KRRT TBA"); and
E. WHEREAS, the parties hereto desire to set forth their respective
rights and obligations concerning the above recitals.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties intending to be
legally bound, agree as follows:
1. Programmer hereby agrees to accept the assignment of the KRRT TBA
subject to the modification of certain provisions as set forth below.
2. All references to "Broker" in the TBA shall be to "Programmer."
3. Section 1.2, Term, of the Time Brokerage Agreement is modified as
follows:
"This Agreement shall be in force from the 31 day of May, 1996 for
the Initial Term of five (5) years. Programmer shall have the option
of extending the Initial Term for an additional term ("Renewal
Term") ending five (5) years immediately after the end of the
Initial Term. In the event that Programmer wishes to exercise the
Renewal Term option, Programmer shall give Licensee written notice
of the exercise of said option at least six (6) months prior to the
end of the Initial Term."
4. Section 1.4 the KRRT TBA is hereby deleted.
iv
<PAGE>
5. Attachment 1.5 is hereby amended as follows:
"During the term of the Time Brokerage Agreement and any renewal
thereof, Programmer will pay to the Licensee on the first day of each
month a monthly payment (the "LMA Payment") equal to (i) an amount
(the "Base Payment") representing the Licensee's estimated cost (as
per Schedule A attached hereto) of operating the station. The LMA
Payment shall be adjusted periodically by the parties in good faith
to reflect: (i) changes in the station's operating costs, and (ii)
capital expenditures reasonably necessary for the continuation of the
station's broadcast signal so that Licensee will recover all of its
expenses and capital expenditures relating to the operations of the
station. In addition to the LMA Payment, during the last twelve (12)
months of the Initial Term of the KRRT TBA, Programmer will pay to
Licensee the Licensee Fee of $8,334.00 per month. During the Renewal
Period commencing on 31 day of May 2001, the License Fee will be
$8,334.00 per month. The License Fee shall be payable on the same
date that the LMA Payments are due."
6.This Agreement may be executed in counterparts, each of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this day and year first written above.
LICENSEE: PROGRAMMER:
KRRT, INC. KABB, INC.
By: /s/ Myron Jones By: /s/ David B. Amy
------------- ----------------------
LICENSE CORP.: ASSIGNOR:
KRRT LICENSE CORP. RIVER CITY BROADCASTING, L.P.
By: /s/ Myron Jones By: /s/ Robert Quicksilver
---------------- ----------------------
v
LOAN AGREEMENT
BY AND BETWEEN
KEYMARKET OF SOUTH CAROLINA, INC.,
AS BORROWER,
AND
RIVER CITY BROADCASTING, L.P.,
AS LENDER
AS OF JULY 7, 1995
<PAGE>
LOAN AGREEMENT
--------------
THIS LOAN AGREEMENT (this "Agreement") is made as of this 7th
day of July, 1995, by and among KEYMARKET OF SOUTH CAROLINA, INC., a South
Carolina corporation ("Borrower"), and RIVER CITY BROADCASTING L.P., a Delaware
limited partnership ("Lender").
RECITALS:
---------
A. Borrower has requested that Lender make certain loans to
it, and Lender is willing to make such loans on the terms and subject to the
conditions set forth herein.
B. Borrower owns and operates Radio Stations WFBC-AM and
WFBC-FM, Greenville, South Carolina and WORD-AM, Spartanburg, South Carolina,
(individually, an "Owned Station" and collectively, the "Owned Stations")
pursuant to licenses issued by the Federal Communications Commission (the "FCC")
and operates Radio Stations WSPA-FM and WSPA-FM, Spartanburg, South Carolina
(individually, an "LMA Station" and collectively, the "LMA Stations"), pursuant
to the LMA. The Owned Stations together with the LMA Stations are hereinafter
collectively referred to as the "Stations" and individually as a "Station."
NOW, THEREFORE, in consideration of the foregoing recitals and
the mutual agreements and covenants contained herein, and other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending legally to be bound, hereby agree as
follows:
ARTICLE I
Defined Terms
-------------
1.1 Definitions. Unless otherwise stated in this Agreement,
the following this shall have the following meanings:
"Affiliate" of a party means any Person, directly or
indirectly, controlling or controlled by such party, or any Person under direct
or indirect common control with such party (as such terms are interpreted from
time to time pursuant to the Securities Act of 1933, as amended).
"Assets" means all of Borrower's rights title and interest in
and to all of the assets, properties privileges, rights, interests and claims,
tangible and intangible, of every type and description, wherever located and
whether or not carried on Borrower's books and records, including all such
assets that are used or useful in connection with the conduct of the business
and operations of any Owned Station and the contracts, rights and other assets
relating to the LMA Stations.
"Capital Expenditures" means payments that are made by
Borrower for the rental, lease, purchase, construction, or use of any property
the value or cost of which, under generally
- 1 -
<PAGE>
accepted accounting principles, consistently applied, should be capitalized and
appear on Borrower's balance sheet in the category of property, plant, or
equipment, without regard to the manner in which such payments or the instrument
pursuant to which they are made are characterized by Borrower or any other
Person.
"Closing" means the consummation of the transactions
contemplated by this Agreement in accordance with the provisions of Section 3.1
hereof.
"Confer" means Kerby E. Confer.
"Contract" means all contracts, leases, non-governmental
licenses and other agreements, written or oral, including any amendments or
other modifications thereto, of Borrower or to which Borrower is a party that
relate to any of the Assets or the business and operations of any Owned Station.
"Default Rate" means a rate of interest equal to the Base Rate
plus two percent (2%) per annum.
"Disclosure Schedule" means that document labeled as such and
referred to in this Agreement, which has been delivered by Borrower to Lender
contemporaneously with the execution of this Agreement.
"Environmental conditions means conditions of the environment
including the ocean, natural resources (including flora and fauna), soil,
surface water, ground water, any present or potential drinking water supply,
subsurface strata or the ambient air, relating to or arising out of the use,
handling, storage, treatment recycling, generation, transportation, dumping,
Release, or threatened Release of Hazardous Materials by any Person. With
respect to claims by employees, Environmental Conditions also includes the
exposure of persons to Hazardous materials within a work place on the Real
Property.
"Environmental Noncompliance" sooner but is not limited to:
(1) the Release or threatened Release of any Hazardous Materials into the
environment, any storm drain, sewer, septic system or publicly owned treatment
works, in violation of any effluent or emission limitations, standards or other
criteria or guidelines established by any federal, state or local law,
regulation, rule, ordinance, plan or order or other Environmental Law; and (2)
any facility operations, procedures, designs, etc., which do not conform with
the requirements of any Environmental Orders and Laws.
"Event of Default" means any of the events specified in
Article VIII hereof.
"FCC Licenses" means those Licenses issued by the FCC to
Borrower in connection with the businesses and operations of any Owned Station,
including those listed in Section 4.5 of the Disclosure schedule.
- 2 -
<PAGE>
"Final Order" means an action or order by the FCC (a) that has
not been reversed, stayed, enjoined, set aside, annulled or suspended, and (b)
with respect to which (i) no requests have been filed for administrative or
judicial review, reconsideration, appeal or stay and the FCC has not initiated a
review of such action or order on its own action and the periods provided by
statute or FCC regulations for filing any such requests and for the FCC to set
aside tho action on its own motion have expired, or (ii) in the event of review,
reconsideration or appeal, the period provided by statute or FCC regulations for
further review, reconsideration or appeal has expired; and with respect to
Renewal, means, in addition to (a) and (b) above, Renewal of each of the FCC
Licenses for the full license term without any now adverse conditions.
"Financial Statements" (i) the unaudited statements of income
and expense and cash flow for Multimedia Broadcasting and The Spartan
Radiocasting Company for the twelve months ended December 31, 1993 and December
31, 1994, and (ii) the unaudited balance sheets of Multimedia Broadcasting and
The Spartan Radiocasting Company as of December 31, 1993 and December 31, 1994.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by. a significant segment of
the accounting profession, that are applicable to the circumstances as of the
date of determination.
"Hazardous Materials" means (1) hazardous materials,
contaminants, constituents hazardous wastes and hazardous substances as those
terms are defined in the following statutes and their implementing regulations,
as amended: the Hazardous Materials Transportation Act, 49 U.S.C. ss. 1801 et
seq., the Resource Conservation and Recovery Act, 42 U.S.C. ss. 6901 et seq.,
the Comprehensive Environmental Response, Compensation and Liability Act, as
amended by the Superfund Amendments and Reauthorization Act, 42 U.S.C. ss. 9601
et seq., the Clean Water Act, 33 U.S.C. ss. 1251 et seq., and the Toxic
Substance control Act, 15 U.S.C. ss. 2601 sea., (2) petroleum, including crude
oil and any fractions thereof, (3) natural gas, synthetic gas and any mixtures
thereof (4) asbestos and/or asbestos-containing materials, (5) PCBs, or
PCB-containing materials or fluids, (6) any substances with respect to which any
federal, state or local agency or other governmental authority may require
either an environmental investigation or environmental remediation, and (7) any
other hazardous or noxious substance, material, pollutant or solid or liquid
waste that is regulated by any Environmental Orders and Laws.
"Indebtedness" means any Liability of Borrower, whether
direct, indirect, or contingent (a) for the payment of borrowed money, (b) that
is evidenced by a promissory note, bond, debenture, or similar instrument or (c)
all leases which should be capitalized on the books of the Borrower as lessee in
accordance with GAAP.
"Intangibles" means all copyrights, trademarks, trade names,
service marks, service names, licenses, patents, permits, jingles, rights to
software franchises, trade secrets, know-how, processes, righter privileges, and
other similar intangible or intellectual property
- 3 -
<PAGE>
rights and interests (and any goodwill associated with any of the foregoing)
applied for, issued to or owned by Borrower (whether or not any registration or
filing has been made with respect thereto) or under which Borrower is licensed
or franchised or in which Borrower has any interest or which is used or useful
in the business and operations of any owned station, including these listed in
Section 4.9 of the Disclosure Schedule.
"Keymarket Closing Date" means the "Closing Date", an defined
in the Keymarket Purchase Agreement.
"Keymarket Purchase Agreement" means the Asset Purchase
Agreement entered into on March 29, 1995 between Lender and the Keymarket
Sellers.
"Keymarket Sellers" means Keymarket of New Orleans, Inc., a
Georgia corporation Keymarket of NEPA, Inc., a Georgia corporation, Lackazerene
Inc, a Georgia corporation, Keymarket of Buffalo, Inc., a Georgia corporation
Keymarket of Nashville, Inc., a Georgia corporation, and Keymarket of Los
Angeles, Inc., a California corporation, and Keymarket Communications, a Georgia
general partnership.
"Lender Debt" means any obligation of Borrower (a) to pay to
Lender the principal of and interest on the Note; (b) to pay, satisfy, or
perform any other Liability or obligation to Lender, whether arising under this
Agreement or otherwise, whether now existing or hereafter incurred matured or
unmatured, direct or contingent, joint or several, including any extensions,
modifications, or renewals thereof and substitutions therefor, and including
without limitation all costs and expenses, including interest thereon and
reasonable attorneys' fees, incurred by Lender for the protection preservation,
or enforcement of rights and remedies arising hereunder or under the Related
Documents; (c) to repay to Lender all amounts advanced at any time by Lender,
including, without limitation, advances for principal or interest payments to
prior secured parties, mortgagee, or lienors, or for taxes, levies, insurance,
rents or repairs to, or maintenance or storage of, any of the property of
Borrower; (d) to perform any covenant or agreement made with Lender; or (e) to
take any other action in respect of any other Liability of any nature of
Borrower to Lender.
"Lender's Option" means the Option Agreement dated the date
hereof among Confer, Borrower and Lender.
"Liability" means (a) any liability or obligation, matured,
contingent, or otherwise, that, in accordance with generally accepted accounting
principles, consistently applied, should be classified as a liability, including
all tax and other proper accruals whether or not it is necessary to disclose
such on a balance sheet; (b) any obligation secured by any mortgage, pledge,
security agreements security interest liens or conditional sale or other title
retention agreement validly existing on or applying to any property or asset
owned, acquired, or hold subject thereto by Borrower, whether or not the
obligation secured thereby has been assumed by Borrower; (c) any obligation of
any other Person (i) that Borrower has directly or indirectly guaranteed assumed
responsibility for, endorsed (other than for collection or deposit in the
ordinary course of business), discounted with recourse, agreed (contingently or
otherwise) to
- 4 -
<PAGE>
purchase or repurchase or otherwise acquire, or otherwise agreed to become
directly or indirectly liable or responsible for, or (ii) in consideration of
which Borrower has agreed to supply or advance funds (whether by way of loan,
stock purchase, capital contribution, or otherwise); (d) all Capital
Expenditures that Borrower is required to make by the terms of any lease, rental
agreement, installment or conditional sale agreement, or other agreement; and
(e) all liabilities in respect of unfunded vested benefits under any Plan and in
respect of withdrawal liability incurred under ERISA.
"Licenses" means all licenses. permits, and other
authorizations (including the FCC Licenses) issued by the FCC or any other
federal, state, or local governmental authority to Borrower which are used or
useful in the business and operations of any Owned Station, including those
listed in Section 4.5 of the Disclosure Schedule.
"LMA" means the Time Brokerage Agreement dated as of August
30, 1994, by and between the Spartan Radiocasting Company and Borrower and any
contracts or agreements of Borrower relating to the foregoing, all of which are
listed on Section 4.23 of the Disclosure Schedule.
"LMA Owner" means any owner of an LMA Station.
"Loan Obligations" mean any and all obligations of Borrower
(a) to pay to Lender the principal of and interest on the Note; (b) to pay,
satisfy, or perform any other Liability or obligation to Lender, arising under
this Agreement, the Note, any Related Document or any other document or
instrument executed in connection with the Loans, and including without
limitation all costs and expenses, including interest thereon and reasonable
attorneys' fees, incurred by Lender for the protection, preservation, or
enforcement of its rights and remedies arising hereunder, under the Note, any
Related Document or such other documents; or (c) to perform any other covenant
or agreement made with Lender hereunder or under the Note, any Related Document
or such other documents.
"Material Adverse change" means a material adverse change,
effect or development (or any change, effect or development that is reasonably
likely to have a material adverse effect) on the assets, business, operating
condition (excluding financial condition) or prospects of the specified
Person(s).
"Option" means the Option Agreement dated August 30, 1994 for
the purchase of WSPA-AM and WSPA-FM Spartanburg, South Carolina between The
Spartan Radiocasting Company and Borrower.
"Permitted Lien" means any of the following liens,
encumbrances, or security interests:
(a) liens for taxes or assessments and similar
charges, that are either (i) not delinquent or (ii) being contested diligently
and in good faith by appropriate proceedings, and as to which Borrower has set
aside adequate reserves on its books;
- 5 -
<PAGE>
(b) statutory liens, . such as mechanics,
materialman's, warehouseman's, carrier's, landlord's (including those landlord's
liens deemed to arise by contract) or other similar liens, incurred in good
faith in the ordinary course of business, that are paid in the ordinary course
of business or that are bonded in order to remove such lion of record within
sixty days after the moneys become due and owing;
(c) liens or security interests arising under or
pursuant to this Agreement or any Related Document or otherwise securing Lander
Debt; and
(d) liens incurred in connection with equipment
leases entered into by Borrower, which are now existing or incurred hereafter in
the ordinary course of business, so long as the aggregate amount of such liens
does not exceed $10,000 at any time.
"Person" means and includes natural persons, corporations,
limited partnerships, general partnerships, joint stock companies, joint
ventures, associations companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not local entities (including
the Stations), and governments and agencies and political subdivisions thereof.
"Possible Default" means an event, situation, or thing that,
with the lap" of any applicable grace period or the giving of notice or both,
would constitute an Event of Default.
"Real Property" means all fee estates and buildings and other
improvements thereon, leasehold interests and all buildings and other
improvements thereon, easements, licenses, rights to access, rights-of-way, and
other real property interests used or useful in the business and operations of
any Owned Station, including the property identified and described in Section
4.6 of the Disclosure Schedule.
"Related Document" means any promissory note, agreement,
guaranty, assignment, collateral assignment mortgage, security agreement, pledge
agreement, financing statement, or other agreement, writing, document, or
instrument, or any amendment or restatement of any of the foregoing, furnished
to Lender pursuant to or otherwise in connection with this Agreement and shall
include, without limitation, the Note.
"Release" means any release, spill, emission leaking, pumping,
pouring, injection, escaping, emptying, deposit, disposal, discharge, dispersal,
leaching, or migration into the indoor or outdoor environment (including,
without limitation, the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), or into or out of
any Real Property and any real property operated or used by Borrower, including
the movement of any Hazardous Material through the air, soil, surface water,
groundwater or property.
"Renewal" means a grant by the FCC of the 1995 license renewal
application for each of the Stations.
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"Restricted Investment" means any investment, by stock
purchase, capital contribution, loan, advance, guaranty of indebtedness,
assumption of liability, or otherwise, in any Affiliate, or any other Person if
such other Person becomes an Affiliate as a result of such investment, of
Borrower.
"Restricted Payment" means (a) any payment or distribution
made, liability incurred, or other consideration given for the purchase,
acquisition, redemption, or retirement of any capital stock of the Borrower, or
as a dividend, return of capital, or other payment or distribution of any kind
on any capital stock of the Borrower outstanding at any time, or (b) any payment
in connection with any loan from a stockholder or Affiliate to the Borrower, or
(c) any payment to purchase, redeem, acquire or retire, or otherwise in respect
of, any Indebtedness or any other liability that is subordinate in right of
payment to, or is pari passu with, the Loans.
"Subsidiary" means any corporation, partnership, joint venture
or other legal entity (a) of which Borrower directly or indirectly owns or
controls at the time outstanding shares of stock or other equity or ownership
interests which have in ordinary circumstances (not dependent upon the happening
of a contingency) voting power to elect a majority of the board of directors, or
similar governing body of said corporation, partnership, joint venture or other
legal entity or otherwise have the legal right to control the management,
policies and direction of such corporation, partnership, joint venture or other
legal entity or (b) of which shares of stock or other equity or ownership
interests of the character described in the foregoing clause (a) are at the time
owned or controlled directly or indirectly by Borrower and one or more
Subsidiaries as defined in the foregoing clause (a) or by one or more such
Subsidiaries.
"Tangible Personal Property" means all machinery, equipment,
tools, vehicles, furniture, office equipment, plant, inventory, goods and wares
of every character (including without limitation all video and audio libraries
and archives) and other tangible personal property owned by Borrower, including
the property identified and described in Section 4.7 of the Disclosure Schedule
and all logs, customer lists, files, lists of advertisers, vendors and
suppliers, computer and electronic data processing material programs and
programming material, plans, diagrams, blueprints schematics, and books and
records relating to the operation of any Owned Station (other than those which
are included among the Excluded Assets), filings with the FCC, and executed
copies of the Contracts.
1.2 List of Other Definitions. The following is a list of
additional terms used in this Agreement and a reference to the Section hereof in
which such term is defined:
Terms Section
----- -------
Administration Section 4.21
Advance Loans Section 2.l
Approved Capital Expenditures Section 5.2
Base Rate Section 2.2 (a)
CERCLIS Section 4.20(a)
Closing Date Section 3.1(a)
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Closing Date Loan Section 2.1
Closing Date Notice Section 2.4
Code Section 4.12(j)
Communications Act Section 5.6(a)
Compensation Arrangement Section 4.12(j)
Employee Plan Section 4.12(J)
Environmental Orders and Laws Section 4.20(a)
Environmental Permits Section 4.20(b)
ERISA Section 4.12(j)
FCC Recitals
LMA Stations Recitals
Loans Section 2.1
Multi-employer Plan Section 4.12(j)
Note Section 2.4
Option Loan Section 2.1
OSHA Section 4.21
Owned Stations Recitals
PCBS Section 4.20(c)
Stations Recitals
Any accounting term not specifically defined in this Section 1
shall have the meaning assigned thereto by generally accepted accounting
principles not inconsistent with Borrower's present accounting procedures.
ARTICLE II
Amount and Terms of Credit
--------------------------
2.1 Loans. (a) Subject to the terms and conditions of this
Agreement, Lander shall make (i) a loan of Five Million Five Hundred and Fifty
Thousand ($5,550,000) Dollars on the closing Date (the "Closing Date Loan")
subject to adjustments an provided in the following paragraph; (ii) at the
request of Borrower, but in the reasonable discretion of Lander, additional
advances not to exceed Five Hundred Thousand ($500,000) for capital and other
operating expenditures (including Approved Capital Expenditures) related to the
operation of the Stations (the *Advance Loans"); and (iii) upon the closing in
connection with the exercise of the Option with the prior written consent of
Lander pursuant to Section 5.14 hereof, a loan in the amount of Five Million one
Hundred Fifty Thousand Dollars ($5,150,000) as the purchase price in connection
with the exercise of the Option, which amount shall be subject to Lender's
approval (the "Option Loan", together with the Closing Date loan and the Advance
Loans, collectively, the "Loans").
(b) If following final resolution of the
determination of the amount of the Working Capital Balance or the Working
Capital Deficit, as the case may be, as contemplated by Section 7.1(p), there
are changes in the amount of such Working Capital Balance or Working Capital
Deficit from that agreed upon by Buyer and Lender as of the
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Closing Date following receipt of Borrower's Certificate under Section 7.1(p),
the following shall apply:
(i) If the Working Capital Balance is
greater, or the Working Capital Deficit is loss, than
tho amounts determined as of the Closing Date, a loan
in the amount of such difference shall be made to the
Borrower;
(ii) If the Working Capital Balance is less,
or Working Capital Deficit is greater, than the
amounts determined as of the Closing Date, a downward
adjustment in the $1,000,000 amount payable by Lender
at the consummation of the asset purchase or stock
purchase (as the case may be) as contemplated under
the Lender's Option, shall be made in an amount equal
to the amount of such difference.
2.2 Interest.
(a) The Loans shall boar interest at the applicable
federal rate, as defined in ss.1274(d) of the Code, (the "Base Rate"). If any
installment of principal or interest or any other Loan Obligations are not paid
when due, all amounts of principal, interest, and other Loan Obligations shall
thereafter bear interest until paid at the Default Rate. Interest shall accrue
on the outstanding principal balance of each of the Loans from the date of each
such Loan and compound annually. Interest shall be computed on the basis of a
year having 360 days and actual days elapsed. Interest on the Loans shall be
paid on the Maturity Date.
(b) The rate of interest payable on the Note from
time to time shall in no event exceed the maximum rate, if any, permissible
under applicable law. If the rate of interest payable on the Note is ever
reduced an a result of the preceding sentence and any time thereafter the
maximum rate permitted by applicable law shall exceed the rate of interest
provided for on the Note, then the rate provided for on the Note shall be
increased to the maximum rate permitted by applicable law for such period as is
required so that the total amount of interest received by Lender is that which
would have been received by Lender but for the operation of the preceding
sentence.
2.3 Maturity. Unless Payment is earlier demanded by Lender,
the Outstanding Principal amount Of the Loans together with all interest accrued
but unpaid thereon, shall be payable on the earlier of (a) July 6, 2000, and (b)
the date on which the asset purchase agreement or the stock purchase agreement
contemplated under the Lender's Option is terminated or consummated and (c) the
date on which the Lender's Option expires and is terminated ("the Maturity
Date").
2.4 The Note. The Loans shall be evidenced by promissory note
in the principal amount of Eleven Million Two Hundred Thousand Dollars
($11,200,000) and payable to Lender, substantially in the form attached hereto
as Exhibit-A attached hereto (the "Note").
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2.5 Payments. All payments or prepayments made or due
hereunder or under the Note shall be made, without offset or counterclaim, in
immediately available funds to Lender prior to 12:00 noon, St. Louis, Missouri
time, on the date when due, at Lender's offices at 1215 Cole Street, St. Louis,
Missouri 63106, or at such other place as Lender may designate in writing.
Whenever any payment to be made under this Agreement is due on a day that is not
a business day, such payment may be made on the next succeeding business day and
such extension of time shall in each case be included in the computation of the
interest payable on the Note.
2.6 Prepayments. Borrower shall not have the right to prepay
all or any part of the Loans, plus interest accrued on the amount prepaid
without the prior written consent of Lender.
ARTICLE III
The Closing
3.1 Time and Place of Closing. (a) Subject to the satisfaction
or, to the extent permissible by law, waiver by Lender on the date scheduled for
Closing of the closing conditions described in Article VII hereof, the parties
hereto shall be obligated to consummate the transactions contemplated hereby at
the Closing of this Agreement, which shall take place at 10:00 a.m., eastern
time, on the Keymarket Closing Date (the "Closing Date").
(b) The Closing shall take place at the offices of
Dow, Lohnes & Albertson, 1235 23rd Street, N.W., Washington, D.C. 20037;
O'Melveny & Myers, 153 East 53rd Street, New York, New York 10022; or at such
other place as shall be mutually agreed to by Lender and-Borrower.
ARTICLE IV
Borrower's Representations and Warranties
-----------------------------------------
Borrower represents and warrants to Lender as follows:
4.1 Organization and Standing. Borrower is a corporation duly
organized, validly existing and in good standing under the laws of the State of
South Carolina and is duly qualified to do business in each jurisdiction where
the conduct of the business or operations of the Stations owned or operated by
Borrower requires such qualification (which jurisdictions are set forth in
Section 4.1 of the Disclosure Schedule). Borrower has the requisite corporate
power and authority to own, lease and operate the Assets, to carry on the
business of the Stations owned or operated by Borrower as now being conducted
and to execute and deliver this Agreement, the Note, each Related Document and
the documents contemplated hereby and thereby to which it is a party and to
perform and comply with all terms, covenants and conditions to be performed and
complied with by Borrower hereunder and thereunder.
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4.2 Subsidiaries. Borrower does not have any Subsidiary or any
other direct or indirect equity interest (by way of stock ownership, partnership
interest or otherwise) in any entity or person.
4.3 Authorization and Binding Obligation. Borrower has full
corporate power and authority to execute, deliver and perform this Agreement,
the Note, each Related Document and all documents contemplated hereby to which
it is a party and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance of this Agreement, the Note,
each Related Document and all documents contemplated hereby to which it is a
party and the consummation of the transactions contemplated hereby and thereby
by Borrower have been duly and validly authorized by all necessary corporate
action on the part of Borrower and no further action or approval of any director
or shareholder of Borrower or any lender to Borrower is required. This
Agreement, the Note and each Related Document has been, and the documents
contemplated hereby and thereby to which it is a party will be, duly and validly
executed and delivered by Borrower and constitutes (or in the case of documents
not yet executed, will be) a legal, valid and binding agreement of Borrower
enforceable against Borrower in accordance with its respective term, except as
the same may be limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws and related court decisions of general applicability
relating to or affecting creditors' rights generally and by the application of
general principles of equity.
4.4 Consents and Approvals; No Violation.
(a) Except as set forth in Section 4.4 of the
Disclosure Schedule, there in no requirement applicable to Borrower to make any
filing with, or to obtain any permit, authorization, consent or approval of, any
governmental or regulatory authority or third party (i) in connection with or to
permit the lawful consummation by Borrower of the borrowings and other
transactions contemplated under this Agreement, the Note, any Related Documents
and the other transactions contemplated hereby and thereby; or (ii) to maintain
the continuing validity and effectiveness of (and to prevent any default under
or violation of) any License, FCC License or Contract from and after the date
hereof and after consummation of the transactions contemplated hereby.
(b) The execution, delivery and performance of this
Agreement, the Note and each other Related Document to which Borrower is a party
(assuming receipt of any consents set forth in Section 4.4 of the Disclosure
Schedule) will not (i) violate, conflict with or result in any breach of any
provision of the Certificate of Incorporation or Bylaws of Borrower, (ii)
violate, conflict with or result in a breach or default (or give rise to any
right of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, agreement lease or other
instrument or obligation to which Borrower is a party or by which any of its
assets or the Assets or the Owned Stations may be bound, (iii) violate or
conflict with any statute, law, rule, regulation, order, writ, injunction or
decree applicable to Borrower, or any of its assets or any of the Assets or any
of the Owned Stations, (iv) require the consent of any third party or (v) create
any claim, liability, mortgagor lien, pledge, condition, charge, or
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encumbrance of any nature whatsoever upon any of Borrower's property, or capital
stock or other equity capital.
4.5 Governmental Authorizations. Section 4.5 of the Disclosure
Schedule lists the FCC Licenses and all other Licenses from governmental and
regulatory authorities which are required for the lawful conduct of the business
and operations of each Owned Station in the manner it is now being conducted.
such FCC Licenses and other Licenses constitute all such licenses necessary to
conduct the business and operations of the Owned Stations an presently conducted
Borrower is the authorized legal holder of the FCC Licenses and all other
Licenses listed in Section 4.5 of the Disclosure Schedule and designated as hold
by Borrower, None of the FCC licenses or other Licenses in subject to any
restriction or condition which would limit the operation of the owned stations
as presently operated. Borrower in not a party to any agreement with any
community group, governmental authority or other third party restricting
programming, employment practices or other aspects of the business or operations
of any owned Station. Borrower has delivered to Lender true, correct and
complete copies of the Licenses listed in Section 4.5 of the Disclosure Schedule
(including any and all amendments and other modifications thereto). The FCC
Licenses and all other Licenses listed in Section 4.5 of the Disclosure Schedule
are valid for the full term set forth in Section 4.5 of the Disclosure Schedule,
are in good standing and are in full force and effect and are not subject to any
liens or encumbrances except as set forth in Section 4.5 of the Disclosure
Schedule Borrower has not engaged in any activity which could cause the
revocation or suspension of the FCC Licenses or any such other Licenses.
Borrower has no reason to believe that anything has occurred since the last
renewal of the FCC Licenses that would adversely affect the application for
Renewal or the prospects for obtaining the Renewal in the ordinary course of
business for full license terms without any adverse new conditions. Borrower is
not aware of any action which would adversely affect the interference-free
technical service area of any owned station as such service area is presently
authorized by the FCC.
4.6 Title to and Condition of Real Property. (a) Section 4.6
of the Disclosure Schedule contains a listing of all the Real Property, and the
Real Property Constitutes all real property interests of any nature whatsoever
necessary to conduct the business or operations of the Owned Stations an now
conducted. Borrower has delivered to Lander true, correct and complete copies of
all deeds, by which Borrower has received an interest in any of the Real
Property, leases, by which Borrower in the losses or lessor of any of the Real
Property, title insurance policies, which Borrower has received with respect to
any of the Real Property, surveyor which Borrower has received with respect to
any of the Real Property, and inspection reports or other instruments or
reports, which Borrower has received with respect to any of the Real Property,
(including any and all amendments and other modifications of such instruments).
All of the Real Property has full practical and insurable legal access to public
roads or streets and has all utilities and services necessary for the proper and
lawful conduct and operation of each of the Owned Stations as now conducted. All
towers, earth receiving dishes and facilities, and other installations equipment
and facilities utilized in connection with the Owned Stations (including any
related buildings and guy anchors) are maintained, placed and located in
accordance with the provisions of all applicable laws, rules, regulations,
deeds, easements, restrictions, leases, licenses, permits or other arrangements
except to the extent that any failure to
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so maintain, place or locate such equipment does not materially interfere with
and will not affect the present or reasonably expected future use of such
equipment or the Real Property and are located entirely on the Real Property
either owned or leased by Borrower, Borrower has sole, good, valid, indefeasible
and marketable fee simple title, insurable at standard rates by a reputable
national title insurer, to all of the fee estates (including the buildings or
improvements thereon), listed in Section 4.6 of the Disclosure Schedule and
designated as owned by Borrower, free and clear of all liens, mortgages,
pledges, covenants, options, rights of first refusal, easements, restrictions,
encroachments, leases, charges and other claims and encumbrances of any nature
whatsoever, and without reservation or exclusion of any mineral, timber or other
rights or interests, except for (i) liens for real estate taxes not yet due and
payable, (ii) liens in favor of Bank of Montreal, as agent, which will be
removed prior to or at the Closing, (iii) easements, rights-of-way and
restrictions of record, none of which materially interferes with or affects the
present or reasonably expected future use or value of such property, and (iv)
any other claims, encumbrances, reservations or exclusions which are described
in Part 2 of Section 4.6 of the Disclosure Schedule.
(b) With respect to each leasehold interest included
in the Real Property, Borrower is not in default thereunder (nor to the
knowledge of Borrower is any other party thereto) and such leasehold interest
(i) is valid, subsisting and in full force and effect; (ii) is not subject to
any liens or encumbrances, except in favor of Bank of Montreal, as agent, which
will be removed prior to or at the Closing or as set forth in Section 4.6 of the
Disclosure Schedule; and (iii) so long an Borrower fulfills its obligations
under the lease therefor, Borrower has enforceable rights to nondisturbance and
peaceful and quiet enjoyment, and no third party holds any real property
interests in the leased promises with the right to foreclose upon or otherwise
terminate or materially impair Borrower's leasehold interest in such promises
(absent a default by Borrower under the terms of the lease therefor). The rental
not forth in each of the leases listed in Section 4.6 of the Disclosure Schedule
in the actual rental being paid, and there are no separate agreements or
understandings with respect to same. Borrower currently has the full right to
exercise any-renewal options contained in any of the leases listed in Section
4.6 of the Disclosure Schedule, on the terms and conditions contained therein
and, upon due exercise, currently would be entitled to enjoy the use of each
leased promises for the full term of such renewal options. To the best of
Borrower's knowledge the leased promises are occupied under a valid and current
occupancy permit or the like to the extent required by law; there are no facts
known to Borrower which would prevent any leased promises from being occupied
after the closing in substantially the same manner as before.
(c) All Real Property (including the improvements
thereon) (i) is in good condition and repair in accordance with normal and
customary industry practices (ordinary wear and tear excepted), (ii) is
available for immediate use in the conduct of the business or operations of each
of the owned Stations, and (iii) complies in all material respects with all
applicable building or zoning codes and the regulations of any governmental
authority having jurisdiction. There are no condemnation proceedings or eminent
domain proceedings, lawsuits or legal proceedings of any kind pending or, to the
knowledge of Borrower, threatened, in connection with any Real Property. The
Real Property and the present us, and condition thereof do not violate any
applicable deed restrictions or other covenants, restrictions, agreements,
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existing site plan approvals, or, in any material respect, any zoning or
subdivision regulations or urban redevelopment plans applicable to the Real
Property as modified by any duly issued variances, and no permits, licenses or
certificates pertaining to the ownership or operation of the Real Property,
other than those which are transferable with the Real Property, are required by
any governmental agency having jurisdiction over the Real Property or their
operation. All improvements made by or constructed for Borrower and, to
Borrower's knowledge with respect to improvements used by Borrower but not made
by it or constructed for it, on the Real Property, were constructed in
compliance in all material respects with all applicable Federal, state or other
statutes, laws, ordinances, regulations, rules, codes, orders or requirements
(including, but not limited to, any building, zoning or environmental laws or
codes) affecting such promises. Section 4.6 of the Disclosure Schedule sets
forth a true and complete list of all construction, architect, engineering and
other agreements, if any, relating to uncompleted construction projects entered
into by Borrower in connection with any Real Property Borrower has heretofore
delivered to Lender true, correct and complete copies of such construction
agreements.
4.7 Title to and Condition of Tangible Personal Property.
Section 4.7 of the Disclosure Schedule contains a listing of each item of
Tangible Personal Property with a value of $2,500 or more. Except with respect
to leased property or an set forth in Section 4.7 of the Disclosure Schedule,
Borrower owns and has good, valid and indefeasible title to the Tangible
Personal Property, free and clear of all liens, mortgages, pledges, and
encumbrances, except for liens for taxes not yet due and payable, liens in favor
of Bank of Montreal, as agents which will be removed prior to or at the Closing,
and any liens set forth in Section 4.7 of the Disclosure Schedule and annotated
to indicate that such liens will be removed at or prior to Closing. Borrower has
not materially reduced its inventory of usable supplies and supply parts from
the quantities normally maintained by Borrower in accordance with its past
practices. Except as set forth in Section 4.7 of the Disclosure Schedule, the
Tangible Personal Property listed in Section 4.7 of the Disclosure Schedule is
in good operating condition and repair in accordance with normal and customary
radio industry practices for items of comparable age and use, ordinary wear and
tear excepted, and is available for immediate use in the business and operations
of the Owned Stations.
4.8 Contracts.
(a) Section 4.8(a) of the Disclosure Schedule lists
all Contracts, except (i) Contracts entered into in the ordinary course of
business for the sale or sponsorship of advertising time on any Owned Station,
for cash substantially at such owned Station's prevailing rat* in an amount for
each such contract not in excess of Fifty Thousand Dollars ($50,000) and with
not more than twelve (12) months remaining in any of their terms; and (ii)
Contracts (other than Contracts as specified in clause (i) above for the sale or
sponsorship of advertising time on any owned Station), entered into in the
ordinary course of business and which impose monetary obligations not in excess
of Twelve Thousand Dollars ($12,000) individually, and which impose no
significant non-monetary obligations on Borrower. Borrower has delivered or made
available to Lender true, correct and complete copies of all written Contracts
and memoranda of all oral agreements and understandings listed in Section 4.8(a)
of the Disclosure Schedule (including any and all amendments and other
modifications to the Contracts). Each of the Contracts is in full
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force and effect and constitutes the legal, valid, binding and legally
enforceable obligation of Borrower (and, to the knowledge of Borrower, of the
other parties thereto), and Borrower has good, valid and indefeasible title to
such Contract, free and clear of any lions or encumbrances except an set forth
in Section 4.8(a) of the Disclosure Schedule. Except as set forth in Section
4.8(a) of the Disclosure Scheduler there is not, under any of the Contracts
designated in Section 4.8(a) of the Disclosure Schedule, any existing defaults
event of default or other event which, with or without due notice or lapse of
time or both, would constitute a default or event of default on the part of
Borrower or, to the knowledge of Borrower, any other party thereto.
(b) Section 4.8(b) of the Disclosure Schedule
describes all outstanding commitments or proposals to make capital expenditures,
additions, improvements and projects which are not yet completed (whether or not
yet begun or in progress), which have been approved by management of any Owned
Station and which will or are expected to require payments to third parties.
4.9 Intangibles. Section 4.9 of the Disclosure Schedule is a
list of all the Intangibles. Borrower has delivered to Lender true, correct and
complete copies of all documents establishing or evidencing the Intangibles.
Except as disclosed in Section 4.9 of the Disclosure Schedule, Borrower owns,
free and clear of all liens and encumbrances, and has good, valid and
indefeasible title to, all the Intangibles designated in Section 4.9 of the
Disclosure Schedule as being owned by Borrower, and Borrower is not infringing
upon or otherwise acting adversely to the right or, to the knowledge of Borrower
claimed right, of any person. Except as disclosed in Section 4.9 of the
Disclosure Schedule, Borrower is not obligated pursuant to any contract to make
any payments by way of royalties, fees or otherwise with respect to any of the
Intangibles Borrower has not received any written notice of any claim that it
has infringed upon or is in conflict with any Intangibles of any third party,
which claim remains outstanding or unresolved an of the date hereof.
4.10 Financial Statements. Borrower has heretofore delivered
to Lender true and complete copies of the Financial Statements. Except as set
forth in Section 4.10 of the Disclosure Schedule, and in the case of those
statements ending before year-end subject to customary year-end adjustments and
accruals, the Financial Statements are in accordance with the books and records
of Borrower, have been prepared in accordance with GAAP consistently applied and
present fairly the financial condition, and results of operations of Borrower
for the periods and as of the date set forth. Borrower has no material
liabilities (fixed, accrued, contingent or otherwise) that have not been
disclosed or referred to in the Financial Statements.
4.11 Totality of Assets. The Assets include all of the assets
or rights, including without limitation, all necessary Real Property, Tangible
Personal Property, Contracts, Licenses, FCC Licenses and Intangibles, necessary
for the continued operation of the Owned Stations in the same manner as
currently operated.
4.12 Personnel Information; Employee Benefit Plans.
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(a) Borrower has heretofore delivered to Lender a
true and complete list of all persons employed at the Owned Stations, including
a description of all compensation arrangements affecting such persons and a
description of the basis for their compensation.
(b) All of Borrower's Employee Plans and Compensation
Arrangements are listed and described in Section 4.12 of the Disclosure
Schedule, and true, correct and complete copies of any such written Employee
Plans and Compensation Arrangements (or related insurance policies) have been
furnished to Lender, along with copies of any employee handbooks or similar
documents describing such Employee Plans and Compensation Arrangements, True,
correct and complete descriptions of any unwritten Employee Plans or
Compensation Arrangements also are provided in Section. 4.12 of the Disclosure
Schedule. Except as disclosed in Section 4.12 of the Disclosure Schedule,
Borrower is not a party to and does not have in effect or to become effective
after the date of this Agreement any bonus, cash or deferred compensation,
severance, medical, health or hospitalization, pension, profit sharing or
thrift, retirement, stock option, employee stock ownership, life or group
insurance, death benefit, welfare, incentive, vacation sick leave, disability or
trust agreement or arrangement.
(c) Each Employee Plan and Compensation Arrangement
has been administered in compliance with its own term and in material compliance
with the provisions of ERISA, the Code, the Age Discrimination in Employment Act
and any other applicable Federal or state laws.
(d) Borrower does not contribute to and is not
required to contribute to any Multi-employer Plan with respect to its employees,
and neither Borrower nor any other trade or business under common control with
Borrower (within the meaning of Sections 414(b), (c), (a) or (o) of the Code)
have incurred or reasonably expect to incur any "withdrawal liability," as
defined under Section 4201 et seq. of ERISA.
(e) At all times on or prior to the closing, the
Employee Plans, to the extent such Employee Plans are intended to be
tax-qualified, satisfy all coverage and minimum participation requirements if
any, imposed on such Employee Plans by the applicable terms of the Code and
ERISA.
(f) Borrower is not aware of the existence of any
governmental audit or examination of any Employee Plan or compensation
Arrangement or of any facts which would lead it to believe that any such audit
or examination is pending or threatened. There exists no action, suit or claim
(other than routine claims for benefits) with respect to any Employee Plan or
Compensation Arrangement pending or, to the knowledge of Borrower, threatened
against any of such plans or arrangements, and Borrower possesses no knowledge
of any facts which could give rise to any such action, suit or claim.
(g) Except as described in Section 4.12 of the
Disclosure Schedule, neither Borrower nor any other trade or business under
common control with Borrower (within
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the meaning of Sections 414(b), (c), (m) or (o) of the Code) sponsor, maintain
or contribute to any Employee Plan or Compensation Arrangement that provides
retiree medical or retiree life insurance coverage to former employees of
Borrower.
(h) Except as described in Section 4.12 of the
Disclosure Schedule, with respect to each Employee Plan and, to the extent
applicable, each Compensation Arrangement: (i) each Employee Plan that is
intended to be tax-qualified, and each amendment thereto, is the subject of a
favorable determination letter, and no plan amendment that is not the subject of
a favorable determination letter would affect the validity of an Employee Plants
letter; (ii) no liability to the Pension Benefit Guaranty corporation has been
or is expected by Borrower or any trade or business under common control with
Borrower (within the meaning of Sections 414(b), (c), (a) or (o) of the Code) to
be incurred; (iii) no Employee Plan ever has incurred an "accumulated funding
deficiency," as such term is defined in Section 302(a)(2) of ERISA and Section
412(a) of the Code, whether or not waived, and otherwise always has fully met
the funding standards required under Title I of ERISA and Section 412 of the
Code; (iv) no "reportable events" as that term in defined in Section 4043(b)(1)
through (8) of ERISA and, to the knowledge of Borrower, Section 4043(b)(9) of
ERISA, ever has occurred with respect to any Employee Plan; (v) there are no
unfunded liabilities with respect to any Employee Plan, i.e., the actuarial
present value of all "benefit liabilities" determined within the meaning of
section 401(a)(2) of the Code) under such Employee Plan, whether or not vested,
does not exceed the current value of the assets of such Employee Plan; (vi) no
prohibited transaction, within the definition of section 4975 of the Code or
Title 1. Part 4 of ERISA, has occurred which would subject Borrower to any
liability; and (vii) all contributions premiums or payments accrued, in whole or
in parts under each Employee Plan or Compensation Arrangement or with respect
thereto as of the Closing will be paid by Borrower prior to the Closing,
including, but not limited to, contributions thereto with respect to the plan
year ending immediately prior to the Closing.
(i) Section 4.12 of the Disclosure Schedule contains
a true, correct and complete list of all qualified beneficiaries, an defined
under Section 4980B(g)(1) of the Code as of the effective date of this Agreement
(excluding, however, qualified beneficiaries who are in the election period for
continuation coverage but who have not yet elected continuation coverage) with
respect to Borrower's operation of the owned Stations, There have been no
failures to provide continuation coverage as required by Section 4980B(f) of the
Code.
(j) For purposes of this Agreement, the following
terms shall have the meaning indicated: (i) "Employee Plan" shall mean any
pension, profit-sharing, deferred compensation, vacation, bonus, incentive,
medical, vision, dental, disability, life insurance or any other employee
benefit plan as defined in Section 3(3) of ERISA to which Borrower or any entity
related to Borrower (under the terms of Section 414(b), (c), (m) or (o) of the
Code) contributes or to which Borrower or any entity related to Borrower (under
the terms of Sections 414(b), (c), (m) or (o) of the Code) sponsors, maintains
or otherwise is bound; (ii) "Code" shall mean the Internal Revenue Code of 1986,
as amended, any successor thereto and any regulations promulgated thereunder;
(iii) "Compensation Arrangement" shall mean any plan or
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compensation arrangement other than an Employee Plan, whether written or
unwritten which provides to employees, former employees, officers, directors and
shareholders of Borrower or any entity related to Borrower (under the terms of
Section 414(b), (c), (m) or (o) of the Code) any compensation or other benefits,
whether deferred or not, in excess of bass salary or wages, including, but not
limited to, any bonus or incentive plan, stock rights plan, deferred
compensation arrangement life insurance, stock purchase plan, severance pay plan
and any other employee fringe benefit plan; (iv) "ERISA" shall mean the Employee
Retirement Income Security Act of 1974, as amended, any successor thereto and
any regulations promulgated thereunder; and (v) "Multi-employer Plan" means a
plan, as defined in ERISA Section 3(37), to which Borrower or any entity related
to Borrower (under the terms of Section 414(b) or (c) of the Code) contributes
or is required to contribute.
(k) Borrower has provided to Lender a copy of all
employment contacts with Owned Station employees, all employee handbooks and
employment policies or procedures* Borrower agrees to provide Lender access to
all personnel records for any and all Owned Station employees.
4.13 Labor Relations. Except as not forth in Section 4.13 of
the Disclosure schedule, Borrower is not a party to any collective bargaining
agreement. Borrower is in compliance in all material respects and have complied
in all material respects with respect to the operations of the Owned Stations
with all applicable laws, rules and regulations relating to the employment of
labor including, without limitation, those related to wages, hours, collective
bargaining, occupational safety, discrimination, and the payment of social
security and other payroll-related taxes. Except as set forth in Section 4.13 of
the Disclosure Schedule, there are no organizing campaigns, picketing, work
stoppages, work slow-downs, work to the rule campaigns, strikes, unfair labor
practice charges, arbitrations, lawsuits or other labor disputes, disturbances
or other controversies or proceedings pending or to Borrower's knowledge
threatened involving Borrower or the employees of any Owned Station or any labor
union or other collective bargaining unit claiming to represent any of the
employees of any Owned Station or seeking to organize the employees of any Owned
Station.
4.14 Litigation. Except as set forth in Section 4.14 of the
Disclosure Schedule, there is no litigation or material action, proceeding or
investigation pending or to Borrower's knowledge threatened against or affecting
Borrower or any owned Station in any federal, state or local court, or before
any arbitrator or administrative agency (including, without limitation, any
proceeding which seeks the forfeiture of, or opposes the renewal of, any of the
FCC Licenses or the other Licenses listed in Section 4.5 of the Disclosure
Schedule), or which seeks to enjoin or prohibit, or otherwise questions the
validity of, any action taken or to be taken pursuant to or in connection with
this Agreement, the Note or any Related Document or which adversely affects
Borrower's ability to perform its obligations under this Agreement, the Note or
any other Related Document. Except as set forth in Section 4.14 of the
Disclosure schedule, neither Borrower nor any Owned Station nor any of the
Assets is subject to any Judgment, write, order, injunction, award or decree by
any court, arbitrator or governmental authority, including any administrative
agency.
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4.15 Reports. All material returns, reports and statements
currently required to be filed by Borrower with the FCC and any other
governmental agency relating to the operations of any Owned Station have been
filed, and all reporting requirements of the FCC and other governmental
authorities having jurisdiction thereof have been complied with in all material
respects. All of such reports, returns and statements are complete and correct
in all material respects as filed. All documents required by the FCC to be
maintained in Borrower's public file (as defined by the rules of the FCC) are
contained therein.
4.16 Taxes. Borrower has filed, or caused to be filed, all
federal, state and local tax returns which are required to be filed in
connection with its ownership interest in and operation of the Owned Stations
owned by Borrower, Except as set forth in Section 4.16 of the Disclosure
Schedule, Borrower has paid, or made provisions for the payment of, (i) all
taxes (including interest and penalties) shown due on such returns for the
periods covered thereby, except such accrued and unpaid taxes for which
appropriate accruals are reflected in the Financial Statements and (ii) all tax
deficiencies (including interest and penalties) assessed as a result of any
examination of tax returns of Borrower by federal, state or local tax
authorities. Borrower is not delinquent in the payment of and there are no
claims pending for the payment of, any tax (including interest and penalties) of
any nature whatsoever that could impose transferee liability upon Lender.
4.17 Compliance with Laws. Except as set forth in Section 4.17
of the Disclosure Schedule, the operations of each Owned Station have been and
are in compliance in all material respects with all FCC Licenses and any other
material Licenses and all applicable laws, regulations and other requirements of
all federal, state and local governmental authorities having jurisdiction over
such Owned Station and its operations.
4.18 Absence of Certain Changes. Except an set forth in
Section 4.18 of the Disclosure Schedule, since September 30, 1994, (a) to the
date hereof, no Owned Station has suffered a Material Adverse Change and (b)
each Owned Station has been operated in the ordinary course and consistent with
past practices and neither Borrower nor the Owned Stations have:
(i) incurred any obligation or liability (fixed,
accrued, contingent or otherwise) except normal trade or business obligations
and liabilities incurred in the ordinary course of business, none of which is
materially adverse;
(ii) mortgaged, pledged or subjected to any other
lien any of the Assets, tangible or intangible otherwise than in the ordinary
course of business;
(iii) sold, assigned, transferred, leased or
otherwise disposed of or agreed to sell, assigns transfer, lease or otherwise
dispose of any of the Assets, tangible or intangible, except for a fair
consideration in the ordinary course of business, or acquired or leased any
assets or properties except for a fair consideration in the ordinary course of
business;
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<PAGE>
(iv) cancelled or compromised any claim or liability
other than in the ordinary course of business;
(v) except as shown on the Financial Statements,
waived or released any rights of value or modified any material agreement,
whether or not in the ordinary course of business;
(vi) transferred or granted any rights under any
lease, licenses, agreements, trademarks, trade names, service marks or
otherwise;
(vii) entered into or renewed any employment
contracts or compensation agreements or made, agreed to make or announced any
change in employment policies or procedures, wages, compensation or employee
benefits for any Owned Station employee, except as may be required by an
existing employments agreement, as required by law, or as otherwise expressly
provided herein;
(viii) suffered any material casualty losses or
damages (whether or not any such loss or damage shall have been covered by
insurance);
(ix) terminated, discontinued, closed or disposed of
any plant, facility or business operation;
(x) revalued any of the Assets (whether tangible or
intangible) or changed any of its accounting records or practices or changed its
depreciation or amortization policies or rates;
(xi) made, or forgiven, any loans or advances to any
person, other than for travels customer entertainment or business promotion not
in excess of $5,000 to any one person; or
(xii) entered into any agreement to do any of the
foregoing.
4.19 Transactions with Affiliates. Except for Kerby E. Confer,
Keymarket Consultants, Inc. and as disclosed in Section 4.19 of the Disclosure
Scheduler Borrower in not now, a party, directly or indirectly, to any contract,
lease, arrangement or transaction whether for the purchase, lease or sale of
property, for the rendition of services or otherwise, with any Affiliate of
Borrower, or any officer, director, employee, proprietor, shareholder or any
"associate of Borrower (as the term "associate" is defined in Rule 405 of the
Rules and Regulations promulgated under the Securities Act of 1933, as amended).
4.20 Environmental Matters.
---------------------
(a) Borrower is not in violation of, and has no
liability or obligation under, any applicable order, judgment, injunction,
award, decree or writ or any applicable law, statute, code, ordinance,
regulation or other requirement of any government or political
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<PAGE>
subdivision thereof, whether federal, state, local or foreign, or any agency,
regulatory authority or instrumentality of any such government or political
subdivision, or any court or arbitrator relating to pollution or protection of
health, public welfare or the environment ("Environmental Orders and Laws"),
including, without limitation, Environmental Orders and Laws relating to
Releases, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials.
There are no claims, actions, suits, proceedings, investigations or inquiries
pending or, to the knowledge of Borrower threatened, and there are no judgments,
orders, writs, or decrees entered against Borrower or relating to or affecting
any Owned Station by or before any federal, state or other court or governmental
authority or agency concerning any Environmental Orders and Laws. None of the
Owned Stations or Borrower has received written notice from the United states
Environmental Protection Agency or any other governmental authority that it is
or may be considered to be a potentially responsible party under any
Environmental Orders and Laws with respect to any site that is listed on the
National Priorities List, the Comprehensive Environmental Response, Compensation
and Liability Act Information System ("CERCLIS") data base or a similar state,
provincial, regional territorial, municipal, local or foreign law list. None of
the Owned Stations or Borrower has received any written notice from any
governmental authority of any condition on any property where any Owned Station
or Borrower has caused Hazardous Materials to be disposed of which would require
any remedial action or removal action, as such terms are defined in
Environmental Orders and Laws.
(b) No lion has been attached to (or is, to the
knowledge of Borrower, threatened to be attached to) any real or personal
property owned or leased by Borrower or relating to any Owned Station pursuant
to any Environmental Orders and Laws. There has been no treatment, storage or
Release of any Hazardous material by any Person on any property owned, operated,
or leased by Borrower or, relating to any Owned Station at any time in any
manner that could reasonably be expected to lead to a material liability. There
are no sites, locations or operations at which there are currently being
undertaken, or have completed, any remedial or response action relating to any
Release of any Hazardous Material, as required by Environmental Orders and Laws.
Borrower has obtained, and is in compliance in all material respects with, all
permits, licenses, authorizations, registrations and other governmental consents
required by applicable Environmental Orders and Laws ("Environmental Permits"),
True, correct and complete copies of all Environmental Permits have been
provided to Lender.
(c) Except as disclosed in Section 4.20 of the
Disclosure Scheduler all of the property owned or leased by Borrower is free of
contamination from any Hazardous Materials, and no discharge, spillage,
uncontrolled loss, seepage or filtration of Hazardous Materials has occurred at,
upon, under or within any property owned or leased by Borrower or at, upon,
under or within any contiguous real estate. Any Hazardous Materials removed for
disposal from the facilities used by Borrower was and is documented, transported
and disposed of in compliance in all material respects with all applicable
Environmental orders and Laws. Except as described in Section 4.20 of the
Disclosure Schedule, none of the property owned or leased by Borrower now
contains, or to the knowledge of Borrower, in the past has contained, any
underground or above ground tanks for the storage of Hazardous Materials. Any
underground storage tanks and/or solid waste disposal facilities owned by
Borrower are used in
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compliance in all material respects with Environmental orders and Laws. There
are-no polychlorinated biphonyls ("PCBs") in any facilities (as defined under
Environmental Orders and Laws) on, about, under or within such properties and
there is no friable asbestos at, on, about, under or within such properties.
4.21 OSHA Matters. Each Owned Station and Borrower is in
compliance in all material respects with the requirements of the occupational
Safety and Health Act and the regulations promulgated thereunder and any similar
laws or regulations of any state or local jurisdiction ("OSHA"). None of the
Owned Stations or Borrower has received any citation from the occupational
Safety and Health Administration or any comparable administration of any state
or local jurisdiction (an "Administration") or any Administration inspector
getting forth any respect in which the facilities or operations of such Owned
Station or Borrower are not in compliance with OSHA, or the regulations under
such act, which non-compliance has not been corrected or remedied to the
satisfaction of such Administration or inspector. Borrower has heretofore
furnished to Lender copies of all citations heretofore issued to any Owned
Station or Borrower and relating to any Owned Station under OSHA and copies of
all correspondence from and to such Administration and any Administration
inspectors during the past three years.
4.22 Insurance. Section 4.22 of the Disclosure Schedule lists
all insurance policies of Borrower which relate to the ownership of the Owned
Stations. All of such policies are in full force and effect and Borrower is not
in default in any material respect thereunder.
4.23 LMA and Option. (a) Borrower has delivered to Lender
true, correct and complete copies of the LMA and Option (including any and all
amendments and other modifications thereto). Each of the LMA and Option is in
full force and effect and constitutes the legal, valid, binding and legally
enforceable obligation of Borrower (and, to the knowledge of Borrower, of the
other parties thereto), and Borrower has good, valid and indefeasible title to
the INA and Option, free and clear of any liens or encumbrances except as set
forth in section 4.23(a) of the Disclosure Schedule. Except as set forth in
Section 4.23(a) of the Disclosure Schedule, there is not, under the LMA or
Option, any existing default, event of default or other event which, with or
without due notice or laps of time or both, would constitute a default or event
of default on the part of Borrower or, to the knowledge of Borrower, any other
party thereto. The Option constitutes the only option hold by Borrower for the
purchase of any radio station and the LMA constitutes the only time brokerage
agreement (including sales and marketing agreements with respect to any radio
station. Each of the INA and Option has been and is in compliance in all
material respects with all licenses, permits, and other authorizations issued by
the FCC or any other federal, state, or local governmental authority to any LMA
Owner which are used or useful in the business and operations of any LMA
Station, and all applicable laws, regulations and other requests of all federal,
state and local governmental authorities having jurisdiction over the LMA
Station related thereto and its operations; and
(b) Each of the representations set forth in Article
IV hereof with respect to Borrower and the Owned Stations are hereby made, to
the knowledge of Borrower with respect to the LMA owners and the LMA Stations
and are hereby incorporated herein, and each defined tern included therein shall
be deemed modified such that the definitions of each
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such term applies to the LMA Owners and the LMA Stations. Set forth an Section
4.23 of the Disclosure Schedule is all of the analogous information to the
extent reasonably available to Borrower relating to the LMA Owners, Borrower, as
operator of the INA Stations, and LMA Stations that is set forth in Sections 4.1
through 4.22 of the Disclosure Schedules with respect to Borrower and Owned
Stations.
4.24 No Commitment of Borrower. No part of any of the Owned
Stations or the Assets is directly or indirectly subject in any manner to any
oral or written commitment or any arrangement for the sale, transfer, assignment
or disposition thereof, in whole or in part.
4.25 Defaults. No Possible Default or Event of
Default exists hereunder or will exist after giving effect to the making of the
Loans.
4.26 Liabilities. Borrower has no Liability of any nature,
whether due or to become due, absolute, contingent, or otherwise, including
Liabilities for taxes and any interest or penalties relating thereto, except for
Liabilities permitted pursuant to Section 6.2 of this Agreement. Borrower does
not know, nor does it have reason to know, of any basis for the assertion
against Borrower of any other Liability,
4.27 Accounts. Each material account (as that term is defined
in the Uniform Commercial Code) as shown on Borrower's books and records,
whether currently existing or hereafter arising, is or will be genuine and in
all respects is or will be what it purports to be, subject to a reasonable
allowance for doubtful accounts consistent with industry practice. The whole of
the balance indicated as being unpaid and owing with respect to each such
account on the books of Borrowers in, and shall be, unpaid and owing.
4.28 No Other Names. Borrower has not conducted business under
any name other than the name in which it executed this Agreement.
4.29 Material Restrictions. Borrower in not a party to any
agreement or other instrument and is not subject to any other restriction that
materially and adversely affects its business, property, assets, operations, or
condition, financial or otherwise.
4.30 Stock of Borrower. The authorized capital stock of
Borrower consists of 100,000 shares of Common Stock, par value $1.00 per share,
1,000 shares of which are issued and outstanding and none of which are hold as
treasury stock. Confer has good, valid and marketable title to all shares of
capital stock of Borrower, free and clear of all Liens, except Permitted Liens.
All of the shares of capital stock of Borrower are duly authorized, validly
issued, fully-paid, nonassessable and free of any preemptive rights, duties or
other governmental charges and have been issued in compliance with all
applicable state and federal laws concerning the issuance of securities. There
are no shares of capital stock of Borrower reserved for issuance.
4.31 Options, Warrants, Rights. Borrower has no outstanding
securities convertible into or evidencing the right to purchase shares or
subscribe for any of its capital
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stock nor does it have any outstanding or authorized subscriptions options
(including inactive and non-qualified stock options), warrants, calls, rights,
commitments or any other agreements or arrangements preemptive or contractual
obligating it to issue any shares of its capital stock or any securities
convertible into or evidencing the right to purchase or subscribe for any shares
of such stock or any other similar arrangements. There are no agreements,
understandings or arrangements with respect to the dividend rights, voting, sale
or transfer of shares of the capital stock of Borrower. There are no irrevocable
proxies executed by confer and no existing rights of Confer to require Borrower
to register any securities of Borrower or to participate with Borrower in any
registration by Borrower of its securities.
4.32 Disclosure. No representation or warranty contained in
this Agreement, in the Disclosure Schedule or any other Related Document to
which Borrower is a party, contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements herein
or therein, taken as a whole, in light of the circumstances under which they
were made, not misleading.
ARTICLE V
Affirmative Covenants
---------------------
Borrower agrees that so long as this Agreement remains in
effect or any of the Loan Obligations remain unpaid, Borrower will perform and
observe each of the following provisions, unless Lender expressly permits in
writing the nonperformance or nonobservance of such provision.
5.1 Conduct of Business of the Stations. Subject to other
provisions of this Agreement, Borrower will conduct the business and operations
of each Station according to the ordinary and usual course of business
consistent with past practices.
5.2 Maintenance of Assets, Records and Inventory. Borrower
will maintain the Assets or replacements thereof in good operating condition and
repair, ordinary wear and tear excepted. Borrower will keep adequate records and
books of account, in which complete entries will be made in accordance with
generally accepted accounting principles consistently applied, reflecting all
financial transactions of Borrower, Borrower will maintain levels of inventory
and spare parts consistent with past practices and will continue to make
operating, promotional and marketing expenditures in the ordinary course of
business consistent with past practices. From and after March 28, 1995, the
Borrower shall not be obligated to make capital expenditures (other than such
expenditures necessary for the maintenance of the normal and customary
operations of the Stations, which shall be made in the ordinary course of
business) except if such capital expenditures are approved by Lender ("Approved
Capital Expenditures"); provided that any equipment ordered prior to March 28,
1995 in connection with $41,500 of WSPA-AM leasehold improvements and a $75,000
STL expenditure for the WSPA-FM studio move shall be purchased by Borrower in
accordance with such orders.
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5.3 Access to Information. Borrower will give Lender and its
authorized representatives reasonable access during normal business hours to the
Assets and to the books and records relating thereto, and will furnish or cause
to be furnished to Lender and their authorized representatives all information
relating to the stations, as Lender may from time to time reasonably request;
provided, however, that the rights of Lender under this Section 5.3 shall not be
exercised in any manner that would interfere unreasonably with the operation of
the Stations. Borrower will use reasonable efforts to obtain, and to provide to
Lender, any information relating to the LMA Stations and LMA Owners (including
such information to be disclosed on Section 4.23 of the Disclosure Schedule) to
the extent such information is not reasonably available to Borrower on the date
of such execution of this Agreement.
5.4 Financial and Other Information. Borrower will, unless
Lender shall otherwise consent in writing, furnish to Lender:
(a) Monthly Financial Statements. As soon as
available and in any event within thirty (30) days after the close of each
month, an unaudited statement of income and expense of the Stations, all
prepared in accordance with generally accepted accounting principles
consistently applied and fairly presenting the financial condition and results
of operations of the Stations as of the dates and for the period indicated;
(b) Annual Financial Statements. As soon as available
and in any event within ninety (90) days after the end of each fiscal year of
Borrower, a balance sheet of the Stations of the end of such fiscal year, and a
statement of income and retained earnings of the Stations for such fiscal year,
and a statement of change in financial position of the Stations for such fiscal
year, all in reasonable detail and stating in comparative form the respective
consolidated figures for the corresponding date and period in the prior fiscal
year and all prepared in accordance with generally accepted accounting
principles consistently applied and as to the consolidated statements and
certified by the chief financial officer of Borrower or, if requested by Lender,
accompanied by an opinion thereon acceptable to Lender by KPMG Peat Marwick or
other independent accounts selected by Borrower and acceptable to Lender.
(c) Accountant's Reports. Promptly upon receipt
thereof, copies of any reports submitted to Borrower by independent certified
public accountants in connection with examination of the financial statements of
Borrower made by such accountants.
(d) Information Related to ERISA. Borrower shall
administer each Employee Plan and compensation Arrangement listed in Section
4.12 of the Disclosure Schedule in compliance with its own terms and in material
compliance with the provisions of ERISA, the Code, the Age Discrimination in
Employment Act and any other applicable Federal or state laws. Promptly after
the filing or receiving thereof, copies of all reports, including annual
reports, and notices which Borrower files with or receives from the U.S.
Department of Labor; and as soon as possible and in any event within thirty (30)
days after Borrower knows or has reason to know that any Prohibited Transaction
(as defined in ERISA) has occurred with respect to any Employee Plan, Borrower
will deliver to Lender a certificate of the chief financial officer of
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Borrower setting forth details as to such Prohibited Transaction and the action
Borrower proposes to take with respect thereto.
(e) Accountant's Certificate Regarding Events of
Default. Simultaneously with the delivery of the annual financial statements
referred to in Section 5.4(b), if requested by Lender, a certificate of the
independent public accountants who audited such statements to the effect that,
in making the examination necessary for the audit of such statements, they have
obtained no knowledge of any condition or event which constitutes an Event of
Default or which, with the giving of notice or lapse of time or both, would
constitute an Event of Default, or if such accountants shall have obtained
knowledge of any such condition or event, specify in such certificate each such
condition or event of which they have knowledge and the nature and status
thereof.
(f) Other Information. Borrower shall furnish to
Lender any and all other information prepared by Borrower concerning the
condition or operations, financial or otherwise, of the Stations that Lender may
reasonably request.
5.5 Notices of Default or Breach.
Borrower will give prompt notice to Lender of (i) any
notice to Lender of (i) any notice of, or other communication relating to, any
default by Borrower or any LMA Owner under any instrument or agreement to which
Borrower is a party or by which Borrower, any Station or the Assets are bound
and (ii) any notice or other communications from any third party alleging that
the consent of such third party is or may be required in connection with the
transactions contemplated by this Agreement.
5.6 FCC Matters.
(a) Borrower will operate each Station in conformity
in all material respects with the FCC Licenses, the Communications Act of 1934,
as amended (the "Communications Act"), and the rules and regulations of the FCC
and other applicable laws, rules and regulations, and maintain the FCC Licenses
in full force and effect. Borrower shall file in a timely manner all reports,
replies and submissions required to be filed with the FCC or any other
governmental agency, department or body in respect of each of the Owned Stations
(including all FCC regulatory fee filings, with payment in full of all fees
due); all such documents will be complete and correct in all material respects.
(b) On or before August 1, 1995, Borrower shall file
with the FCC an application for renewal of the FCC Licensee for the Owned
Stations with the filing fee applicable thereto. Borrower shall thereafter
prosecute such license renewal application with all reasonable diligence and
otherwise use vigorous efforts to obtain the Renewal as expeditiously as
possible and without any adverse new conditions. If reconsideration, review or
judicial review is sought with respect to the Renewal, Borrower shall oppose
such efforts for reconsideration review or judicial review vigorously. Borrowers
shall monitor actions of the LMA Owners with respect to each of the actions set
forth in this Section 5.6(b) with respect to
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the LMA Stations and shall use its reasonable efforts to the extent it is
permitted by applicable agreements to ensure that the LMA Owners take each of
the actions required of Borrower set forth in this Section 5.6(b).
(c) If any provision of this Agreement or the
application thereof to any person or circumstance shall be contrary to the rules
and regulations of the FCC to any extent, the remainder of this Agreement and
the application of such provision to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is contrary to the rules and
regulations of the FCC, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the greatest extent possible. Lender shall
not, directly or indirectly, control, supervise or direct, or attempt to
control, supervise or direct, the operation of the Stations; such operation,
including complete control and supervision of all of each Station's programs,
employees and policies, shall be the sole responsibility of Borrowers. Nothing
in this paragraph shall affect the covenants set forth in Sections 5.1 and 6.1
hereof.
5.7 Maintenance of Insurance.
(a) Borrower shall keep all of its material property
and material equipment continuously insured in amounts not less their
replacement an in a manner so as to avoid the application of any co-insurance
clause, insuring such properties against such risks, including fire, lighting,
flood, vandalism, malicious mischief and such perils as are at any time
comprehended within the term "all risk coverages."
(b) Borrower shall further maintain in full force and
effect comprehensive general accident and public liability insurance against
claim for personal injury, death, or property damage occurring upon, in, about
or in connection with the use or operation of any properties or motor vehicles
owned, occupied, controlled, or used by it, or its employees or agents, or
arising in any other manner out of the business conducted by Borrower.
(c) All of the insurance specified in paragraphs (a)
and (b) above shall be in amounts approved from time to time by Lender and shall
be obtained and maintained by means of policies issued by generally recognized,
financially sound insurance companies. The insurance to be provided may consist
of blanket policies. Borrower shall deposit with Lender upon request
certificates or other evidence satisfactory to Lender that the insurance
required hereby had been obtained and is in full force and effect and, fifteen
days prior to the expiration of any such insurance, Borrower shall furnish
Lender upon request with evidence satisfactory to Lender that such insurance has
been renewed or replaced. At the request of Lender, Borrower shall consolidate
all of its insurance Policies with Lender's insurance policies.
(d) All proceeds of insurance payable in respect of
damage or destruction to any of Borrower's property shall (1) if no Event of
Default or Possible Default
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then exists, be paid to Borrower to be used solely for repair or replacement of
the property so damaged or (2) if an Event of Default or Possible Default then
exists, be applied, in Lenders discretion, against Lender Debt then outstanding,
whether or not then due and payable.
5.8 Money Obligations. Borrower shall pay in full when due all
taxes, assessments, and governmental charges and levies for which it may be or
become liable or to which any or all of its properties may be or become subject
and all of its other obligations calling for the payment of money (except in
each such case only those so long as and to the extent that the same shall be
diligently contested in good faith by appropriate and timely proceedings and for
which Borrower has established adequate reserves) in accordance with normal
business practices and with the terms governing the same.
5.9 Notice. Borrower shall promptly notify Lender (a) whenever
any Event of Default or Possible Default may occur hereunder or any
representation or warranty made in this Agreement or in any Related Document may
for any reason cease in any material respect to be true and complete, (b)
whenever any action, suit or proceeding is commenced by or against Borrower
which, if successful, might materially and adversely affect Borrower or its
ability to perform its obligations hereunder, and (c) whenever any material
adverse change occurs in the assets or proportion of Borrowers.
5.10 Continued Existence; Compliance with Law. Borrower shall
preserve, renew, and keep in full force and effect (i) its existence and good
standing as a corporation in the jurisdiction of its incorporation and qualify
and remain qualified as a foreign corporation in each jurisdiction in which such
qualification is required and (ii) its material rights, certificates, permits
and Licenses, and Borrower shall comply in all material respects with all FCC
Licenses and any other material Licenses and all applicable laws, regulations,
and other requirements of all federal, state and local governmental authorities
having jurisdiction over the Owned Stations and their operations. Without
limiting the generality of the foregoing, Borrower shall maintain and preserve
in full force and effect, and shall not breach or violate, its Licenses and
Contracts if such breach or violation might materially and adversely affect
Borrower or its ability to perform its obligations hereunder.
5.11 Title to Property. All property, whether real or
personal, of Borrower shall be held in the name of Borrower or such Subsidiary,
except for such property which is rented or leased.
5.12 Conduct of Business. Borrower will continue to engage in
an efficient and economical manner in a business of the same general type as now
conducted by it.*
5.13 Consents. Borrower will cooperate with Lender to obtain
from any contracting party with whom Borrower has a contract or agreement,
including without limitation, if requested by Lender, the Contracts, the LMA or
the Option, a consent to the grant by Borrower of a security interest in such
contract or agreement to Lender and Buyer's Lenders.
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5.14 Option. Borrower will exercise the Option at the earliest
possible date under the terms of the Option; provided, however, that Borrower
will give Lender written notice prior to exercising the Option and will refrain
from exercising the Option for so long as Lender objects to the exercise of the
Option by Borrower.
ARTICLE VI
Negative Covenants
------------------
Borrower agrees that so long as this Agreement remains in
effect or any of the Loan Obligations remain unpaid, Borrower shall not directly
or indirectly take any of the actions set out in this Section 6 nor permit any
of the conditions set out herein to occur without the prior written consent of
Lender.
6.1 Conduct of Business of the Stations. Without limiting the
generality of Section 5.1 above, Borrower, unless otherwise consented to in
writing by Lender:
(a) will not enter into or renew any transaction,
contract or commitment (including, without limitation, trade or barter
agreements) that involve a value of more than $5,000, individually, or $25,000
in the aggregate for Borrower, except for time sales agreements for cash entered
into in the ordinary course of business at such Station's prevailing rates for a
term not to exceed one year;
(b) (i) will not sell, assign, transfer or otherwise
dispose of any Assets, except in connection with the acquisition of equivalent
replacement property; (ii) will not permit a sale, exchange, transfer or other
disposition of the stock or partnership interests (or any portion thereof) of
Borrower; and (iii) will not solicit or entertain any discussions with respect
to the foregoing;
(c) will not increase the compensation payable, or to
become payable, to any employee of any Station by more than 5% for any
subsequent term, except as required by existing written agreements that have
been disclosed to Lender in writing;
(d) will not (i) modify, amend, renew, change or
terminate in any respect any contract, including any existing license, lease,
contract or other similar document relating to any Station in any manner that
night have the effect of materially and adversely (a) affecting its financial
condition, (b) affecting the rights of Lender, or (c) decreasing the value of
the collateral securing the Loans; or (ii) undertake any borrowing from third
parties of any nature whatsoever relating to any Station;
(e) will not enter into any collective bargaining
agreement covering any employees, through negotiations or otherwise, or make any
commitment or incur any liability to any labor organization with respect to any
employees; and
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(f) will not purchase or enter into any contract to
purchase (a) the stock of any company; (b) the assets of any company purchased
as part of the acquisition of a business except in connection with any permitted
exercise of the Option; or (c) any other acquisition of assets involving in any
single transaction more than $10,000.
6.2 Indebtedness and Liabilities. Borrower shall not incur,
create, assume, or permit to exist any Indebtedness or Liabilities, except:
(a) Indebtedness arising hereunder or any other
Indebtedness owed to Lender;
(b) unsecured trade accounts payable and other
unsecured current Liabilities incurred and paid in the ordinary course of
business;
(c) liabilities for taxes, assessments, governmental
charges, liens, or similar claims to the extent that payment thereof shall not
be required to be made by the provisions hereof;
(d) any transfer of a check or other medium of
payment for deposit or collection through normal banking channels or any similar
transaction in the normal course of business; and
(e) Liabilities or Indebtedness incurred in
connection with Permitted Liens.
6.3 Guaranties. Borrower shall not pledge its credit or
property in any manner, or otherwise become responsible, for the payment or
other performance of the indebtedness, contract, or other obligation of another
Person and shall not act as a guarantor (whether of payment or of collection),
surety, co-maker, endorser, or agree conditionally or otherwise to make any
purchase, loan, or investment in order thereby to enable another Person to
prevent or correct a default of any kind, except in connection with endorsements
of negotiable instruments for collection in the ordinary course of business.
6.4 Notes, Accounts Receivable, and Claims. Borrower shall not
sell, discount, or otherwise dispose of any note or account receivable, with or
without recourse, except for collection in the ordinary course of business; fail
to assert timely any claim, cause of action, or contract right that it possesses
against any third party; nor agree to settle or compromise any such claim, cause
of action, or contract right except for settlements or compromises made in the
reasonable exercise of business judgment in the ordinary course of business.
6.5 Amendment of Governing Documents. Borrower shall not amend
or modify its Articles of Incorporation or Bylaws unless required by law.
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6.6 Issuance and Sale of Equity Interest. Borrower shall not
(a) issue or sell any capital stock or other equity interest or securities
convertible into or exercisable for any of its capital stock or other equity
interest; (b) permit the transfer of any of its capital stock or other equity
interest; (c) make any direct or indirect redemption purchase or other
acquisition of any of its capital stock; (d) issue any shares of its capital
stock or any other securities, effect any stock split or otherwise change its
capitalization as it exists on the date hereof; or (e) grant, confer or award
any options, warrants, conversion rights or other rights to acquire any shares
of its capital stock.
6.7 Mergers and Consolidations. Borrower shall not be a party
to any consolidation, merger, recapitalization, or other form of reorganization,
or transfer all or substantially all of its assets (as an entirety or
substantially as an entirety in one transaction or a series of related
transactions) to any Person.
6.8 Liens. Borrower shall not (a) acquire any property outside
the ordinary course of business that is subject to any inventory consignment,
lease, land contract, or other title retention contract except as otherwise
expressly permitted herein, or (b) suffer or permit any of the Assets (whether
now owned or hereafter acquired) to be or become encumbered by any mortgage,
security interest, pledge, financing statement, or lien of any kind or nature,
other than Permitted Liens.
6.9 Restricted Payments and Restricted Investments. Borrower
shall not make any Restricted Payments or Restricted Investments.
6.10 Transactions with Affiliates. Borrower shall not enter
into any transaction with any Affiliate, unless such transaction is on terms
which are no less favorable than those reasonably obtainable by Borrower in a
comparable arms'-length transaction with a Person that is not an Affiliate.
6.11 ERISA. Borrower shall not create, become a party to,
incur any liability to or in respect of, or agree or incur any obligation to
contribute to, any Employee Plan other than Employee Plans listed on Section
4.12 of the Disclosure Schedule.
6.12 Accounting Matters. Borrower shall not change its fiscal
year or accounting basis.
6.13 Change of Name. Borrower shall not change its name nor
use any trade name other than its true corporate name, without the prior written
consent of Lender.
ARTICLE VII
Closing Conditions
------------------
7.1 Conditions to the Obligations of Lander to Effect the
Transactions Contemplated Hereby. The obligations of Lander to make the Closing
Date Loan shall be
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further subject to the fulfillment at or prior to the Closing Date of the
following conditions, any one or more of which may be waived in writing by
Lender:
(a) Borrower shall, in all material respects, have
performed and complied with all covenants and agreements contained in this
Agreement required to be performed or complied with by Borrower at or prior to
the closing Date, and all of the representations and warranties of Borrower set
forth in this Agreement shall be true, correct and complete in all material
respects as of the Closing Date as though made at and as of such Closing Date,
except for any representation or warranty that is stated as of a specified
earlier date, in which case such representation and warranty shall be true and
correct in all material respects as of such date. Lender shall have received a
certificate to the effect set forth in the preceding sentence signed on behalf
of Borrower by an executive officer authorized on behalf of Borrower, which
certificate shall be given by such officers after due inquiry, but without
personal liability.
(b) Borrower shall have executed and delivered the
Note.
(c) Borrower shall have executed and delivered to
Lender security agreements mortgages and other Related Documents in form and
substance satisfactory to Lender pursuant to which Borrower grants to Lender a
duly perfected first priority lion on all of the Assets, including real,
personal and mixed property of Borrower, now owned and hereafter acquired which
Lender has heretofore requested or may request, and Borrower shall have caused
Confer to have executed and delivered to Lender pledge agreements and other
Related Documents in form and substance satisfactory to Lender pursuant to which
Confer grants to Lender a duly perfected first priority lion on all of the
capital stock of Borrower.
(d) Lender and Lender's lenders shall have received
opinions addressed to Lender and its lenders in form and substance reasonably
satisfactory to Lender and its lenders.
(e) Lender shall have received from Borrower copies,
certified by an executive officer of Borrower of resolutions adopted on behalf
of Borrower authorizing the execution, delivery and performance of this
Agreement, the Note the Related Documents and all instruments and documents to
be delivered in connection herewith and therewith and the transactions
contemplated hereby and thereby.
(f) Borrower shall have delivered to Lender certified
copies of (a) the Articles of Incorporation of Borrower, certified by the
Secretary of State of the state of its incorporation as of the most recent date
practicable; (b) the Bylaws of Borrower, certified by the secretary of Borrower;
and (c) a certificate of the secretary of Borrower certifying the names of the
officers of Borrower authorized to sign this Agreement, the Note and the other
Related Documents, together with the true signatures of such officers.
(g) No litigation, action or proceeding shall be
pending or threatened before any court, administration or other governmental
agency or arbitrator which (i) challenges or seeks to restrain or prohibit the
condition of the Transactions contemplated hereby; (ii) seeks
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to obtain from Lender or any of its affiliates any material damages as a result
of the transactions contemplated hereby; (iii) may result in the revocation,
cancellation, suspension forfeiture, modification, or impairment of any of the
FCC Licenses; or (iv) is otherwise reasonably likely to result in or have a
Material Adverse Change on any Station or on Lender.
(h) Since the date of this Agreement there shall not
have been any Material Adverse Change in Borrower; provided that a change,
effect or development shall not be doomed a Material Adverse Change hereunder,
if such change, effect or development is primarily the result of general
economic conditions or matters affecting the radio broadcasting industry
generally.
(i) Lender shall have received the audited statements
of income and expense and cash flows for Borrower for the year ended December
31, 1994 and audited balance shoots of Borrower for the year ended December 31,
1994.
(j) Borrower shall have delivered to Lender such
other certificates, opinions, agreements and documents, in form and substance
satisfactory to Lender, an Lender reasonably may request.
(k) Borrower shall have delivered a certificate
signed on behalf of Borrower by an executive officer authorized on behalf of
Borrower setting forth a schedule of insurance with respect to each of the
insurance policies required pursuant to Section 5.7 hereof, and Lender shall be
satisfied with the nature and scope of the insurance policies and each such
insurance policy shall have Lender as loss payee for amounts in excess of an
amount reasonably requested by Lender.
(1) The Assets shall be free and clear of any
liabilities, liens, security interests or encumbrances other than Permitted
Liens and liens created under the Related Documents in favor of Lender.
(m) If available following Borrower's reasonable
efforts to obtain them, Borrower shall deliver an executed Landlord Estoppel
Certificate, substantially in the form annexed hereto as Exhibit B-l for each
leased tower, office and studio site of each Owned Station and a Non-Disturbance
Agreement, substantially in the form of Exhibit B-2 for the leased properties
identified with an asterisk in Section 4.6 of the Disclosure Schedule.
(n) Lender shall have received copies of the
information described in subsections 5.4(a) for the most recent period ended on
or prior to the closing Date, and all such information shall be in form and
substance reasonably satisfactory to Lenders.
(o) The closing under the Keymarket Purchase
Agreement shall have occurred.
(p) At the Closing, Borrower shall deliver to Lender
a certificate of an authorized officer of Borrower setting forth the "Working
Capital Balance* (as hereinafter
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defined) or "Working Capital Deficit" (as hereinafter defined) as the case may
be* As used herein, the term "Working Capital Balance" shall mean the amount, if
any, by which *Current Assets" exceed "Current Liabilities", and the term
"Working Capital Deficit" shall mean the amount, if any, by which "Current
Liabilities" exceed "Current Assets"* As used herein, (A) the term "Current
Liabilities" shall mean the sum, as of 12:01 a.m. on the Closing Date, with
respect to the Borrower of (i) trade accounts payable, (ii) accrued expenses and
(iii) other current liabilities of the Seller, excluding (x) the current portion
of the indebtedness under this Loan Agreement or any long-term indebtedness of
the Seller that is being discharged at the Closing, and, interest thereon, (y)
accrued sick pay and accrued vacation pay of employees of Seller, except for
employees fitting within the categories set forth in Exhibit L to the Keymarket,
Purchase Agreement and (B) the term "Current Assets" shall mean the sun, as of
12:01 a.m. on the Closing Date, with respect to the Borrower, of (i) accounts
receivable (net of a bad debt reserve of 5 % of the face amount of such accounts
receivable) and (ii) prepaid expenses and other current assets of Seller except
(x) prepaid expenses relating to insurance and other contracts of Seller of the
type not being assumed under the Keymarket Purchase Agreement, (y) inventory and
(z) that portion of prepaid expenses with respect to which revenue already has
been received. For purposes hereof, accrued sick pay and accrued vacation pay
shall have the same meaning as provided for such terms in Section 2.6 of the
Keymarket Purchase Agreement. Except as otherwise expressly provided for herein,
Current Assets and Current Liabilities shall be determined in accordance with
generally accepted accounting principles consistently applied. Lender shall have
a period of ninety (90) days after Closing to submit any changes to such
certificate. If the Borrower and Lender do not agree on such changes to the
certificate, any dispute will be resolved in accordance with the procedures set
forth in Section 2.6 of the Keymarket Purchase Agreement.
ARTICLE VIII
Events of Default
-----------------
8.1 Payments. If the principal or any installment of interest
due under the Note shall not be paid in full when due or if any other Loan
Obligations (other than any installment of principal or interest) due hereunder
shall not be paid in full within ton days of the date when due.
8.2 Covenants. If Borrower shall fail or omit to perform,
observe, or satisfy any agreement, covenant, or other provision (other than
those referred to in Section 8.1. hereof) contained or referred to in this
Agreement or any Related Document and such failure shall not have been fully
corrected within thirty days after: (a) the giving of written notice thereof to
Borrower by Lender that the specified Possible Default is to be remedied; or (b)
Lender is notified of such Possible Default or should have been notified
pursuant to Section 5.9 above, whichever is earlier; provided, however, that if
any such failure does not admit of correction, then such failure shall be deemed
to be an Event of Default an of the date of occurrence of such failure.
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8.3 Borrower's Solvency. If Borrower or Confer shall (a)
discontinue business, or (b) generally not pay its or his (as applicable) debts
as such debts become due, or (c) make a general assignment for the benefit of
creditors, or (d) apply for or consent to or acquiesce in the appointment of a
receiver, a custodian, a trustee, or liquidator of all or a substantial part of
its or his (as applicable) assets, or (e) be adjudicated a debtor or have
entered against it or him (as applicable) an order for relief under Title 11 of
the United States Code, as the same may be amended from time to time, or (f)
file a voluntary case in bankruptcy or file a petition or an answer smoking
reorganization or an arrangement with creditors or seeking to take advantage of
any other law (whether federal or state) relating to relief of debtors, or admit
(by answer, by default or otherwise) the material allegations of a petition
filed against it or him (as applicable) in any bankruptcy reorganization,
insolvency, or other proceeding (whether federal or state) relating to relief of
debtors, or (g) suffer or permit to continue unstayed and in effect for sixty
consecutive days any judgment, decree, or order, entered by a court or
governmental commission of competent jurisdiction, that assumes custody or
control of Borrower or Confer (as applicable) approves a petition seeking its or
his (as applicable) reorganization or any other judicial modification of the
rights of its or his (as applicable) creditors, or appoints a receiver,
custodian, trustee, or liquidator for Borrower or Confer (as applicable) or of
all or a substantial part of its his (as applicable) assets, or (h) take, or
omit to take, any action in order thereby to effect any of the foregoing.
8.4 Challenge to Enforceability. If the validity or
enforceability of any provision of this Agreement, the Note or any other Related
Document shall be contested by Borrower or by any stockholder or officer of
Borrower, or by any other Person who has executed any Related Document, or
Borrower or any such other Person shall deny that it or he has any further
liability or obligation hereunder or thereunder.
8.5 Condemnation. Any courts government or governmental agency
shall condemn, seize, or otherwise appropriate, or take custody or control of,
any portion of the property of Borrower, if such condemnation, seizure, or other
appropriation could have a material adverse effect upon Borrower or its ability
to perform its obligations under this Agreement, the Note or any of the other
Related Documents.
8.6 Security Agreements. Any security agreement, mortgage,
pledge agreement, financing statement or other security document included in the
Related Documents shall, at any time after its execution and delivery and for
any reasons cease (1) to create a valid and perfected first priority security
interest in and to the property purported to be subject to such agreement or (2)
to be in full force and effect or shall be declared null and void, or the
validity or enforceability thereof shall be contested by the party thereto or
the party thereto shall deny it has any further liability or obligation under
such agreement.
8.7 Support Agreement. The Keymarket Purchase Agreement or the
Lender's Option shall, at any time after its execution and delivery and for any
reason, cease to be in full force and effect or shall be declared null and void,
or the validity or enforceability thereof shall be contested by the party
thereto or the party thereto shall deny it has any further liability or
obligation under the Keymarket Purchase Agreement or the Lender's Option.
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<PAGE>
8.8 FCC Licenses. If any FCC License relating to any Owned
Station shall be (i) cancelled, revoked or finally denied renewal for any reason
or (ii) renewed on terms which could reasonably be expected to result in a
Material Adverse Change on any Station or in Borrower.
8.9 Employee Retirement Income Security Act. Any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Internal
Revenue code) involving any Employee Plan exists with respect to Borrower or any
ERISA Affiliate and in such event or condition, together with all other events
or conditions, if any, could in the opinion of Lender subject Borrower to any
tax, penalty, or other liability to or with respect to an Employee Plan which in
the aggregate exceed or may exceed Twenty-Five Thousand Dollars ($25,000).
ARTICLE IX
Remedies Upon Default
---------------------
9.1. Optional Defaults. If any Event of Default (other than
the Event of Default referred to in Section 8.3 hereof) occurs, Lender, upon
written notice to Borrower, may accelerate the maturity of all Loan Obligations,
whereupon all Loan Obligations shall become immediately due and payable in full
without any presentment or demand and without any further or other notice of any
kind, all of which are hereby waived by Borrower.
9.2 Automatic Default. If any Event of Default referred to in
Section 8.3 hereof occurs, all principal of and interest on the Note and all of
Borrower's other Loan Obligations shall thereupon become immediately due and
payable in full, all without any presentment, demand, or notice of any kind,
which are hereby waived by Borrower.
9.3 Offsets. If there shall occur or exist any Event of
Default or Possible Default referred to in Section 8.3 hereof or if the maturity
of the Note is accelerated pursuant to Section 9.1 or 9.2 hereof or otherwise,
Lender shall have the right at any time to set off against, and to appropriate
and apply toward the payment of, any and all Lender Debt then owing to Lender by
Borrower, whether or not the same shall then have matured, all indebtedness then
held or owing by Lender to or for the credit or account of Borrower, all without
notice to or demand upon Borrower or any other Person, all such notices and
demands being hereby expressly waived by Borrower.
9.4 Performance by Lender. If at any time Borrower fails or
refuses to pay or perform (i) any obligation or duty to any Person, except for
payments that are the subject of bona fide disputes in the ordinary course of
business, or (ii) any obligation or duty (including each of the agreements and
covenants by Borrower hereunder), Lender may, in its sole discretion, pay or
perform the same on behalf of Borrower, and Borrower shall promptly repay all
amounts so paid, and all costs and expenses so incurred. This repayment
obligation shall become a Loan obligation and shall bear interest at the Default
Rate.
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9.5 Other Remedies. Upon the occurrence of an Event of Default
hereunder, and during the continuance thereof, Lender may exercise any other
right, power, or remedy as may be provided herein, in the Note, or an may be
provided at law or in equity, including, without limitation, the right to seek
specific performance and/or monetary damages. In recognition of the unique
nature of the Loans made hereunder and the damages which Lender will suffer in
the event of a breach by Borrower, Borrower hereby waives any defense that
Lender has an adequate remedy at law for the breach of this Agreement by
Borrower.
ARTICLE X
Miscellaneous Provisions
------------------------
10.1 Interpretation. Each right, power or privilege specified
or referred to in this Agreement or in any Related Document is in addition to
any other rights, powers, or privileges that Lender may otherwise have or
acquire by operation of law, by other contract or otherwise. No course of
dealing in respect of, nor any omission or delay in the exercise of, any right,
power, or privilege by Lender shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any further or other exercise
thereof or of any other right, power or privileges, as each right, powers or
privilege may be exercised independently or concurrently with others and as
often and in such order as Lender nay deem expedient.
10.2 Expenses of Lenders: Indemnity. Whether or not the
transactions contemplated hereby are consummated, except as otherwise expressly
provided herein, all costs and expenses incurred in connection with the
negotiation, preparation and execution of this Agreement, the Related Documents
and the transactions contemplated hereby will be paid by the party incurring
such costs and expenses.
Borrower agrees to pay the reasonable costs and expenses,
including the fees and disbursements of Lender's legal counsel, incurred by
Lender, in connection with (1) the enforcement of this Agreement and the Note;
(2) enforcement of any amendment to or waiver of this Agreement, the Note or the
other Loan Obligations; (3) any proceeding brought or formal action taken by
Lender to enforce any provision of this Agreement, the Note or the other Loan
Obligations or to enforce or exercise any right, power, or remedy hereunder or
thereunder; (4) any action that may be taken or instituted by any Person against
Lender an a result of any of the foregoing; and (5) the implementation of this
Agreement and the Related Documents including, without limitation, the
reasonable fees and expenses of outside legal and business counsel. To the
extent the Lender's Option is exercised, Borrower agrees to pay the reasonable
costs and expenses, including the fees and disbursements of Lender's legal
counsel, incurred by Lender in connection with the negotiation or preparation of
any amendment to or waiver of this Agreement, the Note or the other Loan
obligations which amounts shall be added to the amount of Loans hereunder. If
any taxes shall be payable, or ruled to be payable, to any State or Federal
authority with respect to the execution, delivery, and performance of this
Agreement, the Note or any other Loan Obligation by reason of any existing or
hereinafter enacted Federal or State statute, including without limitation any
documentary stamp tax, Borrower will pay all such
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taxes, including interest and penalties thereon, if any, and will indemnify and
hold harmless Lender against any liability in connection therewith.
10.3 Further Assurances. Borrower take, or cause to be taken,
all actions, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the Loans by, and security interests granted to, Lender contemplated by this
Agreement. From time to time after the Closing Date, without further
consideration, Borrower will, at Lender's expense, execute and deliver, or cause
to be executed and delivered, such additional security agreements, mortgages,
memoranda of lease, Lender's title insurance policies, deeds of trust, pledge
agreements, assignments, licenses, landlord consents and releases and all other
instruments or documents (including, without limitation, UCC financing
statements, fixture filings or similar documents required in order to perfect
the liens created by the security documents included in the Related Documents),
statements, agreements and reports to Lender as Lender may request and to
evidence, preserve protect perfect or otherwise implement or assure the rights
of Lender as contemplated herein and in the Related Documents and to evidence
the representations and warranties of Borrower.
10.4 Amendment and Modification. This Agreement may be
amended, modified or supplemented only by written agreement of Borrower and
Lender. No waiver by Lender of any right, power, or remedy under any of such
instruments shall be effective unless given in writing by Lender.
10.5 Waiver of Compliance; Consents. Except as otherwise
provided in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation, warranty,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. Whenever this Agreement
requires or permits consent by or on behalf of any party hereto, such consent
shall be given in writing in a manner consistent with the requirements for a
waiver of compliance as set forth in this Section 10.5.
10.6 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given when delivered personally or by
Federal Express or other comparable nationally recognized courier service
(receipt requested) or by facsimile transmission telexed or mailed by registered
or certified mail (return receipt requested), postage prepaid, to the parties at
the following addresses (or at such other address for a party an shall be
specified by like notice; provided that notices of a change of address shall be
effective only upon receipt thereof):
To BORROWER:
- ------------
Keymarket Communications, Inc.
2743 Perimeter Parkway
Building 100, Suite 250
- 38 -
<PAGE>
Augusta, Georgia 30909
Attention: Mr. Donald J. Alt
Telephone: (706) 855-0555
Telecopy: (706) 855-1955
Copies to:
- ----------
Joel B. Piassick, Esq.
Kilpatrick & Cody
1100 Peachtree Street
Suits 2800
Atlanta, Georgia 30309
Telephone: (404) 815-6527
Telecopy: (404) 815-6555
Mr. Richard A. Churchill
MC Partners
75 State Street
Suite 2500
Boston, Massachusetts 02109
Telephone: (617) 345-7200
Telecopy: (617) 345-7201
Bruce E. Rogoff, Esq.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
Telephone: (617) 542-6000
Telecopy: (617) 542-2241
To LENDER:
- ----------
c/o River City Broadcasting, L.P.
1215 Cole Street
St. Louis, Missouri 63106
Attention: Mr. Larry D. Marcus
Telephone: (314) 259-5700
Telecopy: (314) 259-5709
- 39 -
<PAGE>
Copies to:
- ----------
John T, Byrnes, Esq.
Dow, Lohnes & Albertson
1255 23rd Street, N.W.
Suite 500
Washington, D.C. 20037
Telephone: (202) 857-2518
Telecopy: (202) 857-2900
10.7 Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns (including, without
limitation, any subsequent holders, if any, of the Note or any replacement
Note(s)), but, except as provided for herein, neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by Borrower
without the prior written consent of Lender.
The parties agree as follows:
(a) Without the consent of Borrower, Lender may
assign its rights and obligations under this Agreement to any other party or
parties; and Lender or such assignee may assign Lender's or such assignee's
rights to indemnification hereunder to its lenders. To the extent this Agreement
is assigned by Lender in accordance with the terms of this Section 10.7, Lender
will take, or cause to be taken, all actions, and do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the assignment contemplated by this Section 10.7.
Furthermore, to the extent this Agreement is assigned by Lender in accordance
with the terms of this Section 10.7 to a party that is not an Affiliate of
Lender, upon such assignment Lender shall have no further obligations under this
Agreement and Borrower's only recourse under this Agreement shall be against
such assignee of Lender.
(b) Except as expressly provided herein, this
Agreement is not intended to, and shall not, confer upon any other person except
the parties hereto any rights or remedies hereunder.
10.8 Governing Law. THIS AGREEMENT AND THE NOTE SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF MISSOURI (BUT NOT THE LAWS PERTAINING TO
CHOICE OF LAW) AS TO ALL MATTERS, INCLUDING BUT NOT LIMITED TO MATTERS OF
VALIDITY, CONSTRUCTION, EFFECT, PERFORMANCE AND REMEDIES.
10.9 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
- 40 -
<PAGE>
10.10 Headings. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning-or
interpretation of this Agreement.
10.11 Entire Agreement. This Agreement, including the Exhibits
hereto, the Disclosure Schedule and the documents delivered pursuant to the
Agreement, including the Note and the other Related Documents, embody the entire
agreement and understanding of the parties hereto in respect of the transactions
contemplated by this Agreement. The Exhibits hereto and the Disclosure Schedule
are an integral part of this Agreement and are incorporated by reference herein.
This Agreement supersedes all prior negotiations, agreements and understandings
between the parties with respect to the transactions contemplated by this
Agreement and all letters of intent and other writings relating to such
negotiations agreements and understandings.
10.12 Severability. If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provision to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law so long as
the economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid or unenforceable, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the greatest
extent possible.
10.13 Press Releases. No press releases or other public
announcements concerning this Agreement or the transactions contemplated hereby
shall be made by any party hereto without the prior written consent of the other
party unless the first such party is legally compelled to do so.
10.14 Publicity. Neither Borrower nor Lender shall make or
issue or cause to be made or issued, any announcement (written or oral)
concerning this Agreement or the transactions contemplated hereby for
dissemination to the general public without the prior consent of the other
party. This provision shall not apply, however, to any announcement or written
statement required to be made by law or the regulations of any federal or state
governmental agency or any stock exchange, except that the party required to
make such announcement shall provide a draft copy thereof to the other party
hereto, and consult with such other party concerning the timing and content of
such announcement, before such announcement is made.
10.15 Survival of Agreements. All covenants, agreements,
representations, and warranties made herein or in any Related Document shall
survive any investigation and the Closing Date, and shall continue in full force
and effect so long as any of the Loan obligations remain to be performed or
paid.
- 41 -
<PAGE>
10.16 Termination. This Agreement shall terminate when all
Loan Obligations shall have been paid in full and all other obligations under
this Agreement, the Note and any other Related Document shall have been fully
performed.
10.17 FCC and License Compliance. Notwithstanding anything
herein or in any of the Related Documents to the contrary, but without limiting
or waiving Borrower's obligations hereunder or under any of the Related
Documents, Lender's remedies hereunder and under the Related Documents are
subject to compliance with the Communications Act of 1934, as amended, the
Licenses and with all applicable rules, regulations and policies of the FCC and
any other governmental authority that has issued a License, and Lender will not
take any action pursuant to this Agreement or any of the Related Documents that
will constitute or result in any assignment of an FCC License or other License
or any change of control of the Station if such assignment of License or change
of control would require under then existing law or the terms of any License
(including the written rules and regulations promulgated by the FCC), the prior
approval of the FCC or any other governmental authority, without first obtaining
such approval. This Agreement, the Related Documents and the transactions
contemplated hereby and thereby do not and will not constitute, create, or have
the effect of constituting or creating, directly or indirectly, actual or
practical ownership of Borrower by Lender or control, affirmative or negative,
direct or indirect, of Borrower by Lender, over the management, or any other
aspect of the operations of Borrower, which ownership and control remains
exclusively and at all times in the stockholders, officers, and employees of
Borrower until such time as Lender has complied with such law, rules,
regulations and policies.
10.8 WAIVER OF JURY TRIAL. BORROWER, TO THE EXTENT PERMITTED
BY LAW, WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN LENDER AND BORROWER
ARISING OUT OF, IN CONNECTION WITH, RELATING TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR THE
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.
- 42 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their respective duly authorized officers as of the
date first above written.
BORROWER:
KEYMARKET OF SOUTH CAROLINA, INC.
By: /s/Kerby E. Confer
------------------------
Name: Kerby E. Confer
Title: President
LENDER:
RIVER CITY BROADCASTING, L.P.
By: BETTER COMMUNICATIONS, INC,
General Partner
By: /s/LarryD. Marcus
------------------------------
Name: Larry D. Marcus
Title: Vice President
- 43 -
<PAGE>
EXHIBITS & DISCLOSURE SCHEDULES
-------------------------------
LISTING
-------
EXHIBITS
--------
EXHIBIT A - Promissory Note
EXHIBIT B-l - Landlord Estoppel Certificate
EXHIBIT B-2 - Non-Disturbance Agreement
DISCLOSURE SCHEDULES
--------------------
Section 4.1 - Organization and Standing
Section 4.4 - Consents
Section 4.5 - FCC Licenses and Other Licenses
Section 4.6 - Real Property
Section 4.7 - Tangible Personal Property
Section 4.8 - Contracts
Section 4.9 - Intangibles
Section 4.10 - Financial Statements
Section 4.12 - Personnel Information; Employee Benefit Plan
Section 4.13 - Labor Relations
Section 4.14 - Litigation
Section 4.16 - Taxes
Section 4.17 - Compliance with Laws
Section 4.18 - Absence of Certain Changes
Section 4.19 - Transactions with Affiliates
Section 4.20 - Environmental Matters
Section 4.22 - Insurance
Section 4.23 - LMA and Option
- 44 -
<PAGE>
EXHIBIT A
---------
PROMISSORY NOTE
---------------
$11,200,000 July 7, 1995
FOR VALUE RECEIVED, the undersigned, KEYMARKET OF SOUTH
CAROLINA, Inc, a South Carolina corporation (the "Maker"), promises to pay to
the order of RIVER CITY BROADCASTING, L,P, a Delaware limited partnership (the
"Payee"), in the manner and at the place provided in that certain Loan
Agreement, dated as of July 7, 1995, between the Maker and the Payee (as the
same may be further amended, modified, restated or extended from time to time,
the "Loan Agreement"), the lesser of (x) the principal sum of Eleven Million Two
Hundred Thousand Dollars ($11,200,000) and (y) the unpaid principal amount of
all advances made by Payee to Maker as the Loans under the Loan Agreement,
together with interest accrued thereon as provided in this Note. Capitalized
terms used herein without definition shall have the meanings assigned those
terms in the Loan Agreement.
The unpaid principal balance of this Note shall bear interest
prior to maturity at the rates determined in accordance with the provisions of
the Loan Agreement.
This Note evidences indebtedness of the Maker to the Payee
arising under the Loan Agreement, to which reference is hereby made for a
statement of the rights of the Payee (including the right of the holder hereof
to declare this Note due prior to its stated maturity and the other rights and
remedies of the holder hereof) and the duties and obligations of the Maker in
relation thereto, but neither this reference to the Loan Agreement nor any
provision thereof shall affect or impair the absolute and unconditional
obligation of the Maker to pay the principal of or interest on this Note when
due.
The principal of and all interest on this Note shall be paid
as provided in the Loan Agreement in immediately available funds constituting
lawful money of the United States of America, not later than 12:00 noon (St.
Louis, Missouri time) on the day when due, at the Payee's offices at 1215 Cole
Street, St. Louis, Missouri 63106, or at such other place as the Payee may
designate in writing. Until notified in writing of the transfer of this Note in
accordance with the terms of the Loan Agreement, Maker shall be entitled to deem
Payee or such person who has been identified by the transferor in writing to
Maker as the owner and holder of this Note, as the owner and holder of this
Note. Each of Payee and any subsequent holder of this Note agrees, by its
acceptance hereof, that before disposing of this Note or any part hereof it will
make a notation hereon of all principal payments previously made hereunder and
of the date to which interest hereon has been paid; provided, however, that the
failure to make a notation of any payment made on this Note shall not limit or
otherwise affect the obligation of Maker hereunder with respect to payments of
principal or interest on this Note.
- 45 -
<PAGE>
Whenever any payment on this Note shall be stated to be due on
a day that is not a business day, such payment may be made on the next
succeeding business day and such extension of time shall in each case be
included in the computation of interest payable on this Note.
This Note is subject to prepayment as provided in Section 2.6
of the Loan Agreement.
To the extent permitted by law, the Maker and each endorser of
this Note, and their respective heirs, successors, legal representatives, and
assigns, hereby severally waive (i) any and all homestead or exemption laws and
rights, and (ii) presentment for payment, demand, protest, notice of
non-payment, notice of protest, and notice of dishonor of the debt evidenced
hereby, together with each and every other notice of any kind respecting this
Note and all lack of diligence or delays in collection or enforcement hereof.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note may become, or may be declared to be, due
and payable in the manner, upon the conditions and with the effect provided in
the Loan Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Loan Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in Section 10.7 of the Loan Agreement and as otherwise may be agreed
in writing between Maker and Payee.
If at any time the indebtedness evidenced by this Note is
collected through legal proceedings or this Note is placed in the hands of
attorneys for collection, the Maker and each endorser of this Note hereby
jointly and severally agree to pay all costs and expenses (including reasonable
attorneys' fees) incurred by the holder of this Note in collecting or attempting
to collect such indebtedness, or otherwise arising in connection with the
enforcement by such holder of any rights or remedies under this Note.
THE MAKER, TO THE EXTENT-PERMITTED BY LAW, WAIVES ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT,
TORT, OR OTHERWISE, BETWEEN THE PAYEE AND THE MAKER ARISING OUT OF, IN
CONNECTION WITH, RELATING TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS NOTE OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS
RELATED HERETO.
No delay or omission on the part of the Payee in exercising
any right hereunder shall operate as a waiver of such right or of any other
right of the Payee, nor shall any delay,
- 46 -
<PAGE>
omission or waiver on any one occasion be deemed a bar to or a waiver of the
same or any other right on any future occasion.
In case any provision (or any part of any provision) contained
in this Note shall for any reason be held by a court of competent jurisdiction
to be invalid illegal, or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision (or
remaininq part of the affected provision) of this Note, but this Note shall be
construed as if such invalid, illegal or unenforceable provision (or part
thereof) had never been contained herein but only to the extent it is invalid,
illegal or unenforceable.
THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
MISSOURI (BUT NOT THE LAWS PERTAINING TO CHOICE OF LAW) AS TO ALL MATTERS,
INCLUDING BUT NOT LIMITED TO MATTERS OF VALIDITY, CONSTRUCTION, EFFECT,
PERFORMANCE AND REMEDIES.
This note being pledged by Payee to its Lenders to secure
obligations under the First Amended and Restated Credit Agreement (the "Credit
Agreement") dated as of April 21, 1995 by and among Payee, Bank of Montreal,
Banks Trust Company and the Lenders listed therein (the "Lenders").
- 47 -
<PAGE>
IN WITNESS WHEREOF, Maker has caused this Note to be executed
and delivered by its duly authorized officer, as of the day and year and at the
place first above written,
KEYMARKET OF SOUTH CAROLINA, INC,
By: __________________________________
Name:
Title:
- 48 -
<PAGE>
TRANSACTIONS ON PROMISSORY NOTE
Outstanding
Amount of Amount of Principal
Loan Made Principal Paid Balance Notation
Date This Date This Date This Date Made By
- ---- --------- --------- --------- -------
- 49 -
<PAGE>
EXHIBIT B-1
-----------
LANDLORD ESTOPPEL CERTIFICATE
________________________ ("Landlord') is the owner of the
property described in Exhibit A. attached hereto and made a part hereof (the
"Property"). Landlord and ------------------ ("Tenant") are the parties to that
certain lease, described and identified on Exhibit B, attached hereto and made a
part hereof (the "Lease"), pursuant to which the Property as specifically
described therein (the "Leased Premises") is leased to Tenant. Tenant seeks to
assign the Lease to River City Broadcasting, L.P. ("RCB") and pursuant to the
request of RCB's lenders, desires to obtain certain assurances from Landlord
with respect to the Lease and the Leased Premises. For good and valuable
consideration, the sufficiency of which in hereby acknowledged, Landlord does
hereby certify for the benefit of Tenant, RCB and their senior secured lenders
an follows:
1. Landlord hereby consents to the execution, delivery,
enforcement and recording of mortgages and collateral assignments of and
security interests in Tenant's and RCB's interest in the Lease and the Leased
Promises and RCB's property in favor of its lenders. If the Lease terminates
prior to its expiration date, then upon request of such lenders, Landlord will
enter into a new lease of the Leased Premises with such lenders' designee upon
the same terms as are contained in the Lease for the remainder of the term of
the Lease, provided such lenders cure all defaults then existing under the
Lease.
2. The Lease is in full force and effect, is unmodified and
has not been altered in any way.
3. To the best of Landlord's knowledge, no default exists
under the Lease, and no event has occurred which, with the passage of time or
the giving of notice, or both, would constitute a default thereunder.
4. To the best of Landlord's knowledge, Tenant has been and is
in full compliance with all of its obligations under the Lease.
5. Landlord has no notice or knowledge that any petition in
bankruptcy has been filed by or against Landlord, or that Landlord has been
adjudicated a bankrupt or insolvent, or that there has been a petition or answer
filed by or against Landlord seeking or acquiescing in any reorganization
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under present federal, state or local law relating to bankruptcy,
insolvency or other relief
- 50 -
<PAGE>
for debtors, or that there has been a trustee, receiver or liquidator appointed
for all or part of Landlord's assets and properties.
LANDLORD:
Dated: ____________________________ By: __________________________
Name:
Title:
- 51 -
<PAGE>
EXHIBIT B-2
-----------
NON-DISTURBANCE AND ATTORNMENT AGREEMENT
This NON-DISTURBANCE AGREEMENT (this "Agreement") is made as
of this ___ day of ____________, 1995, by-and among _____________ (hereinafter
referred to as "Lender", RIVER CITY BROADCASTING, L.P. (hereinafter referred to
as "Tenant") and __________________ (hereinafter collectively referred to as
"Landlord").
R E C I T A L S:
----------------
WHEREAS, Landlord and ________________ were parties to that
certain lease described in Exhibit A attached hereto and made a part hereof
(hereinafter referred to as the "Lease"), relating to the premises described in
Exhibit B attached hereto and by this reference made a part hereof (hereinafter
referred to as the "Premises"); and
WHEREAS, Landlord has consented to the assignment of the Lease
by [Keymarket Entity] to Tenant pursuant to that certain Landlord estoppel
Certificate dated
, 1995; and
WHEREAS, Lender has made or has committed to make a loan to
Landlord (hereinafter referred to as the "Loan") secured by a mortgage, deed of
trust or deed to secure debt (hereinafter referred to as the "Mortgage") which
contains an assignment of leases and rents from Landlord to Lender covering the
Premises;
NOW, THEREFORE, for and in consideration of the mutual
covenants herein contained, the sum of Ten Dollars ($10.00) and other good and
valuable considerations, the receipt and sufficiency of which are hereby
acknowledged, and notwithstanding anything in the Lease to the contrary, it is
hereby agreed as follows:
1. Lender does hereby agree with Tenant that, in the event
Lender becomes the Owner of the Premises by foreclosure, conveyance in lieu of
foreclosure or otherwise so long as Tenant complies with and performs its
obligations under the Lease, (a) Lender will take no action which will interfere
with or disturb (i) possession or use of the Premises by Tenant or Tenant's
assigns, including Tenant's lenders or (ii) the exercise of any other rights
under the Lease by Tenant or Tenant's assigns, including Tenant's lenders and
(b) the Premises shall be subject to the Lease and Lender shall recognize Tenant
and Tenant's assigns, including Tenant's lenders, as the tenant of the Premises
for the remainder of the term of the Lease (including renewal options) in
accordance with the provisions thereof.
2. Tenant does hereby agree with Lender that, in the event
Lender becomes the owner of the Premises by foreclosure, conveyance in lieu of
foreclosure or otherwise, then
- 52 -
<PAGE>
Tenant shall attorn to and recognize Lender as the landlord under the Lease for
the remainder of the term thereof (including renewal options), and Tenant shall
perform and observe its obligations thereunder, subject only to the terms and
conditions of the Lease.
3. All notices and other communications hereunder shall be in
writing and shall be deemed given when delivered personally or by Federal
Express or other comparable nationally recognized courier service (receipt
requested) or by facsimile transmission, telexed or mailed by registered or
certified mail (return receipt requested), postage prepaid, to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice; provided that notices of a change of address shall be
effective only upon receipt thereof):
To Lender:
----------
------------------------------
------------------------------
------------------------------
To Tenant:
---------- River City Broadcasting, L.P.
1215 Cole Street
St. Louis, Missouri 63106
Attention: Mr. Larry D. Marcus
Telephone: (314) 259-5700
Telecopy: (314) 259-5709
To Landlord:
------------
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
4. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legal representatives,
successors, successors-in-title and assigns. When used herein, the term
"landlord" refers to Landlord and to any successor to the interest of Landlord
under the Lease.
- 53 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement under seal as of the date first above written.
LENDER:
As to Lender, signed [__________________________________]
sealed and delivered in
the presence of:
___________________________________ By: ____________________________
Unofficial Witness Name:
Title:
___________________________________ (BANK SEAL)
Notary Public
Commission Expiration Date:
(NOTARIAL SEAL)
- 54 -
<PAGE>
TENANT:
As to Tenant, signed RIVER CITY BROADCASTING, L.P.
sealed and delivered in
the presence of: By: BETTER COMMUNICATIONS,
INC., General Partner
___________________________________ By: ___________________________
Unofficial Witness Name:
Title:
___________________________________ (CORPORATE SEAL)
Notary Public
Commission Expiration Date:
(NOTARIAL SEAL)
- 55 -
<PAGE>
As to Landlord, signed LANDLORD:
sealed and delivered in
the presence of: [__________________________________]
___________________________________ By: ___________________________
Unofficial Witness
Its:______________________-
Attest:_____________________________
___________________________________ Its:___________________________
Notary Public
[CORPORATE SEAL]
Commission Expiration Date:
(NOTARIAL SEAL)
- 56 -
<PAGE>
DISCLOSURE SCHEDULES
SCHEDULE 4.1 - LOAN AGREEMENT
Organization and Standing
-------------------------
State State
Corporation Incorp. Qualified
- ----------- ------- ---------
Keymarket of South Carolina, Inc. SC --
- 57 -
<PAGE>
SCHEDULE 4.4 - LOAN AGREEMENT
Consents
--------
None.
- 58 -
<PAGE>
SCHEDULE 4.5 - LOAN AGREEMENT
FCC and Other Licences
----------------------
Keymarket of South Carolina, Inc.
1. Radio Station WORD (AM), Spartanburg, South Carolina
Renewal of Station License, expires 12/01/96
KPM-508 Remote Pickup Base,
expires 12/01/96
WLP-258 Aural 1-C Relay,
expires 12/01/96
WCP-260 Aural 1-C Relay,
expires 12/01/96
WNTA-993 Part 94 TEL
WNTB-717 Part 94 TEL
2. Radio Station WFBC (FM), Greenville, South Carolina
Renewal of Station License, expires 12/01/95
KIY-43 Aural Studio Transmitter Link,
expires 12/01/95
KPK-45[0] Remote Pickup Mobile System,
expires 12/01/95
KPL-9[0]6 Remote Pickup Mobile System,
expires 12/01/95
K[_ _]-962 Remote Pickup Base,
expires 12/01/95
K[_]-[_ _]23 Remote Pickup Mobile,
expires 12/01/95
3. Radio Station W[_ _]C (AM), Greenville, South Carolina
- 59 -
<PAGE>
Renewal of Station License, expires 12/01/95
KA-[_]8696 Remote Pickup Mobile System,
expires 12/01/95
KA-95342 Remote Pickup Mobile System,
expires 12/01/95
KFR-360 Remote Pickup Base,
expires 12/01/95
KIP-335 Remote Pickup Base,
expires 12/01/95
KPI-955 Remote Pickup Base,
expires 12/01/95
WHA-866 Aural Studio Transmitter Link,
expires 12/01/95
WYR-259 Remote Pickup Base,
expires 12/01/95
WYR-260 Remote Pickup Base
expires 12/01/95
4. Satellite Uplink
E910487 Domestic Fixed Satellite,
expires 08/30/2001
- 60 -
<PAGE>
SCHEDULE 4.6 - LOAN AGREEMENT
Real Property
-------------
Keymarket of South Carolina, Inc.
Greenville/Spartanburg, SC
Call Letters: WFBC (AM/FM)
WORD (AM)
Studio: All three stations operate from studio at:
501 Rutherford Street
Greenville, SC 29609
Owned by Keymarket of south Carolina, Inc.
Tower Sites:
WFBC-AM
59 North Sixth Street
Greenville, SC 29611
Owned by Keymarket of South Carolina, Inc.
WFBC-FM 505 Hemlock Trail Cleveland, SC
29635 *Leased from Multimedia, Inc.
WORD-AM
383 Belcher Road
Inman, SC 29349
Owned by Keymarket of South Carolina, Inc.
Reservations, exceptions and exclusions:
1. As to 501 Rutherford Street:
Apparent encroachment of parking spaces off circular drive onto insured
premises as shown on a plat of survey for Multimedia, Inc. and KSDK,
Inc., by Piedmont Surveyors, dated February 18, 1983, and recorded in
Plat Book 9-J, page 66, RMC Office.
2. As to 59 North Sixth Street:
- 61 -
<PAGE>
Title to those portions of the property within the bounds of Birnie
Street, Vance Street, and 60-foot street as shown on Plat 000, page 65,
said RMC Office.
Lack of record title as to the remaining Portion of 31,65-acre tract,
20 acres, more or less, prior to December 29, 1966, being the date of
recordation of Deed to Southeastern Broadcasting Corporation from Abney
Mills, dated November 16, 1966, and recorded in Deed book 810, page
142, RMC Office for Greenville County, South Carolina; also, defects,
liens, or encumbrances (including, among others, possible outstanding
interests of former owners, or those claiming under them), created
prior to recordation of said deed.
- 62 -
<PAGE>
SCHEDULE 4.7 - LOAN AGREEMENT
Tangible Personal Property
--------------------------
Copies of the Tangible Personal Property list are available from Dow,
Lohnes and Albertson or River City Broadcasting, L.P.
- 63 -
<PAGE>
SCHEDULE 4.81/
Contracts
---------
KEYMARKET OF SOUTH CAROLINA, INC.
WFCB-AM/FM & WORD-AM
REVENUE
Network
- -------
CBS - WFBC/FM
- WFBC/AM
- WORD/AM
ABC -
Affiliation AGT
Sports Rights
- -------------
Clemson
Furman University Athletic Department Sports Ntwk Agt. 05/08/92
Other Revenue
- -------------
Carolina Sound, Inc. 01/01/89
DIRECT COSTS
National Rep
- ------------
The KATZ Agency, Inc. - FM 03/23/70 (Illegible)
- AM 03/23/70 (Illegible)
Licensing
- ---------
Broadcast Music, Inc. - WFBC/AM02/03/94
- WFBC/FM
- WORD/AM
SESAC Inc. - WFBC 04/27/88
- WORD 03/15/91
American Society of Composers, Authors and Publishers
- WFBC/FM01/01/91
- WFBC/AM01/01/91
- WORD/AM01/01/91
- --------
1/ Contracts listed on Schedule 4.6 are incorporated herein by reference.
- 64 -
<PAGE>
PROGRAMMING
Talent
- ------
Michael Reagan Show
Richard Ervasti d/b/a Dick Ervasti Prod
Music Services
- --------------
Vallie Consulting
Shane Media
Program Rights
- --------------
EFM Media Management - FM 10/25/90
- AM 12/07/93
Tony Griffin
Carolina Panthers
Atlanta Braves
NPR - Clemson Satellite
Dow, Jones & Company, Inc. - Wall Street Journal Report 04/19/94
SJS Entertainment Promedia, Inc. 06/09/94
Premiere Radio Networks 02/03/92
Gold Comedy Network
News/Weather
- ------------
Accu-Weather, Inc. 05/21/92
The Associated Press WFBC-AM/FM/WORD 07/22/93
Weatherline, Inc. 07/10/90
TECHNICAL
Technical - Rent
- ----------------
Tower Lease Agreement Between KSDK, Inc. and Multimedia
SALES DEPARTMENT
Rating Services
- ---------------
The Arbitron Ratings Company 03/26/91
Tapscan Incorporated 04/07/93
Marketing Research Partners, Inc. 01/21/94
Griffin Radio Research Reports 12/12/92
ADVERTISING PROMOTION
Advertising/Promotion
- ---------------------
Film House, Inc. 01/21/94
CUZ - Robert Michaelson
- 65 -
<PAGE>
GENERAL & ADMINISTRATIVE
G&A - Rent/Lease
- ----------------
Alco Capital Resources, Inc. Copier Lease 03/31/93
AT&T Credit Corporation Voice Mail System 09/14/89
AT&T Credit Corporation Voice Mail System 01/12/90
Spartanburg Business
Advanced Business Systems (copier service) 03/30/93
Computer Services
- -----------------
Columbine Systems, Inc. AM/FM/WORD 09/30/93
Columbine Printer Main Agt
Radio Computing Services, Inc. 07/24/92
Building Services
- -----------------
Southeastern Alarm (Date Illegible)
(Alarm Security Company)
Jam Productions, Inc. 01/20/94
LMA
- ---
Spartan Radiocasting Company 08/30/94
- 66 -
<PAGE>
SCHEDULE 4.9 - LOAN AGREEMENT
Intangibles
-----------
WFBC-AM
WFBC-FM
WORD-AM
- 67 -
<PAGE>
SCHEDULE 4.10 - LOAN AGREEMENT
Financial Statements
--------------------
None.
- 68 -
<PAGE>
SCHEDULE 4.12 - LOAN AGREEMENT
Personnel Information; Employee Benefit Plans
---------------------------------------------
Health and Life Insurance
- 69 -
<PAGE>
SCHEDULE 4.13 - LOAN AGREEMENT
Labor Relations
---------------
None.
- 70 -
<PAGE>
SCHEDULE 4.14 - LOAN AGREEMENT
Litigation
----------
None.
- 71 -
<PAGE>
SCHEDULE 4.16 - LOAN AGREEMENT
Taxes
-----
None.
- 72 -
<PAGE>
SCHEDULE 4.17 - LOAN AGREEMENT
Compliance with Laws
--------------------
None.
- 73 -
<PAGE>
SCHEDULE 4.18 - LOAN AGREEMENT
Absence of Certain Changes
--------------------------
None.
- 74 -
<PAGE>
SCHEDULE 4.19 - LOAN AGREEMENT
Transactions with Affiliates
----------------------------
None.
- 75 -
<PAGE>
SCHEDULE 4.20 - LOAN AGREEMENT
Environmental Matters
---------------------
PCBs relative to WFBC-AM, at Tower Site at 501 Rutherford Road, which
are presently being removed, the cost of which is being reimbursed by
Multimedia, Inc.
- 76 -
<PAGE>
SCHEDULE 4.22 - LOAN AGREEMENT
Insurance
---------
Employer Reinsurance Corporation - broadcasters liability, errors and omissions
Continental - general liability, workman's compensation, auto, fire and casualty
- 77 -
<PAGE>
SCHEDULE 4.23 - LOAN AGREEMENT
LMA and Option
--------------
Section 4.23(a)
None
Section 4.23(b)
I. Spartan Radiocasting Company
Schedule 4.5: WSPA-AM, Spartanburg, SC
WSPA-FM, Spartanburg, SC
Schedule 4.8: See attached 4.23(a)
Schedule 4.9: WSPA-AM
WSPA-FM
- 78 -
<PAGE>
PROGRAM DEPARTMENT CONTRACTS 4.23(a)
WSPA-FM
Contract Name
- -------------
Broadcast Programming, Inc. - Music Service 11/15/94
MCA Skywatch Traffic, Inc.
CBS, Inc.05/02/94 (with Spartan Radiocasting Company)
Jack Taddeo Communications Corp. 03/31/92
Jeff Davis Productions 05/03/94 - TFN
Carried, but not under contract:
Surfside Diner Beach show (Sundays 7P - 12M)
WSPA-AM
Contract Name
- -------------
Host Communications, Inc. 07/27/94
Charlotte Hornets 1994 - '95 (no date)
South Carolina Network, Inc. 07/22/82
(with Spartan Radiocasting Company)
Clear Channel Radio 05/25/94
(with Spartan Radiocasting Company)
WSB, Inc. 12/10/91
Mutual Broadcasting System, Inc. 07/20/93
Jim Hightower Show 03/02/93
Champion Productions 11/01/93
(with Spartan Radiocasting Company)
The Broadcast Group 02/06/89
(with Spartan Radiocasting company)
CBS Radio Programs 08/24/92
(with Spartan Radiocasting company)
Whitaker Productions 06/02/94
(with Spartan Radiocasting Company)
Dow Jones and Company, Inc. 10/19/92
(with Spartan Radiocasting Company)
MCA Skywatch Traffic, Inc. 12/30/93
Carried, but not under contract:
Wofford College Football and Basketball
High School Football Game of The Week
Battle of The Brains (8th Grade Quiz Show)
On The House-SNP Radio Network
NFL Football (CBS Radio Network)
- 79 -
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Defined Terms
1.1 Definitions..........................................................1
1.2 List of Other Definitions............................................8
ARTICLE II
Amount and Terms of Credit
2.1 Loans................................................................8
2.2 Interest.............................................................9
2.3 Maturity............................................................10
2.4 The Note............................................................10
2.5 Payments............................................................10
ARTICLE III
The Closing
3.1 Time and Place of Closing...........................................10
ARTICLE IV
Borrower's Representations and Warranties
4.1 Organization and Standing...........................................11
4.2 Subsidiaries........................................................11
4.3 Authorization and Binding Obligation................................11
4.4 Consents and Approvals; No Violation................................11
4.5 Governmental Authorizations.........................................12
4.6 Title to and Condition of Real Property.............................13
4.7 Title to and Condition of Tangible Personal Property................14
4.8 Contracts...........................................................15
4.9 Intangibles.........................................................15
4.10 Financial Statements................................................16
4.11 Totality of Assets..................................................16
4.12 Personnel Information; Employee Benefit Plans.......................16
4.13 Labor Relations.....................................................18
4.14 Litigation..........................................................19
4.15 Reports.............................................................19
4.16 Taxes...............................................................19
4.17 Compliance with Laws................................................20
4.18 Absence of Certain Changes..........................................20
4.19 Transactions with Affiliates........................................21
4.20 Environmental Matters...............................................21
4.21 OSHA Matters........................................................22
4.22 Insurance...........................................................23
4.23 LMA and Option......................................................23
- i -
<PAGE>
4.24 No Commitment of Borrower...........................................23
4.25 Defaults............................................................23
4.26 Liabilities.........................................................24
4.27 Accounts............................................................24
4.28 No Other Names......................................................24
4.29 Material Restrictions...............................................24
4.30 Stock of Borrower...................................................24
4.31 Options, Warrants, Rights...........................................24
4.32 Disclosure..........................................................24
ARTICLE V
Affirmative Covenants
5.1 Conduct of Business of the Stations.................................25
5.2 Maintenance of Assets, Records and Inventory........................25
5.3 Access to Information...............................................25
5.4 Financial and Other Information.....................................26
5.5 Notices of Default or Breach........................................27
5.6 FCC Matters.........................................................27
5.7 Maintenance of Insurance............................................28
5.8 Money Obligations...................................................28
5.9 Notice..............................................................29
5.10 Continued Existence; Compliance with Law............................29
5.11 Title to Property...................................................29
5.12 Conduct of Business.................................................29
5.13 Consents............................................................29
5.14 Option..............................................................29
ARTICLE VI
Negative Covenants
6.1 Conduct of Business of the Stations.................................30
6.2 Indebtedness and Liabilities.......................................30
6.3 Guaranties..........................................................31
6.4 Notes, Accounts Receivable, and Claims..............................31
6.5 Amendment of Governing Documents....................................31
6.6 Issuance and Sale of Equity Interest................................31
6.7 Mergers and Consolidations..........................................32
6.8 Liens...............................................................32
6.9 Restricted Payments and Restricted Investments......................32
6.10 Transactions with Affiliates........................................32
6.11 ERISA...............................................................32
6.12 Accounting Matters..................................................32
6.13 Change of Name......................................................32
ARTICLE VII
Closing Conditions
7.1 Conditions to the Obligations of Lander to Effect the
Transactions........................................................32
- ii -
<PAGE>
ARTICLE VIII
Events of Default
8.1 Payments............................................................35
8.2 Covenants...........................................................35
8.3 Borrower's Solvency.................................................35
8.4 Challenge to Enforceability.........................................36
8.5 Condemnation........................................................36
8.6 Security Agreements.................................................36
8.7 Support Agreement...................................................36
8.8 FCC Licenses........................................................36
8.9 Employee Retirement Income Security Act.............................37
ARTICLE IX
Remedies Upon Default
9.1. Optional Defaults...................................................37
9.2 Automatic Default...................................................37
9.3 Offsets.............................................................37
9.4 Performance by Lender...............................................37
9.5 Other Remedies......................................................37
ARTICLE X
Miscellaneous Provisions
10.1 Interpretation......................................................38
10.2 Expenses of Lenders: Indemnity......................................38
10.3 Further Assurances..................................................38
10.4 Amendment and Modification..........................................39
10.5 Waiver of Compliance; Consents......................................39
10.6 Notices.............................................................39
10.7 Assignment..........................................................41
10.8 Governing Law.......................................................42
10.9 Counterparts........................................................42
10.10 Headings............................................................42
10.11 Entire Agreement....................................................42
10.12 Severability........................................................42
10.13 Press Releases......................................................42
10.14 Publicity...........................................................42
10.15 Survival of Agreements..............................................43
10.16 Termination.........................................................43
10.17 FCC and License Compliance..........................................43
10.8 WAIVER OF JURY TRIAL................................................43
EXHIBITS & DISCLOSURE SCHEDULES
LISTING.............................................................45
- iii -
<PAGE>
EXHIBITS
Exhibit A - Promissory Note..........................................46
Exhibit B-1 - Landlord Estoppel Certificate............................51
Exhibit B-2 - Non-disturbance and Attornment Agreement.................53
DISCLOSURE SCHEDULES
Schedule 4.1 - Loan Agreement - Organization and Standing...............58
Schedule 4.4 - Loan Agreement - Consents................................59
Schedule 4.5 - Loan Agreement - FCC and Other Licences..................60
Schedule 4.6 - Loan Agreement - Real Property...........................62
Schedule 4.7 - Loan Agreement - Tangible Personal Property..............64
Schedule 4.8 - Contracts................................................65
Schedule 4.9 - Loan Agreement - Intangibles.............................68
Schedule 4.10 - Loan Agreement - Financial Statements....................69
Schedule 4.12 - Loan Agreement - Personnel Information; Employee
Benefit Plans...........................70
Schedule 4.13 - Loan Agreement - Labor Relations.........................71
Schedule 4.14 - Loan Agreement - Litigation..............................72
Schedule 4.16 - Loan Agreement - Taxes...................................73
Schedule 4.17 - Loan Agreement - Compliance with Laws....................74
Schedule 4.18 - Loan Agreement - Absence of Certain Changes..............75
Schedule 4.19 - Loan Agreement - Transactions with Affiliates............76
Schedule 4.20 - Loan Agreement - Environmental Matters...................77
Schedule 4.22 - Loan Agreement - Insurance...............................78
Schedule 4.23 - Loan Agreement - LMA and Option..........................79
- iv -
<PAGE>
FIRST AMENDMENT TO LOAN AGREEMENT
This First Amendment to Loan Agreement (the "Amendment") is
entered into as of May 24, 1996 by and between KEYMARKET OF SOUTH CAROLINA,
INC., a South Carolina corporation ("Borrower") and RIVER CITY BROADCASTING,
L.P., a Delaware limited partnership ("Lender")
WITNESSETH
WHEREAS, the Borrower and Lender are parties to that certain
Loan Agreement dated as of July 7, 1995 (the "Loan Agreement"); and
WHEREAS, Borrower has requested that Lender make certain
additional loans to it, and Lender has made, and is willing to make, such loans
on the terms and subject to the conditions set forth herein;
NOW THEREFORE, in consideration of the premises herein
contained, and for other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto hereby agree as follows:
l. Defined Terms. Capitalized terms used herein and not otherwise defined
herein shall have the meanings attributed to such terms in the Loan
Agreement.
2. Amendments of the Loan Aareement.
2.1 Section 1.1 is hereby amended by adding the following definitions
thereto in their proper alphabetical order:
"Additional Loan Funding Date" means the date of the funding
of an Additional Loan.
"Joint Sales Agreements" means each of the Joint Sales
Agreement dated as of November 10, 1995 by and among Borrower,
WLWZ Operating Company, Inc., WLWZ License Subsidiary, Inc.,
WLYZ Operating Company, Inc. and WLYZ License Subsidiary,
Inc., and the Joint Sales Agreement dated April 30, 1996 among
Borrower, Palm Broadcasting Company, L.P. and Palm
Broadcasting License Partnership.
"JSA Stations" means Radio Stations WXWX-FM, Easley, South
Carolina and WXWZ-FM, Greer, South Carolina.
"Notice of Borrowing" means written or telegraphic notice given to
Lender specifying the date and the amount of the Additional Loan that
Borrower seeks.
<PAGE>
2.2 Section 1.2 is hereby amended by adding the following additional terms in
their proper alphabetical order:
Additional Loans Section 2.1
Confer Loan Section 4.33
Initial Additional Loans Section 2.1
Other Loans Section 2.1
2.3 Section 2.1 is hereby amended in its entirety as follows:
2.1 Loans. (a) Subject to the terms and conditions of this Agreement,
Lender shall make (i) a loan of Five Million Five Hundred and Fifty
Thousand ($5,550,000) Dollars on the Closing Date (the "Closing Date
Loan") subject to adjustments as provided in the following paragraph;
(ii) at the request of Borrower, but in the reasonable discretion of
Lender, additional advances not to exceed Five Hundred Thousand
($500,000) for capital and other operating expenditures (including
Approved Capital Expenditures) related to the operation of the Stations
(the "Advance Loans"); (iii) upon the closing in connection with the
exercise of the Option with the prior written consent of Lender
pursuant to Section 5.14 hereof, a loan in the amount of Five Million
One Hundred Fifty Thousand Dollars ($5,150,000) as the purchase price
in connection with the exercise of the Option, which amount shall be
subject to Lender's approval (the "Option Loan"); (iv) advances to be
made no more frequently than monthly in an aggregate amount not to
exceed One Million Two Hundred Thousand Dollars ($1,200,000) solely for
operating expenditures related to the operations of the Stations and
the JSA Stations pursuant to the Joint Sales Agreements and to repay
the Confer Loan (the "Additional Loans") subject to satisfaction of the
conditions set forth in Section 7.2 hereof and notwithstanding anything
to the contrary set forth herein, only to the extent Lender does not
deem itself insecure hereunder and (v) other loans as may be approved
by Lender in its sole discretion in an aggregate amount not to exceed
$775,000 (the "Other Loans").
The parties acknowledge and agree that following the advances
heretofore made by Lender to Borrower in the amounts of (i) $4,478.46,
(ii) $9,729.20, (iii) $100,000, (iv) $103,915.46, (v) $96,000.00, (vi)
$132,363.84 to repay the Confer Loan, (vii) $33,000.00, (viii)
$164,000.00, (ix) $30,000.00, (x) $94,400.00, (xi) $75,600.00 (xii)
$40,000.00, (xiii) $75,000.00 and (xiv) $40,000.00 (collectively, the
"Initial Additional Loans") constitute Additional Loans. The Closing
Date Loan, the Advance Loans, the Option Loans, the Additional Loans
and the Other Loans are hereinafter collectively referred to as the
"Loans".
2.4 Section 2.4 is hereby amended to read in its entirety as follows:
2.4 The Note. The Loans shall be evidenced by an amended and
restated promissory note in the principal amount of Thirteen Million
One Hundred Seventy-Five Thousand Dollars ($13,175,000) and payable to
Lender, substantially in the form attached as Exhibit A to the First
Amendment to Loan Agreement dated as of May 24, 1996 between Borrower
and Lender (the "Note").
2
<PAGE>
2.5 Article IV is hereby amended by adding the following provision at the end
thereof, and Borrower hereby represents and warrants to Lenders as follows:
4.33 Confer Loan. On December 26, 1995, Confer made a loan to
Borrower in the amount of $131,000, bearing interest on the outstanding
principal amount at a rate of ten percent (10%) per annum (the "Confer
Loan").
2.6 Article V is hereby amended by adding the following provision at the end
thereof, and Borrower hereby agrees that so long as the Loan Agreement, as it
may be amended, remains in effect or any of the Loan Obligations remain unpaid,
Borrower will perf orm and observe the following provision:
5.15 Additional Funding. Prior to taking, or omitting to take,
any action that could effect any of the matters set forth in Section
8.3 below, Borrower will notify Lender and seek additional funding from
Lender, and to the extent Lender agrees to provide such funding,
Borrower will accept such funding in order to prevent any of the
matters set forth in Section 8.3 from occurring.
2.7 Article VII is hereby amended by renaming such Article VII "Closing
Conditions and Additional Loan and Other Loan Funding Conditions" and by adding
the following provisions at the end thereof:
7.2 Conditions to the Obligations of Lender to Effect the
Additional Loans Contemplated Hereby. The obligations of Lender to make
Additional Loans on each Additional Loan Funding Date shall be further
subject to the fulfillment of the following conditions, any one or more
of which may be waived in writing by Lender:
At least five (5) days before the proposed Additional Loan
Funding Date:
(a) Lender shall have received no later than 12:00 Noon
(St. Louis time) an irrevocable, originally executed Notice of
Borrowing signed by a duly authorized officer of Borrower.
(b) Lender shall have received on the date of delivery of
the Notice of Borrowing, a certificate of a duly authorized
officer of Borrower, with supporting documentation, as to each
Additional Loan other than the Initial Additional Loans, (i)
setting forth an itemization of the operating expenditures
related to the operations of the Stations and the JSA Stations
pursuant to the Joint Sales Agreement for the preceding month
and (ii) certifying that the proceeds of the preceding
Additional Loan were used solely to pay expenses in accordance
with the previous certificate delivered under this Section
7.2(b) (i) and Section 2.1(a) (iv) hereof, such certificate
and supporting documentation to be in form and substance
satisfactory to Lender.
7.3 Conditions to the Obligation of Lender to Effect the Other
Loans Contemplated Hereby. The obligations of Lender to make Other
Loans on each Other
3
<PAGE>
Loan Funding Date shall be further subject to the fulfillment of the
following conditions, any one or more of which may be waived in writing
by Lender:
(a) At least ten (10) days before the proposed Other
Loan Funding Date Lender shall have received, no later
than 12:00 Noon (St. Louis time) a certificate of a duly
authorized officer of Borrower setting forth in reasonable
detail the purposes of such other loan; and
(b) In the event Lender shall have notified Borrower
of its willingness to make such Other Loan, at least five
(5) days before the proposed Other Loan Funding Date
Lender shall have received an irrevocable, originally
executed Notice of Borrowing signed by a duly authorized
officer of Borrower.
2.8 Article VIII is here amended by adding the following
provisions at the end thereof:
8.10 Use of Proceeds of Additional Loans and Other Loans.
The proceeds of any Additional Loan are used for any purpose
other than as specified in Section 2.1(a) (iv) hereof or the
proceeds of any Other Loan are used for any purpose other than
approved by Lender as specified in Section 2.1(a) (v) hereof.
3. Conditions-of Effectiveness to this Amendment. This
Amendment shall become effective on the date on which each of the
following conditions has been fulfilled:
(a) This Amendment. The Borrower and the Lender shall have
each executed and delivered this Amendment.
(b) Amended and Restated Note. The Borrower shall have
executed and delivered to Lender the Note.
(c) Certified Resolutions. Lender shall have received from
Borrower copies, certified by an executive officer of Borrower
of resolutions adopted on behalf of Borrower authorizing the
execution, delivery and performance of this Amendment, and all
instruments and documents to be delivered in connection
herewith and the transactions contemplated hereby.
(d) Evidence of Payment to the MC Partners. Release and
Certified Resolutions. The Keymarket Sellers shall have
provided evidence of payment of the Release Payment to the MC
Partners in connection with, and as defined under, the release
executed by the MC Partners in favor of the Borrower, and the
Lender in substantially the form of Exhibit B attached hereto
and Lender shall have received (i) an executed copy of such
release and (ii) copies, certified by an executive officer of
each of the MC Partners, of resolutions adopted on behalf of
such MC Partner authorizing the execution, delivery and
performance of such release.
4
<PAGE>
4. Amendment of Related Documents: Affirmation and Agreement of the
Borrower. The Borrower acknowledges and agrees that each Related
Document, including the security agreements, stock pledge agreements
and mortgages executed in connection with the Loan Agreement shall
continue in full force and effect and all of the obligations thereunder
shall be valid and enforceable and shall not be impaired or affected by
the execution or effectiveness of this Amendment or the amendment and
restatement of the Note. The Borrower represents and warrants that all
representations and warranties contained in the Related Documents are
true, correct and complete in all material respects on and as of the
date hereof to the extent as though made on as of the date hereof. The
Borrower further acknowledges and agrees that the security interests
and liens granted by the Borrower and Confer to the Bank pursuant to
the Related Documents shall secure all obligations of the Borrower
arising under the Loan Agreement, as amended hereby, and the Note, as
amended and restated, and that the Secured Obligations (as that term is
defined in the Security Agreement executed by Borrower and in the
Pledge Agreement executed by Confer) shall include all obligations of
Borrower arising under the Loan Agreement, as amended hereby, and the
Note as amended and restated.
5. Ratification. Except as specifically amended pursuant hereto, the Loan
Agreement, the Note and all other Related Documents, shall remain in
full force and effect and are hereby ratified, approved and confirmed.
6. Reference to Loan Agreement.
----------------------------
(a) From and after the Effective Date, each reference in the
Loan Agreement to "this Agreement", "hereof", or "hereunder" or words
of like import, and all references to the Loan Agreement in any and all
Related Documents, agreements, instruments, documents, notes,
certificates and other writings of every kind and nature shall be
deemed to mean the Loan Agreement, as amended by this Amendment, and
each reference in the Loan Agreement to "the Note" or words of like
import, and all references to the Note in any and all Related
Documents, agreements, instruments, documents, notes, certificates and
other writings of every kind and nature shall be deemed to mean the
Note, as amended and restated pursuant to this Amendment.
(b) The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy
of the Lender under the Loan Agreement or any of the Related Documents,
nor constitute a waiver of any provision of the Loan Agreement or any
of the Related Documents.
7. CHOICE OF LAW. THIS AMENDMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF MISSOURI (BUT NOT THE LAWS PERTAINING TO CHOICE OF LAW) AS TO
ALL MATTERS, INCLUDING, BUT NOT LIMITED TO MATTERS OF VALIDITY,
CONSTRUCTION, EFFECT, PERFORMANCE AND REMEDIES.
8. Execution in Counterparts. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate
counterparts, each of which when
5
<PAGE>
so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the date first above written.
BORROWER:
KEYMARKET OF SOUTH CAROLINA, INC.
By: /s/ Kerby E. Confer
--------------------------
Name:
Title:
LENDER:
RIVER CITY BROADCASTING, L.P.
By: BETTER COMMUNICATIONS, INC.,
General Partner
By: /s/ Larry D. Marcus
----------------------------
Name:
Title:
7
<PAGE>
Exhibit A to Loan Agreement
AMENDED AND RESTATED PROMISSORY NOTE
------------------------------------
$13,175,000 May 24, 1996
FOR VALUE RECEIVED, the undersigned, KEYMARKET OF SOUTH CAROLINA, Inc.,
a South Carolina corporation (the "Maker"), promises to pay to the order of
RIVER CITY BROADCASTING, L.P., a Delaware limited partnership (the "Payee"), in
the manner and at the place provided in that certain Loan Agreement, dated as of
July 7, 1995, as amended between the Maker and the Payee (as the same may be
further amended, modified, restated or extended from time to time, the "Loan
Agreement"), the lesser of (x) the principal sum of Thirteen Million One Hundred
Seventy-Five Thousand Dollars ($13,175,000) and (y) the unpaid principal amount
of all advances made by Payee to Maker as the Loans under the Loan Agreement,
together with interest accrued thereon as provided in this Note. Capitalized
terms used herein without definition shall have the meanings assigned those
terms in the Loan Agreement.
The unpaid principal balance of this Note shall bear interest prior to
maturity at the rates determined in accordance with the provisions of the Loan
Agreement.
This Note evidences indebtedness of the Maker to the Payee arising
under the Loan Agreement, to which reference is hereby made for a statement of
the rights of the Payee (including the right of the holder hereof to declare
this Note due prior to its stated maturity and the other rights and remedies of
the holder hereof) and the duties and obligations of the Maker in relation
thereto, but neither this reference to the Loan Agreement nor any provision
thereof shall affect or impair the absolute and unconditional obligation of the
Maker to pay the principal of or interest on this Note when due. This Note is an
amendment and restatement of the Note dated July 7, 1995 made by Maker in favor
of Payee (the "Original Note") and not a replacement, substitution or repayment
thereof. The indebtedness and liabilities of Maker under the Original Note
remain in full force and effect, as amended, renewed and extended hereby.
The principal of and all interest on this Note shall be paid as
provided in the Loan Agreement in immediately available funds constituting
lawful money of the United States of America, not later than 12:00 noon (St.
Louis, Missouri time) on the day when due, at the Payee's offices at 1215 Cole
Street, St. Louis, Missouri 63106, or at such other place as the Payee may
designate in writing. Until notified in writing of the transfer of this Xote in
accordance with the terms of-the Loan Agreement, Maker shall be entitled to deem
Payee or such person who has been identified by the transferor in writing to
Maker as the owner and holder of this Note, as the owner and holder of this
Note. Each of Payee and any subsequent holder of this Note agrees, by its
acceptance hereof, that before disposing of this Note or any part hereof it will
make & notation hereon of all principal payments previously made hereunder and
of the date to which interest hereon has been paid; that the failure to make a
notation of any payment made on this Note shall not limit or otherwise affect
the obligation of Maker hereunder with respect to payments of principal or
interest on this Note.
<PAGE>
Whenever any payment on this Note shall be stated to be due on a day
that is not a business day, such payment may be made on the next succeeding
business day and such extension of time shall in each case be included in the
computation of interest payable on this Note.
This Note is subject to prepayment as provided in Section 2.6 of the
Loan Agreement.
To the extent permitted by law, the Maker and each endorser of this
Note, and their respective heirs, successors, legal representatives, and
assigns, hereby severally waive (i) any and all homestead or exemption laws and
rights, and (ii) presentment for payment, demand, protest, notice of
non-payment, notice of protest, and notice of dishonor of the debt evidenced
hereby, together with each and every other notice of any kind respecting this
Note and all lack of diligence or delays in collection or enforcement hereof.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note may become, or may be declared to be, due and
payable in the manner, upon the conditions and with the effect provided in the
Loan Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Loan Agreement.
This Note is subject to restrictions on transfer or assignment as
provided in Section 10.7 of the Loan Agreement and as otherwise may be agreed in
writing between Maker and Payee.
If at any time the indebtedness evidenced by this Note is collected
through legal proceedings or this Note is placed in the hands of attorneys for
collection, the Maker and each endorser of this Note hereby jointly and
severally agree to pay all costs and expenses (including reasonable attorneys'
fees) incurred by the holder of this Note in collecting or attempting to collect
such indebtedness, or otherwise arising in connection with the enforcement by
such holder of any rights or remedies under this Note.
THE MAKER, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY RIGHT TO HAVE A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE, BETWEEN THE PAYEE AND THE MAKER ARISING OUT OF, IN CONNECTION
WITH, RELATING TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS NOTE OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.
No delay or omission on the part of the Payee in exercising any right
hereunder shall operate as a waiver of such right or of any other right of the
Payee, nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or a waiver of the same or any other right on any future occasion.
2
<PAGE>
In case any provision (or any part of any provision) contained in this
Note shall for any reason be held by a court of competent jurisdiction to be
invalid, illegal, or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision (or remaining part of
the affected provision) of this Note, but this Note shall be construed as if
such invalid, illegal or unenforceable provision (or part thereof) had never
been contained herein but only to the extent it is invalid, illegal or
unenforceable.
THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MISSOURI (BUT
NOT THE LAWS PERTAINING TO CHOICE OF LAW) AS TO ALL MATTERS, INCLUDING BUT NOT
LIMITED TO MATTERS OF VALIDITY, CONSTRUCTION, EFFECT, PERFORMANCE AND REMEDIES.
This note being pledged by Payee to its Lenders to secure obligations
under the First Amended and Restated Credit Agreement (the "Credit Agreement')
dated as of April 21, 1995 by and among Payee, Bank of Montreal, Banks Trust
Company and the Lenders listed therein (the "Lenders").
IN WITNESS WHEREOF, Maker has caused this Note to be executed and
delivered by its duly authorized officer, as of the day and year and at the
place first above written.
KEYMARKET OF SOUTH CAROLINA, INC.
By:__________________________________
Name:
Title:
3
OPTION AGREEMENT
----------------
THIS OPTION AGREEMENT, made and entered into this 7th
day of July, 1995, by and among Keymarket of South Carolina, Inc,
("South Carolina"), Kerby E, Confer ("Confer") and River City
Broadcasting, L.P. ("River City"),
R E C I T A L S:
1. South Carolina is the licensee of, and owns and operates
radio stations WFBC-AM and WFBC-FM, Greenville, South Carolina and WORD-AM,
Spartanburg, South Carolina (the "Owned Stations") and is a party to that
certain Time Brokerage Agreement dated as of August 30, 1994 by and between
South Carolina and Spartan Radiocasting Company (the "LMA Agreement") and an
option Agreement dated as of August 30, 1994 by and between South Carolina and
Spartanburg Radiocasting Company (the "LMA Option Agreement") each relating to
Radio Stations WSPA-AM and WSPA-FM Spartanburg, South Carolina (the "LMA
Stations").
2. Concurrent with the execution hereof, River City
is making a loan to South Carolina pursuant to the terms of that
certain Loan Agreement between River City and South Carolina
dated of even date herewith,
3. South Carolina desires to grant to River City an option to
purchase the assets of South Carolina on the terms and conditions set forth
herein and Confer desires to grant to River City an option to purchase all of
the issued and outstanding stock of South Carolina on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the foregoing, the loan to
be made by River City pursuant to the Loan Agreement and the mutual covenants,
warranties, and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree that:
1. Option. (a) South Carolina hereby gives, grants, transfers
and conveys unto River City, and its successors and assigns, the sole and
exclusive right, privilege and option to purchase (the "Asset Option"), on the
terms and conditions hereinafter set forth, all of the tangible and intangible
personal property, licenses, authorizations and certain leases, contracts and
agreements relating to the operation of the Owned Stations including, without
limitation, all rights under the LMA Agreement and the LMA Option Agreement (the
"Asset Option Property"), and including without limitation, that property
described below:
<PAGE>
- 2 -
(i) All of the licenses and other authorizations issued by the
Federal communications Commission (the "FCC") for the
operation of the Owned Stations;
(ii) All of the tangible personal property now existing or
hereafter acquired and used or useful in the operation of the
Owned Stations;
(iii) All of the intangible personal property now existing or
hereafter acquired, including cash and accounts receivable of
South Carolina;
(iv) The fee simple and leasehold interests in real property
of South Carolina used or useful in the operation of the Owned
Stations as specified in the Asset Purchase Agreement or the
Stock Purchase Agreement;
(v) The contracts, agreements and other leases of South
Carolina specified in the Asset Purchase Agreement or Stock
Purchase Agreement (as defined below) or which River City
elects to assume, including without limitation, the LMA
Agreement and the Option Agreement; and
(vi) Any assets of any nature owned by South Carolina and used
or useful in connection with the LMA Stations.
Should River City exercise the Asset Option, the Asset option
Property shall be assigned, transferred and conveyed by South Carolina to River
City (or its successors or assigns), by good and sufficient bill of sale and/or
other documents of transfer, all in form and substance satisfactory to River
City, free and clear of all liens, charges, encumbrances, debts, liabilities and
obligations whatsoever, other than those solely in favor of River City.
(b) Confer hereby gives, grants, transfers and
conveys unto River City, and its successors and assigns, the sole and exclusive
right, privilege and option to purchase (the "Stock option"), all of the issued
and outstanding capital stock of South Carolina all of which is described on
Exhibit A hereto (the "Stock option Property"). Should River City exercise the
Stock Option, the Stock Option Property shall be assigned, transferred and
conveyed by Confer to River City (or its successors or assigns), by good and
sufficient instruments of transfer, including stock powers executed in blank, in
form and substance satisfactory to River City, free and clear of all liens,
charges, encumbrances, debts, liabilities and obligations whatsoever, other than
those solely in favor of River City.
<PAGE>
- 3 -
(c) The consideration payable for the Asset Option
Property shall be equal to the sum of One Million Dollars ($1,000,000) plus the
cancellation of the outstanding principal amount of the loans made to South
Carolina pursuant to the loan Agreement and any accrued and unpaid interest
thereon. The consideration payable for the Stock Option property shall be equal
to the sum of One Million Dollars ($1,000,000).
2. Period of Option. The Asset Option and the Stock Option
shall be exercisable at any time during the period from and after the date
hereof, but on or prior to the date thirty (30) days after the date on which the
Federal Communications Commission ("FCC") grant of the 1995 license renewal
application for each of the Owned Stations for the full license term and such
grant has become a Final Order (as hereinafter defined); provided that in no
event may the Asset Option or Stock Option be exercised more than five years
after the date hereof. Final order means an action or order by the FCC (a) that
has not been reversed, stayed, enjoined, set aside, annulled or suspended, and
(b) with respect to which (i) no requests have been filed for administrative or
judicial review, reconsideration, appeal or stay and the FCC has not initiated a
review of such action or order on its own motion and the periods provided by
statute or FCC regulations for filing any such requests and for the FCC to set
aside the action on its own motion have expired, or (ii) in the event of review,
reconsideration or appeal, the period provided by statute or FCC regulations for
further review, reconsideration or appeal has expired. The parties hereto agree
that Buyer shall have no obligation to exercise either the Asset option or the
Stock Option, or any liability for failing to exercise either the Asset Option
or the Stock Option.
3. Exercise of Option. The parties hereto agree that within
three (3) business days after the exercise of the Asset Option, South Carolina
and River City (or its successor or assigns) shall enter into an Asset Purchase
Agreement, such document to be substantially in the form annexed hereto as
Exhibit B (the "Asset Purchase Agreement") (subject to (i) changes relating to
the name, organization and other similar matters relating to the buyer in the
event of assignment by River City; (ii), updates to the exhibits reflecting
changes since the date hereof; (iii) changes necessary to reflect inclusion of
any assets acquired as a result of the exercise, if any, of the LMA Option
Agreement; and (iv) such other changes as may be reasonably requested by River
City. In the event that River City exercises the Stock Option, River City and
Confer agree that they (or River City's successors or assigns) shall within
three (3) business days after the exercise of the Stock Option, enter into a
Stock Purchase Agreement, such document to be substantially in the form annexed
hereto as Exhibit C (the "Stock Purchase Agreement"), and subject to additional
changes of the type
<PAGE>
- 4 -
referred to in clauses (i), (ii), (iii) and (iv) of the preceding sentence,
4. Representations, Covenants and Warranties of South
Carolina. South Carolina represents, warrants, and covenants to River City as
follows:
(a) That South Carolina is now, and for so long as this
Agreement shall be in effect, will be a corporation duly organized, validly
existing, and in good standing under the laws of South Carolina.
(b) That South Carolina is now, and for so long as this
Agreement shall be in effect, will be the holder of the broadcast licenses and
other authorizations issued by the FCC and necessary for the operation of the
Owned Stations;
(c) That South Carolina does not know of, or have any
reasonable grounds to know of any:
(i) Litigation or proceeding pending or threatened
against or relating to the Owned Stations, the LMA Stations or
their respective properties or business;
(ii) Basis for any current or prospective
governmental investigation or action relative to the Owned
Stations, the LMA Stations or their respective properties or
business;
(d) That should River City exercise the Asset Option or the
Stock Option, South Carolina does not know of any facts which would cause the
Commission to deny its consent to the assignment of the Station's licenses to
River city (subject to receipt of the waiver described in Section 5 of the Asset
Purchase Agreement and Section 5 of the Stock Purchase Agreement, as
applicable); and
(e) That execution, delivery and performance of this Agreement
has been authorized by all necessary corporate action on the part of South
Carolina and does not violate, conflict with or cause a breach or default under,
any law, rule, regulation, license, agreement or contract to which South
Carolina is subject, bound or a party and this Agreement constitutes the legal,
valid and binding obligation of South Carolina, enforceable in accordance with
its terms; and
(f) That South Carolina shall not issue any additional capital
stock to any person or entity or grant any options, warrants, or other rights of
any nature to acquire capital stock.
<PAGE>
- 5 -
5. Representations, Warranties and Covenants of River City.
River City represents, warrants, and covenants to South Carolina and Confer:
That execution, delivery and performance of this Agreement
has been authorized by all necessary partnership action on the part of River
City and this Agreement and constitutes the legal, valid and binding obligation
of River City, enforceable in accordance with its terms.
6. Representations, Warranties and Covenants of Confer. Confer
represents, warrants and covenants to River City:
(a) That to his knowledge, the representations and warranties
of South Carolina made herein are true and correct;
(b) The authorized, issued and outstanding capital stock of
South Carolina is as set forth on Exhibit A hereto. Confer is the beneficial and
record owner of all of the issued and outstanding capital stock of South
Carolina. There are no outstanding options, warrants, or other rights of any
nature to relate in any manner to the right to acquire, purchase or redeem
capital stock of South Carolina; and
(c) That Confer has all necessary power, authority and
capacity to execute, deliver and perform this Agreement, that such execution,
delivery and performance does not violate, conflict with or cause a breach or
default under any law, rule, regulation, license, agreement or contract to which
Confer is subject, bound or a party and this Agreement constitutes the legal,
valid and binding obligation of Confer, enforceable in accordance with its
terms.
7. Consummation of Agreement. Subject to the express terms and
conditions of this Agreement, and without expanding such terms and conditions,
South Carolina, Confer and Buyer shall cooperate fully with each other and their
respective counsel and accountants in connection with any steps required to be
taken as part of their respective obligations under this Agreement and will each
use their respective commercially reasonable efforts to perform or fulfill all
conditions and obligations to be performed or fulfilled by them under this
Agreement so that the transactions contemplated hereby shall be consummated.
8. Memorandum. South Carolina and River City shall execute
contemporaneously herewith a memorandum briefly outlining the existence of this
Agreement, an original copy of which shall be delivered to River City for filing
in such place of records as River City shall determine.
9. Specific Performance. South Carolina and Confer acknowledge
and agree that, due to the unique nature of the
<PAGE>
- 6 -
subject matter or this Agreement, River City (and its assigns) would suffer
irreparable damages in the event of a breach of this Agreement, which damages
could not adequately be compensated except by specific performance of this
Agreement. Accordingly, without limiting any other remedy that may be available
to River city (or its successor and assigns) at law or equity, in the event of a
breach by South Carolina or Confer of this Agreement, it is agreed that River
City (or its successor and assigns) shall be entitled to temporary and permanent
injunctive relief, including, but not limited to, specific performance hereof,
without any showing of actual damage or inadequacy of legal remedy, in any
proceeding before a court of law with proper jurisdiction to hear the matter,
which may be brought to enforce this Agreement. South Carolina and Confer hereby
waive any defense that there is an adequate remedy at law for such breach of
this Agreement.
10. Confidentiality. South Carolina, Confer and River City
agree to keep confidential and to cause their respective employees, counsel,
accountants and other representatives to keep confidential, the term and
provisions of this Agreement as well as all documents and other information and
data, whether written or oral, relating to any of the other parties hereto,
furnished by any other party hereto or such party's representatives. Nothing
contained herein shall prevent any party from disclosing the terms and
provisions of this Agreement or delivering any documents, or disclosing other
information or data relating to any other party (a) in connection with any legal
proceedings to which it is a party (or otherwise pursuant to a subpoena) or
pursuant to the request of a court or governmental authority or otherwise to the
extent required by law, (b) to such party's consultants, advisors, counsel,
accountants, lenders and potential lenders, and investors or partners or
potential investors or partners, (c) by River City to any assignee or potential
assignee and such assignee or potential assignee's consultants, advisors,
counsel, accountants, lenders and Potential lenders and investors and potential
investors or partners; and (d) in connection with any filings with the FCC or
pursuant to Section 8 hereof.
11. Other Agreements, (a) So long as the Asset Option or Stock
Option may be exercised hereunder, South Carolina and Confer shall not, and
shall not permit any of their respective affiliates to, directly or indirectly
(i) solicit or encourage inquiries or offers from, or initiate or engage in
negotiations or substantive discussions with, any person or entity other than
River City (or its successor or assigns) with respect to the sale, exchange,
transfer or dispositions of the respective assets (or any portion thereof) of
South Carolina or the stock (or any portion thereof) of South Carolina; (ii)
enter into any agreement with any person or entity other than River City (or its
successor or assigns) with respect to the sale, exchange, transfer or other
<PAGE>
- 7 -
disposition of the respective assets (or any portion thereof) of South Carolina
or the stock (or any portion thereof) of South Carolina; or (iii) afford access
to the books, records or properties of South Carolina or Confer relating to the
respective assets (or any portion thereof) of South Carolina or the stock (or
any portion thereof) of South Carolina to any person or entity other than River
City (or its successor or assigns) that may be considering any commercial
arrangement involving the sale, exchange, transfer or other disposition of the
assets (or any portion thereof) of South Carolina or the stock (or any portion
thereof) of South Carolina.
(b) South Carolina and Confer shall from and after the date of
this Agreement until the earlier of the expiration of the Asset Option or the
Stock Option, as the case may be, or the consummation of the Asset Purchase
Agreement or the Stock Purchase Agreement, as the case may be, cause the
business of South Carolina to be conducted in the ordinary and usual course,
consistent with past practice and in accordance with the covenants and
agreements set forth in Articles V and VI of the Loan Agreement and shall not
take any other action that would hinder or impair the exercise of the Asset
Option or Stock Option or the purchase of the assets of South Carolina or the
purchase of the stock of South Carolina.
(c) If requested by River City, subject to and in accordance
with the terms of the LMA Option Agreement, South Carolina shall exercise its
rights under the LMA Option Agreement.
12. Expenses. Whether or not the transactions contemplated
hereby are consummated, except as otherwise expressly provided herein, all costs
and expenses incurred in connection with this Agreement and the transactions
contemplated hereby will be paid by the party incurring such costs and expenses,
13. Further Assurances. Subject to the terms and conditions of
this Agreement, each of the parties hereto will use all commercially reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement,
14. Amendment and Modification. This Agreement may be amended,
modified or supplemented only by written agreement of South Carolina, Confer and
Buyer.
<PAGE>
- 8 -
15. Waiver of Compliance: Consents. Except as otherwise
provided in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation, warranty,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. Whenever this Agreement
requires or permits consent by or on behalf of any party hereto, such consent
shall be given in writing in a manner consistent with the requirements for a
waiver of compliance as set forth in this Section 15.
16. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given when delivered personally or by
Federal Express or other comparable nationally recognized courier service
(receipt requested) or by facsimile transmission, telexed or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice; provided that notices of a change of address
shall be effective only upon receipt thereof):
To South Carolina and Confer:
-----------------------------
Keymarket Communications, Inc,
2743 Perimeter Parkway
Building 100, Suite 250
Augusta, Georgia 30909
Attention: Mr, Donald J, Alt
Telephone: (706) 855-0555
Telecopy: (706) 855-1955
Copies to:
----------
Joel B. Piassick, Esq,
Kilpatrick & Cody
1100 Peachtree Street
Suite 2800
Atlanta, Georgia 30309
Telephone: (404) 815-6527
Telecopy: (404) 815 6555
Robert F, Wright, Jr,, Esq.
2743 Perimeter Parkway
Building 100, Suite 250
Augusta, Georgia 30909
Telephone: (706) 860-1095
Telecopy: (706) 855-1955
<PAGE>
- 9 -
Mr. Richard A. Churchill
MC Partners
75 State Street
Suite 2500
Boston, Massachusetts 02109
Telephone: (617) 345-7200
Telecopy: (617) 345-7201
Bruce E. Rogoff, Esq.
Mintz, Levint, Cohn, Ferris,
Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
Telephone: (617) 542-6000
Telecopy: (617) 542-2241
To Buyer:
---------
c/o River City Broadcasting, L.P.,
1215 Cole Street
St. Louis, Missouri 63106
Attention: Mr. Larry D. Marcus
Telephone: (314) 259-5700
Telecopy: (314) 259-5709
Copies to:
----------
John T. Byrnes, Esq.
Dow, Lohnes & Albertson
1255 23rd Street, N.W.
Suite 500
Washington, D.C. 20037
Telephone: (202) 857-2518
Telecopy: (202) 857-2900
17. Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns, but, except as provided for
herein, neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by South Carolina or Confer without the prior
written consent of Buyer.
The parties agree as follows:
(a) Without the consent of South Carolina or Confer,
Buyer may assign its rights and obligations under this Agreement to any other
party or parties. To the extent this Agreement is assigned by Buyer in
accordance with the terms of this Section 17 to a party that is not an Affiliate
of Buyer, upon such assignment Buyer shall have no further obligations under
this Agreement and South Carolina's and Confer's only
<PAGE>
- 10 -
recourse under this Agreement shall be against such assignee of Buyer.
(b) Except as expressly provided herein, this
Agreement is not intended to, and shall not, confer upon any other person except
the parties hereto any rights or remedies hereunder.
18. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF MISSOURI (BUT NOT THE LAWS PERTAINING TO CHOICE OF LAW) AS
TO ALL MATTERS, INCLUDING BUT NOT LIMITED TO MATTERS OF VALIDITY, CONSTRUCTION,
EFFECT, PERFORMANCE AND REMEDIES.
19. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20. Headings. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement.
21. Entire Agreement. This Agreement, including the Exhibits
hereto and the documents, delivered pursuant to the Agreement or other written
agreements referring specifically to this Agreement, embody the entire agreement
and understanding of the parties hereto in respect of the transactions
contemplated by this Agreement. The Exhibits hereto are an integral part of this
Agreement and are incorporated by reference herein. This Agreement supersedes
all prior negotiations, agreements and understandings between the parties with
respect to the transactions contemplated by this Agreement and all letters of
intent and other writings executed prior to the date hereof relating to such
negotiations, agreements and understandings.
22. Severability, If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provision to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law so long as
the economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid or unenforceable, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the greatest
extent possible.
<PAGE>
- 11 -
23. Press Releases. No press releases or other public
announcements concerning this Agreement or the transactions contemplated hereby
shall be made by any party hereto without the prior written consent of the other
party unless the first such party is legally compelled to do so.
24. Publicity. Neither South Carolina, Confer nor Buyer shall
make or issue or cause to be made or issued, any announcement (written or oral)
concerning this Agreement or the transactions contemplated hereby for
dissemination to the general public without the prior consent of the other
party, This provision shall not apply, however, to any announcement or written
statement required to be made by law or the regulations of any federal or state
governmental agency or any stock exchange, except that the party required to
make such announcement shall provide a draft copy thereof to the other party
hereto, and consult with such other party concerning the timing and content of
such announcement, before such announcement is made.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the day and year first written above.
RIVER CITY BROADCASTING, L.P.
By: BETTER COMMUNICATIONS, INC.,
General Partner
By: /s/ LarryD. Marcus
--------------------------
Name: LARRY D. MARCUS
Title: VICE PRESIDENT
KEYMARKET OF SOUTH CAROLINA, INC.
By: /s/Kerby E. Confer
----------------------------
Name:
Title
/s/ Kerby E. Confer
----------------------------------
Kerby E. Confer
<PAGE>
- 12 -
EXHIBIT A
AUTHORIZED, ISSUED AND OUTSTANDING
CAPITAL STOCK OF SOUTH CAROLINA
The authorized capital stock of Keymarket of South Carolina,
Inc, consists of 100,000 shares of Common Stock, par value $1,00 per share,
1,000 shares of which are issued and outstanding and none of which are held as
treasury stock.
<PAGE>
- 13 -
EXHIBIT B TO OPTION AGREEMENT
-----------------------------
ASSET PURCHASE AGREEMENT
BY AND AMONG
RIVER CITY BROADCASTING, L.P.
AND
KEYMARKET OF SOUTH CAROLINA, INC.
---------------------, ------
<PAGE>
TABLE OF CONTENTS
-----------------
Section 1. Assets to Be Conveyed...........................................1
Section 2. Purchase Price..................................................3
Section 3. Assumption of Liabilities.......................................3
Section 4. Representations, Covenants and Warranties
of Seller.......................................................3
Section 5. Representations, Warranties and Covenants
of Buyer........................................................5
Section 6. Adjustments.....................................................5
Section 7. Expenses........................................................5
Section 8. Obligations of the Parties Before Closing.......................6
Section 9. Contingency of Obligations of Buyer.............................6
Section 10. Contingency of Obligations of Seller............................7
Section 11. Further Closing Documents.......................................8
Section 12. Application to Commission.......................................9
Section 13. Commission Approval............................................10
Section 14. Remedies of Parties Upon Default...............................10
Section 15. Damage to Seller's Properties..................................10
Section 16. Closing........................................................11
Section 17. Notices........................................................11
Section 18. Survival.......................................................12
Section 19. Commissions....................................................13
Section 20. Further Assurances.............................................13
Section 21. Amendment and Modification.....................................13
Section 22. Waiver Of Compliance; Consents.................................13
Section 23. Assignment.....................................................14
<PAGE>
Section 24. Governing Law..................................................14
Section 25. Counterparts...................................................14
Section 26. Headings.......................................................14
Section 27. Entire Agreement...............................................14
Section 28. Severability...................................................15
Section 29. Press Releases.................................................15
Section 30. Publicity......................................................15
Section 31. Employee Matters...............................................15
Section 32. Control of the Stations........................................17
<PAGE>
ASSET PURCHASE AGREEMENT
THIS AGREEMENT, made and entered into this ____ day of
___________________, _______, by and between KEYMARKET OF SOUTH CAROLINA, INC.,
a South Carolina corporation ("Seller"), and RIVER CITY BROADCASTING, L.P., a
Delaware limited partnership ("Buyer").
WITNESSETH:
WHEREAS, Seller is the licensee of, and owns and operates
radio stations WFBC-AM and WFBC-FM, Greenville, South Carolina and WORD-AM,
Spartanburg,, South Carolina (the "Owned Stations") and is a party to that
certain Time Brokerage Agreement dated as of August 30, 1994 by and between
South Carolina and Spartanburg Radiocasting Company (the "LMA Agreement") and an
Option Agreement dated as of August 30, 1994 by and between South Carolina and
Spartanburg Radiocasting Company (the "LMA Option Agreement") each relating to
Radio Stations WSPA-AM and WSPA-FM Spartanburg, South Carolina (the "LMA
Stations"). The Owned Stations and the LMA Stations are individually referred to
herein as a "Station" and collectively as the "Stations."
WHEREAS, Seller desires to sell, and Buyer desires to
purchase, all of the tangible and intangible personal property of Seller,
subject only to certain specified exceptions; and
WHEREAS, Buyer desires to obtain, and Seller is willing to
allow Buyer to obtain, the assignment of the authorizations issued by the
Federal Communications Commission ("Commission") for the operation of the Owned
Stations and any other licenses, permits or authorizations issued by any
governmental or regulatory agency in connection with the operation of the owned
Stations; and
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants, warranties and agreements between the parties contained
herein, the parties hereby agree that:
Section 1. Assets to Be Conveyed. On the "Closing Date", as
defined in Section 16 hereof, Seller will assign, transfer, sell, convey and
deliver to Buyer the licenses and authorizations relating to the Owned Stations,
and all of the tangible and intangible personal property, leasehold interests in
real property, and agreements and contracts of Seller, as described below:
(a) Subject to Commission approval, all legally
assignable licenses, permits, authorizations, consents, franchises and
certificates of compliance issued by the Commission, and any other governmental
or regulatory agency that
<PAGE>
- 2 -
are required in connection with the operation of the Owned Stations (hereinafter
referred to as the "Licenses");
(b) All of the tangible personal property of Seller,
including, without limitation, all equipment, machinery, fixtures, furniture,
leasehold improvements, vehicles, transmitters, receivers, transformers,
antennas, tower, equipment, records and tapes so used;
(c) All of the intangible personal property of
Seller, and specifically including any cash, accounts receivable, prepaid items
and general ledgers, of Seller;
(d) The real property interests held in fee simple
and leasehold interests in real property of Seller used or useful in the
operation of the Owned Stations that are set forth in Section 4.6 of the
Disclosure Schedule to the Loan Agreement dated as of _________________, 1995 by
and between Seller and Buyer (the "Loan Agreement") and real property fee simple
interests acquired or leasehold interests entered into after the date of the
Loan Agreement as permitted in accordance with the terms of the Loan Agreement;
(e) The contracts and agreements of Seller, including
the LMA Agreement and the Option Agreement, that are either set forth in Section
4.8 of the Disclosure Schedule to the Loan Agreement or are not required to be
set forth in the Disclosure Schedule under the provisions of Section 4.8 of the
Loan Agreement and those contracts and agreements entered into after the date of
the Loan Agreement as permitted in accordance with the terms of the Loan
Agreement;
(f) The call letters and all trademarks, tradenames,
service marks, copyrights, jingles, slogans, permits, franchises, and property
rights and interests required in the operation of the Owned Stations; and
(g) All business and governmental records (except
corporate records and tax returns of Seller) and Commission files relating to
the operation of the Owned Stations, including without limitation, purchase and
sale order files, mailing lists, advertisers lists, sales materials and records,
personnel files, and medium materials, provided, that Buyer and Seller shall
each have full access after the Closing to such records held by the other party
relating to the operation of the Station by Seller for the purpose of
bookkeeping, tax preparation, accounting procedures and for such other purposes
as may be reasonably necessary or proper.
The foregoing licenses authorizations, tangible and intangible
personal property, fee simple real property interests, leasehold interests in
real property, contracts and agreements
<PAGE>
- 3 -
("Station Assets") are to be assigned, transferred and conveyed to Buyer, by
good and sufficient bill of sale and/or other documents of transfer, free and
clear of all liens, charges, encumbrances, debts, liabilities and obligations
whatsoever, except for liens in favor of Buyer created under the Loan Agreement
and related documents.
Notwithstanding the foregoing, there shall be excluded from
the assets transferred by Seller to Buyer hereunder corporate records and tax
returns of Seller.
Section 2. Purchase Price. Subject to any adjustments pursuant
to Section 6, the purchase price to be paid by Seller to Buyer for the Station
Assets, on the Closing Date, shall be the sum of One Million Dollars
($1,000,000) and the cancellation of the outstanding principal amount of the
loans made to Seller pursuant to the Loan Agreement.
Section 3. Assumption of Liabilities. Upon the sale and
purchase of the Station Assets, Buyer shall assume Seller's obligations
associated with the Owned Stations to be performed after 12:01 AN on the Closing
Date (but not obligations to have been performed by Seller prior to such time)
under, and as set forth in, the contracts, leases and agreements described in
Section 1(d) and (e) hereof. Buyer is not agreeing to, and shall not, assume any
other liability, obligation, undertaking, expense or agreement of Seller of any
kind, absolute or contingent, known or unknown, and the execution, delivery and
performance of this Agreement shall not render Buyer liable for any such
liability, obligation, undertaking, expense or agreement.
Section 4. Representations, Covenants and Warranties of
Seller. Seller represents, warrants, and covenants:
(a) That Seller is now and as of the Closing
Date will be a corporation duly organized,, validly existing and in good
standing under the laws of South Carolina.
(b) That Seller, now and as of the Closing Date,
is and will be the valid holder in good standing of the Licenses and other
authorizations issued by the Commission.
(c) That the Owned Stations and to Seller's
knowledge, the LMA Stations, are in material compliance with all applicable
rules of the Commission and for the Licenses.
(d) That Seller does not know of, or have any
reasonable grounds to know of any:
<PAGE>
- 4 -
(i) Litigation or proceeding pending or
threatened against or relating to the Owned Stations,
the LMA Stations or their respective properties or
business.
(ii) Basis for any current or prospective
governmental investigation or action relative to the
Owned Station(s), the LMA Stations or their
respective properties or business;
(e) That Seller does not know of any facts which
would cause the Commission to deny its consent to the assignment of the Licenses
to Buyer, except that Seller makes no representation regarding any necessary
waiver of the Commission's one-to-a-market rule, 47 C.F.R. ss.73.3555(b).
(f) That Seller is entitled and authorized to
own and operate the Owned Stations and to carry on its business in the manner
and in the place where the Owned Station is owned and operated and the business
is now conducted.
(g) That Seller has the power and authority to
execute and deliver this Agreement, to consummate the transactions it
contemplates and to take all other actions required to be taken by Seller
pursuant to the provisions of this Agreement, and neither the execution of this
Agreement nor the consummation of the transactions contemplated by it will
violate or constitute a default on the part of Seller under any contract or
agreement to which Seller is a party or by which Seller is bound or under any
law, statute, rule, regulation, decree or order of any court or governmental
agency or authority. That this Agreement constitutes the legal, valid and
binding obligation of Seller, enforceable in accordance with its terms.
(h) That no consent or approval of any other person
or entity which has not been obtained by Seller is required before Seller may
execute, deliver and perform its obligations under this Agreement, with the
exception of the Commission and the other party to the LMA Agreement and the
Option Agreement and under such other contracts or agreements of Seller
requiring consent to assignment and Seller shall use all commercially reasonable
efforts to obtain such consents.
(i) That Seller has not caused or allowed any
chemical, toxic, radioactive or other hazardous waste or material to be brought
or stored upon any of the leasehold property or other assets of the Owned
Stations or the LMA Stations.
(j) That Seller has good, valid and, in the case
of any real property in fee simple, marketable, title to all of the Station
Assets, free and clear of all liens, charges, encumbrances, debts, liabilities
and obligations of any nature
<PAGE>
- 5 -
whatsoever, except for liens in favor of Buyer created under the Loan Agreement
and related documents and that the Station Assets are in good order and repair
and are used in material compliance with all state and federal laws and
regulations relating to safety of the work place.
(k) That the Station Assets are adequately covered by
insurance against fire, theft and other casualty.
(l) That Seller has filed all returns and other
reports of taxes due or information required for all federal, state and local
income, franchise, business, sales and use taxes, and all returns or reports,
when filed, were accurate and complete, and all taxes which should have been
paid have been paid.
Section 5. Representations, Warranties and Covenants of Buyer.
Buyer represents, warrants and covenants:
(a) That Buyer is and as of the Closing Date
will be a limited partnership duly organized, validly existing and in good
standing under the laws of its State of organization.
(b) That this Agreement constitutes the legal,
valid and binding obligation of Buyer, enforceable in accordance
with its terms.
(c) That except for the necessity of a waiver of
the Commission's one-to-a-market rule, 47 C.F.R. ss.73.3555(b) because of Buyer
ownership of WLOS(TV) and WAXA(TV), Buyer does not know of any facts which would
disqualify it under the Communications Act of 1934,, as amended, from owning or
operating the Station or which would cause the Commission to deny its consent to
the assignment of the Station to Buyer.
(d) That Buyer will reasonably cooperate with
Seller in securing assignment of the leasehold interests in real estate to be
transferred from Seller to Buyer hereunder, and in securing completed
assignments, and consents thereto where applicable, of the remaining contracts
and commitments of Seller to be assumed by Buyer hereunder, including timely
completing any applications required by third parties such as credit reports and
financial statements, etc.
Section 6. Adjustments. To the extent applicable, a downward
adjustment in an amount equal to the amount calculated under Section 2.1(b)(ii)
of the Loan Agreement.
Section 7. Expenses. The expenses involved in the preparation
and consummation of this Agreement shall be borne by the party incurring same.
<PAGE>
- 6 -
Section 8. Obligations of the Parties Before Closing. From and
after the date of this Agreement and until the Closing Date:
(a) Seller shall conduct the business of the
Owned Stations in the normal course and as has been heretofore
conducted by Seller;
(b) Seller shall not purchase, sell, lease, or
dispose of, or enter into any contract for the purchase, sale, lease or
disposition of any property or assets having a cost in excess of $5,000 or a
contractual period extending beyond the Closing Date without the prior written
approval of Buyer;
(c) Seller shall operate the Owned Stations in
all material respects in accordance with all laws, rules and regulations
applicable to it, including the regulations of the Commission;
(d) Seller shall provide to Buyer, promptly upon
receipt thereof by Seller, a copy of (i) any notice from the Commission or any
other governmental authority of the revocation, suspension, or limitation of the
rights under, or of any proceeding for the revocation, suspension, or limitation
of the rights or that such authority may in the future (as the result of failure
to comply with laws or regulations or for any other reason) revoke, suspend, or
limit the rights under any License, or any other license or permit held by
Seller respecting the owned Station, and (ii) copies of all protests,
complaints, challenges or other documents filed with the Commission by third
parties concerning either of the Station, and promptly upon the filing or making
thereof, copies of Seller's responses to such filings; and
(e) Seller shall notify Buyer in writing
immediately upon learning of the institution or threat of any material action
against Seller in any court, or any action against Seller before the Commission
or any other governmental agency, and notify Buyer in writing promptly upon
receipt of any administrative or court order relating to the Station Assets or
the business of Seller.
Section 9. Contingency of Obligations of Buyer. All
obligations of Buyer under this Agreement are subject to the fulfillment, prior
to or at the Closing Date, of each of the following conditions, any of which
Buyer may waive in writing:
(a) The representations and warranties of Seller
contained in this Agreement shall be true at and as of the Closing Date as
though such representations and warranties were made at and as of the Closing
Date.
<PAGE>
- 7 -
(b) Seller shall have materially performed and
complied with all agreements and conditions required by this Agreement to be
performed or complied with by Seller prior to or at the Closing.
(c) The Commission shall have granted its
approval of the assignment of the Owned Stations' licenses and authorizations to
Buyer and such approval has become a Final Order (as defined herein) and any
necessary waiver required under the terms of C.F.R. ss.73.3555(b) shall have
been obtained without any adverse conditions to Buyer and shall have become a
Final Order.
(d) Seller shall have delivered to Buyer an
opinion from its counsel, dated as of the Closing Date to the following effect:
(i) Seller is a corporation validly existing
and in good standing under the laws of the State of
Louisiana;
(ii) Seller is entitled to own its
properties and carry on its business as, and in the
places where, the properties are owned and operated
and the business is now conducted;
(iii) All actions to be taken by or on the
part of Seller to authorize it to carry out and
perform the Agreement and the transactions it
contemplated have been duly and properly taken;
(iv) There are no actions, suits or
proceedings before any Court or administrative agency
pending or threatened against or affecting Seller or
the Station Assets; and
(v) This Agreement constitutes the legal,
valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms, subject
to customary bankruptcy and similar limitations and
limitations on the availability of equitable
remedies.
(e) Buyer shall not have exercised its right
to terminate this Agreement pursuant to Section 15
hereof.
Section 10. Contingency of Obligations of Seller. All
obligations of Seller under this Agreement are subject to the fulfillment, prior
to or at the Closing, of each of the following conditions, any of which Seller
may waive in writing:
<PAGE>
- 8 -
(a) The representations and warranties of Buyer
contained in this Agreement shall be true at and as of the Closing Date as
though such representations and warranties were made at and as of the Closing
Date.
(b) Buyer shall have materially performed and
complied with all agreements and conditions required by this Agreement to be
performed or complied with by Buyer prior to or at the Closing Date.
(c) The Commission shall have granted its
approval of the assignment of the Owned Stations' Licenses to
Buyer.
(d) The payment to Seller by Buyer of the
Purchase Price.
(e) The assumption by Buyer of all contracts,
leases and agreements of Seller to be assumed by Buyer hereunder.
(f) Buyer shall have delivered to Seller an
opinion from its counsel, dated as of the Closing Date to the following effect:
(i) Buyer is a limited partnership validly
existing and in good standing under its State of
organization;
(ii) All partnership actions to be taken by
or on the part of Buyer to authorize it to carry out
and perform the Agreement and the transactions it
contemplated have been duly and properly taken; and
(iii) This Agreement constitutes the legal,
valid and binding obligation of Buyer enforceable
against Buyer in accordance with its terms, subject
to customary bankruptcy and similar limitations and
limitations on the availability of equitable
remedies.
Section 11. Further Closing Documents. On the Closing Date and
as a further contingency of the obligation of Buyer (in the case of (a) and (b)
below) or Seller (in the case of (b) below), as applicable, as provided for
below to close hereunder:
(a) Seller shall deliver to Buyer:
(i) One or more bills of sale conveying to
Buyer all of the tangible and intangible personal
<PAGE>
- 9 -
property included in the assets to be acquired by
Buyer hereunder;
(ii) one or more general warranty deeds, for
all real property owned in fee simple and one or more
assignments of the leasehold interests in real
property transferring to Buyer such leasehold
interests; and
(iii) one or more assignments, with all
necessary consents, assigning to Buyer all of the
contracts, agreements, accounts receivable and cash
to be assigned to Buyer hereunder,
(b) Seller and Buyer shall also execute such
other documents, as may reasonably be necessary for the implementation and
consummation of this Agreement.
Unless otherwise provided in this Agreement, all instruments
and documents delivered shall be dated the Closing Date and shall be reasonably
satisfactory as to form and content to each party and its respective counsel.
Section 12. Application to Commission. Seller and Buyer shall
cooperate in the prompt preparation and filing, within seven (7) days from the
date of this Agreement, of an application with the Commission requesting its
consent to the assignment of the Licenses for the Owned Stations from Seller to
Buyer (or to such other entity as designed by Buyer). The parties shall
thereafter prosecute the Commission application(s) with all reasonable diligence
and otherwise use their commercially reasonable efforts to obtain the grants of
such applications) as expeditiously as practicable (but no party shall have any
obligation to take any unreasonable steps to satisfy complainants, if any, which
steps would substantially impair or diminish rights under the Commission
Licenses or otherwise impose an unreasonable burden on a party). If the
Commission consent imposes any condition on any party hereto, such party shall
use its commercially reasonable efforts to comply with such condition unless
compliance would be unduly burdensome or would have a material adverse effect
upon Buyer, or materially adversely affects its constituent partners, or any of
its subsidiaries, as appropriate. If reconsideration, review or judicial review
is sought with respect to the Commission consent, Buyer and Seller shall oppose
such efforts for reconsideration, review or judicial review vigorously. If the
Closing shall not have occurred for any reason within the original effective
period of the Commission consent, and if none of the parties hereto are in
breach or default of its obligations, representations, warranties and covenants
or duties hereunder, the parties shall jointly request an extension of the
effective period of the Commission consent. Notwithstanding any of the
foregoing, if the Commission consent
<PAGE>
- 10 -
imposes any condition that would adversely change (other than a change in
reporting requirements that is not unduly burdensome) or limit the operations of
any of the owned Stations or of WLOS(TV) or WAXA(TV) after the Closing or
require a divestiture of either WLOS(TV) or WAXA(TV) by Buyer after the Closing,
Buyer may, at its option, terminate this Agreement without any liability or
obligation to Seller.
Section 13. Commission Approval. If the Commission has failed
to grant its approval of the assignment of the Owned Stations' Licenses from
Seller to Buyer within a period of sixty (60) months from the date of filing of
the applications described herein, either Seller or Buyer may thereafter
terminate this Agreement by giving written notice to the other; provided,
however, that the party desiring to terminate shall not then be in material
breach of this Agreement and have been then notified in writing by the other
party thereof.
Section 14. Remedies of Parties Upon Default. If Seller
defaults in the performance of its obligations under this Agreement to complete
the sale to the Buyer as herein set forth, and Buyer shall not be in material
breach, Buyer may terminate this Agreement upon notice in writing to Seller and
shall be entitled to bring an action for damages or specific performance or
both. If Buyer defaults in the performance of its obligations under this
Agreement to complete the purchase from Seller as herein set forth, as and when
herein set forth, and Seller shall not be in material breach, Seller may
terminate this Agreement upon notice in writing to Buyer, and Seller shall be
entitled to bring an action for damages or specific performance or both. In the
event that both Buyer and Seller have defaulted hereunder, and neither party's
default was caused by the inability of such party to perform due to the other
party's default, then either party may terminate this Agreement upon written
notice to the other without any further liability to each other. Neither Buyer,
on the one hand, nor Seller, on the other hand, may rely on the failure of any
condition precedent set forth herein to be satisfied if such failure was caused
by such party's (or parties') failure to act in good faith, or a breach of or
failure to perform its representations, warranties, covenants or other
obligations in accordance with the terms hereof.
Section 15. Damage to Seller's Properties. In the event of any
material damage to the Stations or any of the assets to be acquired by Buyer by
reason of fire or other casualty or incident occurring between the date hereof,
and the Closing Date, Seller shall give Buyer notice of such event. In such
notice, Seller shall indicate its best estimate of the damages, and if
repairable, the length of time required for restoration. Seller shall take all
reasonable steps to repair, replace and restore such property as soon as
possible after the loss, and in addition, if repairable, shall apply any
insurance proceeds
<PAGE>
- 11 -
received because of such loss to such restoration. In the event of such damage,
which is not fully required or restored prior to closing, or if is interrupted
such that the regular broadcast signal of any Station (including its effective
radiated power is diminished in any material respect for a period of 72
continuous hours or more at any time prior to the Closing Date, Buyer may
terminate this Agreement or postpone the Closing Date for a period of up to 180
days.
Section 16. Closing. The Closing Date, as used throughout this
Agreement, shall take place (subject to the provisions of this Agreement
deferring or permitting the postponement of the Closing) within ten (10) days
after the later of (i) consent of the Commission to the assignment of the
Commission Licenses shall have been granted and shall have become a Final Order,
and (ii) grant by the Commission of any necessary waiver under 47 C.F.R.
ss.73.3555(b) shall have been obtained and such grant shall have become a Final
Order, such date and the place thereof to be selected by Buyer. "Final Order"
means an action or order by the Commission (a) that has not been reversed,
stayed, enjoined, set aside, annulled or suspended, and (b) with respect to
which (i) no requests have been filed for administrative or judicial review,
reconsideration, appeal or stay and the Commission has not initiated a review of
such action or order on its own action and the periods provided by statute or
Commission regulations for filing any such requests and for the Commission to
set aside the action on its own notion have expired, or (ii) in the event of
review, reconsideration or appeal, the period provided by statute or Commission
regulations for further review, reconsideration or appeal has expired.
Section 17. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given when delivered
personally or by Federal Express or other comparable nationally recognized
courier service (receipt requested) or by facsimile transmission, telexed or
mailed by registered or certified mail (return receipt requested), postage
prepaid, to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice; provided that notices of a change
of address shall be effective only upon receipt thereof):
To South Carolina:
------------------
Keymarket Communications, Inc.
2743 Perimeter Parkway
Building 100, Suite 250
Augusta, Georgia 30909
Attention: Mr. Donald J. Alt
Telephone: (706) 855-0555
Telecopy: (706) 855-1955
<PAGE>
- 12 -
Copies to:
----------
Joel B. Piassick, Esq.
Kilpatrick & Cody
1100 Peachtree Street
Suite 2800
Atlanta, Georgia 30309
Telephone: (404) 815-6527
Telecopy: (404) 815 6555
Mr. Richard A. Churchill
MC Partners
75 State Street
Suite 2500
Boston, Massachusetts 02109
Telephone: (617) 345-7200
Telecopy: (617) 345-7201
Bruce E. Rogoff, Esq.
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
Telephone: (617) 542-6000
Telecopy: (617) 542-2241
To Buyer:
---------
c/o River City Broadcasting, L.P.
1215 Cole Street
St. Louis, Missouri 63106
Attention: Mr. Larry D. Marcus
Telephone: (314) 259-5700
Telecopy: (314) 259-5709
Copies to:
----------
John T. Byrnes, Esq.
Dow, Lohnes & Albertson
1255 23rd Street, N.W.
Suite 500
Washington, D.C. 20037
Telephone: (202) 857-2518
Telecopy: (202) 857-2900
Section 18. Survival. Notwithstanding any investigation made
by either Buyer or Seller, all covenants, agreements, representations and
warranties contained in this Agreement, and in any other instruments which may
be delivered pursuant hereto or in connection with the transactions contemplated
hereby, shall be deemed to be material and to have been relied upon by Buyer or
Seller, as applicable, but the
<PAGE>
- 13 -
representations and warranties of the parties made herein shall not survive the
Closing and the condition of the transactions contemplated by this Agreement;
provided that nothing herein shall affect Buyer's rights under that certain
Asset Purchase Agreement dated as of March , 1995, by and among Buyer, Seller
and certain affiliated entities of Seller (the "Purchase Agreement").
Section 19. Commissions. Except for any fee payable to Star
Media Group, Inc. pursuant to a Letter Agreement among Sellers and Star Media
Group, Inc. dated June 1, 1994, which fees shall be paid by Seller, Buyer and
Seller represent and warrant that neither it or its affiliates nor any person or
entity acting on its behalf has incurred any liability for any finders' or
brokers' fees or commissions in connection with the transaction contemplated by
this Agreement, Buyer agrees to indemnify and hold harmless Seller against any
fee, commission, loss or expense arising out of any claim by any other broker or
finder employed or alleged to have been employed by Buyer, and Seller agrees to
indemnify and hold harmless Buyer against any fee, commission, loss or expense
arising out of any claim by any other broker or finder employed or alleged to
have been employed by any Seller.
Section 20. Further Assurances. Subject to the terms and
conditions of this Agreement, each of the parties hereto will use all
commercially reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the sale
contemplated by this Agreement. From time to time after the Closing Date,
without further consideration, Seller will, at Seller's expense, execute and
deliver, or cause to be executed and delivered, such documents to Buyer as Buyer
may reasonably request in order to more effectively vest in Buyer good title to
the Station Assets and to evidence the representations and warranties of Seller.
From time to time after the Closing Date, without further consideration, Buyer
will, at Buyer's expense, execute and deliver such documents to Seller as Seller
may reasonably request in order to more effectively consummate the sale of the
Station Assets pursuant to this Agreement.
Section 21. Amendment and Modification. This Agreement may be
amended, modified or supplemented only by written agreement of Seller and Buyer.
Section 22. Waiver Of Compliance; Consents. Except as
otherwise provided in this Agreement, any failure of any of the parties to
comply with any obligation, representation, warranty, covenant, agreement or
condition herein may be waived by the party entitled to the benefits thereof
only by a written instrument signed by the party granting such waiver, but such
waiver or failure to insist upon strict compliance with such
<PAGE>
- 14 -
obligation, representation, warranty, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing in a manner consistent
with the requirements for a waiver of compliance as set forth in this Section
22.
Section 23. Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but, except as
provided for herein, neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by either Buyer or Sellers hereto
without the prior written consent of the other party.
The parties agree as follows:
(a) Without the consent of Seller, Buyer may assign
all or any of the rights and obligations under this Agreement to any other
party. Furthermore, to the extent this Agreement is assigned by Buyer in
accordance with the terms of this Section 23 to a party that is not an affiliate
of Buyer, upon such assignment Buyer shall have no further obligations under
this Agreement and Seller's only recourse under this Agreement shall be against
such assignee of Buyer.
(b) Except as expressly provided herein, this
Agreement is not intended to, and shall not, confer upon any other person except
the parties hereto any rights or remedies hereunder.
Section 24. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF MISSOURI (BUT NOT THE LAWS PERTAINING TO CHOICE OF LAW)
AS TO ALL MATTERS, INCLUDING BUT NOT LIMITED TO MATTERS OF VALIDITY,
CONSTRUCTION, EFFECT, PERFORMANCE AND REMEDIES.
Section 25. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Section 26. Headings. The article and section headings
contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the parties and shall not in any way affect the meaning
or interpretation of this Agreement.
Section 27. Entire Agreement. This Agreement and the documents
delivered pursuant to the Agreement, the Loan Agreement and the Option Agreement
dated as of ,
<PAGE>
- 15 -
between Buyer and Seller, and the Purchase Agreement, embody the entire
agreement and understanding of the parties hereto in respect of the transactions
contemplated by this Agreement. This Agreement supersedes all prior
negotiations, agreements and understandings between the parties with respect to
the transactions contemplated by this Agreement and all letters of intent and
other writings executed prior to the date hereof relating to such negotiations,
agreements and understandings; provided that nothing herein shall affect the
provisions of the Loan Agreement, the Option Agreement or the Purchase
Agreement;
Section 28. Severability. If any provision of this Agreement
or the application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provision to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law so long as
the economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid or unenforceable, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the greatest
extent possible.
Section 29. Press Releases. No press releases or other public
announcements concerning this Agreement or the transactions contemplated hereby
shall be made by any party hereto without the prior written consent of the other
party unless the first such party is legally compelled to do so.
Section 30. Publicity. Neither Seller nor Buyer shall make or
issue or cause to be made or issued, any announcement (written or oral)
concerning this Agreement or the transactions contemplated hereby for
dissemination to the general public without the prior consent of the other
party. This provision shall not apply, however, to any announcement or written
statement required to be made by law or the regulations of any federal or state
governmental agency or any stock exchange, except that the party required to
make such announcement shall provide a draft copy thereof to the other party
hereto, and consult with such other party concerning the timing and content of
such announcement, before such announcement is made.
Section 31. Employee Matters. (a) At Closing, Buyer shall
offer employment to all of Seller's employees who are actively employed as of
the Closing Date (such employees who accept employment with Buyer, "Transferred
Employees") on terms and conditions substantially identical to the terms and
<PAGE>
- 16 -
conditions offered to other employees employed by Buyer in Buyer's radio
division, including any changes to such terms and conditions, as may be made by
Buyer after the Closing Date; provided, however, that Buyer, in its sole
discretion, shall have the option to provide to such Transferred Employees
health care coverage on substantially the terms of the health care coverage
provided by the Seller prior to the Closing Date. To the extent permitted by
applicable law, each Transferred Employee's years of service with Seller, to the
extent credited under Seller's employee benefits plans, shall be credited as
years of service towards eligibility and vesting in Buyer's comparable employee
benefit plans, including any qualified retirement, pension, profit sharing or
401(k) plans. With respect to the health care plan of Buyer that provides
coverage to Transferred Employees after the Closing in accordance with this
Section 31, Buyer shall offer coverage thereto without the application of
pre-existing conditions restrictions for any pre-existing conditions of the
Transferred Employees covered under the terms of Seller's health care plan
immediately prior to the Closing Date. In addition, to the extent any
Transferred Employee has paid medical expenses which have been applied against
such employee's deductible under Seller's health insurance plan with respect to
the plan, that amount shall be credited by Buyer towards satisfying any
deductible under Buyer's health insurance plan. Seller agrees to use its best
efforts to assist Buyer in the assumption of any insurance contracts used to
provide health care coverage to Seller's employees in the event Buyer notifies
Seller of its intent to assume such contracts.
(b) Seller shall be responsible for and shall pay all
amounts owed to (i) any employees who have not become Transferred Employees and
(ii) any Transferred Employees for services performed prior to the Closing,
except in respect of Transferred Employees for accrued sick leave and for
accrued vacation pay. Seller shall indemnify and hold Buyer harmless from any
liabilities relating to employees (whether or not Transferred Employees) not
expressly assumed by Buyer hereunder. Notwithstanding the foregoing, however,
after the Closing, Buyer shall be solely responsible for wages, benefits and any
employment related claims brought by any Transferred Employee against Buyer or
Seller by reason of Buyer's acts or omissions in connection with such employment
or the termination thereof, to the extent any such liability or claims is
attributable to a period commencing after the-Closing Date. Buyer shall
indemnify and hold Seller harmless from and against any and all such claims
(including reasonable attorneys fees and other expenses associated with such
claims) referred to in the preceding sentence.
(c) It is understood and agreed that all provisions
contained in this Section 31 are included for the sole
<PAGE>
- 17 -
benefit of the parties hereto and do not and shall not create any right in any
other person, including any employees.
Section 32. Control of the Stations. Prior to the Closing,
Buyer shall not, directly or indirectly, control, supervise or direct, or
attempt to control, supervise or direct, the operation of the Owned Stations;
such operation, including complete control and supervision of all of each Owned
Station's programs, employees and policies, shall be the sole responsibility of
Seller.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
KEYMARKET OF SOUTH CAROLINA, INC.
By:
-------------------------------
Name:
Title:
RIVER CITY BROADCASTING, L.P.
By:Better Communications, Inc.,
General Partner
By:
-------------------------------
Name:
Title:
<PAGE>
- 18 -
EXHIBIT C TO OPTION AGREEMENT
-------------------------------
STOCK PURCHASE AGREEMENT
BY AND AMONG
RIVER CITY BROADCASTING, L.P.
AND
KERBY E. CONFER
--------------------------, ---------
<PAGE>
- 19 -
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
Section 1. Shares to Be Sold......................................................................4
Section 2. Purchase Price.........................................................................4
Section 3. Liabilities............................................................................4
Section 4. Representations, Covenants and Warranties of
Seller.................................................................................5
Section 5. Representations, Warranties and Covenants
of Buyer...............................................................................7
Section 6. Adjustments............................................................................7
Section 7. Expenses...............................................................................7
Section 8. Obligations of the Parties Before Closing..............................................7
Section 9. Contingency of Obligations of Buyer....................................................8
Section 10. Contingency of Obligations of Seller...................................................9
Section 11. Further Closing Documents.............................................................10
Section 12. Application to Commission.............................................................10
Section 13. Commission Approval...................................................................11
Section 14. Remedies of Parties upon Default......................................................11
Section 15. Damage to Company's Properties........................................................11
Section 16. Closing...............................................................................11
Section 17. Notices...............................................................................12
Section 18. Survival..............................................................................13
Section 19. Commissions...........................................................................13
Section 20. Further Assurances....................................................................13
Section 21. Amendment and Modification............................................................14
Section 22. Waiver of Compliance; Consents........................................................14
Section 23. Assignment............................................................................14
Section 24. Governing Law.........................................................................14
Section 25. Counterparts..........................................................................15
<PAGE>
- 20 -
Section 26. Headings..............................................................................15
Section 27. Entire Agreement......................................................................15
Section 28. Severability..........................................................................15
Section 29. Press Releases........................................................................15
Section 30. Publicity.............................................................................15
Section 31. Control of the Stations...............................................................16
</TABLE>
<PAGE>
- 1 -
STOCK PURCHASE AGREEMENT
THIS AGREEMENT, made and entered into this _____ day of
_______________, _____, by and between Kerby E, Confer ("Seller") and RIVER CITY
BROADCASTING, L.P., a Delaware limited partnership ("Buyer").
WITNESSETH:
WHEREAS, Seller owns all of the issued and outstanding shares
(the "Shares") of capital stock of Keymarket of South Carolina, Inc,, a South
Carolina corporation (the "Company"), Seller desires to sell to Buyer, and Buyer
desires to purchase from Seller, the Shares on the terms and conditions herein
set forth.
WHEREAS, Company is the licensee of, and owns and operates
radio stations WFBC-AM and WFBC-FM, Greenville, South Carolina and WORD-AM,
Spartanburg, South Carolina (the "Owned Stations") and is a party to that
certain Time Brokerage Agreement dated as of August 30, 1994 by and between
South Carolina and Spartanburg Radiocasting Company (the "LMA Agreement") and an
Option Agreement dated as of August 30, 1994 by and between South Carolina and
Spartanburg Radiocasting Company (the "LMA Option Agreement") each relating to
Radio Stations WSPA-AM and WSPA-FM Spartanburg, South Carolina (the "LMA
Stations"). The Owned Stations and the LMA Stations are individually referred to
herein as a "Station" and collectively as the "Stations."
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants, warranties and agreements between the parties contained
herein, the parties hereby agree that:
Section 1. Shares to Be Sold. On the "Closing Date," as
defined in Section 16 hereof, Seller will sell, assign, transfer, convey and
deliver to Buyer ___ shares of common stock of the Company (the "Shares") which
Shares constitute all of the issued and outstanding capital stock of the
Company. At Closing, Seller shall deliver the stock certificates evidencing the
Shares, together with stock powers duly endorsed in blank and such other
instruments of transfer as Buyer may reasonably request. The Shares shall be
free and clear of all liens, charges, encumbrances, debts, liabilities and other
obligations whatsoever, except for liens in favor of Buyer created under that
certain Loan Agreement dated as of 1995 between Buyer and Company (the "Loan
Agreement") and related documents.
Section 2. Purchase Price. Subject to any adjustments as
provided for in Section 6, the purchase price to
<PAGE>
- 2 -
be paid by Seller to Buyer for the Shares, on the Closing Date, shall be the sum
of One Million Dollars ($1,000,000).
Section 3. Liabilities. At the Closing Date, Seller covenants
and agrees that the Company shall have no liability, obligation, undertaking,
expense or agreement of any kind, absolute or contingent, known or unknown,
except for: (a) obligations to Buyer under the Loan Agreement; (b) obligations
from and after the Closing Date under the contracts, leases and agreements
described in Section 4(m) and (n) below; and (c) other obligations incurred in
the ordinary course of business of the company consistent with past practice and
which have been adjusted in Buyer's favor in accordance with the provisions of
Section 6 hereof.
Section 4. Representations, Covenants and Warranties of
Seller. Seller represents, warrants, and covenants:
(a) That Company is now and as of the Closing Date
will be a corporation duly organized, validly existing and in good standing
under the laws of South Carolina.
(b) That Company, now and as of the Closing Date, is
and will be the valid holder in good standing of the licenses, permits, and
other authorizations (the "Licenses") issued by the commission.
(c) That the Owned Stations and to Seller's
knowledge, the LMA Stations, are in material compliance with all applicable
rules of the Commission and for the Licenses.
(d) That Seller does not know of, or have any
reasonable grounds to know of any:
(i) Litigation or proceeding pending or
threatened against or relating to the Company, the
owned Stations, the LMA Stations or their respective
properties or business
(ii) Basis for any current or prospective
governmental investigation or action relative to the
Company, the Owned Station(s), the LMA Stations or
their respective properties or business;
(e) That Seller does not know of any facts which
would cause the Commission to deny its consent to the transfer of control of the
Licenses to Buyer, except that Seller makes no representation regarding any
necessary waiver of the Commission's one-to-a-market rule, 47 C.F.R.
ss.73.3555(b),
<PAGE>
- 3 -
(f) That Company is entitled and authorized to own
and operate the Owned Stations and to carry on its business in the manner and in
the place where the Owned Station is owned and operated and the business is now
conducted.
(g) That Seller has the power and authority to
execute and deliver this Agreement, to consulate the transactions it
contemplates and to take all other actions required to be taken by Seller
pursuant to the provisions of this Agreement, and neither the execution of this
Agreement nor the consummation of the transactions contemplated by it will
violate or constitute a default on the part of Seller or Company under any
contract or agreement to which Seller or Company is a party or by which Seller
or Company is bound or under any law, statute, rule, regulation decree or order
of any court or governmental agency or authority. That this Agreement
constitutes the legal, valid and binding obligation of Seller, enforceable in
accordance with its terms.
(h) That no consent or approval of any other person
or entity which has not been obtained by Seller is required before Seller may
execute, deliver and perform its obligations under this Agreement, with the
exception of the Commission and under such other contracts or agreements of
Company requiring consent to the stock transfer contemplated hereby and Seller
shall use all commercially reasonable efforts to obtain such consents.
(i) That Seller has not caused or allowed any
chemical, toxic, radioactive or other hazardous waste or material to be brought
or stored upon any of the leasehold property or other assets of the Owned
Stations or the LMA Stations.
(j) That Company has good, valid and, in the case of
any real property in fee simple, marketable, title to all of the Assets of the
Company, free and clear of all liens, charges, encumbrances debts, liabilities
and obligations of any nature whatsoever, except for liens in favor of Buyer
created under the Loan Agreement and related documents and that the Assets of
the company are in good order and repair and are used in material compliance
with all state and federal laws and regulations relating to safety of the work
place.
(k) That the Assets of the Company are adequately
covered by insurance against fire, theft and other casualty.
(1) That Company has filed all returns and all other
reports of taxes due or information required for all federal, state and local
income, franchise, business, sales and use taxes, and all returns or reports,
when filed, were accurate and complete, and all taxes which should have been
paid have been paid.
<PAGE>
- 4 -
(m) That the only real property interests held in fee
simple and leasehold interests in real property of Company used or useful in the
operation of the Owned Stations are those set forth in Section 4.6 of the
Disclosure Schedule to the Loan Agreement and real property fee simple interests
acquired or leasehold interests entered into after the date of the Loan
Agreement as permitted in accordance with the terms of the Loan Agreement.
(n) That the only contracts and agreements of Company
are either set forth in Section 4.8 of the Disclosure Schedule to the Loan
Agreement or are not required to be set forth in the Disclosure Schedule under
the provisions of Section 4.8 of the Loan Agreement and those contracts and
agreements entered into after the date of the Loan Agreement as permitted in
accordance with the terms of the Loan Agreement.
(o) The Shares constitute all of the issued and
outstanding Capital Stock of the Company, The Shares are duly issued, fully paid
and non-assessable. The Shares are owned beneficially and of record by Seller,
the Seller has good and valid title to the shares and the shares are free and
clear of all liens, charges, encumbrances, debts, liabilities and obligations
whatsoever, except for liens in favor of Buyer created under the Loan Agreement.
There are no options, warrants, or other rights of any nature whatsoever to
acquire capital stock of the Company.
Section 5. Representations, Warranties and Covenants of Buyer.
Buyer represents, warrants and covenants:
(a) That Buyer is and as of the Closing Date will be
a limited partnership duly organized, validly existing and in good standing
under the laws of its State of organization.
(b) That this Agreement constitutes the legal, valid
and binding obligation of Buyer, enforceable in accordance with its terms.
(c) That except for the necessity of a waiver of the
Commission's one-to-a-market rule, 47 C.F.R. ss.73.3555(b) because of Buyer
ownership of WLOS(TV) and WAXA(TV), Buyer does not know of any facts which would
disqualify it under the Communications Act of 1934, as amended, from owning or
operating the Station or which would cause the Commission to deny its consent to
the assignment of the Station to Buyer.
(d) That Buyer will reasonably cooperate with Seller
in securing consents where applicable, of the remaining contracts and
commitments of Company, including timely completing any applications required by
third parties such as credit reports and financial statements, etc.
<PAGE>
- 5 -
Section 6. Adjustments. To the extent applicable, a downward
adjustment in an amount equal to the amount calculated under Section 2.1(b)(ii)
of the Loan Agreement.
Section 7. Expenses. The expenses involved in the preparation
and consummation of this Agreement shall be borne by the party incurring same.
Section 8. Obligations of the Parties Before Closing. From and
after the date of this Agreement and until the Closing Date:
(a) Seller shall cause Company to conduct the
business of the Owned Stations in the normal course and as has been heretofore
conducted by Seller;
(b) Seller shall cause Company not to purchase, sell,
lease, or dispose of, or enter into any contract for the purchase, sale, lease
or disposition of any property or assets having a cost in excess of $5,000 or a
contractual period extending beyond the Closing Date without the prior written
approval of Buyer;
(c) Seller shall cause Company to operate the Owned
Stations in all material respects in accordance with all laws, rules and
regulations-applicable to it, including the regulations of the Commission;
(d) Seller shall provide to Buyer, promptly upon
receipt thereof by Seller, a copy of (i) any notice from the commission or any
other governmental authority of the revocation, suspension, or limitation of the
rights under, or of any proceeding for the revocation, suspension, or limitation
of the rights or that such authority may in the future (as the result of failure
to comply with laws or regulations or for any other reason) revoke, suspend, or
limit the rights under any License, or any other license or permit held by
Seller respecting the Owned Station, and (ii) copies of all protests,
complaints, challenges or other documents filed with the Commission by third
parties concerning either of the Station, and promptly upon the filing or making
thereof, copies of Seller's responses to such filings; and
(e) Seller shall notify Buyer in writing immediately
upon learning of the institution or threat of any material action against Seller
or Company in any court, or any action against Seller or Company before the
Commission or any other governmental agency, and notify Buyer in writing
promptly upon receipt of any administrative or court order relating to business
of the Company.
<PAGE>
- 6 -
Section 9. Contingency of Obligations of Buyer. All
obligations of Buyer under this Agreement are subject to the fulfillment, prior
to or at the Closing Date, of each of the following conditions, any of which
Buyer may waive in writing:
(a) The representations and warranties of Seller
contained in this Agreement shall be true at and as of the Closing Date as
though such representations and warranties were made at and as of the Closing
Date.
(b) Seller shall have materially performed and
complied with all agreements and conditions required by this Agreement to be
performed or complied with by Seller prior to or at the Closing.
(c) The Commission shall have granted its approval of
the transfer of control of the Company's licenses and authorizations to Buyer
and such approval has become a Final order (as defined herein) and any necessary
waiver required under the terms of C.F.R. ss.73.3555(b) shall have been obtained
without any adverse conditions to Buyer and shall have become a Final Order.
(d) Seller shall have delivered to Buyer an opinion
from its counsel, dated as of the Closing Date to the following effect:
(i) Company is a corporation validly
existing and in good standing under the laws of the
State of Louisiana;
(ii) Company is entitled to own its
properties and carry on its business as, and in the
places where, the properties are owned and operated
and the business is now conducted;
(iii) All actions to be taken by or on the
part of Seller or Company to authorize then to carry
out and perform the Agreement and the transactions it
contemplated have been duly and properly taken;
(iv) There are no actions, suits or
proceedings before any Court or administrative agency
pending or threatened against or affecting Seller or
the Company;
(v) This Agreement constitutes the legal,
valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms, subject
to customary bankruptcy and similar
<PAGE>
- 7 -
limitations and limitations on the availability of
equitable remedies.
(e) Buyer shall not have exercised its right
to terminate this Agreement pursuant to Section 15
hereof.
Section 10. Contingency of Obligations of Seller. All
obligations of Seller under this Agreement are subject to the fulfillment, prior
to or at the Closing, of each of the following conditions, any of which Seller
may waive in writing:
(a) The representations and warranties of Buyer
contained in this Agreement shall be true at and as of the Closing Date as
though such representations and warranties were made at and as of the Closing
Date.
(b) Buyer shall have materially performed and
complied with all agreements and conditions required by this Agreement to be
performed or complied with by Buyer prior to or at the Closing Date.
(c) The Commission shall have granted its approval of
the transfer of control of the Company's Licenses to Buyer.
(d) The payment to Seller by Buyer of the Purchase
Price.
(e) Buyer shall have delivered to Seller an opinion
from its counsel, dated as of the Closing Date to the following effect:
(i) Buyer is a limited partnership validly
existing and in good standing under its State of
organization;
(ii) All partnership actions to be taken by
or on the part of Buyer to authorize it to carry out
and perform the Agreement and the transactions it
contemplated have been duly and properly taken; and
(iii) This Agreement constitutes the legal,
valid and binding obligation of Buyer enforceable
against Buyer in accordance with its terms, subject
to customary bankruptcy and similar limitations and
limitations on the availability of equitable
remedies.
Section 11. Further Closing Documents. On the Closing Date and
as a further contingency of the obligation of Buyer (in the case of (a) and (b)
below) or Seller (in the case
<PAGE>
- 8 -
of (b) below), as applicable, as provided for below, to close hereunder:
(a) Seller shall deliver to Buyer:
(i) The stock certificates evidencing the
shares and stock powers executed in blank.
(ii) All necessary consents under any
agreements of the Seller for the transfer of the
stock contemplated hereunder.
(b) Seller and Buyer shall also execute such other
documents, as may reasonably be necessary for the implementation and
consummation of this Agreement.
Unless otherwise provided in this Agreement, all instruments
and documents delivered shall be dated the Closing Date and shall be reasonably
satisfactory as to form and content to each party and its respective counsel.
Section 12. Application to Commission. Seller and Buyer shall
cooperate in the prompt preparation and filing, within seven (7) days from the
date of this Agreement, of an application with the commission requesting its
consent to the transfer of control of the Licenses for the Owned Stations from
Seller to Buyer (or to such other entity as designed by Buyer). The parties
shall thereafter prosecute the Commission applications) with all reasonable
diligence and otherwise use their commercially reasonable efforts to obtain the
grants of such applications) as expeditiously as practicable (but no party shall
have any obligation to take any unreasonable steps to satisfy complainants, if
any, which steps would substantially impair or diminish rights under the
Commission Licenses or otherwise impose an unreasonable burden on a party). If
the Commission consent imposes any condition on any party hereto, such party
shall use its commercially reasonable efforts to comply with such condition
unless compliance would be unduly burdensome or would have a material adverse
effect upon Buyer, or materially adversely affects its constituent partners, or
any of its subsidiaries, as appropriate, If reconsideration, review or judicial
review is sought with respect to the Commission consent, Buyer and Seller shall
oppose such efforts for reconsideration, review or judicial review vigorously.
If the Closing shall not have occurred for any reason within the original
effective period of the Commission consent, and if none of the parties hereto
are in breach or default of its obligations, representations, warranties and
covenants or duties hereunder, the parties shall jointly request an extension of
the effective period of the commission consent. Notwithstanding any of the
foregoing, if the Commission consent imposes any condition that would adversely
change (other than a change in reporting requirements that is not
<PAGE>
- 9 -
unduly burdensome) or limit the operations of any of the Owned Stations or of
WLOS(TV) or WAXA(TV) after the Closing or require a divestiture of either
WLOS(TV) or WAXA(TV) by Buyer after the Closing, Buyer may, at its option,
terminate this Agreement without any liability or obligation to Seller.
Section 13. Commission Approval. If the Commission has failed
to grant its approval of the Licenses from Seller to Buyer within a period of
sixty (60) months from the date of filing of the applications described herein,
either Seller or Buyer may thereafter terminate this Agreement by giving written
notice to the other; provided, however, that the party desiring to terminate
shall not then be in material breach of this Agreement and have been then
notified in writing by the other party thereof.
Section 14. Remedies of Parties upon Default. If Seller
defaults in the performance of its obligations under this Agreement to complete
the sale to the Buyer as herein set forth, and Buyer shall not be in material
breach, Buyer may terminate this Agreement upon notice in writing to Seller and
shall be entitled to bring an action for damages or specific performance or
both. If Buyer defaults in the performance of its obligations under this
Agreement to complete the purchase from Seller as herein set forth, as and when
herein set forth, and Seller shall not be in material breach, Seller may
terminate this Agreement upon notice in writing to Buyer, and Seller shall be
entitled to bring an action for damages or specific performance or both. In the
event that both Buyer and Seller have defaulted hereunder, and neither party's
default was caused by the inability of such party to perform due to the other
party's default, then either party may terminate this Agreement upon written
notice to the other without any further liability to each other. Neither Buyer,
on the one hand, nor Seller, on the other hand, may rely on the failure of any
condition precedent set forth herein to be satisfied if such failure was caused
by such party's (or parties') failure to act in good faith, or a breach of or
failure to perform its representations, warranties, covenants or other
obligations in accordance with the terms hereof.
Section 15. Damage to Company's Properties. In the event of
any material damage to the Owned Stations or any of the Company's assets by
reason of fire or other casualty or incident occurring between the date hereof,
and the Closing Date, Seller shall give Buyer notice of such event. In such
notice, Seller shall indicate its best estimate of the damages, and if
repairable, the length of time required for restoration. Seller shall cause
Company to take all reasonable steps to repair, replace and restore such
property as soon as possible after the loss, and in addition, if repairable,
shall apply any insurance proceeds received because of such loss to such
restoration. In the event of such damage, which is not fully required or
restored
<PAGE>
- 10 -
prior to Closing, or if is interrupted such that the regular broadcast signal of
such Owned Station (including its effective radiated power is diminished in any
material respect for a period of 72 continuous hours or more at any time prior
to the Closing Date, Buyer may terminate this Agreement or postpone the Closing
Date for a period of up to 180 days.
Section 16. Closing. The Closing Date, as used throughout this
Agreement, shall take place (subject to the provisions of this Agreement
deferring or permitting the postponement of the Closing) within ten (10) days
after the later of (i) consent of the Commission to the assignment of the
Commission Licenses shall have been granted and shall have become a Final Order,
and (ii) grant by the Commission of any necessary waiver under 47 C.F.R.
ss.73.3555(b) shall have been obtained and such grant shall have become a Final
Order, such date and the place thereof to be selected by Buyer. "Final Order"
means an action or order by the Commission (a) that has not been reversed,
stayed, enjoined, not aside, annulled or suspended,, and (b) with respect to
which (i) no requests have been filed for administrative or judicial review,
reconsideration, appeal or stay and the Commission has not initiated a review of
such action or order on its own notion and the periods provided by statute or
commission regulations for filing any such requests and for the commission to
set aside the action on its own motion have expired, or (ii) in the event of
review, reconsideration or appeal, the period provided by statute or commission
regulations for further review, reconsideration or appeal has expired.
Section 17. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given when delivered
personally or by Federal Express or other comparable nationally recognized
courier service (receipt requested) or by facsimile transmission, telexed or
mailed by registered or certified mail (return receipt requested), postage
prepaid, to the parties at the following addresses (or at such other address for
a party as shall be specified by like notice; provided that notices of a change
of address shall be effective only upon receipt thereof):
To South Carolina:
------------------
Keymarket Communications, Inc.
2743 Perimeter Parkway
Building 100, Suite 250
Augusta, Georgia 30909
Attention: Mr. Donald J. Alt
Telephone: (706) 855-0555
Telecopy: (706) 855-1955
copies to:
---------
<PAGE>
- 11 -
Joel B. Piassick, Esq.
Kilpatrick & Cody
1100 Peachtree Street
Suite 2800
Atlanta, Georgia 30309
Telephone: (404) 815-6527
Telecopy: (404) 815 6555
Mr. Richard A. Churchill
MC Partners
75 State Street
Suite 2500
Boston, Massachusetts 02109
Telephone: (617) 345-7200
Telecopy: (617) 345-7201
Bruce E. Rogoff, Esq.
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
Telephone: (617) 542-6000
Telecopy: (617) 542-2241
To Buyer:
--------
c/o River City Broadcasting, L.P.
1215 Cole Street
St. Louis, Missouri 63106
Attention: Mr. Larry D. Marcus
Telephone: (314) 259-5700
Telecopy: (314) 259-5709
Copies to:
John T. Byrnes, Esq.
Dow, Lohnes & Albertson
1255 23rd Street, N.W.
Suite 500
Washington, D.C. 20037
Telephone: (202) 857-2518
Telecopy: (202) 857-2900
Section 18. Survival. Notwithstanding any investigation made
by either Buyer or Seller, all covenants, agreements, representations and
warranties contained in this Agreement, and in any other instruments which may
be delivered pursuant hereto or in connection with the transactions contemplated
hereby, shall be deemed to be material and to have been relied upon by Buyer or
Seller, as applicable, but the representations and warranties of the parties
made herein shall not survive the Closing and the consummation of the
transactions
<PAGE>
- 12 -
contemplated by this Agreement; provided that nothing herein shall affect
Buyer's rights under that certain Asset Purchase Agreement dated as of March __,
1995, by and among Buyer, Seller and certain affiliated entities of Seller (the
"Purchase Agreement").
Section 19. Commissions. Except for any fee payable to Star
Media Group, Inc. pursuant to a Letter Agreement among Sellers and Star Media
Group, Inc. dated June 1, 1994, which fees shall be paid by Seller or his
affiliates, Buyer and Seller represent and warrant that neither it or its
affiliates nor any person or entity acting on its behalf has incurred any
liability for any finders, or brokers' fees or commissions in connection with
the transaction contemplated by this Agreement. Buyer agrees to indemnify and
hold harmless Seller against any fee, commission, loss or expense arising out of
any claim by any other broker or finder employed or alleged to have been
employed by Buyer, and Seller agrees to indemnify and hold harmless Buyer
against any fee, commission, loss or expense arising out of any claim by any
other broker or finder employed or alleged to have been employed by any Seller.
Section 20. Further Assurances. Subject to the terms and
conditions of this Agreement, each of the parties hereto will use all
commercially reasonable efforts to take, or cause to be taken, all actions, and
to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consulate and make effective the sale
contemplated by this Agreement. From time to time after the Closing Date,
without further consideration, Seller will, at Seller's expense, execute and
deliver, or cause to be executed and delivered, such documents to Buyer as Buyer
may reasonably request in order to more effectively vest in Buyer good title to
the shares and to evidence the representations and warranties of Seller. From
time to time after the Closing Date, without further consideration, Buyer will,
at Buyer's expense, execute and deliver such documents to Seller as Seller may
reasonably request in order to more effectively consummate the sale of the
shares pursuant to this Agreement.
Section 21. Amendment and Modification. This Agreement may be
amended, modified or supplemented only by written agreement of Seller and Buyer.
Section 22. Waiver of Compliance; Consents. Except as
otherwise provided in this Agreement, any failure of any of the parties to
comply with any obligation, representation, warranty, covenant, agreement or
condition herein may be waived by the party entitled to the benefits thereof
only by a written instrument signed by the party granting such waiver, but such
waiver or failure to insist upon strict compliance with such obligation,
representation, warranty, covenant, agreement or
<PAGE>
- 13 -
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. Whenever this Agreement requires or permits consent
by or on behalf of any party hereto, such consent shall be given in writing in a
manner consistent with the requirements for a waiver of compliance as set forth
in this Section 22.
Section 23. Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but, except as
provided for herein, neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by either Buyer or Sellers hereto
without the prior written consent of the other party.
The parties agree as follows:
(a) Without the consent of Seller, Buyer may assign
all or any of the rights and obligations under this Agreement to any other
party. Furthermore, to the extent this Agreement is assigned by Buyer in
accordance with the terms of this Section 23 to a party that is not an affiliate
of Buyer, upon such assignment Buyer shall have no further obligations under
this Agreement and Seller's only recourse under this Agreement shall be against
such assignee of Buyer.
(b) Except as expressly provided herein, this
Agreement is not intended to, and shall not, confer upon any other person except
the parties hereto any rights or remedies hereunder.
Section 24. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF MISSOURI (BUT NOT THE LAWS PERTAINING TO CHOICE OF LAW)
AS TO ALL MATTERS, INCLUDING BUT NOT LIMITED TO MATTERS OF VALIDITY,
CONSTRUCTION, EFFECT, PERFORMANCE AND REMEDIES.
Section 25. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Section 26. Headings. The article and section headings
contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the parties and shall not in any way affect the meaning
or interpretation of this Agreement.
Section 27. Entire Agreement. This Agreement and the documents
delivered pursuant to the Agreement, the Loan Agreement and the Option Agreement
dated as of between Buyer and Seller, and the Purchase Agreement, embody the
entire agreement
<PAGE>
- 14 -
and understanding of the parties hereto in respect of the transactions
contemplated by this Agreement. This Agreement supersedes all prior
negotiations, agreements and understandings between the parties with respect to
the transactions contemplated by this Agreement and all letters of intent and
other writings executed prior to the date hereof relating to such negotiations,
agreements and understandings; provided that nothing herein shall affect the
provisions of the Loan Agreement, the Option Agreement or the Purchase
Agreement;
Section 28. Severability. If any provision of this Agreement
or the application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provision to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law so long as
the economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid or unenforceable, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the greatest
extent possible.
Section 29. Press Releases. No press releases or other public
announcements concerning this Agreement or the transactions contemplated hereby
shall be made by any party hereto without the prior written consent of the other
party unless the first such party is legally compelled to do so.
Section 30. Publicity. Neither Seller nor Buyer shall make or
issue or cause to be made or issued, any announcement (written or oral)
concerning this Agreement or the transactions contemplated hereby for
dissemination to the general public without the prior consent of the other
party. This provision shall not apply, however, to any announcement or written
statement required to be made by law or the regulations of any federal or state
governmental agency or any stock exchange, except that the party required to
make such announcement shall provide a draft copy thereof to the other party
hereto, and consult with such other party concerning the timing and content of
such announcement, before such announcement is made.
Section 31. Control of the Stations. Prior to the Closing,
Buyer shall not, directly or indirectly, control, supervise or direct, or
attempt to control, supervise or direct, the operation of the Owned Stations;
such operation, including complete control and supervision of all of each Owned
Station's
<PAGE>
- 15 -
programs, employees and policies,, shall be the sole responsibility of Seller
and the Company.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
KEYMARKET OF SOUTH CAROLINA, INC.
By:
-------------------------------
Name:
Title:
RIVER CITY BROADCASTING, L.P.
By: Better Communications, Inc.
General Partner
By:
-------------------------------
Name:
Title:
Exhibit 10.9
OPTION AGREEMENT
BETWEEN
KANSAS CITY TV 62 LIMITED PARTNERSHIP,
as Seller
and
THE INDIVIDUALS NAMED HEREIN,
ON BEHALF OF AN ENTITY TO BE FORMED,
as Buyer
DATED AS OF
MAY 24, 1994
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No
-------
ARTICLE I
<S> <C>
GRANT OF OPTION; GENERAL TERMS OF SALE............................................................................2
1.1 Option Grant; Assets Covered....................................................................2
(a) FCC Authorizations.....................................................................3
(b) Tangible Personal Property.............................................................3
(c) Real Property..........................................................................3
(d) Agreements for Sale of Time............................................................3
(e) Program Contracts......................................................................3
(f) Other Contracts........................................................................3
(g) Trade-marks, etc.......................................................................3
(h) Programming Copyrights.................................................................3
(i) FCC Records............................................................................4
(j) Files and Records......................................................................4
(k) Goodwill...............................................................................4
(l) Prepaid items..........................................................................4
(m) Cash...................................................................................4
(n) Receivables and Other Claims...........................................................4
1.2 Excluded Assets.................................................................................4
(a) Excluded Personal Property.............................................................4
(b) Insurance..............................................................................4
(c) Name...................................................................................5
(d) Certain Contracts......................................................................5
(e) Corporate Books and Records............................................................5
(f) Other Books and Records................................................................5
(g) Transaction Documents..................................................................5
(h) Pension Assets, Etc....................................................................5
1.3 Option Exercise.................................................................................5
1.4 Liabilities.....................................................................................5
(a) Release of Certain Liens...............................................................6
(b) Assumption of Liabilities Generally....................................................6
(c) Certain Advances.......................................................................6
ARTICLE II
CLOSING..........................................................................................................7
2.1 Exercise Price..................................................................................7
(a) Payment................................................................................7
(b) Allocation of Cash Purchase Price......................................................7
2.2 The Closing.....................................................................................7
i
<PAGE>
2.3 Deliveries at Closing...........................................................................7
(a) Deliveries by Sellers..................................................................8
(b) Deliveries by Buyer....................................................................8
ARTICLE III
[RESERVED]........................................................................................................9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER...........................................................................9
4.1 Incorporation...................................................................................9
4.2 Corporate Action................................................................................9
4.3 No Defaults.....................................................................................9
4.4 Brokers........................................................................................10
ARTICLE V
COVENANTS OF SELLER..............................................................................................10
5.1 Covenants of Seller Generally..................................................................10
(a) Operation in Ordinary Course..........................................................10
(b) Restrictions..........................................................................10
(c) Organization/Goodwill.................................................................11
(d) Access to Facilities, Files, and Records. Buyers' Access Generally...................11
(e) Notice of Proceedings.................................................................11
(f) Notice of Certain Developments........................................................11
(g) No Premature Assumption of Control....................................................12
5.2 Covenants of Seller during Exercise Period.....................................................12
(a) Application for Commission Consent....................................................12
(b) Consents..............................................................................12
(c) Consummation of Sale..................................................................12
(d) Hart-Scott-Rodino.....................................................................13
ARTICLE VI
COVENANTS OF BUYER...............................................................................................13
6.1 Covenants of Buyer Generally...................................................................13
6.2 Covenants of Buyer during Exercise Period......................................................13
ARTICLE VII
CONDITIONS TO SELLER'S OBLIGATIONS ON THE CLOSING DATE...........................................................13
7.1 Representations, Warranties, Covenants.........................................................14
7.2 Proceedings....................................................................................14
7.3 FCC Authorization..............................................................................14
ii
<PAGE>
7.4 Hart-Scott-Rodino..............................................................................14
7.5 Other Instruments..............................................................................14
7.6 Existing Station Indebtedness..................................................................15
ARTICLE VIII
REMEDIES.........................................................................................................15
8.1 Bulk Sales Indemnity...........................................................................15
8.2 Limitation of Recourse.........................................................................15
8.3 Acknowledgment by Buyer........................................................................15
ARTICLE IX
POST-CLOSING MATTERS.............................................................................................16
9.1 Corporate Name.................................................................................16
9.2 Post-Sale Employee Matters.....................................................................16
(a) Post-Closing Employment Generally.....................................................16
(b) Notice to Continuing Employees........................................................16
(c) Responsibility for Termination Costs..................................................16
ARTICLE X
TERMINATION/MISCELLANEOUS........................................................................................16
10.1 Termination of Agreement Prior to the Closing Date.............................................16
(a) By Seller.............................................................................17
(b) By Buyer..............................................................................17
10.2 Liabilities Upon Termination...................................................................17
10.3 Expenses.......................................................................................17
10.4 Assignments....................................................................................17
10.5 Further Assurances.............................................................................18
10.6 Notices........................................................................................18
10.7 Captions.......................................................................................19
10.8 Law Governing..................................................................................19
10.9 Consent to Jurisdiction, Etc...................................................................19
10.10 Waiver of Provisions...........................................................................20
10.11 Counterparts...................................................................................20
10.12 Entire Agreement/Amendments....................................................................20
10.13 Access to Books and Record.....................................................................20
10.14 Public Announcements...........................................................................21
10.15 [RESERVED].....................................................................................21
10.16 Definitional Provisions........................................................................21
(a) Terms Defined in Appendix.............................................................21
(b) Gender and Number.....................................................................21
iii
<PAGE>
10.17 Arbitration....................................................................................21
(a) Generally.............................................................................21
(b) Notice of Arbitration.................................................................22
(c) Selection of Arbitrator...............................................................22
(d) Conduct of Arbitration................................................................22
(e) Enforcement...........................................................................22
(f) Expenses..............................................................................22
10.18 Confidential Information: Seller...............................................................23
10.19 Confidential Information: Buyer................................................................23
10.20 Commencement of Certain Pre-Closing Activities.................................................24
</TABLE>
iv
<PAGE>
OPTION AGREEMENT
----------------
THIS OPTION AGREEMENT is dated as of May 24, 1994, and is
entered into between Kansas City TV 62 Limited Partnership, a Delaware limited
partnership ("Seller"), and David D. Smith, J. Duncan Smith, Frederick G. Smith
and Robert E. Smith, each, on behalf of an entity to be formed by them
("Buyer"). Other capitalized terms are defined in the Appendix to this
AGREEMENT.
RECITAL
-------
A. WHEREAS, Seller is the licensee of broadcast television
station KSMO- TV, Kansas City, Missouri (the "Station").
B. WHEREAS, Seller desires to grant to Buyer an option to
acquire the Station Assets described in more detail below, and Buyer desires to
be granted such option, all or the terms described below.
NOW, THEREFORE, IN CONSIDERATION OF the foregoing and of other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the individuals which are parties hereto, on behalf of Buyer, and
Seller agree as follows:
ARTICLE I
GRANT OF OPTION;
----------------
GENERAL TERMS OF SALE
---------------------
1.1 Option Grant; Assets Covered. Seller hereby grants to
Buyer, and Buyer hereby accepts Seller's grant of, an option (the "Option") to
acquire the Station Assets upon the terms and conditions set forth in this
AGREEMENT. Upon and subject to the terms and conditions stated in this
AGREEMENT, or the Closing Date, Seller, as its interests may appear, shall
convey, transfer, and deliver to Buyer, and Buyer shall acquire from Seller, all
of Seller's rights in, to and under the assets and properties of Seller, real
and personal, tangible and intangible, of every kind and description which are
owned and used by Seller in connection with the business and operations of the
Station, as a going concern, including, without limitation, rights under
contracts and leases, real and personal property, plant and equipment,
inventories, intangibles, licenses and goodwill, but excluding all such assets
and properties which constitute Excluded Assets. The rights, assets, property,
and business of the Seller with respect to the Station to be transferred to
Buyer pursuant to this Section 1.1 in connection with the exercise of the Option
are referred to as the "Station Assets," and the purchase and sale of the
Station Assets pursuant to this AGREEMENT in connection with the exercise of the
option is referred to as the "Sale," Subject to Section 1.2, the Station Assets
include, without limitation, Seller's rights in, to and under the following, in
each case if and to the extent in existence and held by Seller immediately prior
to the Closing:
<PAGE>
(a) FCC Authorizations. All licenses and
authorizations issued by the FCC to Seller with respect to the Station
(the "FCC Authorizations"), and all applications therefor, together
with any renewals, extensions, modifications thereof and additions
thereto.
(b) Tangible Personal Property. All equipment,
vehicles, furniture, pictures, transmitting towers, transmitters,
office materials and supplies, spare parts and other tangible personal
property of every kind and description used in connection with the
business and operations of the Station.
(c) Real Property. All real property interests held
by Seller and all buildings, structures, towers, and improvements
thereon used in the business and operations of the Station, and all
other rights under any Contracts relating to real property (the "Realty
Contracts"); provided that, in the event of destruction of or damage to
any such real property interest or any improvement thereon which is not
repaired or restored prior to the Closing Date, then at the Closing
Seller shall assign to Buyer all of Seller's interest, if any, in the
proceeds (the "Proceeds") of any insurance covering such damage or
destruction.
(d) Agreements for Sale of Time. All orders,
agreements and other Contracts for the sale of advertising time
(including Trades) on the Station (collectively, the "Time Sales
Contracts"), to the extent unperformed as of the Closing Date.
(e) Program Contracts. All program licenses and
other Contracts under which Seller is authorized to broadcast film
product or programs on the Station (collectively, the "Program
Contracts").
(f) Other Contracts. All Contracts relating to the
Station to which Seller is a party with respect to the Station (other
than any Contract described in Section 1.1(c), 1.1(d) or 1.1(e) hereof)
(collectively, the "Other Assumed Contracts"), including the Program
Consulting AGREEMENT dated as of the date hereof among Seller and the
individuals which are parties hereto, on behalf of an entity to be
formed by them.
(g) Trade-marks, etc. All trademarks, service
marks, trade names, jingles, slogans, logotypes, the goodwill
associated with the foregoing, and patents, owned and used by Seller in
connection with the business and operations of the station, including,
without limitation, all Seller's rights to use the call letters
"KSMO-TV" and any related names and phrases in connection with the
Station.
(h) Programming Copyrights. All program and
programming materials and elements of whatever form or nature owned by
Seller and used solely in connection with the business and operations
of the Station, whether recorded on tape or any other substance or
intended for live performance, and whether completed or in
2
<PAGE>
production, and all related common law and statutory copyrights owned
by or licensed to Seller and used in connection with the business and
operations of the Station.
(i) FCC Records. Subject to Section 10.13, all FCC
logs and other compliance records of Seller that relate to the
operations of the Station.
(j) Files and Records. Subject to Section 10.13,
all files and other records of Seller relating solely to the business
and operations of the Station prior to the Closing Date, including,
without limitation, all books, records, accounts, checks, payment
records, tax records (including, without limitation, payroll,
unemployment, real estate, and other tax records), and other such
similar books and records of Seller, for three (3) fiscal years
immediately preceding the Closing Date (collectively, the "Seller's
Recent Station Records").
(k) Goodwill. All of Seller's goodwill in, and
going concern value of, the Station.
(l) Prepaid items. All prepaid expenses relating to
the Station.
(m) Cash. All cash, cash equivalents, and cash
items of any kind whatsoever, certificates of deposit, money market
instruments, bank balances, and rights in and to bank accounts,
marketable and other securities held by Seller.
(n) Receivables and Other Claims. All notes and
accounts receivable and other receivables of Seller relating to or
arising out of the operation of the Station prior to the Closing, all
security, insurance, and similar deposits, and all other claims of
Seller with respect to transactions or other conduct of the business of
the Station prior to the Closing, including, without limitation, claims
for tax refunds and claims of Seller under all Contracts with respect
to events or the period prior to the Closing.
As used in this AGREEMENT, the terms "Realty Contracts," "Time Sales Contracts,"
"Program Contracts," and "Other Assumed Contracts" do not include Contracts of
any type described above which are Excluded Contracts.
1.2 Excluded Assets. There shall be excluded from the Station
Assets and, to the extent in existence on the Closing Date, retained by Seller,
the following assets (the "Excluded Assets"):
(a) Excluded Personal Property. All personal
property located at the Boston, Massachusetts headquarters of
ABRY Communications and all proceeds thereof, and all tangible
personal property retired, disposed of or consumed in the
3
<PAGE>
ordinary course of the business of the Station, or as
otherwise permitted by this AGREEMENT, between the date of
this AGREEMENT and the Closing Date.
(b) Insurance. Subject to section 1.1(c), all
contracts of insurance and all insurance plans and the assets thereof,
together with all rights and claims thereunder.
(c) Name. All of Seller' s rights to use the name
"ABRY," any variation thereof, or any related logo, name or phrase.
(d) Certain Contracts. All Realty Contracts, Time
Sales Contracts, Program Contracts and Other Assumed Contracts which
expire and are not renewed, or which otherwise terminate, prior to the
Closing Date (collectively, the "Excluded Contracts."
(e) Corporate Books and Records. Subject to section
10.13, all account books of original entry and other than duplicate
copies of those files and records, if any, that are maintained at any
executive office of Seller or the off ices of Seller' s parent entities
or direct or indirect equity owners, and all materials of Seller which
constitute attorney work product or contain information which is
protected by attorney-client privilege, wherever located, relating to
matters at or prior to the Closing; provided that Seller will provide
Buyer access to such work product or privileged information to the
extent necessary for Buyer to defend any claim brought against Buyer by
a Person which is not, or is not an Affiliate of, a party to this
AGREEMENT.
(f) Other Books and Records. Subject to Section
10.13, Seller's account books of original entry with respect to the
station, and all books, records, accounts, checks, payment records, tax
records (including, without limitation, payroll, unemployment, real
estate, and other tax records), and other similar books, records, and
information of Seller relating to the operation of the business of the
Station prior to the Closing Date, excluding the Seller' Recent Station
Records.
(g) Transaction Documents. All rights of Seller, or
any successor to Seller, pursuant to any Transaction Document.
(h) Pension Assets, Etc. Pension, profit sharing,
retirement, bonus, stock purchase, savings plan and trusts, 401(k)
plans, health insurance plans, and the assets thereof, and all other
plans, agreements, or understandings to provide employee welfare,
pension or other benefits of any kind for any employees (or dependents
or related persons of any employees) of Seller.
1.3 Option Exercise. In order to exercise the Option, Buyer
must deliver to Seller written notice (an "Exercise Notice") of Buyer's
intention to do so. Buyer may withdraw
respect to
4
<PAGE>
any Exercise Notice prior to the Closing by written notice to that effect to
Seller. Upon the withdrawal of any Exercise Notice, Buyer shall reimburse Seller
for all reasonable out-of-pocket expenses incurred by Seller in connection with
its compliance with Section 5.2 with such Exercise Notice. Nothing contained in
this Section 1.3 is intended to prohibit Buyer from subsequently exercising the
Option after any such withdrawal.
1.4 Liabilities.
(a) Release of Certain Liens. At the Closing, the
Station Assets shall be sold and conveyed to Buyer free and clear of
all Liens securing the repayment of Existing Station Indebtedness
(except to the extent it is Assumed Indebtedness).
(b) Assumption of Liabilities Generally. The
"Assumed Liabilities" are the Assumed Indebtedness (if any) and all
other liabilities and obligations of Seller relating to the operation
of the Station or the ownership or operation of the Station Assets, in
each case as of the Closing Date, whether contingent or absolute, known
or unknown, accrued or not accrued, or matured or unmatured, including
all liabilities and obligations pursuant to any Realty Contract, Time
Sales Contract, Program Contract or Other Assumed Contract
(collectively, the "Assumed Contracts") in effect on the Closing Date,
in each case whether or not any Consent of any Person is required in
order to permit the assignment of Seller's rights arising under such
Contract to Buyer or the assumption of any such liability by Buyer. On
the Closing Date, Buyer will assume and agree to pay, satisfy, perform
and discharge all Assumed Liabilities. From and after the Closing,
Buyer will discharge and reimburse and hold harmless Seller against,
and Seller will not be responsible or otherwise liable for, any Assumed
Liability. Notwithstanding the foregoing, except as otherwise provided
in this Agreement, the "Assumed Liabilities" will not include, and on
the Closing Date Buyer shall not assume or thereafter be liable for,
any liability or obligation of Seller relating to any Existing Station
Indebtedness which is not Assumed Indebtedness (it being understood
that all Existing Station Indebtedness which is not Assumed
Indebtedness will be satisfied prior to, or contemporaneously with, the
Closing), or any duty, obligation, or liability of Seller relating to
any pension, 401(k) or other similar plan, agreement, or arrangement
provided by Seller to employees of Seller. Existing Station
Indebtedness is "Assumed Indebtedness" to the extent that Buyer
notifies Seller in writing that Buyer will assume such Existing Station
Indebtedness in connection with the Closing and Buyer actually so
assumes such Existing Station Indebtedness. The revenues, expenses and
liabilities of Seller or attributable to the Station and the Station
Assets will not be prorated between Buyer and Seller in connection with
the Closing.
(c) Certain Advances. Buyer acknowledges that, from
time to time, ABRY Communications III, L.P., a Delaware limited
partnership ("ABRY III"), may advance funds from time to time (up to
$1,700,000 in the aggregate) to fund rights payments by Seller pursuant
to Seller's Kansas City Royals baseball broadcasting rights
5
<PAGE>
agreement, and that interest will accrue on the principal amount of
such advances (from the time the proceeds of such advances are used to
fund such rights payments) at the rate of 8.5% per annum, compounded
annually. Upon the Closing, Buyer shall assume Seller's obligation to
repay such advances, together with any accrued and unpaid interest, and
will repay such advances (together with such accrued and unpaid
interest) in full in cash.
ARTICLE II
CLOSING
-------
2.1 Exercise Price.
---------------
(a) Payment. In consideration of Seller's
performance of this Agreement and the transfer and delivery of the
Station Assets to Buyer at the Closing, Buyer will (I) pay to Seller an
amount (the "Cash Purchase Price") which is equal to the lesser of (A)
the outstanding principal amount of the Existing Station Indebtedness,
plus the amount of all unpaid accrued interest thereon and all
penalties, indemnities, reimbursements, premiums and other amounts
payable in respect thereof, in each case as of the Closing Date and in
each case to the extent the same is not Assumed Indebtedness, plus
$1.00, and (B) $9,000,000, and (ii) assume the Assumed Liabilities. The
Cash Purchase Price shall be paid by Buyer to Seller on the Closing
Date by wire transfer of immediately available funds to such bank
account(s) as Seller may designate on or prior to the Closing Date.
(b) Allocation of Cash Purchase Price. Buyer and
Seller agree that they will allocate the Cash Purchase Price among the
Station Assets based on an appraisal which is hereafter approved by
Buyer and Seller and which is set forth in a report rendered by a
nationally-recognized appraisal firm selected by Buyer and approved by
Seller (which approval Seller may not unreasonably withhold or delay),
whose fee shall be paid by Buyer. Buyer and Seller will use reasonable
efforts to ensure that such report is completed and delivered to Buyer
and Seller prior to the Closing Date. Buyer and Seller agree to file
(at such times and in such manner as may be required by applicable
Legal Requirements) all relevant returns and reports (including,
without limitation, Forms 8594, Asset Acquisition Statements, and all
income and other tax returns) on the basis of such allocations.
2.2 The Closing. Subject to Section 10.1, the closing of the
Sale and the assumption of the Assumed Liabilities (the "Assumption"), and the
consummation of all related transactions to be consummated and contemporaneously
therewith pursuant to this Agreement (collectively, the "Closing"), shall be
held after the satisfaction or Seller's waiver in writing of each of the
conditions set forth in Article VII, at the offices of Kirkland & Ellis located
in New
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York, New York, and at the time and on the date specified by Buyer in writing to
Seller delivered not less than fifteen business days prior to such date, or at
such other place and/or at such other time and day as Seller and Buyer may agree
in writing. In connection with the Closing, the Seller will enter into
non-competition arrangements with respect to the Kansas City ADI in
substantially the form of the Non-Competition Agreements entered into by certain
investors in ABRY Communications on the date hereof.
2.3 Deliveries at Closing. All actions at the Closing shall be
deemed to occur simultaneously, and no document or payment to be delivered or
made at the Closing shall be deemed to be delivered or made until all such
documents and payments are delivered or made to the reasonable satisfaction of
Buyer, Seller and their respective counsel.
(a) Deliveries by Sellers. At the Closing, Seller
shall deliver to Buyer such instruments of conveyance and other
customary documentation as shall in form and substance be reasonably
satisfactory to Buyer and its counsel in order to effect the Sale,
including, without limitation, the following:
(1) one or more bills of sale conveying the Station
Assets;
(2) any releases of Liens that are necessary in order
to transfer the Station Assets as contemplated by
Section 1.4(a);
(3) a certified copy of the resolutions or proceedings
of Seller (or a Person which is a direct or
indirect general partner of Seller) authorizing
Seller's consummation of the Sale;
(4) a certificate as to the existence and good standing
of Seller issued by the Secretary of State of each
of the States of Delaware and Missouri, in each
case dated on or after the fifth Business Day prior
to the Closing Date, certifying as to the
qualification of Seller in each such jurisdiction;
(5) a receipt for the Cash Purchase Price;
(6) one or more opinions of Seller's counsel or special
counsel, each dated the Closing Date, each in form
and substance reasonably acceptable to Buyer;
(7) all Consents received by Seller through the Closing
Date;
(8) the non-competition agreement described in Section
2.2; and
(9) such other documents as Buyer may reasonably
request.
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(b) Deliveries by Buyer. At the Closing, Buyer
shall deliver to Seller the Cash Purchase Price as provided in Section
2.1, repay the advance, together with the unpaid accrued interest,
described in Section 1.4(c), and deliver such instruments of assumption
and other customary documentation as shall in form and substance be
reasonably satisfactory to Seller and its counsel in order to effect
the Sale and the Assumption, including, without limitation, the
following:
(1) a certificate of Buyer dated the Closing Date to
the effect that, except as specified in such
certificate, the conditions set forth in Article
VII have been fulfilled;
(2) a certified copy of the resolutions or proceedings
of Buyer authorizing the consummation of the Sale
and the Assumption;
(3) a certificate issued by the Secretary of State of
each of the States of Missouri and Maryland, in
each case dated on or after the fifth Business Day
prior to the Closing Date, certifying as to the
incorporation and/or qualification of Buyer in each
such jurisdiction;
(4) one or more opinions of Buyer's counsel or special
counsel, each dated the Closing Date, each in form
and substance reasonably acceptable to Seller; and
(5) such other documents as Seller may reasonably
request.
ARTICLE III
[RESERVED]
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer represents and warrants to Seller as follows:
4.1 Incorporation. On the Closing Date, Buyer will be a
corporation or other entity duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its purported organization and
will be in good standing under the laws of the State of Missouri. On the Closing
Date, Buyer will have the corporate or other power and authority to ratify the
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entry into this Agreement by the individuals which are parties hereto and to
consummate the transactions contemplated by this Agreement.
4.2 Corporate Action. On the Closing Date, all actions
necessary to be taken by or on the part of Buyer in connection with the
consummation of transactions contemplated hereby to be consummated and necessary
to make the same effective will have been duly and validly taken. This Agreement
has been duly and validly authorized, executed, and delivered on behalf of Buyer
and constitutes a valid and binding agreement, enforceable against the
individuals which are parties hereto on behalf of Buyer, in accordance with and
subject to its terms, subject to the effect of applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, arrangement, moratorium or
similar laws affecting the rights of creditors generally and the availability of
equitable remedies.
4.3 No Defaults. On the Closing Date (after giving effect to
all approvals and consents which have been obtained), neither the execution and
delivery of this Agreement on behalf of Buyer, nor the consummation by Buyer of
the transactions contemplated by this Agreement to be consummated on or prior to
the Closing Date, will constitute, or, with the giving of notice or the passage
of time or both, would constitute, a material violation of or would conflict in
any material respect with or result in any material breach of or any material
default under, any of the terms, conditions, or provisions of any Legal
Requirement to which Buyer is subject, or of Buyer's certificate of
incorporation or by-laws or similar organizational documents, or of any material
contract, agreement, or instrument to which Buyer is a party of by which Buyer
is bound.
4.4 Brokers. There is no broker or finder or other Person who
would have any valid claim against Seller for a commission or brokerage fee in
connection with this Agreement or the transactions contemplated hereby as a
result of any agreement or understanding of or action taken by Buyer or any
Affiliate of Buyer (including any individual which is a party hereto).
ARTICLE V
COVENANTS OF SELLER
-------------------
5.1 Covenants of Seller Generally. Seller covenants and agrees
that, from the date of this Agreement until the Closing, except as (I) Buyer may
otherwise consent (which consent Buyer will not unreasonably withhold or delay
upon Seller's request) or (ii) Seller may otherwise be requested by Buyer to act
or refrain from acting:
(a) Operation in Ordinary Course. From time to
time, Seller will use reasonable efforts to carry on its business and
operations and keep its books of account, records, and files in the
ordinary and usual course, in a manner which is not inconsistent with
its past practices, except as may be reasonable in light of
circumstances which are then prevailing. Notwithstanding the foregoing,
during the term of this Agreement no amount of the $250,000 annual
management fee heretofore paid by Seller to ABRY Communications will
become payable and Seller will compensate ABRY Communications for time
spent in the operation of the Station by ABRY Communications personnel
on a per-diem basis. Seller will promptly execute any
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necessary applications for renewal of FCC Authorizations necessary for
the operation of the Station as presently conducted.
(b) Restrictions. Seller will not (to the extent
the following restrictions are permitted by the FCC and all other
applicable Legal Requirements):
(1) other than in the ordinary course of business,
sell, lease (as lessor), transfer, or agree to
sell, lease (as lessor), or transfer any material
Station Assets (other than in the ordinary course
of its business) without replacement thereof with
functionally equivalent or superior assets
(provided that nothing set forth in this Agreement
shall be deemed to prohibit Seller from paying any
amount in respect of any Existing Station
Indebtedness, including any interest, penalty,
indemnification, reimbursement, premium or other
amount relating thereto);
(2) enter into any Trades which will involve the
furnishing of advertising in exchange for
merchandise (provided that Seller may perform its
obligations and exercise its rights under Trades in
effect on the date of this Agreement); or
(3) apply to the FCC for any construction permit that
would materially restrict the Station's present
operations or make any material adverse change in
the buildings or leasehold improvements owned by
Seller.
(c) Organization/Goodwill. Seller shall use
reasonable efforts to preserve the business organization of the Station
and preserve the goodwill of the Station's suppliers, customers, and
others having business relations with it.
(d) Access to Facilities, Files, and Records.
Buyers' Access Generally. From time to time, at the request of Buyer,
Seller shall give or cause to be given to the officers, employees,
accountants, counsel, and representatives of Buyer
(1) access (in the presence of any representative
designated by Seller, at Seller's option), upon
reasonable prior notice, during normal business
hours, to all facilities, property, accounts,
books, deeds, title papers, insurance policies,
licenses, agreements, contracts, commitments,
records, equipment, machinery, fixtures, furniture,
vehicles, accounts
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payable and receivable, and inventories of Seller
related to the Station, and
(2) all such other information in Seller's possession
concerning the affairs of the Station as Buyer may
reasonably request,
provided that the foregoing does not disrupt or interfere with the
business and operations of Seller or the Station.
(e) Notice of Proceedings. Seller will promptly
notify Buyer in writing upon becoming aware of any order or decree or
any complaint praying for an order or decree restraining or enjoining
the consummation of the Sale or the Assumption, or upon receiving any
notice from any governmental department, court, agency, or commission
of its intention to institute an investigation into or institute a suit
or proceeding to restrain or enjoin the consummation of the Sale or the
Assumption, or to nullify or render ineffective this Agreement or the
Sale or the Assumption if consummated.
(f) Notice of Certain Developments. Seller shall
give prompt written notice to Buyer (1) if the Station Assets shall
have suffered damage on account of fire, explosion, or other cause of
any nature which is sufficient to prevent operation of the Station in
any material respect for more than ten (10) consecutive days, (2) if
the regular broadcast transmission of the Station in the normal and
usual manner in which it heretofore has been operating is interrupted
in a material manner for a period of more than ten (10) consecutive
days or (3) if Seller receives a National Labor Relations Board union
election petition relating to employees of the Station.
(g) No Premature Assumption of Control. Nothing
contained in this Section 5.1 shall give Buyer any right to control the
programming, operations, or any other matter relating to the Station
prior to the Closing Date, and Seller shall have complete control of
the programming, operations, and all other matters relating to the
Station up to the time of the Closing.
5.2 Covenants of Seller during Exercise Period. Seller
covenants and agrees that, after its receipt of any Exercise Notice and until
either the Closing occurs or such Exercise Notice is withdrawn or deemed to be
withdrawn pursuant to Section 1.3, in each case at Buyer's expense:
(a) Application for Commission Consent. As promptly
as practicable, Seller will complete Seller's portion of applications
to the FCC requesting the Required FCC Consents, and upon receipt of
Buyer's portion of such applications, will promptly file such
applications with the FCC jointly with Buyer. Seller will diligently
take or cooperate in the taking of all reasonable steps that are
necessary, proper, or
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<PAGE>
desirable to expedite the preparation of such applications and their
prosecution to a final grant. Seller will promptly provide Buyer with a
copy of any pleading, order, or other document served on Seller
relating to such applications.
(b) Consents. Seller will use reasonable efforts
(without being required to make any payment not specifically required
by the terms of any licenses, leases, and other contracts) jointly with
Buyer to (1) obtain or cause to be obtained prior
to the Closing Date all Consents or, in the absence of any Consent, one
or more replacement agreements which would be effective on or prior to
the Closing and would grant Buyer (after the Closing) substantially the
same benefits with respect to the Station as Seller enjoys with respect
to the Station immediately prior to the Closing under the replaced
Contract(s), and (2) cause each Consent or replacement agreement to
become effective as of the Closing Date (whether it is granted or
entered into prior to or after the Closing).
(c) Consummation of Sale. Subject to the provisions
of Article VII and Section 11.1, Seller shall use reasonable efforts to
fulfill and perform all conditions and obligations on its part to be
fulfilled and performed under this Agreement and to cause the
conditions set forth in Article VII to be fulfilled and cause the Sale
and the Assumption to be consummated.
(d) Hart-Scott-Rodino. As promptly as practicable,
Seller shall prepare and file all documents with the Federal Trade
Commission and the United States Department of Justice which may be
required to comply with the Hart-Scott-Rodino Act in connection with
the Sale and the Assumption, and shall promptly furnish all materials
thereafter requested by any of the regulatory agencies having
jurisdiction over such filings, in connection with the Sale and the
Assumption. Seller will take all reasonable actions, and will file and
use reasonable efforts to have declared effective or approved all
documents and notifications with any governmental or regulatory bodies,
as may be necessary or may reasonably be requested under federal
antitrust laws for the consummation of the Sale and the Assumption.
ARTICLE VI
COVENANTS OF BUYER
------------------
6.1 Covenants of Buyer Generally. Buyer covenants and agrees
that Buyer will promptly notify Seller in writing upon becoming aware of any
order or decree or any complaint praying for an order or decree restraining or
enjoining the consummation of the Sale or the Assumption, or upon receiving any
notice from any governmental department, court, agency, or commission or its
intention to institute an investigation into or institute a suit or
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proceeding to restrain or enjoin the consummation of the Sale or the Assumption,
or to nullify or render ineffective this Agreement or the Sale or the Assumption
if consummated.
6.2 Covenants of Buyer during Exercise Period. Buyer covenants
and agrees that, after it gives any Exercise Notice and unless and until such
Exercise Notice is withdrawn or deemed to be withdrawn pursuant to Section 1.3,
Buyer will use reasonable efforts (both prior to and after the Closing Date)
jointly with Seller to obtain or cause to be obtained prior to the Closing Date
all Consents and to execute such assumption instruments as may be required or
requested in connection with obtaining any Consent (or, in the alternative,
enter into one or more replacement agreements which would be effective on or
prior to the Closing and would grant Buyer substantially the same benefits with
respect to the Station as Seller enjoys with respect to the Station under the
replaced Contract(s) immediately prior to the Closing), so long as such
assumption instruments and/or agreements do not alter the original terms and
conditions of the Contracts in question in any material respect to the detriment
of Buyer (it being understood that Buyer will not seek any modification of any
Contract or any agreement or other arrangement between Buyer (or any of its
Affiliates) and any other party to a Contract (or any of its Affiliates) so long
as any Consent of such other party has not been obtained).
ARTICLE VII
CONDITIONS TO SELLER'S OBLIGATIONS
ON THE CLOSING DATE
-------------------
The obligation of Seller to consummate the Sale on the Closing
Date is, at Seller's option, subject to the fulfillment of the following
conditions at or prior to the time of the Closing:
7.1 Representations, Warranties, Covenants.
---------------------------------------
(a) Each of the representations and warranties of
Buyer contained in this Agreement shall be true and accurate in all
material respects (except to the extent changes are permitted or
contemplated pursuant to this Agreement) both on the date of this
Agreement and as if made on and as of the Closing Date; and
(b) Buyer shall have performed and complied in all
material respects with each and every covenant and agreement required
by this Agreement to be performed or complied with by it prior to or at
the Closing (including the delivery of the Cash Purchase Price).
7.2 Proceedings.
------------
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(a) No action or proceeding shall have been
instituted and be pending before any court or governmental body to
restrain or prohibit, or to obtain a material amount of damages in
respect of, the consummation of the Sale or the Assumption that, in the
reasonable opinion of Seller, may reasonably be expected to result in a
preliminary or permanent injunction against such consummation or, if
the Sale or the Assumption were consummated, an order to nullify or
render ineffective this Agreement or the Sale or the Assumption or for
the recovery against Seller of a material amount of damages; and
(b) none of the parties to this Agreement
(including Buyer) shall have received written notice from any
governmental body of (I) such governmental body's intention to
institute any action or proceeding to restrain or enjoin or nullify
this Agreement or the Sale or the Assumption, or to commence any
investigation (other than a routine letter of inquiry, including,
without limitation, a routine Civil Investigative Demand) into the
consummation of the Sale or the Assumption, or (ii) the actual
commencement of such an investigation which has not been disclosed to
Seller prior to the date of this Agreement.
7.3 FCC Authorization. The FCC Approval Date shall have
occurred and all Required FCC Consents shall be in full force and effect.
7.4 Hart-Scott-Rodino. Any applicable waiting period under the
Hart-Scott- Rodino Act shall have expired or been terminated.
7.5 Other Instruments. Buyer shall have delivered, or shall
stand ready to deliver, to Seller such instruments, documents, and certificates
as are contemplated by Section 2.3(b).
7.6 Existing Station Indebtedness. The aggregate amount
necessary to satisfy in full the Existing Station Indebtedness which is not
Assumed Indebtedness will not exceed the amount of the Cash Purchase Price.
ARTICLE VIII
REMEDIES
--------
8.1 Bulk Sales Indemnity. Buyer and Seller have jointly
determined that there will be no attempt to comply with the notice provisions of
any bulk sales law which may apply to the purchase and sale of the Station
Assets pursuant to this Agreement. Buyer will indemnify and hold Seller harmless
from and against any and all damages, claims, losses, expenses, costs,
obligations, and liabilities, including, without limiting the generality
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of the foregoing, liabilities for reasonable attorneys' fees and expenses,
suffered directly or indirectly by Buyer by reason of or arising out of
non-compliance with any such bulk sales law.
8.2 Limitation of Recourse. In no event will Buyer, after the
Closing, be entitled to claim or seek any damages by reason of, or rescission
of, or any other remedy in respect of, the Sale or the Assumption or any of the
other transactions consummated pursuant to the Transaction Documents, any right
of rescission or rights to damages or other remedies which Buyer might otherwise
have being hereby expressly waived and any claims or judgments being limited
accordingly.
8.3 Acknowledgment by Buyer. Buyer has conducted and prior to
the Closing will continue to conduct, to its satisfaction, an independent
investigation and verification of the financial condition, results of
operations, assets, liabilities, properties and projected operations of the
Station and the Station Assets. In determining to proceed with the transactions
contemplated by this Agreement, Buyer has relied, and will rely, on the
covenants of Seller and the results of such independent investigation and
verification. BUYER ACKNOWLEDGES THAT SELLER MAKES NO REPRESENTATION OR WARRANTY
IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY. BUYER FURTHER
UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT ALL REPRESENTATIONS AND WARRANTIES OF
ANY KIND OR NATURE (INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION OR
WARRANTY RELATING TO THE PROJECTED, FUTURE OR HISTORICAL FINANCIAL CONDITION,
RESULTS OR OPERATIONS, ASSETS OR LIABILITIES RELATING TO THE STATION), EXPRESS
OR IMPLIED, ARE SPECIFICALLY DISCLAIMED BY SELLER. Buyer further acknowledges
that as of the date hereof Seller is in default in respect of certain of the
Existing Station Indebtedness and that, after the date of this Agreement, any or
all of the direct or indirect ownership interests in Seller may be transferred
to Persons which may have little or no net worth, and that, after the Closing,
at such time as the ultimate owners of Seller may elect, Seller and certain
entities related to Seller will be liquidated and dissolved.
ARTICLE IX
POST-CLOSING MATTERS
--------------------
9.1 Corporate Name. Promptly after the Closing Date, Seller
shall take such action as is necessary to change its partnership name in its
certificate of limited partnership filed with the Secretary of State of the
State of Delaware and all other qualifications to do business in all other
jurisdictions to a name which does not include, and which is not confusingly
similar to, the name "KSMO" or "TV 62." Notwithstanding anything in this
Agreement to the contrary, Seller shall be entitled to continue to use its
present partnership name until such time as such name change is effective and to
the extent necessary to accomplish such name change, and may endorse checks and
other instruments and execute agreements, reports, and other documents in such
name.
9.2 Post-Sale Employee Matters.
(a) Post-Closing Employment Generally. Buyer agrees
to offer on the Closing Date employment for at least 90 days to each
individual who is an employee of Seller with respect to the Station as
of the Closing Date (the "Continuing Employees"), which employment
shall be at an annual salary which is not less than the annual salary
for such employee immediately prior to the Closing Date, and such
employment shall include benefits and other terms and conditions,
including, without limitation, health, medical, life insurance, vision
and disability benefits (effective without any waiting
15
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periods and without exclusion for pre-existing conditions) on terms
which shall be, for at least 90 days after the Closing Date,
substantially equivalent to those which are being provided to such
employee immediately prior to the Closing Date by Seller.
(b) Notice to Continuing Employees. Buyer
agrees that Seller may inform Seller's employees that Buyer has agreed
to offer all Continuing Employees employment as provided in this
Section 9.2.
(c) Responsibility for Termination Costs.
Buyer will assume and indemnify Seller from and against any and all
severance or other liabilities arising out of Seller's termination of
the employment of any Continuing Employment (including, without
limitation, any liabilities under the WARN Act).
ARTICLE X
TERMINATION/MISCELLANEOUS
-------------------------
10.1 Termination of Agreement Prior to the Closing Date. This
Agreement may be terminated at any time on or prior to the Closing as follows:
(a) By Seller. By Seller, by written notice (a
"Seller Termination Notice") to Buyer at any time after the fifteenth
anniversary of the date of this Agreement if (I) the Closing has not
occurred on or prior to the date upon which such Seller's Termination
Notice is given, and (II) the absence of satisfaction of any of
Seller's conditions to closing set forth in Article VII which has not
been either satisfied or waived by Seller is not caused solely by a
breach by Seller of its obligations under this Agreement.
(b) By Buyer. By Buyer, by written notice to
Seller, at any time. Neither Buyer nor Seller shall have any liability
to the other for costs, expenses, damages (consequential or otherwise),
loss of anticipated profits, or otherwise as a result of a termination
pursuant to this Section 10.1. The parties hereto agree that time is of
the essence with respect to the provisions of this Section 10.1. This
Article X will survive the termination of this Agreement pursuant to
this Section 10.1.
10.2 Liabilities Upon Termination. Buyer's sole and exclusive
remedy for any failure of performance or compliance by Seller with any covenant
or agreement contained in this Agreement prior to the Closing shall be (I)
Buyer's right, if any, under applicable law or equitable principles, to seek
damages in respect of Buyer's direct out-of-pocket losses or expenses (but not
any damages in respect of lost profits or other similar or consequential
damages) occasioned by and as a consequence of Seller's breach; and (ii) Buyer's
right, if any, under applicable law or equitable principles, to seek specific
enforcement or this Agreement
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against Seller subject to FCC approval and other required approvals; provided
that Buyer shall not be entitled to specific performance with respect to the
consummation of the Sale unless (A) each condition to closing set forth in
Article VII has been satisfied or waived in writing by Seller or (B) the absence
of satisfaction of each such condition to closing which has not been satisfied
or waived in writing by Seller is caused solely by a breach by Seller or its
obligations under this Agreement.
10.3 Expenses. Except as otherwise expressly provided in this
Agreement, each of Seller and Buyer shall bear all of its expenses incurred in
connection with the transaction contemplated by this Agreement, including,
without limitation, accounting and legal fees incurred in connection herewith
(it being understood that Seller may pay such expenses out of the Station Assets
and, to the extent not paid prior to the Closing, Seller's obligations to pay
such expenses will be Assumed Liabilities).
10.4 Assignments. This Agreement shall not be assigned by
Seller without the prior written consent of Buyer; provided that after the
Closing, Seller may assign its rights pursuant to this Agreement to any other
Person in connection with the dissolution, liquidation or winding up or
administration of the affairs of such Seller. Upon the formation of Buyer, the
rights under this Agreement of the individuals which are parties hereto may be
assigned to Buyer, so long as Buyer assumes the obligations of such individuals
under this Agreement by executing an instrument which is reasonably satisfactory
in form and substance to Seller. Until written evidence of such assignment and
assumption is given to Seller, Seller may rely on any act of any one or more of
the individuals which are parties hereto as being the act of Buyer and Buyer
will be bound by all such acts so relied upon by Seller. After such assignment
to, and assumption by, Buyer, Buyer's rights under this Agreement may be
assigned by Buyer only with the prior written consent of Seller, said consent
not to be unreasonably withheld, except that Buyer may assign its rights and
interests hereunder absolutely to one or more directly or indirectly
wholly-owned subsidiaries of Sinclair; provided, in each case, that Buyer gives
Seller prior written notice of such assignment and provided further that no such
assignment shall relieve the assigning Person of any of its obligations or
liabilities hereunder. Notwithstanding the foregoing, the parties hereto hereby
agree that: (I) the rights of Buyer under this Agreement may be collaterally
assigned to The Chase Manhattan Bank, N.A., as agent for certain lenders (in
such capacity, the "Agent") to secure obligations owing by Buyer to the Agent
and such lenders and (ii) the Agent may transfer such rights pursuant to its
exercise of remedies with respect to such collateral security to any other
person or entity with the prior written consent of Seller, which consent may not
be unreasonably withheld (it being understood and agreed that the Agent shall be
a third party beneficiary of the agreement constituted by this sentence). Any
attempt to assign this Agreement without first obtaining any consent which is
required by this Section 10.4 shall be void. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
10.5 Further Assurances. From time to time prior to, at, and
after the Closing Date, each party hereto will execute all such instruments and
take all such actions as another party hereto, being advised by counsel, shall
reasonably request in connection with carrying out
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and effectuating the intent and purpose hereof, and all transactions and things
contemplated by this Agreement, including, without limitation, the execution and
delivery of any and all confirmatory and other instruments, in addition to those
to be delivered on the Closing Date, as the case may be, and any and all actions
which may reasonably be necessary to complete the transactions contemplated
hereby.
10.6 Notices. All notices, demands, and other communications
which may or are required to be given hereunder or with respect hereto shall be
in writing, shall be delivered personally or sent by nationally recognized
overnight delivery service, charges prepaid, or by registered or certified mail,
return-receipt requested, and shall be deemed to have been given or made when
personally delivered, the next business day after delivery to such overnight
delivery service, five (5) days after deposited in the mail, first class postage
prepaid, as the case may be, addressed as follows:
(a) If to Seller:
c/o ABRY Communications
18 Newbury Street
Boston, Massachusetts 02216
Attn: Mr. Andrew Banks
Mr. Royce Yudkoff
with a copy (which will not constitute
notice to Seller) to:
--------------------
John L. Kuehn
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
or to such other address and/or with such other copies as Seller may from time
to time designate by notice to Buyer (or, prior to the assignment and assumption
contemplated by the second sentence of Section 10.4, the individuals which are
parties hereto) given in accordance with this Section 10.6.
(b) If to Buyer (or to such individuals):
c/o Sinclair Broadcasting Group, Inc.
2000 W. 41st Street
Baltimore, Maryland 21211
Attn: Mr. David D. Smith
with a copy (which will not constitute
notice to Buyer or such individuals) to:
----------------------------------------
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Steven A. Thomas, Esquire
Thomas & Libowitz, P.A.
The USF&G Tower
100 Light Street, Suite 1100
Baltimore, Maryland 21202
or to such other address and/or with such other copies as Buyer may from time to
time designate by notice to Seller given in accordance with this Section 10.6.
10.7 Captions. The captions of Articles and Sections of this
Agreement are for convenience only, and shall not control or affect the meaning
or construction of any of the provisions of this Agreement.
10.8 Law Governing. THIS AGREEMENT SHALL BE GOVERNED BY,
CONSTRUED, AND ENFORCED IN ACCORDANCE WITH THE LAWS OF MARYLAND, WITHOUT
REFERENCES TO ITS PRINCIPLES OF CONFLICT OF LAWS, EXCEPT TO THE EXTENT THAT THE
FEDERAL LAW OF THE UNITED STATES GOVERNS THE TRANSACTIONS CONTEMPLATED HEREBY.
10.9 Consent to Jurisdiction, Etc. SUBJECT TO SECTION 10.17,
IN THE EVENT OF ANY ACTION OF PROCEEDING WITH RESPECT TO ANY MATTER PERTAINING
TO THIS AGREEMENT, THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY CONSENT TO
THE EXCLUSIVE JURISDICTION AND VENUES OF THE COURTS OF THE STATE OF MARYLAND AND
OF ANY FEDERAL COURT LOCATED IN BALTIMORE, MARYLAND IN CONNECTION WITH ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE TRANSACTION DOCUMENTS.
THE PARTIES HERETO HEREBY WAIVE PERSONAL SERVICE OF ANY PROCESS IN CONNECTION
WITH ANY SUCH ACTION OR PROCEEDING AND AGREE THAT THE SERVICE THEREOF MAY BE
MADE BY CERTIFIED OR REGISTERED MAIL ADDRESSED TO OR BY PERSONAL DELIVERY IN
ACCORDANCE WITH SECTION 10.6. IN THE ALTERNATIVE, IN ITS DISCRETION, ANY OF THE
PARTIES HERETO MAY EFFECT SERVICE UPON ANY OTHER PARTY IN ANY OTHER FORM OR
MANNER PERMITTED BY LAW.
10.10 Waiver of Provisions. The terms, covenants,
representations, warranties, and conditions of this Agreement may be waived only
by a written instrument executed by the Person waiving compliance. The failure
of Buyer or Seller at any time or times to require performance of any provision
of this Agreement shall in no manner affect the right at a later date to enforce
the same. No waiver Buyer or Seller of any condition or the breach of any
provision, term, covenant, representation, or warranty contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be or construed as a further or continuing waiver of any such
condition or of the breach of any other provision, term, covenant,
representation, or warranty of this Agreement.
19
<PAGE>
10.11 Counterparts. This Agreement may be executed in two (2)
or more counterparts, and all counterparts so executed shall constitute one (1)
agreement binding on all of the parties hereto, notwithstanding that all the
parties hereto are not signatory to the same counterpart.
10.12 Entire Agreement/Amendments. This Agreement (including
the Schedules hereto), the other Transaction Documents and the Confidentiality
Agreement dated October 15, 1992 between Buyer and ABRY Communications,
constitute the entire agreement among the parties hereto pertaining to the
subject matter hereof and supersede any and all prior and contemporaneous
agreements understandings, negotiations, and discussions, whether oral or
written, between them relating to the subject matter hereof. No amendment or
waiver of any provision of this Agreement shall be binding unless executed in
writing by the party to be found thereby.
10.13 Access to Books and Records.
----------------------------
(a) Buyer shall preserve for not less than five (5)
years after the Closing Date all books and records included in the
Station Assets. After such five-year period, Buyer will not destroy any
books or records relating to the conduct of business of the Station
prior to the Closing unless Buyer first offers to transfer such books
and records to Seller at no cost to Seller, and if Buyer is requested
to do so, Buyer will transfer such books or records to Seller.
(b) After the Closing, Seller will not destroy any
books or records relating to the conduct of business of the Station
prior to the Closing Date unless Seller first offers to transfer such
books and records to Buyer at no cost to Buyer, and if Seller is
requested to do so, Seller will transfer such books or records to
Buyer.
(c) At the request of any other party to this
Agreement, Buyer and Seller will permit each other (including such
other party's officers, employees, accountants, and counsel) any
access, upon reasonable prior written notice during normal business
hours, to all of its property, accounts, books, contracts, records,
accounts payable and receivable, records of employees, FCC logs and
other information concerning the affairs or operation of the Station as
such other party to this Agreement may reasonably request for any
reasonable purpose, and to make extracts or copies from the foregoing
at the requesting party's expense.
10.14 Public Announcements. Prior to the Closing, neither
Buyer (including any individual which is a party hereto) nor Seller shall,
except by mutual agreement with the other of them (including agreement as to
content, text and method or distribution or release), make any press release or
other public announcement or disclosure concerning the transactions contemplated
by this Agreement, except as may be required by any Legal Requirement
(including, without limitation, filings and reports required to be made with or
pursuant to the rules of the Securities and Exchange Commission; provided that,
prior to making any such announcement or disclosure required by any Legal
Requirement, to the extent practicable, the
20
<PAGE>
disclosing Person gives to Buyer (in the case of a disclosure by Seller) or
Seller (in the case of a disclosure by Buyer or any such individual) prior
written notice of the context, text and content of the method of distribution or
release of, and all other material facts concerning, such disclosure.
10.15 [RESERVED]
10.16 Definitional Provisions.
-----------------------
(a) Terms Defined in Appendix. Each capitalized
term which is used and not otherwise defined in this Agreement has the meaning
which is specified for such term in the Appendix which is attached to this
Agreement.
(b) Gender and Number. Words used in this
Agreement, regardless of the gender and number specifically used, will be deemed
and construed to include any other gender, masculine, feminine or neuter, and
any other number, singular or plural, as the context requires.
10.17 Arbitration.
(a) Generally. Buyer and Seller agree that the
arbitration procedures described in this Section 10.17 will be the sole and
exclusive method of resolving and remedying any claim for indemnification or
other remedy arising under this Agreement (collectively, "Disputes"); provided
that nothing in this Section 10.17 will prohibit a party from instituting
litigation to enforce any Final Arbitration Award. Buyer and Seller agree that,
except as otherwise provided in the Commercial Arbitration Rules of the American
Arbitration Association as in effect from time to time (the "AAA Rules"), the
arbitration procedures described in this Section 10.17 and any Final Arbitration
Award will be governed by, and will be enforceable pursuant to, the Uniform
Arbitration Act as in effect in the State of Maryland from time to time. No
Person will be entitled to claim or recover punitive damages in any such
proceeding.
(b) Notice of Arbitration. If Buyer or Seller
asserts that there exists a Dispute, then such Person (the "Disputing Person")
will give the other of them a written notice setting forth the nature of the
asserted Dispute. If Buyer and Seller do not resolve any such asserted Dispute
prior to the tenth Business Day after such notice is given, then the Disputing
Person may commence arbitration pursuant to this Section 10.17 by giving the
other of them a written notice to that effect (an "Arbitration Notice"), setting
forth any matters which are required to be set forth therein in accordance with
the AAA Rules.
(c) Selection of Arbitrator. Buyer and Seller will
attempt to select a single arbitrator by mutual agreement. If no such arbitrator
is selected prior to the twentieth Business Day after the related Arbitration
Notice is given, then an arbitrator which is
21
<PAGE>
experienced in matters of the type which are the subject matter of the Dispute
will be selected in accordance with the AAA Rules.
(d) Conduct of Arbitration. The arbitration will be
conducted under the AAA Rules, as modified by any written agreement between
Buyer and Seller. The arbitrator will conduct the arbitration in a manner so
that the final result, determination, finding, judgment or award determined by
the arbitrator (the "Final Arbitration Award") is made or rendered as soon as
practicable, and the parties will use reasonable efforts to cause a Final
Arbitration Award to occur not later than the sixtieth day after the arbitrator
is selected. Any Final Arbitration Award will be final and binding upon Buyer
and Seller,, and there will be no appeal from or reexamination of any Final
Arbitration Award, except in the case of fraud, perjury or evident partiality or
misconduct by the arbitrator prejudicing the rights of Buyer or Seller or to
correct manifest clerical errors.
(e) Enforcement. Buyer and Seller agree that a
Final Arbitration Award may be enforced in any state or federal court having
jurisdiction over the subject matter of the related Dispute.
(f) Expenses. A prevailing party in any arbitration
proceeding in connection with this Agreement shall be entitled to recover from
the non-prevailing party its reasonable attorneys' fees and disbursements in
addition to any damages or other remedies awarded to such prevailing party, and
the non-prevailing party also will be required to pay all other costs and
expenses associated with the arbitration; provided that (1) if an arbitrator is
unable to determine that a party is a prevailing party in any such arbitration
proceeding, then such costs and expenses will be equitably allocated by such
arbitrator upon the basis of the outcome of such arbitration proceeding, and (2)
if such arbitrator is unable to allocate such costs and expenses and expenses in
such a manner, then the costs and expenses of such arbitration will be paid
one-half by Buyer and one-half by Seller, and each of them will pay the
out-of-pocket expenses incurred by it or on its behalf. As part of any Final
Arbitration Award, the arbitrator may designate the prevailing party for
purposes of this Section 10.17. Except as provided in the preceding sentences,
each party to this Agreement will bear its own costs and expenses (including
legal fees and disbursements) in connection with any such proceeding or
submission.
10.18 Confidential Information: Seller. Until the
Closing Date, Seller shall not use or disclose to any person (except as may be
required by Legal Requirement) any confidential information received from any
ABRY Buyer or its agents in the course of investigating, negotiating, and
completing the transactions contemplated by this Agreement or any other ABRY
Agreement. For purposes of this Section 10.18, nothing shall be deemed to be
confidential information that: (a) is known to any ABRY Seller at the time of
its initial disclosure to any ABRY Seller or any representative or Affiliate of
any ABRY Seller; (b) becomes publicly known or available other than through
disclosure by any ABRY Seller; (c) is rightfully received by Seller from any
Person unrelated to any ABRY Seller (other than any Person engaged by any ABRY
Seller in connection with the transactions contemplated by any ABRY Purchase
Agreement); or (d) is independently developed by any ABRY Seller. For
22
<PAGE>
purposes of this Agreement, any information which Seller or any of its agents
obtains or has obtained from any other ABRY Seller or its agents and which such
ABRY Seller or agent obtained from any ABRY Buyer or its agent will be deemed to
have been obtained by such Seller from an ABRY Buyer.
10.19 Confidential Information: Buyer. Until the Closing Date,
Buyer (including each individual which is a party hereto) shall not use for its
or any other Persons benefit and shall not disclose to any other Person (except
as may be required by Legal Requirement) any confidential information
(including, without limitation, financial information and information regarding
program contracts and revenue) received from any ABRY Seller or its agent or
pertaining to any ABRY Seller or any Group Station in the course of
investigating, negotiating, and performing the transactions contemplated by this
Agreement or any other ABRY Agreement. For purposes of this Section 10.19,
nothing shall be deemed to be confidential information that: (a) is known to an
ABRY Buyer at the time of its initial disclosure to any ABRY Buyer or any
representative or Affiliate of any ABRY Buyer; (b) becomes publicly known or
available other than through disclosure by any ABRY Buyer or any Person
described in Section 5.1(d)(2); (c) is rightfully received by any ABRY Buyer
from an unrelated Person (other than any other ABRY Buyer or any Person engaged
by any ABRY Buyer in connection with the transactions contemplated by any ABRY
Purchase Agreement); or (d) is independently developed by any ABRY Buyer. Buyer
and each individual which is a party hereto agrees to be bound by the
obligations of Sinclair pursuant to, and no provision of this Section 10.19 will
be deemed to supersede or in any way limit any obligation or right of Sinclair,
Buyer or any such individual under, the Confidentiality Agreement dated October
15, 1992 between Sinclair and ABRY Communications which Confidentiality
Agreement will survive the execution and termination of this Agreement. For
purposes of this Agreement, any information which Buyer or any such individual
or any agent of any of them obtains or has obtained from any other ABRY Buyer or
its agents and which such other ABRY Buyer or agent obtained from any ABRY
Seller or its agent will be deemed to have been obtained by Sinclair, Buyer or
such individual from an ABRY Seller.
10.20 Commencement of Certain Pre-Closing Activities. No party
shall be required to comply with or otherwise perform its covenants and
agreements set forth in Sections 5.2 or 6.2 with respect to any exercise of the
Option so long as such party reasonably concludes that it is not likely that the
condition set forth in Section 7.6 will be satisfied unless and until the
holders of the Existing Station Indebtedness have entered into agreements which
will permit the condition set forth in Section 7.6 to be satisfied.
23
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their duly authorized officers, all as of the day and year first
above written.
KANSAS CITY TV 62 LIMITED PARTNERSHIP
By: ABRY communications II, L.P.
Its: General Partner
By: BVC Communications III, Inc.
Its: Managing General Partner
By:
-----------------
Its:
-----------------
---------------------
David D. Smith
---------------------
J. Duncan Smith
---------------------
Frederick G. Smith
---------------------
Robert E. Smith
24
<PAGE>
APPENDIX
Cross-References. The following is a list of the capitalized terms
which are used in this Agreement and the corresponding provision in which each
such term is defined:
Term Provision
- ---- ---------
AAA Rules Section 10.17(a)
ABRY Appendix
ABRY Buyer Appendix
ABRY Seller Appendix
Affiliate Appendix
Arbitration Section 10.17(b)
Assumed Contract Section 1.4(b)
Assumed Indebtedness Section 1.4(b)
Assumed Liabilities Section 1.4(b)
Assumption Section 2.2
BBM Appendix
Business Day Appendix
Buyer Preamble
Cash Purchase Price Section 2.1(a)
Chesapeake Appendix
Closing Section 2.2
Closing Date Appendix
Communications Act Appendix
Consent Appendix
Continuing Employees Section 9.2
Contract Appendix
Copley Appendix
Disputes Section 10.17(a)
Disputing Person Section 10.17(b)
Exercise Notice Section 1.3
Excluded Assets Section 1.2
Excluded Contracts Section 1.2(e)
Existing Station Indebtedness Appendix
FCC Appendix
FCC Approval Date Appendix
FCC Authorizations Section 1.1(a)
Final Arbitration Award Section 10.17(d)
Group Stations Appendix
Hart-Scott-Rodino Act Appendix
Legal Requirements Appendix
Lien Appendix
New WCGV Appendix
New WTTO Appendix
25
<PAGE>
Option Section 1.1
Other Assumed Contracts Section 1.1(f)
Person Appendix
Proceeds 1.1(c)
Program Contracts Section 1.1(e)
Realty Contracts Section 1.1(c)
Required FCC Consent Appendix
Sale Section 1.1
Seller Preamble
Seller's Termination Notice Section 10.1(a)
Seller's Recent Station Records Section 1.1(j)
Sinclair Appendix
Station Assets Section 1.1
Station Recital A
Super 18 Appendix
Time Sales Contracts Section 1.1(d)
Trades Appendix
Transaction Documents Appendix
WARN Act Appendix
WCGV Appendix
WNUV Appendix
WSTR Appendix
WSTR Purchase Agreement Appendix
WTTO Appendix
Additional Defined Terms. In addition, the following capitalized terms
have the following meaning when used in this Agreement and the Schedules
attached to this Agreement:
"ABRY" means ABRY Communications, L.P., a Delaware limited partnership.
"ABRY Buyer" means Sinclair, Buyer (including each individual which is
a party hereto), Chesapeake, New WCGV, New WTTO, or any direct or indirect
assignee of any of the rights of any of them pursuant to any Transaction
Document, or any Affiliate of any of them.
"ABRY Agreements" means this Agreement and any other agreement which
has been or may hereafter be entered into by Seller or its Affiliates and Buyer
or its Affiliates with respect to the transfer or operation of any assets
relating to any Group Station.
"ABRY Seller" means ABRY, BBM, BVC, Copley, Seller, Super 18, WCGV,
WNUV (prior to the date hereof only), WSTR, WTTO, or any direct or indirect
assignee of any of the rights of any of them pursuant to any Transaction
Document, or any Affiliate of any of them.
"BBM" means BBM Partners, L.P., a Delaware limited partnership.
26
<PAGE>
A "Business Day" means any day other than a Saturday, Sunday or other
day upon which banks in New York, New York are not open for business.
"Chesapeake" means Chesapeake Television, Inc., a Maryland corporation.
"Closing Date" means the date upon which the Closing occurs.
"Communications Act" means the Communications Act of 1934, as in effect
from time to time.
With respect to any Contract, a "Consent" means any consent or approval
of any Person other than any party to this Agreement which, in accordance with
the terms of such Contract, is required to be obtained in order to permit the
consummation of the Sale or the Assumption.
"Contract" means any agreement, lease, arrangement, commitment, or
understanding to which Seller with respect to the Station is a party.
"Copley" means Copley Place Capital Group, a Massachusetts general
partnership.
"Existing Station Indebtedness" at any time means the indebtedness of
Seller which is described in Schedule 1.4 attached hereto, plus all unpaid
accrued interest thereon and all penalties, indemnities, reimbursements,
premiums and other amounts payable in respect thereof, as of such time.
"FCC" means the Federal Communications Commission or any successor
thereto.
"FCC Approval Date" means the first day upon which each Required FCC
Consent is effective.
"Group Stations" means the Station, broadcast television station
WTTO-TV, Birmingham, Alabama, broadcast television station WCGV-TV, Milwaukee,
Wisconsin, broadcast television station WVTV-TV, Milwaukee, Wisconsin, broadcast
television station WNUV-TV, Baltimore, Maryland, and broadcast television
station WSTR-TV, Cincinnati, Ohio.
"Hart-Scott-Rodino Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as in effect from time to time.
"Legal Requirements" means the Communications Act, the rules,
regulations and policies of the FCC, and all other federal state and local laws,
rules, regulations, ordinances, judgments, orders and decrees.
"Lien" means any mortgage, pledge, hypothecation, encumbrance, lien
(statutory or otherwise), preference, priority or other security agreement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement and any lease having
27
<PAGE>
substantially the same effect as any of the foregoing and any assignment or
deposit arrangement in the nature of a security device).
"New WCGV" means WCGV Inc., a Maryland corporation.
"New WTTO" means WTTO, Inc., a Maryland corporation.
A "Person" means any individual, partnership, joint venture,
corporation, trust, unincorporated association or government or department
thereof.
A "Required FCC Consent" means any action or order by the FCC granting
its consent to the assignment to Buyer (or its permitted assignee) pursuant to
this Agreement of any FCC Authorization without any condition which in the
reasonable judgment of Buyer or Seller is adverse to Buyer or Seller, as the
case may be, in any material respect.
"Sinclair" means Sinclair Broadcasting Group, Inc., a Maryland
corporation.
"Super 18" means Super 18 Television Limited Partnership, a Delaware
limited partnership.
"Trades" means all trade, barer or similar arrangements for the sale of
advertising time other than for cash (other than any firm or program barer
arrangements and radio barter arrangements) on the Station.
"Transaction Documents" means this Agreement, the other ABRY Agreements
and all other documents executed and delivered in connection therewith, in each
case as in effect from time to time.
"WARN Act" means the federal Worker Adjustment and Retraining
Notification Act or any applicable state law or other Legal Requirement
regarding termination of employees, in each case, as in effect from time to
time.
28
<PAGE>
Schedule 1.4
------------
Outstanding Debt
as of March 31, 1994
Kansas City (KSMO)
Philips Credit Corporation $ 9,611.007 + $492,708
accrued interest
KZKC Television Inc. $ 8,000,000 + $1,747,728
accrued interest
Fries $ 129,645
Disney 547,822
Columbia 1,494,327
MCA 1,141,459
MGM 1,013,764
Paramount 890,942
Fox 571,217
Warner 3,020,821
C. Burnett 338,246
Worldvision 154,989
Misc. 444,496
Total Debt $19,851,443
29
<PAGE>
EXHIBIT B
---------
LIENS AND ENCUMBRANCES
----------------------
Pledge and encumbrance of KSMO Option in favor of The Chase Manhattan
Bank (National Association) pursuant to that certain Pledge and Security
Agreement dated December 12, 1994 by and between David D. Smith, Frederick G.
Smith, J. Duncan Smith and Robert E. Smith (each individually, as "Obligor" and,
collectively, the "Obligors"); and The Chase Manhattan Bank (National
Association).
0
Exhibit 10.10
OPTION AGREEMENT
BETWEEN
CINCINNATI TV 64 LIMITED PARTNERSHIP,
as Seller
and
THE INDIVIDUALS NAMED HEREIN,
ON BEHALF OF AN ENTITY TO BE FORMED,
as Buyer
DATED AS OF
MAY 24, 1994
<PAGE>
TABLE OF CONTENTS
ARTICLE I
GRANT OF OPTION;
GENERAL TERMS OF SALE...................................1
1.1 Option Grant; Assets Covered..........................................1
(a) FCC Authorizations...........................................2
(b) Tangible Personal Property...................................2
(c) Real Property................................................2
(d) Agreements for Sale of Time..................................2
(e) Program Contracts............................................2
(f) Other Contracts..............................................2
(g) Trademarks, etc..............................................2
(h) Programming Copyrights.......................................2
(i) FCC Records..................................................3
(j) Files and Records............................................3
(k) Goodwill.....................................................3
(l) Prepaid Items................................................3
(m) Cash.........................................................3
(n) Receivables and Other Claims.................................3
1.2 Excluded Assets.......................................................3
(a) Excluded Personal Property...................................3
(b) Insurance....................................................4
(c) Name.........................................................4
(d) Certain Contracts............................................4
(e) Corporate Books and Records..................................4
(f) Other Books and Records......................................4
(g) Transaction Documents........................................4
(h) Pension Assets, Etc..........................................4
1.3 Option Exercise.......................................................4
1.4 Liabilities...........................................................5
(a) Release of Certain Liens.....................................5
(b) Assumption of Liabilities Generally..........................5
ARTICLE II
CLOSING.......................................5
2.1 Exercise Price........................................................5
(a) Payment......................................................5
(b) Allocation of Cash Purchase Price............................6
2.2 The Closing...........................................................6
2.3 Deliveries at Closing.................................................6
- i -
<PAGE>
(a) Deliveries by Sellers........................................6
(b) Deliveries by Buyer..........................................7
ARTICLE III
[RESERVED]..................................8
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER..................8
4.1 Incorporation.........................................................8
4.2 Corporate Action......................................................8
4.3 No Defaults...........................................................8
4.4 Brokers...............................................................9
ARTICLE V
COVENANTS OF SELLER......................................9
5.1 Covenants of Seller Generally.........................................9
(a) Operation in Ordinary Course.................................9
(b) Restrictions.................................................9
(c) Organization/Goodwill.......................................10
(d) Access to Facilities, Files, and Records....................10
(e) Notice of Proceedings.......................................10
(f) Notice of Certain Developments..............................11
(g) No Premature Assumption of Control..........................11
5.2 Covenants of Seller during Exercise Period...........................11
(a) Application for Commission Consent..........................11
(b) Consents....................................................11
(c) Consummation of Sale........................................12
(d) Hart-Scott-Rodino..................................12
ARTICLE VI
COVENANTS OF BUYER.....................................12
6.1 Covenants of Buyer Generally.........................................12
6.2 Covenants of Buyer during Exercise Period............................12
ARTICLE VII
CONDITIONS TO SELLER'S OBLIGATIONS
ON THE CLOSING DATE..............................13
7.1 Representations, Warranties, Covenants...............................13
7.2 Proceedings..........................................................13
- ii -
<PAGE>
7.3 FCC Authorization....................................................14
7.4 Hart-Scott-Rodino....................................................14
7.5 Other Instruments....................................................14
7.6 Existing Station Indebtedness........................................14
ARTICLE VIII
REMEDIES....................................14
8.1 Bulk Sales Indemnity.................................................14
8.2 Limitation of Recourse...............................................14
8.3 Acknowledgment by Buyer..............................................14
ARTICLE IX
POST-CLOSING MATTERS.............................15
9.1 Corporate Name.......................................................15
9.2 Post-Sale Employee Matters...........................................15
(a) Post-Closing Employment Generally...........................15
(b) Notice to Continuing Employees..............................16
(c) Responsibility for Termination Costs........................16
ARTICLE X
TERMINATION/MISCELLANEOUS..............................16
10.1 Termination of Agreement Prior to the Closing Date...................16
(a) By Seller...................................................16
(b) By Buyer....................................................16
10.2 Liabilities Upon Termination.........................................16
10.3 Expenses.............................................................17
10.4 Assignments..........................................................17
10.5 Further Assurances...................................................17
10.6 Notices..............................................................18
10.7 Captions.............................................................19
10.8 Law Governing........................................................19
10.9 Consent to Jurisdiction, Etc.........................................19
10.10 Waiver of Provisions.................................................19
10.11 Counterparts.........................................................19
10.12 Entire Agreement/Amendments..........................................20
10.13 Access to Books and Records..........................................20
10.14 Public Announcements.................................................20
10.15 [RESERVED]...........................................................21
10.16 Definitional Provisions..............................................21
(a) Terms Defined in Appendix...................................21
- iii -
<PAGE>
(b) Gender and Number...........................................21
10.17 Arbitration..........................................................21
(a) Generally...................................................21
(b) Notice of Arbitration.......................................21
(c) Selection of Arbitrator.....................................21
(d) Conduct of Arbitration......................................22
(e) Enforcement.................................................22
(f) Expenses. .................................................22
10.18 Confidential Information: Seller....................................22
10.19 Confidential Information: Buyer.....................................23
10.20 Commencement of Certain Pre-Closing Activities.......................23
- iv -
<PAGE>
OPTION AGREEMENT
----------------
THIS OPTION AGREEMENT is dated as of May 24, 1994, and is
entered into between Cincinnati TV 64 Limited Partnership, a Delaware limited
partnership ("Seller") , and David D. Smith, J. Duncan Smith, Frederick G. Smith
and Robert E. Smith, each on behalf of an entity to be formed by them ("Buyer")
. Other capitalized terms are defined in the Appendix to this Agreement.
RECITAL
-------
A. WHEREAS, Seller is the licensee of broadcast television
station WSTR- TV, Cincinnati, Ohio (the "Station").
B. WHEREAS, Seller desires to grant to Buyer an option to
acquire the Station Assets described in more detail below, and Buyer desires to
be granted such option, all on the terms described below.
NOW, THEREFORE, IN CONSIDERATION OF the foregoing and of other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the individuals which are parties hereto, on behalf of Buyer, and
Seller agree as follows:
ARTICLE I
GRANT OF OPTION;
----------------
GENERAL TERMS OF SALE
---------------------
1.1 Option Grant; Assets Covered. Seller hereby grants to
Buyer, and Buyer hereby accepts Seller's grant of, an option (the "Option") to
acquire the Station Assets upon the terms and conditions set forth in this
Agreement. Upon and subject to the terms and conditions stated in this
Agreement, on the Closing Date, Seller, as its interests may appear, shall
convey, transfer, and deliver to Buyer, and Buyer shall acquire from Seller, all
of Seller's rights in, to and under the assets and properties of Seller, real
and personal, tangible and intangible, of every kind and description which are
owned and used by Seller in connection with the business and operations of the
Station, as a going concern, including, without limitation, rights under
contracts and leases, real and personal property, plant and equipment,
inventories, intangibles, licenses and goodwill, but excluding all such assets
and properties which constitute Excluded Assets. The rights, assets, property,
and business of the Seller with respect to the Station to be transferred to
Buyer pursuant to this Section 1.1 in connection with the exercise of the Option
are referred to as the "Station Assets" and the purchase and sale of the Station
Assets pursuant to this Agreement in connection with the exercise of the Option
is referred to as the "Sale." Subject to Section 1.2, the Station Assets
include, without limitations, Seller's rights in, to and under the following, in
each case if and to the extent in existence and held by Seller immediately prior
to the Closing:
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(a) FCC Authorizations. All licenses and
authorizations issued by the FCC to Seller with respect to the Station
(the "FCC Authorizations"), and all applications therefor, together
with any renewals, extensions, or modifications thereof and additions
thereto.
(b) Tangible Personal Property. All equipment,
vehicles, furniture, fixtures, transmitting towers, transmitters,
office materials and supplies, spare parts and other tangible personal
property of every kind and description used in connection with the
business and operations of the Station.
(c) Real Property. All real property interests held
by Seller and all buildings, structures, towers, and improvements
thereon used in the business and operations of the Station, and all
other rights under any Contracts relating to real property (the "Realty
Contracts") ; provided that, in the event of destruction of or damage
to any such real property interest or any improvement thereon which is
not repaired or restored prior to the Closing Date, then at the Closing
Seller shall assign to Buyer all of Seller's interest, if any, in the
proceeds (the "Proceeds") of any insurance covering such damage or
destruction.
(d) Agreements for Sale of Time. All orders,
agreements and other Contracts for the sale of advertising time
(including Trades) on the Station (collectively, the "Time Sales
Contracts"), to the extent unperformed as of the Closing Date.
(e) Program Contracts. All program licenses and other
Contracts under which Seller is authorized to broadcast film product or
programs on the Station (collectively, the "Program Contracts").
(f) Other Contracts. All Contracts relating to the
Station to which Seller is a party with respect to the Station (other
than any Contract described in Section 1.1(c), 1.1(d) or 1.1 (e)
hereof) (collectively, the "Other Assumed Contracts") , including the
Program Consulting Agreement dated as of the date hereof among Seller
and the individuals which are parties hereto, on behalf of an entity to
be formed by them.
(g) Trademarks, etc. All trademarks, service marks,
trade names, jingles, slogans, logotypes, the goodwill associated with
the foregoing, and patents, owned and used by Seller in connection with
the business and operations of the Station, including, without
limitation, all Seller's rights to use the call letters "WSTR-TV" and
any related names and phrases in connection with the Station.
(h) Programming Copyrights. All program and
programming materials and elements of whatever form or nature owned by
Seller and used solely in connection with the business and operations
of the Station, whether recorded on tape or any other substance or
intended for live performance, and whether completed or in
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production, and all related common law and statutory copyrights owned
by or licensed to Seller and used in connection with the business and
operations of the Station.
(i) FCC Records. Subject to Section 10.13~, all FCC
logs and other compliance records of Seller that relate to the
operations of the Station.
(j) Files and Records. Subject to Section 10.13, all
files and other records of Seller relating solely to the business and
operations of the Station prior to the Closing Date, including, without
limitation, all books, records, accounts, checks, payment records, tax
records (including, without limitation, payroll, unemployment, real
estate, and other tax records), and other such similar books and
records of Seller, for three (3) fiscal years immediately preceding the
Closing Date (collectively, the "Seller's Recent Station Records").
(k) Goodwill. All of Seller's goodwill in, and going
concern value of, the Station.
(l) Prepaid Items. All prepaid expenses relating to
the Station.
(m) Cash. All cash, cash equivalents, and cash items
of any kind whatsoever, certificates of deposit, money market
instruments, bank balances, and rights in and to bank accounts,
marketable and other securities held by Seller.
(n) Receivables and Other Claims. All notes and
accounts receivable and other receivables of Seller relating to or
arising out of the operation of the Station prior to the Closing, all
security, insurance, and similar deposits, and all other claims of
Seller with respect to transactions or other conduct of the business of
the Station prior to the Closing, including, without limitation, claims
for tax refunds and claims of Seller under all Contracts with respect
to events or the period prior to the Closing.
As used in this Agreement, the terms "Realty Contracts," "Time Sales Contracts,"
"Program Contracts," and "Other Assumed Contracts" do not include Contracts of
any type described above which are Excluded Contracts.
1.2 Excluded Assets. There shall be excluded from the Station
Assets and, to the extent in existence on the Closing Date, retained by Seller,
the following assets (the "Excluded Assets"):
(a) Excluded Personal Property. All personal property
located at the Boston, Massachusetts headquarters of ABRY
Communications and all proceeds thereof, and all tangible personal
property retired, disposed of or consumed in the ordinary course of the
business of the Station, or as otherwise permitted by this Agreement,
between the date of this Agreement and the Closing Date.
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(b) Insurance. Subject to Section 1.1(c), all
contracts of insurance and all insurance plans and the assets thereof,
together with all rights and claims thereunder.
(c) Name. All of Seller's rights to use the name
"ABRY," any variation thereof, or any related logo, name or phrase.
(d) Certain Contracts. All Realty Contracts, Time
Sales Contracts, Program Contracts and Other Assumed Contracts which
expire and are not renewed, or which otherwise terminate, on or prior
to the Closing Date (collectively, the "Excluded Contracts").
(e) Corporate Books and Records. Subject to Section
10.13, all account books of original entry and other than duplicate
copies of those files and records, if any, that are maintained at any
executive office of Seller or the offices of Seller's parent entities
or direct or indirect equity owners, and all materials of Seller which
constitute attorney work product or contain information which is
protected by attorney-client privilege, wherever located, relating to
matters at or prior to the Closing; provided that Seller will provide
Buyer access to such work product or privileged information to the
extent necessary for Buyer to defend any claim brought against Buyer by
a Person which is not, or is not an Affiliate of, a party to this
Agreement.
(f) Other Books and Records. Subject to Section
10,13, Seller's account books of original entry with respect to the
Station, and all books, records, accounts, checks, payment records, tax
records (including, without limitation, payroll, unemployment, real
estate, and other tax records), and other similar books, records, and
information of Seller relating to the operation of the business of the
Station prior to the Closing Date, excluding the Seller's Recent
Station Records.
(g) Transaction Documents. All rights of Seller, or
any successor to Seller, pursuant to any Transaction Document.
(h) Pension Assets, Etc. Pension, profit sharing,
retirement, bonus, stock purchase, savings plan and trusts, 401(k)
plans, health insurance plans, and the assets thereof, and all other
plans, agreements, or understandings to provide employee welfare,
pension or other benefits of any kind for any employees (or dependents
or related persons of any employees) of Seller.
1.3 Option Exercise. In order to exercise the Option, Buyer
must deliver to Seller written notice (an "Exercise Notice") of Buyer's
intention to do so. Buyer may withdraw any Exercise Notice prior to the Closing
by written notice to that effect to Seller. Upon the withdrawal of any Exercise
Notice, Buyer shall reimburse Seller for all reasonable out-of-pocket expenses
incurred by Seller in connection with its compliance with Section 5.2 with
respect to such Exercise Notice. Nothing contained in this Section 1.3 is
intended to prohibit Buyer from subsequently exercising the Option after any
such withdrawal.
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1.4 Liabilities.
(a) Release of Certain Liens. At the Closing, the
Station Assets shall be sold and conveyed to Buyer free and clear of
all Liens securing the repayment of Existing Station Indebtedness
(except to the extent it is Assumed Indebtedness).
(b) Assumption of Liabilities Generally. The "Assumed
Liabilities" are the Assumed Indebtedness (if any) and all other
liabilities and obligations of Seller relating to the operation of the
Station or the ownership or operation of the Station Assets, in each
case as of the Closing Date, whether contingent or absolute, known or
unknown, accrued or not accrued, or matured or unmatured, including all
liabilities and obligations pursuant to any Realty Contract, Time Sales
Contract, Program Contract or Other Assumed Contract (collectively, the
"Assumed Contracts") in effect on the Closing Date, in each case
whether or not any Consent of any Person is required in order to permit
the assignment of Seller's rights arising under such Contract to Buyer
or the assumption of any such liability by Buyer. On the Closing Date,
Buyer will assume and agree to pay, satisfy, perform and discharge all
Assumed Liabilities. From and after the Closing, Buyer will discharge
and reimburse and hold harmless Seller against, and Seller will not be
responsible or otherwise liable for, any Assumed Liability.
Notwithstanding the foregoing, except as otherwise provided in this
Agreement, the "Assumed Liabilities" will not include, and on the
Closing Date Buyer shall not assume or thereafter be liable for, any
liability or obligation of Seller relating to any Existing Station
Indebtedness which is not Assumed Indebtedness (it being understood
that all Existing Station Indebtedness which is not Assumed
Indebtedness will be satisfied prior to, or contemporaneously with, the
Closing), or any duty, obligation, or liability of Seller relating to
any pension, 401(k) or other similar plan, agreement, or arrangement
provided by Seller to employees of Seller. Existing Station
Indebtedness is "Assumed Indebtedness" to the extent that Buyer
notifies Seller in writing that Buyer will assume such Existing Station
Indebtedness in connection with the Closing and Buyer actually so
assumes such Existing Station Indebtedness. The revenues, expenses and
liabilities of Seller or attributable to the Station and the Station
Assets will not be prorated between Buyer and Seller in connection with
the Closing.
ARTICLE II
CLOSING
-------
2.1 Exercise Price.
--------------
(a) Payment. In consideration of Seller's performance
of this Agreement and the transfer and delivery of the Station Assets
to Buyer at the Closing, Buyer will (i) pay to Seller an amount (the
"Cash Purchase Price") which is equal to the
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lesser of (A) the outstanding principal amount of the Existing Station
Indebtedness, plus the amount of all unpaid accrued interest thereon
and all penalties, indemnities, reimbursements, premiums and other
amounts payable in respect thereof, in each case as of the Closing Date
and in each case to the extent the same is not Assumed Indebtedness,
plus $1,000, and (B) $11,000,000, and (ii) assume the Assumed
Liabilities. The Cash Purchase Price shall be paid by Buyer to Seller
on the Closing Date by wire transfer of immediately available funds to
such bank account(s) as Seller may designate on or prior to the Closing
Date.
(b) Allocation of Cash Purchase Price. Buyer and
Seller agree that they will allocate the Cash Purchase Price among the
Station Assets based on an appraisal which is hereafter approved by
Buyer and Seller and which is set forth in a report rendered by a
nationally-recognized appraisal firm selected by Buyer and approved by
Seller (which approval Seller may not unreasonably withhold or delay) ,
whose fee shall be paid by Buyer. Buyer and Seller will use reasonable
efforts to ensure that such report is completed and delivered to Buyer
and Seller prior to the Closing Date. Buyer and Seller agree to file
(at such times and in such manner as may be required by applicable
Legal Requirements) all relevant returns and reports (including,
without limitation, Forms 8594, Asset Acquisition Statements, and all
income and other tax returns) on the basis of such allocations.
2.2 The Closing. Subject to Section 10.1, the closing of the
Sale and the assumption of the Assumed Liabilities (the "Assumption") , and the
consummation of all related transactions to be consummated contemporaneously
therewith pursuant to this Agreement (collectively, the "Closing"), shall be
held after the satisfaction or Seller's waiver in writing of each of the
conditions set forth in Article VII, at the offices of Kirkland & Ellis located
in New York, New York, and at the time and on the date specified by Buyer in
writing to Seller delivered not less than fifteen business days prior to such
date, or at such other place and/or at such other time and day as Seller and
Buyer may agree in writing. In connection with the Closing, the Seller will
enter into non-competition arrangements with respect to the Cincinnati ADI in
substantially the form of the Non-Competition Agreements entered into by certain
investors in ABRY Communications on the date hereof.
2.3 Deliveries at Closing. All actions at the Closing shall be
deemed to occur simultaneously, and no document or payment to be delivered or
made at the Closing shall be deemed to be delivered or made until all such
documents and payments are delivered or made to the reasonable satisfaction of
Buyer, Seller and their respective counsel.
(a) Deliveries by Sellers. At the Closing, Seller
shall deliver to Buyer such instruments of conveyance and other
customary documentation as shall in form and substance be reasonably
satisfactory to Buyer and its counsel in order to effect the Sale,
including, without limitation, the following:
(1) one or more bills of sale conveying the
Station Assets;
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(2) any releases of Liens that are necessary in
order to transfer the Station Assets as
contemplated by Section 1.4(a);
(3) a certified copy of the resolutions or
proceedings of Seller (or a Person which is
a direct or indirect general partner of
Seller) authorizing Seller's consummation of
the Sale;
(4) a certificate as to the existence and good
standing of Seller issued by the Secretary
of State of each of the States of Delaware
and Ohio, in each case dated on or after the
fifth Business Day prior to the Closing
Date, certifying as to the qualification of
Seller in each such jurisdiction;
(5) a receipt for the Cash Purchase Price;
(6) one or more opinions of Seller's counsel or
special counsel, each dated the Closing
Date, each in form and substance reasonably
acceptable to Buyer;
(7) all Consents received by Seller through the
Closing Date;
(8) the non-competition agreement described in
Section 2.2; and
(9) such other documents as Buyer may reasonably
request.
(b) Deliveries by Buyer. At the Closing, Buyer shall
deliver to Seller the Cash Purchase Price as provided in Section 2.1
and such instruments of assumption and other customary documentation as
shall in form and substance be reasonably satisfactory to Seller and
its counsel in order to effect the Sale and the Assumption, including,
without limitation, the following:
(1) a certificate of Buyer dated the Closing
Date to the effect that, except as specified
in such certificate, the conditions set
forth in Article VII have been fulfilled;
(2) a certified copy of the resolutions or
proceedings of Buyer authorizing the
consummation of the Sale and the Assumption;
(3) a certificate issued by the Secretary of
State of each of the States of Ohio and
Maryland, in each case dated on or after the
fifth Business Day prior to the Closing
Date, certifying as to the
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incorporation and/or qualification of Buyer
in each such jurisdiction;
(4) one or more opinions of Buyer's counsel or
special counsel, each dated the Closing
Date, each in form and substance reasonably
acceptable to Seller; and
(5) such other documents as Seller may
reasonably request.
ARTICLE III
[RESERVED]
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer represents and warrants to Seller as follows:
4.1 Incorporation. On the Closing Date, Buyer will be a
corporation or other entity duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its purported organization and
will be in good standing under the laws of the State of Ohio, On the Closing
Date, Buyer will have the corporate or other power and authority to ratify the
entry into this Agreement by the individuals which are parties hereto and to
consummate the transactions contemplated by this Agreement.
4.2 Corporate Action. On the Closing Date, all actions
necessary to be taken by or on the part of Buyer in connection with the
consummation of transactions contemplated hereby to be consummated and necessary
to make the same effective will have been duly and validly taken. This Agreement
has been duly and validly authorized, executed, and delivered on behalf of Buyer
and constitutes a valid and binding agreement, enforceable against the
individuals which are parties hereto, on behalf of Buyer, in accordance with and
subject to its terms, subject to the effect of applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance, arrangement, moratorium or
similar laws affecting the rights of creditors generally and the availability of
equitable remedies.
4.3 No Defaults. On the Closing Date (after giving effect to
all approvals and consents which have been obtained), neither the execution and
delivery of this Agreement on behalf of Buyer, nor the consummation by Buyer of
the transactions contemplated by this
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Agreement to be consummated on or prior to the Closing Date, will constitute,
or, with the giving of notice or the passage of time or both, would constitute,
a material violation of or would conflict in any material respect with or result
in any material breach of or any material default under, any of the terms,
conditions, or provisions of any Legal Requirement to which Buyer is subject, or
of Buyer's certificate of incorporation or by-laws or similar organizational
documents, or of any material contract, agreement, or instrument to which Buyer
is a party or by which Buyer is bound.
4.4 Brokers. There is no broker or finder or other Person who
would have any valid claim against Seller for a commission or brokerage fee in
connection with this Agreement or the transactions contemplated hereby as a
result of any agreement or understanding of or action taken by Buyer or any
Affiliate of Buyer (including any individual which is a party hereto).
ARTICLE V
COVENANTS OF SELLER
-------------------
5.1 Covenants of Seller Generally. Seller covenants and agrees
that, from the date of this Agreement until the Closing, except as (i) Buyer may
otherwise consent (which consent Buyer will not unreasonably withhold or delay
upon Seller's request) or (ii) Seller may otherwise be requested by Buyer to act
or refrain from acting:
(a) Operation in Ordinary Course. From time to time
Seller will use reasonable efforts to carry on its business and
operations and keep its books of account, records, and files in the
ordinary and usual course, in a manner which is not inconsistent with
its past practices, except as may be reasonable in light of
circumstances which are then prevailing. Notwithstanding the foregoing,
during the term of this Agreement no amount of the $250,000 annual
management fee heretofore paid by Seller to ABRY Communications will
become payable and Seller will compensate ABRY Communications for time
spent in the operation of the Station by ABRY Communications personnel
on a per-diem basis. Seller will promptly execute any necessary
applications for renewal of FCC Authorizations necessary for the
operation of the Station as presently conducted.
(b) Restrictions. Seller will not (to the extent the
following restrictions are permitted by the FCC and all other
applicable Legal Requirements):
(1) other than in the ordinary course of
business, sell, lease (as lessor), transfer,
or agree to sell, lease (as lessor) , or
transfer any material Station Assets (other
than in the ordinary course of its business)
without replacement thereof with
functionally equivalent or
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superior assets (provided that nothing set
forth in this Agreement shall be deemed to
prohibit Seller from paying any amount in
respect of any Existing Station
Indebtedness, including any interest,
penalty, indemnification, reimbursement,
premium or other amount relating thereto);
(2) enter into any Trades which will involve the
furnishing of advertising in exchange for
merchandise (provided that Seller may
perform its obligations and exercise its
rights under Trades in effect on the date of
this Agreement); or
(3) apply to the FCC for any construction permit
that would materially restrict the Station's
present operations or make any material
adverse change in the buildings or leasehold
improvements owned by Seller.
(c) Organization/Goodwill. Seller shall use
reasonable efforts to preserve the business organization of the Station
and preserve the goodwill of the Station's suppliers, customers, and
others having business relations with it.
(d) Access to Facilities, Files, and Records. Buyers'
Access Generally. From time to time, at the request of Buyer, Seller
shall give or cause to be given to the officers, employees,
accountants, counsel, and representatives of Buyer
(1) access (in the presence of any
representative designated by Seller, at
Seller's option), upon reasonable prior
notice, during normal business hours, to all
facilities, property, accounts, books,
deeds, title papers, insurance policies,
licenses, agreements, contracts,
commitments, records, equipment, machinery,
fixtures, furniture, vehicles, accounts
payable and receivable, and inventories of
Seller related to the Station, and
(2) all such other information in Seller's
possession concerning the affairs of the
Station as Buyer may reasonably request,
provided that the foregoing does not disrupt
or interfere with the business and
operations of Seller or the Station.
(e) Notice of Proceedings. Seller will promptly
notify Buyer in writing upon becoming aware of any order or decree or
any complaint praying for an order or decree restraining or enjoining
the consummation of the Sale or the Assumption, or upon receiving any
notice from any governmental department, court, agency, or commission
of its intention to institute an investigation into or institute a suit
or proceeding to restrain or enjoin the consummation of the Sale or the
Assumption, or to
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nullify or render ineffective this Agreement or the Sale or the
Assumption if consummated.
(f) Notice of Certain Developments. Seller shall give
prompt written notice to Buyer (1) if the Station Assets shall have
suffered damage on account of fire, explosion, or other cause of any
nature which is sufficient to prevent operation of the Station in any
material respect for more than ten (10) consecutive days, (2) if the
regular broadcast transmission of the Station in the normal and usual
manner in which it hereto fore has been operating is interrupted in a
material manner for a period of more than ten (10) consecutive days or
(3) if Seller receives a National Labor Relations Board union election
petition relating to employees of the Station.
(g) No Premature Assumption of Control. Nothing
contained in this Section 5.1 shall give Buyer any right to control the
programming, operations, or any other matter relating to the Station
prior to the Closing Date, and Seller shall have complete control of
the programming, operations, and all other matters relating to the
Station up to the time of the Closing.
5.2 Covenants of Seller during Exercise Period. Seller
covenants and agrees that, after its receipt of any Exercise Notice and until
either the Closing occurs or such Exercise Notice is withdrawn or deemed to be
withdrawn pursuant to Section 1.3, in each case at Buyer's expense:
(a) Application for Commission Consent. As promptly
as practicable, Seller will complete Seller's portion of applications
to the FCC requesting the Required FCC Consents, and upon receipt of
Buyer's portion of such applications, will promptly file such
applications with the FCC jointly with Buyer. Seller will diligently
take or cooperate in the taking of all reasonable steps that are
necessary, proper, or desirable to expedite the preparation of such
applications and their prosecution to a final grant. Seller will
promptly provide Buyer with a copy of any pleading, order, or other
document served on Seller relating to such applications.
(b) Consents. Seller will use reasonable efforts
(without being required to make any payment not specifically required
by the terms of any licenses, leases, and other contracts) jointly with
Buyer to (1) obtain or cause to be obtained prior to the Closing Date
all Consents or, in the absence of any Consent, one or more replacement
agreements which would be effective on or prior to the Closing and
would grant Buyer (after the Closing) substantially the same benefits
with respect to the Station as Seller enjoys with respect to the
Station immediately prior to the Closing under the replaced
Contract(s), and (2) cause each Consent or replacement agreement to
become effective as of the Closing Date (whether it is granted or
entered into prior to or after the Closing).
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(c) Consummation of Sale. Subject to the provisions
of Article VII and Section 11.1, Seller shall use reasonable efforts to
fulfill and perform all conditions and obligations on its part to be
fulfilled and performed under this Agreement and to cause the
conditions set forth in Article VII to be fulfilled and cause the Sale
and the Assumption to be consummated.
(d) Hart-Scott-Rodino. As promptly as practicable,
Seller shall prepare and file all documents with the Federal Trade
Commission and the United States Department of Justice which may be
required to comply with the Hart-Scott-Rodino Act in connection with
the Sale and the Assumption, and shall promptly furnish all materials
thereafter requested by any of the regulatory agencies having
jurisdiction over such filings, in connection with the Sale and the
Assumption. Seller will take all reasonable actions, and will file and
use reasonable efforts to have declared effective or approved all
documents and notifications with any governmental or regulatory bodies,
as may be necessary or may reasonably be requested under federal
antitrust laws for the consummation of the Sale and the Assumption.
ARTICLE VI
COVENANTS OF BUYER
------------------
6.1 Covenants of Buyer Generally. Buyer covenants and agrees
that Buyer will promptly notify Seller in writing upon becoming aware of any
order or decree or any complaint praying for an order or decree restraining or
enjoining the consummation of the Sale or the Assumption, or upon receiving any
notice from any governmental department, court, agency, or commission of its
intention to institute an investigation into or institute a suit or proceeding
to restrain or enjoin the consummation of the Sale or the Assumption, or to
nullify or render ineffective this Agreement or the Sale or the Assumption if
consummated.
6.2 Covenants of Buyer during Exercise Period. Buyer covenants
and agrees that, after its gives any Exercise Notice and unless and until such
Exercise Notice is withdrawn or deemed to be withdrawn pursuant to Section 1.3,
Buyer will use reasonable efforts (both prior to and after the Closing Date)
jointly with Seller to obtain or cause to be obtained prior to the Closing Date
all Consents and to execute such assumption instruments as may be required or
requested in connection with obtaining any Consent (or, in the alternative,
enter into one or more replacement agreements which would be effective on or
prior to the Closing and would grant Buyer substantially the same benefits with
respect to the Station as. Seller enjoys with respect to the Station under the
replaced Contract(s) immediately prior to the Closing), so long as such
assumption instruments and/or agreements do not alter the original terms and
conditions of the Contracts in question in any material respect to the detriment
of Buyer (it being understood that Buyer will not seek any modification of any
Contract or any agreement or other arrangement
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between Buyer (or any of its Affiliates) and any other party to a Contract (or
any of its Affiliates) so long as any Consent of such other party has not been
obtained).
ARTICLE VII
CONDITIONS TO SELLER'S OBLIGATIONS
ON THE CLOSING DATE
-------------------
The obligation of Seller to consummate the Sale on the Closing
Date is, at Seller's option, subject to the fulfillment of the following
conditions at or prior to the time of the Closing:
7.1 Representations, Warranties, Covenants.
(a) Each of the representations and warranties of
Buyer contained in this Agreement shall be true and accurate in all
material respects (except to the extent changes are permitted or
contemplated pursuant to this Agreement) both on the date of this
Agreement and as if made on and as of the Closing Date; and
(b) Buyer shall have performed and complied in all
material respects with each and every covenant and agreement required
by this Agreement to be performed or complied with by it prior to or at
the Closing (including the delivery of the Cash Purchase Price).
7.2 Proceedings.
(a) No action or proceeding shall have been
instituted and be pending before any court or governmental body to
restrain or prohibit, or to obtain a material amount of damages in
respect of, the consummation of the Sale or the Assumption that, in the
reasonable opinion of Seller, may reasonably be expected to result in a
preliminary or permanent injunction against such consummation or, if
the Sale or the Assumption were consummated, an order to nullify or
render ineffective this Agreement or the Sale or the Assumption or for
the recovery against Seller of a material amount of damages; and
(b) none of the parties to this Agreement (including
Buyer) shall have received written notice from any governmental body of
(i) such governmental body's intention to institute any action or
proceeding to restrain or enjoin or nullify this Agreement or the Sale
or the Assumption, or to commence any investigation (other than a
routine letter of inquiry, including, without limitation, a routine
Civil Investigative Demand) into the consummation of the Sale or the
Assumption, or (ii) the actual commencement of such an investigation
which has not been disclosed to Seller prior to the date of this
Agreement.
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7.3 FCC Authorization. The FCC Approval Date shall have
occurred and all Required FCC Consents shall be in full force and effect.
7.4 Hart-Scott-Rodino. Any applicable waiting period under the
Hart-Scott- Rodino Act shall have expired or been terminated.
7.5 Other Instruments. Buyer shall have delivered, or shall
stand ready to deliver, to Seller such instruments, documents, and certificates
as are contemplated by Section 2.3(b).
7.6 Existing Station Indebtedness. The aggregate amount
necessary to satisfy in full the Existing Station Indebtedness which is not
Assumed Indebtedness will not exceed the amount of the Cash Purchase Price.
ARTICLE VIII
REMEDIES
--------
8.1 Bulk Sales Indemnity. Buyer and Seller have jointly
determined that there will be no attempt to comply with the notice provisions of
any bulk sales law which may apply to the purchase and sale of the Station
Assets pursuant to this Agreement. Buyer will indemnify and hold Seller harmless
from and against any and all damages, claims, losses, expenses, costs,
obligations, and liabilities, including, without limiting the generality of the
foregoing, liabilities for reasonable attorneys fees and expenses, suffered
directly or indirectly by Buyer by reason of or arising out of non-compliance
with any such bulk sales law.
8.2 Limitation of Recourse. In no event will Buyer, after the
Closing, be entitled to claim or seek any damages by reason of, or rescission
of, or any other remedy in respect of, the Sale or the Assumption or any of the
other transactions consummated pursuant to the Transaction Documents, any right
of rescission or rights to damages or other remedies which Buyer might otherwise
have being hereby expressly waived and any claims or judgments being limited
accordingly.
8.3 Acknowledgment by Buyer. Buyer has conducted and prior to
the Closing will continue to conduct, to its satisfaction, an independent
investigation and verification of the financial condition, results of
operations, assets, liabilities, properties and projected operations of the
Station and the Station Assets. In determining to proceed with the transactions
contemplated by this Agreement, Buyer has relied, and will rely, on the
covenants of Seller and the results of such independent investigation and
verification. BUYER ACKNOWLEDGES THAT SELLER MAKES NO REPRESENTATION OR WARRANTY
IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY, BUYER FURTHER
UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT ALL REPRESENTATIONS
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<PAGE>
AND WARRANTIES OF ANY KIND OR NATURE (INCLUDING, WITHOUT LIMITATIONS, ANY
REPRESENTATION OR WARRANTY RELATING TO THE PROJECTED, FUTURE OR HISTORICAL
FINANCIAL CONDITION, RESULTS OR OPERATIONS, ASSETS OR LIABILITIES RELATING TO
THE STATION) EXPRESS OR IMPLIED, ARE SPECIFICALLY DISCLAIMED BY SELLER. Buyer
further acknowledges that, after the date of this Agreement, any or all of the
direct or indirect ownership interests in Seller may be transferred to Persons
which may have little or no net worth, and that, after the Closing, at such time
as the ultimate owners of Seller may elect, Seller and certain entities related
to Seller will be liquidated and dissolved.
ARTICLE IX
POST-CLOSING MATTERS
--------------------
9.1 Corporate Name. Promptly after the Closing Date, Seller
shall take such action as is necessary to change its partnership name in its
certificate of limited partnership filed with the Secretary of State of the
State of Delaware and all other qualifications to do business in all other
jurisdictions to a name which does not include, and which is not confusingly
similar to, the name "WSTR" or "TV 64". Notwithstanding anything in this
Agreement to the contrary, Seller shall be entitled to continue to use its
present partnership name until such time as such name change is effective and to
the extent necessary to accomplish such name change, and may endorse checks and
other instruments and execute agreements, reports, and other documents in such
name.
9.2 Post-Sale Employee Matters.
--------------------------
(a) Post-Closing Employment Generally. Buyer agrees
to offer on the Closing Date employment for at least 90 days to each
individual who is an employee of Seller with respect to the Station as
of the Closing Date (the "Continuing Employees"), which employment
shall be at an annual salary which is not less than the annual salary
for such employee immediately prior to the Closing Date, and such
employment shall include benefits and other terms and conditions,
including, without limitation, health, medical, life insurance, vision
and disability benefits (effective without any waiting periods and
without exclusion for pre-existing conditions) on terms which shall be,
for at least 90 days after the Closing Date, substantially equivalent
to those which are being provided to such employee immediately prior to
the Closing Date by Seller.
(b) Notice to Continuing Employees. Buyer agrees that
Seller may inform Seller's employees that Buyer has agreed to offer all
Continuing Employees employment as provided in this Section 9.2.
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<PAGE>
(c) Responsibility for Termination Costs. Buyer will
assume and indemnify Seller from and against any and all severance or
other liabilities arising out of Seller's termination of the employment
of any Continuing Employee (including, without limitation, any
liabilities under any WARN Act).
ARTICLE X
TERMINATION/MISCELLANEOUS
-------------------------
10.1 Termination of Agreement Prior to the Closing Date. This
Agreement may be terminated at any time on or prior to the Closing as follows:
(a) By Seller. By Seller, by written notice (a
"Seller' Termination Notice") to Buyer at any time after the fifteenth
anniversary of the date of this Agreement if (I) the Closing has not
occurred on or prior to the date upon which such Seller's Termination
Notice is given, and (II) the absence of satisfaction of any of
Seller's conditions to closing set forth in Article VII which has not
been either satisfied or waived by Seller is not caused solely by a
breach by Seller of its obligations under this Agreement.
(b) By Buyer. By Buyer, by written notice to Seller,
at any time.
Neither Buyer nor Seller shall have any liability to the other for costs,
expenses, damages (consequential or otherwise) , loss of anticipated profits, or
otherwise as a result of a termination pursuant to this Section 10.1. The
parties hereto agree that time is of the essence with respect to the provisions
of this Section 10.1. This Article X will survive the termination of this
Agreement pursuant to this Section 10.1.
10.2 Liabilities Upon Termination. Buyer's sole and exclusive
remedy for any failure of performance or compliance by Seller with any covenant
or agreement contained in this Agreement prior to the Closing shall be (i)
Buyer's right, if any, under applicable law or equitable principles, to seek
damages in respect of Buyer's direct out-of-pocket losses or expenses (but not
any damages in respect of lost profits or other similar or consequential
damages) occasioned by and as a consequence of Seller's breach; and (ii) Buyer's
right, if any, under applicable law or equitable principles, to seek specific
enforcement of this Agreement against Seller subject to FCC approval and other
required approvals; provided that Buyer shall not be entitled to specific
performance with respect to the consummation of the Sale unless (A) each
condition to closing set forth in Article VII has been satisfied or waived in
writing by Seller or (B) the absence of satisfaction of each such condition to
closing which has not been satisfied or waived in writing by Seller is caused
solely by a breach by Seller of its obligations under this Agreement.
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<PAGE>
10.3 Expenses. Except as otherwise expressly provided in this
Agreement, each of Seller and Buyer shall bear all of its expenses incurred in
connection with the transactions contemplated by this Agreement, including,
without limitation, accounting and legal fees incurred in connection herewith
(it being understood that Seller may pay such expenses out of the Station Assets
and, to the extent not paid prior to the Closing, Seller's obligations to pay
such expenses will be Assumed Liabilities).
10.4 Assignments. This Agreement shall not be assigned by
Seller without the prior written consent of Buyer; provided that after the
Closing, Seller may assign its rights pursuant to this Agreement to any other
Person in connection with the dissolution, liquidation or winding up or
administration of the affairs of such Seller. Upon the formation of Buyer, the
rights under this Agreement of the individuals which are parties hereto may be
assigned to Buyer, so long as Buyer assumes the obligations of such individuals
under this Agreement by executing an instrument which is reasonably satisfactory
in form and substance to Seller. Until written evidence of such assignment and
assumption is given to Seller, Seller may rely on any act of any one or more of
the individuals which are parties hereto as being the act of Buyer and Buyer
will be bound by all such acts so relied upon by Seller. After such assignment
to, and assumption by, Buyer, Buyer's rights under this Agreement may be
assigned by Buyer only with the prior written consent of Seller, said consent
not to be unreasonably withheld, except that Buyer may assign its rights and
interests hereunder absolutely to one or more directly or indirectly wholly
owned subsidiaries of Sinclair; provided, in each case, that Buyer gives Seller
prior written notice of such assignment and provided further that no such
assignment shall relieve the assigning Person of any of its obligations or
liabilities hereunder. Notwithstanding the foregoing, the parties hereto hereby
agree that: (i) the rights of Buyer under this Agreement may be collaterally
assigned to The Chase Manhattan Bank, N.A., as agent for certain lenders (in
such capacity, the "Agent") to secure obligations owing by Buyer to the Agent
and such lenders and (ii) the Agent may transfer such rights pursuant to its
exercise, of remedies with respect to such collateral security to any other
person or entity with the prior written consent of Seller, which consent may not
be unreasonably withheld (it being understood and agreed that the Agent shall be
a third party beneficiary of the agreement constituted by this sentence). Any
attempt to assign this Agreement without first obtaining any consent which is
required by this Section 10.4 shall be void. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
10.5 Further Assurances. From time to time prior to, at, and
after the Closing Date, each party hereto will execute all such instruments and
take all such actions as another party hereto, being advised by counsel, shall
reasonably request in connection with carrying out and effectuating the intent
and purpose hereof, and all transactions and things contemplated by this
Agreement, including, without limitation, the execution and delivery of any and
all confirmatory and other instruments, in addition to those to be delivered on
the Closing Date, as the case may be, and any and all actions which may
reasonably be necessary to complete the transactions contemplated hereby.
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<PAGE>
10.6 Notices. All notices, demands, and other communications
which may or are required to be given hereunder or with respect hereto shall be
in writing, shall be delivered personally or sent by nationally recognized
overnight delivery service, charges prepaid, or by registered or certified mail,
return-receipt requested, and shall be deemed to have been given or made when
personally delivered, the next business day after delivery to such overnight
delivery service, five (5) days after deposited in the mail, first class postage
prepaid, as the case may be, addressed as follows:
(a) If to Seller:
c/o ABRY Communications
18 Newbury Street
Boston, Massachusetts 02116
Attn: Mr. Andrew Banks
Mr. Royce Yudkoff
with a copy (which will not constitute
notice to Seller) to:
---------------------
John L. Kuehn
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
or to such other address and/or with such other copies as Seller may from time
to time designate by notice to Buyer (or, prior to the assignment and assumption
contemplated by the second sentence of Section 10.4, the individuals which are
parties hereto) given in accordance with this Section 10.6.
(b) If to Buyer (or to such individuals):
c/o Sinclair Broadcast Group, Inc.
2000 W. 41st Street
Baltimore, Maryland 21211
Attn: Mr. David D. Smith
with a copy (which will not constitute
notice to Buyer or such individuals) to:
----------------------------------------
Steven A. Thomas, Esquire
Thomas & Libowitz, P.A.
The USF&G Tower
100 Light Street, Suite 1100
Baltimore, Maryland 21202
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<PAGE>
or to such other address and/or with such other copies as Buyer may from time to
time designate by notice to Seller given in accordance with this Section 10.6.
10.7 Captions. The captions of Articles and Sections of this
Agreement are for convenience only, and shall not control or affect the meaning
or construction of any of the provisions of this Agreement.
10.8 Law Governing. THIS AGREEMENT SHALL BE GOVERNED BY,
CONSTRUED, AND ENFORCED IN ACCORDANCE WITH THE LAWS OF MARYLAND, WITHOUT
REFERENCES TO ITS PRINCIPLES OF CONFLICT OF LAWS,
10.9 Consent to Jurisdiction, Etc. SUBJECT TO SECTION 10.17,
IN THE EVENT OF ANY ACTION OF PROCEEDING WITH RESPECT TO ANY MATTER PERTAINING
TO THIS AGREEMENT, THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY CONSENT TO
THE EXCLUSIVE JURISDICTION AND VENUES OF THE COURTS OF THE STATE OF MARYLAND AND
OF ANY FEDERAL COURT LOCATED IN BALTIMORE, MARYLAND IN CONNECTION WITH ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE TRANSACTION DOCUMENTS.
THE PARTIES HERETO HEREBY WAIVE PERSONAL SERVICE OF ANY PROCESS IN CONNECTION
WITH ANY SUCH ACTION OR PROCEEDING AND AGREE THAT THE SERVICE THEREOF MAY BE
MADE BY CERTIFIED OR REGISTERED MAIL ADDRESSED TO OR BY PERSONAL DELIVERY IN
ACCORDANCE WITH SECTION 10.6. IN THE ALTERNATIVE, IN ITS DISCRETION, ANY OF THE
PARTIES HERETO MAY EFFECT SERVICE UPON ANY OTHER PARTY IN ANY OTHER FORM OR
MANNER PERMITTED BY LAW.
10.10 Waiver of Provisions. The terms, covenants,
representations, warranties, and conditions of this Agreement may be waived only
by a written instrument executed by the Person waiving compliance. The failure
of Buyer or Seller at any time or times to require performance of any provision
of this Agreement shall in no manner affect the right at a later date to enforce
the same. No waiver Buyer or Seller of any condition or the breach of any
provision, term, covenant, representation, or warranty contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be or construed as a further or continuing waiver of any such
condition or of the breach of any other provision, term, covenant,
representation, or warranty of this Agreement.
10.11 Counterparts. This Agreement may be executed in two (2)
or more counterparts, and all counterparts so executed shall constitute one (1)
agreement binding on all of the parties hereto, notwithstanding that all the
parties hereto are not signatory to the same counterpart.
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<PAGE>
10.12 Entire Agrreement/Amendments. This Agreement (including
the Schedules hereto), the other Transaction Documents and the Confidentiality
Agreement dated October 15, 1992 between Buyer and ABRY Communications,
constitute the entire agreement among the parties hereto pertaining to the
subject matter hereof and supersede any and all prior and contemporaneous
agreements, understandings, negotiations, and discussions, whether oral or
written, between them relating to the subject matter hereof. No amendment or
waiver of any provision of this Agreement shall be binding unless executed in
writing by the party to be bound thereby.
10.13 Access to Books and Records.
---------------------------
(a) Buyer shall preserve for not less than five (5)
years after the Closing Date all books and records included in the
Station Assets. After such five-year period, Buyer will not destroy any
books or records relating to the conduct of business of the Station
prior to the Closing unless Buyer first offers to transfer such books
and records to Seller at no cost to Seller, and if Buyer is requested
to do so, Buyer will transfer such books or records to Seller.
(b) After the Closing, Seller will not destroy any
books or records relating to the conduct of business of the Station
prior to the Closing Date unless Seller first offers to transfer such
books and records to Buyer at no cost to Buyer, and if Seller is
requested to do so, Seller will transfer such books or records to
Buyer.
(c) At the request of any other party to this
Agreement, Buyer and Seller will permit each other (including such
other party's officers, employees, accountants, and counsel) any
access, upon reasonable prior written notice during normal business
hours, to all of its property, accounts, books, contracts, records,
accounts payable and receivable, records of employees, FCC logs and
other information concern ing the affairs or operation of the Station
as such other party to this Agreement may reasonably request for any
reasonable purpose, and to make extracts or copies from the foregoing
at the requesting party's expense.
10.14 Public Announcements. Prior to the Closing, neither
Buyer (including any individual which is a party hereto) nor Seller shall,
except by mutual agreement with the other of them (including agreement as to
content, text and method or distribution or release) , make any press release or
other public announcement or disclosure concerning the transactions contemplated
by this Agreement, except as may be required by any Legal Requirement
(including, without limitation, filings and reports required to be made with or
pursuant to the rules of the Securities and Exchange Commission); provided that,
prior to making any such announcement or disclosure required by any Legal
Requirement, to the extent practicable, the disclosing Person gives to Buyer (in
the case of a disclosure by Seller) or Seller (in the case of a disclosure by
Buyer or any such individual) prior written notice of the context, text and
content of, the method of distribution or release of, and all other material
facts concerning, such disclosure.
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<PAGE>
10.15 [RESERVED]
10.16 Definitional Provisions.
(a) Terms Defined in Appendix. Each capitalized term
which is used and not otherwise defined in this Agreement or any
Schedule to this Agreement has the meaning which is specified for such
term in the Appendix which is attached to this Agreement.
(b) Gender and Number. Words used in this Agreement,
regardless of the gender and number specifically used, will be deemed
and construed to include any other gender, masculine, feminine or
neuter, and any other number, singular or plural, as the context
requires.
10.17 Arbitration.
-----------
(a) Generally. Buyer and Seller agree that the
arbitration procedures described in this Section 10. 17 will be the
sole and exclusive method of resolving and remedying any claim for
indemnification or other remedy arising under this Agreement
(collectively, "Disputes"); provided that nothing in this Section 10.17
will prohibit a party from instituting litigation to enforce any Final
Arbitration Award. Buyer and Seller agree that, except as otherwise
provided in the Commercial Arbitration Rules of the American
Arbitration Association as in effect from time to time (the "AAA
Rules"), the arbitration procedures described in this Section 10.17 and
any Final Arbitration Award will be governed by, and will be
enforceable pursuant to, the Uniform Arbitration Act as in effect in
the State of Maryland from time to time. No Person will be entitled to
claim or recover punitive damages in any such proceeding.
(b) Notice of Arbitration. If Buyer or Seller asserts
that there exists a Dispute, then such Person (the "Disputing Person")
will give the other of them a written notice setting forth the nature
of the asserted Dispute. If Buyer and Seller do not resolve any such
asserted Dispute prior to the tenth Business Day after such notice is
given, then the Disputing Person may commence arbitration pursuant to
this Section 10.17 by giving the other of them a written notice to that
effect (an "Arbitration Notice"), setting forth any matters which are
required to be set forth therein in accordance with the AAA Rules.
(c) Selection of Arbitrator. Buyer and Seller will
attempt to select a single arbitrator by mutual agreement. if no such
arbitrator is selected prior to the twentieth Business Day after the
related Arbitration Notice is given, then an arbitrator which is
experienced in matters of the type which are the subject matter of the
Dispute will be selected in accordance with the AAA Rules.
(d) Conduct of Arbitration. The arbitration will be
conducted under the AAA Rules, as modified by any written agreement
between Buyer and Seller. The
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<PAGE>
arbitrator will conduct the arbitration in a manner so that the final
result, determination, finding, judgment or award determined by the
arbitrator (the "Final Arbitration Award") is made or rendered as soon
as practicable, and the parties will use reasonable efforts to cause a
Final Arbitration Award to occur not later than the sixtieth day after
the arbitrator is selected. Any Final Arbitration Award will be final
and binding upon Buyer and Seller, and there will be no appeal from or
reexamination of any Final Arbitration Award, except in the case of
fraud, perjury or evident partiality or misconduct by the arbitrator
prejudicing the rights of Buyer or Seller or to correct manifest
clerical errors.
(e) Enforcement. Buyer and Seller agree that a Final
Arbitration Award may be enforced in any state or federal court having
jurisdiction over the subject matter of the related Dispute.
(f) Expenses. A prevailing party in any arbitration
proceeding in connection with this Agreement shall be entitled to
recover from the non-prevailing party its reasonable attorneys' fees
and disbursements in addition to any damages or other remedies awarded
to such prevailing party, and the non-prevailing party also will be
required to pay all other costs and expenses associated with the
arbitration; provided that (1) if an arbitrator is unable to determine
that a party is a prevailing party in any such arbitration proceeding,
then such costs and expenses will be equitably allocated by such
arbitrator upon the basis of the outcome of such arbitration
proceeding, and (2) if such arbitrator is unable to allocate such costs
and expenses and expenses in such a manner, then the costs and expenses
of such arbitration will be paid one-half by Buyer and one-half by
Seller, and each of them will pay the out-of-pocket expenses incurred
by it or on its behalf. As part of any Final Arbitration Award, the
arbitrator may designate the prevailing party for purposes of this
Section 10.17. Except as provided in the preceding sentences, each
party to this Agreement will bear its own costs and expenses (including
legal fees and disbursements) in connection with any such proceeding or
submission.
10.18 Confidential Information: Seller. Until the Closing
Date, Seller shall not use or disclose to any Person (except as may be required
by Legal Requirement) any confidential information received from any ABRY Buyer
or its agents in the course of investigating, negotiating, and completing the
transactions contemplated by this Agreement or any other ABRY Agreement. For
purposes of this Section 10.18, nothing shall be deemed to be confidential
information that: (a) is known to any ABRY Seller at the time of its initial
disclosure to any ABRY Seller or any representative or Affiliate of any ABRY
Seller; (b) becomes publicly known or available other than through disclosure by
any ABRY Seller; (c) is rightfully received by Seller from any Person unrelated
to any ABRY Seller (other than any Person engaged by any ABRY Seller in
connection with the transactions contemplated by any ABRY Purchase Agreement);
or (d) is independently developed by any ABRY Seller. For purposes of this
Agreement, any information which Seller or any of its agents obtains or has
obtained from any other ABRY Seller or its agents and which such ABRY Seller or
agent obtained from any ABRY Buyer or its agent will be deemed to have been
obtained by such Seller from an ABRY Buyer.
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<PAGE>
10.19 Confidential Information: Buyer. Until the Closing Date,
Buyer (including each individual which is a party hereto) shall not use for its
or any other Person's benefit and shall not disclose to any other Person (except
as may be required by Legal Requirement) any confidential information
(including, without limitation, financial information and information regarding
program contracts and revenue) received from any ABRY Seller or its agent or
pertaining to any ABRY Seller or any Group Station in the course of
investigating, negotiating, and performing the transactions contemplated by this
Agreement or any other ABRY Agreement. For purposes of this Section 10.19,
nothing shall be deemed to be confidential information that: (a) is known to an
ABRY Buyer at the time of its initial disclosure to any ABRY Buyer or any
representative or Affiliate of any ABRY Buyer; (b) becomes publicly known or
available other than through disclosure by any ABRY Buyer or any Person
described in Section 5.1(d)(2); (c) is rightfully received by any ABRY Buyer
from an unrelated Person (other than any other ABRY Buyer or any Person engaged
by any ABRY Buyer in connection with the transactions contemplated by any ABRY
Purchase Agreement); or (d) is independently developed by any ABRY Buyer. Buyer
and each individual which is a party hereto agrees to be bound by the
obligations of Sinclair pursuant to, and no provision of this Section 10.19 will
be deemed to supersede or in any way limit any obligation or right of Sinclair,
Buyer or any such individual under, the Confidentiality Agreement dated October
15, 1992 between Sinclair and ABRY Communications, which Confidentiality
Agreement will survive the execution and termination of this Agreement. For
purposes of this Agreement, any information which Buyer or any such individual
or any agent of any of them obtains or has obtained from any other ABRY Buyer or
its agents and which such other ABRY Buyer or agent obtained from any ABRY
Seller or its agent will be deemed to have been obtained by Sinclair, Buyer or
such individual from an ABRY Seller.
10.20 Commencement of Certain Pre-Closing Activities. No party
shall be required to comply with or otherwise perform its covenants and
agreements set forth in Sections 5.2 or 6.2 with respect to any exercise of the
Option so long as such party reasonably concludes that it is not likely that the
condition set forth in Section 7.6 will be satisfied, unless and until the
holders of the Existing Station Indebtedness have entered into agreements which
will permit the condition set forth in Section 7.6 to be satisfied.
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed by their duly authorized officers, all as of the day and year
first above written.
CINCINNATI TV 64 LIMITED PARTNERSHIP
By: ABRY Communications II, L.P,
Its: General Partner
By: BVC Communi-
cations II, Inc.
Its: Managing General Partner
By:
-----------------------------
Its: VICE PRESIDENT
---------------------------------
David D. Smith
---------------------------------
J. Duncan Smith
---------------------------------
Frederick G. Smith
---------------------------------
Robert E. Smith
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<PAGE>
APPENDIX
Cross-References. The following is a list of the capitalized
terms which are used in this Agreement and the corresponding provision in which
each such term is defined:
Term Provision
- ---- ---------
AAA Rules Section 10.17(a)
ABRY Appendix
ABRY Buyer Appendix
ABRY Seller Appendix
Affiliate Appendix
Arbitration Section ~10.17(b)
Assumed Contract Section ~1,4(b)
Assumed Indebtedness Section ~1.4(b)
Assumed Liabilities Section ~1.4(b)
Assumption Section 2,2
BBM Appendix
Business Day Appendix
Buyer Preamble
Cash Purchase Price Section 2.1(a)
Chesapeake Appendix
Closing Section 2.2
Closing Date Appendix
Communications Act Appendix
Consent Appendix
Continuing Employees Section 9.2
Contract Appendix
Copley Appendix
Disputes Section 10.17(a)
Disputing Person Section 10.17(b)
Exercise Notice Section 1.3
Excluded Assets Section 1.2
Excluded Contracts Section 1.2(e)
Existing Station Indebtedness Appendix
FCC Appendix
FCC Approval Date Appendix
FCC Authorizations Section 1.1(a)
Final Arbitration Award Section 10.17(d)
Group Stations Appendix
Hart-Scott-Rodino Act Appendix
KSMO Appendix
KSMO Purchase Agreement Appendix
Legal Requirements Appendix
Lien Appendix
New WCGV Appendix
New WTTO Appendix
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<PAGE>
Term Provision
Option Section 1. 1
Other Assumed Contracts Section 1.1(f)
Person Appendix
Proceeds 1.1(c)
Program Contracts Section 1.1(e)
Realty Contracts Section 1.1(c)
Required FCC Consent Appendix
Sale Section 1.1
Seller Preamble
Seller's Termination Notice Section 10.1(a)
Seller's Recent Station Records Section 1.1(j)
Sinclair Appendix
Station Assets Section 1.1
Station Recital A
Super 18 Appendix
Time Sales Contracts Section 1.1(d)
Trades Appendix
Transaction Documents Appendix
WARN Act Appendix
WCGV Appendix
WNUV Appendix
WTTO Appendix
Additional Defined Terms. In addition, the following
capitalized terms have the following meaning when used in this Agreement and the
Schedules attached to this Agreement:
"ABRY" means ABRY Communications, L.P. , a Delaware limited
partnership.
"ABRY Buyer" means Sinclair, Buyer (including each individual
which is a party hereto), Chesapeake, New WCGV, New WTTO, or any direct or
indirect assignee of any of the rights of any of them pursuant to any
Transaction Document, or any Affiliate of any of them.
"ABRY Agreements" means this Agreement and any other agreement
which has been or may hereafter be entered into by Seller or its Affiliates and
Buyer or its Affiliates with respect to the transfer or operation of any assets
relating to any Group Station.
"ABRY Seller" means ABRY, BBM, BVC, Copley, KSMO, Super 18,
WCGV, WNUV (prior to the date hereof only), WTTO, Seller, or any direct or
indirect assignee of any of the rights of any of them pursuant to any
Transaction Document, or any Affiliate of any of them.
"BBM" means BBM Partners, L.P., a Delaware limited
partnership.
"BVC" means BVC Communications, Inc., a Delaware corporation.
A "Business Day" means any day other than a Saturday, Sunday
or other day upon which banks in New York, New York are not open for business.
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<PAGE>
"Chesapeake" means Chesapeake Television, Inc., a Maryland
corporation.
"Closing Date" means the date upon which the Closing occurs.
"Communications Act" means the Communications Act of 1934, as
in effect from time to time.
With respect to any Contract, a "Consent" means any consent or
approval of any Person other than any party to this Agreement which, in
accordance with the terms of such Contract, is required to be obtained in order
to permit the consummation of the Sale or the Assumption.
"Contract" means any agreement, lease, arrangement,
commitment, or understanding to which Seller with respect to the Station is a
party.
"Copley" means Copley Place Capital Group, a Massachusetts
general partnership.
"Existing Station Indebtedness" at any time means the
indebtedness of Seller which is described in Schedule 1.4 attached hereto, plus
all unpaid accrued interest thereon and all penalties, indemnities,
reimbursements, premiums and other amounts payable in respect thereof, as of
such time.
"FCC" means the Federal Communications Commission or any
successor thereto.
"FCC Approval Date" means the first day upon which each
Required FCC Consent is effective.
"Group Stations" means the Station, broadcast television
station WTTO-TV, Birmingham, Alabama, broadcast television station WCGV-TV,
Milwaukee, Wisconsin, broadcast television station WVTV-TV, Milwaukee,
Wisconsin, broadcast television station WNUV-TV, Baltimore, Maryland, and
broadcast television station KSMO-TV, Kansas City, Missouri.
"Hart-Scott-Rodino Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as in effect from time to time.
"KSMO" means Kansas City TV 62 Limited Partnership, a Delaware
limited partnership.
"KSMO Purchase Agreement" means the option Agreement dated as
of the date of this Agreement between KSMO and the individuals who are parties
hereto, on behalf of an entity to be formed by them, as in effect from time to
time.
"Legal Requirement" means the Communications Act, the rules,
regulations and policies of the FCC, and all other federal, state and local
laws, rules, regulations, ordinances, judgments, orders and decrees.
- 27 -
<PAGE>
"Lien" means any mortgage, pledge, hypothecation, encumbrance,
lien (statutory or otherwise) , preference, priority or other security agreement
of any kind or nature whatsoever (including any conditional sale or other title
retention agreement and any lease having substantially the same effect as any of
the foregoing and any assignment or deposit arrangement in the nature of a
security device).
"New WCGV" means WCGV, Inc. a Maryland corporation.
"New WTTO" means WTTO, Inc. a Maryland corporation.
A "Person" means any individual, partnership, joint venture,
corporation, trust, unincorporated association or government or department
thereof.
A "Required FCC Consent" means any action or order by the FCC
granting its consent to the assignment to Buyer (or its permitted assignee)
pursuant to this Agreement of any FCC Authorization without any condition which
in the reasonable judgment of Buyer or Seller is adverse to Buyer or Seller, as
the case may be, in any material respect.
"Sinclair" means Sinclair Broadcasting Group, Inc. , a
Maryland corporation.
"Super 18" means Super 18 Television Limited Partnership, a
Delaware limited partnership.
"Trades" means all trade, barter or similar arrangements for
the sale of advertising time other than for cash (other than any film or program
barter arrangements and radio barter arrangements) on the Station.
"Transaction Documents" means this Agreement, the other ABRY
Agreements, and all other documents executed and delivered in connection
therewith, in each case as in effect from time to time.
"WARN Act" means the federal Worker Adjustment and Retraining
Notification Act or any applicable state law or other Legal Requirement
regarding termination of employees, in each case, as in effect from time to
time.
"WCGV" means WCGV, Inc, a Delaware corporation.
"WNUV" means WNUV TV-54 Limited Partnership,, a Delaware
limited partnership,
"WTTO" means WTTO, Inc., a Delaware corporation.
- 28 -
<PAGE>
Schedule 1.4
------------
Outstanding Debt
as of March 31, 1994
Cincinnati (WSTR)
Philips Credit Corporation $16,033,008
United Cable Television $ 6,000,000 + $2,242,885
Financing Corporation accrued interest
Total Debt $24,75,893
- 29 -
Exhibit 10.11
STOCK PURCHASE AGREEMENT
by and between
SINCLAIR BROADCAST GROUP, INC,
and
THE STOCKHOLDERS OF
SUPERIOR COMMUNICATIONS GROUP, INC.
<PAGE>
TABLE OF CONTENTS
Page
----
SECTION 1 DEFINITIONS.........................................................2
SECTION 2 SALE OF SHARES......................................................2
SECTION 3 PURCHASE PRICE......................................................2
3.1 Payment......................................................2
3.2 Disbursing Agent.............................................3
3.3 Funded Debt..................................................3
SECTION 4 CLOSING.............................................................3
SECTION 5 REPRESENTATIONS AND WARRANTIES OF SELLERS...........................3
5.1 Representations as to Shares, etc............................3
5.2 Organization and Good Standing...............................4
5.3 Capitalization...............................................4
5.4 No Conflicts.................................................4
5.5 Real Property................................................5
5.6 Personal Property............................................5
5.7 Financial Statements.........................................5
5.8 FCC..........................................................5
5.9 Intellectual Property........................................6
5.10 Employee Benefit Plans.......................................6
5.11 Employee Relations...........................................6
5.12 Insurance....................................................7
5.13 Material Contracts...........................................7
5.14 Comipliance with Laws........................................7
5.15 Litigation...................................................7
5.16 No Brokers...................................................7
5.17 Consents.....................................................7
5.18 Environmental................................................8
5.19 Tax Matters..................................................8
SECTION 6 REPRESENTATIONS AND WARRANTIES OF PURCHASER.........................9
6.1 Organization and Good Standing...............................9
6.2 Execution and Effect of Agreement............................9
6.3 No Conflicts.................................................9
6.4 Consents....................................................10
6.5 Availability of Funds.......................................10
6.6 Litigation..................................................10
6.7 No Brokers..................................................10
6.8 FCC.........................................................10
<PAGE>
SECTION 7 ADDITIONAL PROVISIONS REGARDING REPRESENTATIONS AND
WARRANTIES..........................................................11
7.1 Limitation; Survival.......................................11
7.2 Right to Update Schedules..................................11
7.3 Knowledge of Purchaser or Sellers..........................11
7.4 Schedules and Exhibits.....................................11
SECTION 8 TAX MATTERS.......................................................11
8.1 Section 338 Election.......................................11
SECTION 9 ADDITIONAL COVENANTS AND UNDERTAKINGS.............................12
9.1 Further Assurances and Assistance..........................12
9.2 Access to Information......................................12
9.3 Conduct of Business Prior to Closing.......................12
9.4 H-S-R Act..................................................13
9.5 FCC Application............................................13
9.6 Books and Records..........................................14
9.7 Employees and Employee Benefits............................14
9.8 Control of Stations........................................14
SECTION 10 INDEMNIFICATION...................................................15
10.1 Indemnification of Purchaser by Sellers....................15
10.2 Indemnification of Sellers by Purchaser....................15
10.3 Limitations and Other Provisions Regarding
Indemnification Obligations................................15
10.4 Notice of Claim Defense of Action..........................16
SECTION 11 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PARTIES TO
CLOSE...............................................................18
11.1 Conditions to the Obligation of Purchaser..................18
11.2 Conditions Precedent to the Obligation of
Sellers....................................................19
SECTION 12 DELIVERIES AT THE CLOSING........................................19
12.1 Deliveries by Sellers......................................19
12.2 Deliveries by Purchaser....................................20
SECTION 13 EXPENSES.........................................................20
SECTION 14 TERMINATION......................................................20
SECTION 15 NOTICES..........................................................21
SECTION 16 SELLERS' AGENTS..................................................22
16.1 Sellers' Agents............................................22
<PAGE>
SECTION 17
MISCELLANEOUS........................................................23
17.1 Headings....................................................23
17.2 Schedules and Exhibits......................................23
17.3 Execution in Counterparts...................................23
17.4 Entire Agreement............................................23
17.5 Governing Law...............................................23
17.6 Modification................................................23
17.7 Successors and Assigns......................................23
17.8 Waiver......................................................23
17.9 Severability................................................24
17.10 Announcements...............................................24
17.11 Specific Performance........................................24
ANNEX 1 DEFINITIONS...........................................................1
ANNEX 2 Number of Shares......................................................7
<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of
this 1st day of March, 1996, is entered into by and among Sinclair Broadcast
Group, Inc., a Maryland corporation ("Purchaser"), and PNC Capital Corp, Primus
Capital Fund II Limited Partnership, Albert M. Holtz, Perry A. Sook, Richard J.
Roberts, George F. Boggs, Albert M. Holtz, as Trustee for the Irrevocable Deed
of Trust for Tara Ellen Holtz, dated December 6, 1994, and Albert M. Holtz, as
Trustee for the Irrevocable Deed of Trust for Meghan Ellen Holtz, dated December
6, 1994 (each a "Seller" and collectively, "Sellers").
WITNESSETH:
WHEREAS, Sellers own collectively all of the issued and
outstanding shares of capital stock (the "Stock") of Superior Communications
Group, Inc,, a Delaware corporation (the "Company"); and
WHEREAS, the Company owns all of the capital stock of Superior
Communications of Kentucky, Inc., a Delaware corporation, which owns the assets
(other than the FCC license) of and operates television station WDKY-TV in
Lexington, KY ("WDKY"); and
WHEREAS, the Company also owns all of the capital stock of
Superior Communications of Oklahoma, Inc., an Oklahoma corporation, which owns
the assets (other than the FCC license) of and operates television station
KOCB-TV in Oklahoma City, OK ("KOCB"); and
WHEREAS, Superior OK License Corp. and Superior KY License
Corp., each an indirect subsidiary of the Company, respectively hold the
licenses granted by the Federal Communications Commission (the "FCC") pursuant
to which KOCB and WDKY (each a "Station" and collectively the "Stations") are
permitted to operate (the "FCC Licenses"); and
WHEREAS, Sellers desire to sell to Purchaser, and Purchaser
desires to purchase from Sellers, all of the outstanding shares of Stock;
NOW, THEREFORE, for the purpose of consummating the above
transaction and in consideration of the promises and mutual covenants herein
contained, Sellers and Purchaser hereby agree as follows:
- 1 -
<PAGE>
SECTION 1
DEFINITIONS
As used in this Agreement, capitalized terms shall have the
meanings specified in the text hereof or on Annex 1 hereto (which is
incorporated herein by reference) , which meanings shall be applicable to both
the singular and plural forms of the terms defined.
SECTION 2
SALE OF SHARES
At the Closing, each Seller, severally and not jointly, shall
sell, assign, transfer and deliver to Purchaser, and Purchaser shall purchase
from each Seller, that number and class of shares of Stock as is set forth
opposite the name of each Seller in Annex 2 hereto.
SECTION 3
PURCHASE PRICE
3.1 Payment. In consideration for the sale of the Stock, Purchaser
shall pay to Sellers the aggregate amount of $63,000,000 plus the Cash on Hand
less the principal amount of all Funded Debt (the "Purchase Price") , payable as
follows:
(1) $3,150,000 simultaneously with the execution and delivery
of this Agreement, to be held in escrow by Kirkpatrick & Lockhart LLP
as Escrow Agent pursuant to the Escrow Agreement in the form of Exhibit
A hereto (the "Deposit Escrow Agreement"). At the Closing, Purchaser
and Sellers shall cause such $3,150,000 to be released to the
Disbursing Agent (as hereinafter defined) and shall cause any interest
or other additional amounts in such escrow to be released to Purchaser;
(2) $1,000,000 at the Closing to be held in Escrow (the
"Indemnification Escrow") by PNC Bank National Association as Escrow
Agent pursuant to the Indemnification Escrow Agreement in the form of
Exhibit B hereto (the "Indemnification Escrow Agreement") ; and
(3) The balance of the Purchase Price at the Closing, by wire
transfer of federal or other immediately available funds to the
accounts specified by the Sellers' Agents or, to the extent no such
accounts are specified, to the following bank account of the Disbursing
Agent:
- 2 -
<PAGE>
WIRE TRANSFER INSTRUCTIONS
FOR KIRKPATRICK & LOCKHART LLP ESCROW ACCOUNT
Bank: PNC Bank
Pittsburgh, Pennsylvania
ABA Routing No: 043-000096
Kirkpatrick & Lockhart LLP IOLTA Account No: 105 11592
3.2 Disbursing Agent. The Disbursing Agent shall disburse the
Purchase Price to Sellers in accordance with the Disbursement Agreement.
3.3 Funded Debt. At the Closing, Purchaser shall also cause the
Companies to pay in full all Funded Debt.
SECTION 4
CLOSING
The closing of the transaction contemplated by this Agreement
(the "Closing"), subject to fulfillment or waiver of the conditions set forth in
Section 10 hereof, shall be held at the offices of Kirkpatrick & Lockhart LLP,
1500 Oliver Building, Pittsburgh, PA 15222, at 10:00 A.M. local time (but shall
be deemed to have occurred at the close of business on the immediately preceding
day) , on the later to occur of (a) five Business Days after all applicable
waiting periods under the H-S-R Act shall have expired or terminated or (b) five
Business Days after the Initial Orders (the date of Closing being the "Closing
Date") , unless the parties shall mutually agree upon a different date or
location.
SECTION 5
REPRESENTATIONS AND WARRANTIES OF SELLERS
5.1 Representations as to Shares, etc. Each Seller, severally and not
jointly, hereby represents and warrants to Purchaser that: (i) such Seller is
the record and the beneficial owner of all the shares of the Stock set forth
opposite such Seller's name in Annex 2 hereto, except that the beneficial owners
of those shares of Stock indicated on Annex 2 as being held pursuant to
instruments of trust are as set forth in such instruments of trust; (ii) such
Seller (and the beneficial owner of such stock to the extent that such
beneficial owner is different from such Seller) owns all of the shares of the
Stock set forth opposite such Seller's name in Annex 2 hereto free and clear of
any lien, security interest, pledge or encumbrance other than those set forth on
Schedule 5.1 hereof, all of which will be released at or before the Closing;
(iii) upon transfer of the Stock set forth opposite such Seller's name in Annex
2 hereto to Purchaser at the Closing, Purchaser will have legal and equitable
title to such Stock, free and clear of any lien, security
- 3 -
<PAGE>
interest, pledge or encumbrance, except for any lien, security interest, pledge
or encumbrance created by Purchaser; (iv) such Seller has full power and
authority to enter into this Agreement, and the consummation of the transactions
contemplated hereby has been duly authorized by all necessary action on the part
of such Seller; (v) this Agreement has been duly executed and delivered by such
Seller and constitutes a legal, valid and binding obligation of such Seller,
enforceable against such Seller in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the rights of creditors generally and to the exercise of judicial
discretion in accordance with general principles of equity (whether applied by a
court of law or equity); and (vi) neither the execution and delivery of this
Agreement by such Seller nor the consummation of the transactions contemplated
hereby by such Seller will (a) violate any of the provisions of any governing
documents of such Seller if it is an entity, (b) prevent or materially interfere
with such Seller's ability to perform its obligations hereunder, or (c) conflict
with or result in a breach of, or give rise to a right of termination of, or
accelerate the performance required by the terms of any judgment, court order or
consent decree, or any agreement, indenture, mortgage or instrument to which
such Seller is a party or to which its property is subject, or constitute a
default thereunder, where such conflict, breach, right of termination,
acceleration or default would prevent or materially interfere with such Seller's
ability to perform hereunder.
Sellers, jointly and severally, hereby represent and warrant
to Purchaser:
5.2 Organization and Good Standing. Each of the Companies is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation as listed on Schedule 5.2 hereto, and has
full corporate power and authority to carry on its business as it is now being
conducted. Each of the Companies is qualified as a foreign corporation and is in
good standing under the laws of each jurisdiction in which the conduct of its
business or the ownership of its properties requires such qualification, except
where the failure to be so qualified would not have a Material Adverse Effect.
5.3 Capitalization. The designations of each class of the capital stock
of each of the Companies and the number of authorized and issued and outstanding
shares thereof is as described on Schedule 5.3. All the shares of the Stock have
been validly issued and are fully paid and nonassessable. Except as described on
Schedule 5.3, (i) no shares of capital stock of the Companies are held in
treasury, (ii) there are no other issued or outstanding equity securities of any
of the Companies and (iii) there are no other issued or outstanding securities
of any of the Companies convertible at any time into equity securities of any of
the Companies. None of the Companies is subject to any commitment or obligation
that would require the issuance or sale of additional shares of capital stock of
any of the Companies at any time under options, subscriptions, warrants, rights
or any other obligations. None of the Companies has any equity interest in any
corporation, partnership, joint venture or other entity, other than another
Company.
5.4 No Conflicts. Except as described on Schedule 5.4, neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will
- 4 -
<PAGE>
(a) violate any provision of applicable law, rule and regulation which violation
would prevent materially or materially interfere with Sellers' ability to
perform hereunder or have a Material Adverse Effect, or (b) conflict with or
result in a breach of, or give rise to a right of termination of, or accelerate
the performance required by the terms of any judgment, court order or consent
decree, or any agreement, indenture, mortgage or instrument to which any of the
Companies is a party or to which their property is subject, or constitute a
default thereunder, where such conflict, breach, right of termination,
acceleration or default would prevent or materially interfere with Sellers'
ability to perform hereunder or have a Material Adverse Effect.
5.5 Real Property. All interests of any of the Companies in and to any
Real Property are listed on Schedule 5.5 hereto, and true and complete copies of
all leases related thereto have heretofore been delivered to Purchaser. The
Companies have good and marketable title to each parcel of Real Property listed
on Schedule 5.5 that is identified thereon as being owned by the Companies, free
and clear of all liens, mortgages and encumbrances, subject only to Permitted
Exceptions and the matters shown on Schedule 5.5. To the Companies' Knowledge,
none of the Companies is in material default or has received written notice of
default under any lease of Real Property that has not been cured or withdrawn.
5.6 Personal Property. Except (a) as set forth on Schedule 5.6 hereto,
(b) for taxes not yet due and payable and (c) liens, security interests or
encumbrances that do not materially impair the use thereof, the Companies have
good title to all of their material items of tangible personal property and
assets, free and clear of all liens, security interests and encumbrances. Taken
as a whole, the condition of the tangible personal property of the Companies is
adequate for its present use by the Companies.
5.7 Financial Statements. The Companies have provided or made available
to Purchaser copies of the Financial Statements and the Partnership Financial
Statements. The Financial Statements and the Partnership Financial Statements
have been prepared in accordance with GAAP consistently applied with prior
periods, except as may be noted therein. The Financial Statements and the
Partnership Financial Statements present fairly, in all material respects, the
financial position of the Companies (or the Partnership, as the case may be) as
at and for the periods indicated therein. Except as set forth on Schedule 5.7
hereto, the Business has been conducted in the ordinary course since December
31, 1994, and the Companies have not suffered an adverse change in their
business or financial condition since December 31, 1994, that would have a
Material Adverse Effect. The absolute value of the consolidated pre-tax income
or loss of the Companies for 1995 is less than $4,000,000.
5.8 FCC. The Companies are operated in material compliance with the
terms of the FCC Licenses, the Communications Act of 1934, as amended, and
applicable rules, regulations and policies of the FCC ("FCC Rules and
Regulations") . All FCC Licenses, a true and complete list of which is set forth
on Schedule 5.8 and true and complete copies of each of which have been
delivered to Purchaser, are valid and in full force and effect. Except as set
forth on Schedule 5.8, no application, action or proceeding is pending for the
renewal or modification of any of the FCC Licenses and, to the Companies'
Knowledge, there is not now before the FCC
- 5 -
<PAGE>
any investigation or complaint against any of the Companies or relating to the
Stations, the unfavorable resolution of which would impair the qualifications of
the applicable Companies to hold any material FCC Licenses. Except as set forth
on Schedule 5.8, there is no proceeding pending before the FCC, and there is no
outstanding notice of violation from the FCC, with respect to the Stations.
Except as set forth on Schedule 5.8, no order or notice of violation has been
issued by any governmental entity which permits, revocation, adverse
modification or termination of any FCC License. All documents required by 47
~C.F.R, Section 73.3526 to be kept in the Stations, public inspection files are
in such file, other than documents the absence of which either individually or
in the aggregate would be immaterial to the conduct of the operations of the
Companies as presently conducted, or the Stations or the ability of the
applicable Companies to renew the FCC Licenses, and such file will be maintained
in proper order and complete up to and through the Closing Date, except for any
such immaterial documents.
5.9 Intellectual Property. The Companies have delivered or made
available to Purchaser a complete list of all Intellectual Property on the date
hereof. To the Companies' Knowledge, except as otherwise set forth on Schedule
5.9 hereto, the Companies own such Intellectual Property free and clear of any
royalty, lien, encumbrance or charge. Except as set forth on Schedule 5.9 during
the two year period immediately preceding the date of this Agreement, none of
the Companies has received any written notice or written claim that any such
Intellectual Property is not valid or enforceable, or of any infringement upon
or conflict with any patent, trademark, service mark, copyright or trade name of
any third party by the Companies. Except as set forth on Schedule 5.9, during
the two year period immediately preceding the date of this Agreement, none of
the Companies has given any notice of infringement to any third party with
respect to any of the Intellectual Property.
5.10 Employee Benefit Plans. Attached as Schedule 5.10 is a complete
and accurate list, as of the date hereof, of all employee benefit plans, all
employee welfare benefit plans, all employee pension benefit plans, all
multi-employer plans, and all multi-employer welfare arrangements (as defined in
Sections 3(1), (2), (37), and (40), respectively, of ERISA), which are currently
maintained and/or sponsored by the Companies, or to which the Companies
currently contribute, or have an obligation to contribute in the future,
including, without limitation, employment agreements and any other agreements
containing "golden parachute" provisions and deferred compensation agreements
(collectively, the "Plans"), together with a list of employees covered thereby.
Complete and accurate copies of all Plans and any trusts related thereto have
been provided to Purchaser. Schedule 5.10 also contains a list of all of the
plans that have been terminated by any Company within the past three years.
5.11 Employee Relations. Except as set forth on Schedule 5.11 hereto,
the employees of the Companies are not covered by any collective bargaining
agreement. No strike, work stoppage,! slowdown or labor dispute involving any
employees of the Companies has occurred during the past three years or, to
Companies, Knowledge, is threatened. Schedule 5.11 also contains a list of all
employees of any Company and their salary or rate of pay.
- 6 -
<PAGE>
5.12 Insurance. Schedule 5.12 hereto contains a list of all material
insurance policies concerning the Business, other than employee-benefit related
insurance policies. To the Companies' Knowledge, all such policies are in full
force and effect and no notice of cancellation or termination has been received.
5.13 Material Contracts. Schedule 5.13 hereto contains a list of all
the Material Contracts, and true copies of such agreements have been furnished
to Purchaser or have been made available to Purchaser. To the Companies'
Knowledge, there exists no default or event which, with notice or lapse of time,
or both, would constitute a default by any party to any such Material Contract,
except where such default would not have a Material Adverse Effect. Neither
Sellers nor the Companies have received written notice that any party to any
Material Contract intends to cancel or terminate any such agreement or to
exercise or not to exercise any option to renew thereunder.
5.14 Comipliance with Laws. Except as set forth on Schedule 5.14, to
the Companies' Knowledge, each of the Companies is in compliance with all
applicable Federal, state and local laws, rules and regulations, except where
the failure to so comply would not have a Material Adverse Effect.
5.15 Litigation. Except as set forth on Schedule 5.15 hereto, there is
no suit, claim, action, proceeding or arbitration pending or, to the Companies'
Knowledge, threatened against (i) any of the Companies, or (ii) against any of
Sellers which seeks to enjoin or obtain damages in respect of the transactions
contemplated hereby. There is no outstanding citation, order, judgment, writ,
injunction, or decree of any court, government, or governmental or
administrative agency against or affecting the Business or the Companies which
could reasonably be expected to have a Material Adverse Effect, except as
disclosed on Schedule 5.15.
5.16 No Brokers. Neither any Company nor any Seller nor anyone acting
on the behalf thereof has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the sale of the Stock and the transactions contemplated by this Agreement,
other than the Company's engagement of Communications Equity Associates, Inc, as
exclusive agent for the Companies and Sellers, to attempt to arrange the
disposition of the Stock.
5.17 Consents. Except (a) for filings, consents, approvals and
authorizations that the failure to obtain or make would not have a Material
Adverse Effect, (b) as set f orth on Schedule 5.17 hereto, (c) for filings
pursuant to the H-S-R Act, or (d) the applications requesting the approval and
consent of the FCC to the transactions contemplated by this Agreement (the "FCC
Applications"), no filing, consent, approval or authorization of any
governmental authority or of any third party on the part of any Seller or any of
the Companies is required in connection with the execution and delivery of this
Agreement by Sellers or the consummation of any of the transactions contemplated
hereby.
- 7 -
<PAGE>
5.18 Environmental. Except as set forth on Schedule 5.18 hereto:
(a) To the Companies' Knowledge, all of the operations of the Companies
at or from any Real Property comply in all material respects with applicable
Environmental Laws. To the Companies, Knowledge, none of the Companies has
engaged in or permitted any operations or activities upon any of the Real
Property for the purpose of or involving the treatment, storage, use,
generation, release, discharge, emission, or disposal of any Hazardous
Substances at the Real Property, except in substantial compliance with
applicable Environmental Laws.
(b) None of the Real Property is listed or, to the Companies'
Knowledge, proposed for listing on the National Priorities List pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),
42 U.S.C. 9601 et seq., or any similar inventory, register or identification of
sites requiring investigation or remediation maintained by any state or other
governmental authority. The Companies have not received any written notice from
any governmental entity or third party of any actual or threatened Environmental
Liabilities with respect to the Real Property or the conduct of the Business.
(c) To the Companies' Knowledge, there are no conditions existing at
the Real Property that require, or which with the giving of notice or the
passage of time or both would likely require remedial or corrective action,
removal or closure pursuant to the Environmental Laws.
(d) To the Companies' Knowledge, the Companies have all the material
permits, authorizations, licenses, consents and approvals necessary for the
current conduct of the Business and for the operations on, in or at the Real
Property which are required under applicable Environmental Laws and are in
substantial compliance with the terms and conditions of all such permits,
authorizations, licenses, consents and approvals.
5.19 Tax Matters. Except as set forth on Schedule 5.19 hereto:
(a) All Returns with respect to any material Tax required to be filed
by, or with respect to, the Companies have been filed when due in timely
fashion. All Taxes shown as payable on such Returns have been paid when due in
timely fashion. Sellers have made available to Purchaser, for the last three
taxable years, copies of all income and franchise Tax Returns filed by, or with
respect to, the Companies. Sellers also have made available to Purchaser the
copies of all examination reports and statements of deficiencies assessed with
respect to the Companies for the last three taxable years.
(b) No Tax Proceeding is currently being conducted with respect to the
Companies and none of the Companies has received notification from any Tax
Authority that it intends to commence a Tax Proceeding with respect to any
Return.
(c) There are no agreements for the extension of the time for
assessment of any Taxes relating to the Companies.
- 8 -
<PAGE>
(d) There are no liens on the assets of the companies for any Tax
currently due and owing.
(e) None of the Sellers is a "foreign person" as that term is defined
in Section 1445 (f) (3) of the Code.
(f) There is not, and will not be as of the Closing, any agreement or
consent made under Section 341(f) of the Code affecting any of the Companies.
(g) None of the Companies has made, nor will become obligated to make,
as a result of any event connected with the transaction contemplated by this
Agreement, any "excess parachute payment" as defined in Section 28OG of the Code
(without regard to subsection (b)(4) thereof).
(h) All taxes of the Companies for the year 1995 either have been paid
or will be paid prior to the Closing.
SECTION 6
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Sellers that:
6.1 Organization and Good Standing. Purchaser is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Maryland. Purchaser has full corporate power and authority to carry on its
business as it is now being conducted.
6.2 Execution and Effect of Agreement. Purchaser has full corporate
power and authority to enter into this Agreement. The consummation of the
transactions contemplated hereby has been duly authorized by all necessary
corporate action on the part of Purchaser. This Agreement has been duly executed
and delivered by Purchaser and constitutes a legal, valid and binding obligation
of Purchaser, enforceable against Purchaser in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the rights of creditors generally and to the exercise of
judicial discretion in accordance with general principles of equity (whether
applied by a court of law or equity).
6.3 No Conflicts.
(a) Except as provided in Sections 6.3(b) and 6.4 hereof, neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (a) violate any of the provisions of the
charter or by-laws of Purchaser, (b) to Purchaser's Knowledge, violate any
provision of applicable law, rule or regulation which violation would have a
material adverse effect on the business or financial condition of Purchaser or
prevent or materially interfere with Purchaser's ability to perform hereunder or
(c) conflict with or result in
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a breach of, or give rise to a right of termination of, or accelerate the
performance required by the terms of any judgment, court order or consent
decree, or any agreement, indenture, mortgage or instrument to which Purchaser
is a party or to which its property is subject, or constitute a default
thereunder, except where such conflict, breach, right of termination,
acceleration or default would not have a material adverse effect on the business
or financial condition of Purchaser or prevent or materially interfere with
Purchaser's ability to perform hereunder.
(b) Purchaser has filed an application for consent to the assignment of
the FCC licenses associated with WSTR-TV~, Cincinnati, Ohio (the "WSTR
Application"), the Grade B contour of which overlaps the Grade B contour of
WDKY. Purchaser agrees that it will amend the WSTR Application to request a
waiver of the Commission's rules prohibiting the acquisition of television
stations with such overlapping contours and inform the Commission to give
precedence to the application for consent to the transfer of control of the
licensee of WDKY. Purchaser further agrees that it will take any and all actions
that may be reasonably necessary to ensure that the Initial Order will not be
delayed in any manner by any matter relating to the WSTR Application or WSTR-TV.
6.4 Consents. Except (i) as set forth on Schedule 6.4 hereto, (ii) for
filings pursuant to the H-S-R Act, or (iii) the FCC Applications, no filing,
consent, approval or authorization of any governmental authority or of any third
party on the part of Purchaser is required in connection with the execution and
delivery of this Agreement by Purchaser or the consummation of any of the
transactions contemplated hereby.
6.5 Availability of Funds. Purchaser has available and will have
available on the Closing Date sufficient funds to enable it to consummate the
transactions contemplated by this Agreement, including the payment of the
Purchase Price. At Sellers' request, Purchaser shall provide Sellers with
evidence reasonably satisfactory to Sellers of the availability of such funds.
6.6 Litigation. There is no suit, claim, action, proceeding or
arbitration pending or, to Purchaser's Knowledge, threatened against Purchaser
which seeks to enjoin or obtain damages in respect of the transactions
contemplated hereby.
6.7 No Brokers. Except for Alex Brown & Sons, Inc., neither Purchaser
nor anyone acting on its behalf has employed any broker or finder or incurred
any liability for any brokerage fees, commissions or finders' fees in connection
with the purchase of the Stock and the transactions contemplated by this
Agreement.
6.8 FCC. Except for the ministerial confirmation by the FCC that the 12
station national ownership limit in its existing regulations has been eliminated
by the enactment of the Communications Act of 1996, Purchaser is qualified to
acquire control of the FCC Licenses as contemplated by this Agreement under the
Communications Act of 1934 and the FCC Rules and Regulations, without any
requirement to obtain any waiver thereof. Except as described in Section 6.3(b)
, there is no state of affairs relating directly or indirectly to Buyer or its
plans for
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the Companies or the Stations that could reasonably be expected to result in a
refusal by the FCC to approve the transactions contemplated hereby or to delay
such approval.
SECTION 7
ADDITIONAL PROVISIONS REGARDING
REPRESENTATIONS AND WARRANTIES
7.1 Limitation; Survival. Except as specifically set forth herein or in
any Schedule, Exhibit or other document delivered pursuant hereto, neither party
has made any representation or warranty with respect to the transactions to be
consummated hereunder. Except as set forth in the last sentence of this Section
7.1, the representations and warranties herein and the obligations of the
parties shall survive the Closing for a period of one year. Sellers'
representations and warranties in Section 5.18 (environmental matters) hereof
shall survive the Closing for a period of two years and Sellers' representation
and warranties set forth in Section 5.19 (tax matters) shall survive until the
applicable statute of limitations for the imposition of that Tax has run,
provided, however, that any claims that have been made before such date shall
survive until the final resolution thereof.
7.2 Right to Update Schedules. Sellers shall have the right, without
being deemed to be in breach of its representations and warranties set forth in
this Agreement, to supplement or amend the Schedules to this Agreement with
respect to any matter arising after the date hereof or, as to any representation
and warranty that is limited to Companies' Knowledge, discovered by Sellers
between the date hereof and the Closing Date.
7.3 Knowledge of Purchaser or Sellers. If any party hereto (a "Knowing
Party") has knowledge upon its execution and delivery of this Agreement or at
Closing that any other party hereto (an "Other Party") is or will be in breach
of any representation or warranty made or to be made in this Agreement by such
other Party, then such Knowing Party shall not have any right or remedy
(including indemnification pursuant to Section 10 below) with respect to such
breach, and the Other Party will not be deemed to be in breach of such
representation or warranty.
7.4 Schedules and Exhibits. Disclosure of any fact or item in any
Schedule or Exhibit hereto shall be deemed to have been disclosed in all other
Schedules or Exhibits requiring such disclosure and for purposes of all other
representations and warranties made herein.
SECTION 8
TAX MATTERS
8.1 Section 338 Election. Notwithstanding anything set forth this
Agreement to the contrary, Purchaser shall be responsible for and shall pay all
Tax Liabilities resulting from an actual or deemed election made under Section
338 of the Code (or any comparable provision
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under foreign, state or local law) with respect to any of the Companies in
connection with the purchase of stock on the Closing Date.
SECTION 9
ADDITIONAL COVENANTS AND UNDERTAKINGS
9.1 Further Assurances and Assistance. Purchaser and Sellers agree that
each will execute and deliver to the other any and all documents, in addition to
those expressly provided for herein, that may be necessary or appropriate to
implement the provisions of this Agreement, whether before, at or after the
Closing. The parties agree to cooperate with each other to any extent reasonably
required in order to accomplish fully the transactions herein contemplated.
9.2 Access to Information. Sellers, from and after the date of this
Agreement and until the Closing Date, shall give Purchaser and Purchaser's
employees and counsel full and complete access upon reasonable notice during
normal business hours, to all officers, employees, offices, properties,
agreements, records and affairs of the Companies or otherwise relating to the
Business, will provide Purchaser with all regularly prepared financial
statements of the Companies, and will provide copies of such information
concerning the Companies and the Business as Purchaser may reasonably request;
provided, however, that the foregoing shall not permit Purchaser or any agent
thereof to (i) disrupt the Business or (ii) contact any employee of any Company
without providing reasonable prior notice to Sellers and allowing a
representative of Sellers to be present. In addition, while Purchaser may
perform a Phase I study, Purchaser shall not perform intrusive testing on any
Real Property without Sellers' consent, which will not be unreasonably withheld.
9.3 Conduct of Business Prior to Closing. Except as contemplated by
this Agreement, from and after the date hereof Sellers shall use their
reasonable best efforts (without requiring Sellers or the Companies to incur
material costs or expenses outside the ordinary course of the Business) to
conduct such Business in the ordinary course. Except as contemplated by this
Agreement or as consented to by Purchaser (which consent shall not unreasonably
be withheld), from and after the date hereof Sellers shall act, and shall cause
the Companies to act, as follows:
(a) The Companies will not adopt any material change in any method of
accounting or accounting practice, except as contemplated or required by GAAP;
(b) None of the Companies will amend its charter or by-laws;
(c) Except (i) for the disposition of obsolete equipment in the
ordinary course of business, or (ii) as set forth on Schedule 9.3 hereto, none
of the Companies will sell, mortgage, pledge or otherwise dispose of any
material assets or properties owned or used in the operation of the Business;
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(d) None of the Companies will merge or consolidate with, or agree to
merge or consolidate with, or purchase or agree to purchase all or substantially
all of the assets of, or otherwise acquire, any other business entity;
(e) None of the Companies will authorize for issuance, issue or sell
any additional shares of its capital stock or any securities or obligations
convertible into shares of its capital stock or issue or grant any option,
warrant or other right to purchase any shares of its capital stock;
(f) None of the Companies will incur, or agree to incur, any debt f or
borrowed money other than draws under the Companies, existing revolving credit
agreement; and
(g) None of the Companies will change its historic practices concerning
the payment of accounts payable.
9.4 H-S-R Act. Each of Purchaser and Sellers shall, within ten Business
Days following the date hereof, file duly completed and executed Pre-Merger
Notification and Report Forms as required under the H-S-R Act and shall
otherwise use their respective best efforts (without requiring either Purchaser
or Sellers to incur material costs or expenses) to comply promptly with any
requests made by the Federal Trade Commission or the Department of Justice
pursuant to the H-S-R Act or the regulations promulgated thereunder. All filing
fees and other similar payments in connection with the H-S-R Act shall be split
equally by Purchaser and the Company.
9.5 FCC Application.
(a) Each of Purchaser and Sellers shall, within five Business Days
following the date hereof, file with the FCC the FCC Applications; provided that
the parties shall cooperate with each other in the preparation of the FCC
Applications and shall in good faith and with due diligence take all reasonable
steps necessary to expedite the processing of the FCC Applications and to secure
such consents or approvals as expeditiously as practicable. If the Closing shall
not have occurred for any reason within the initial effective periods of the
granting of FCC approval of any of the FCC Applications, and no party shall have
terminated this Agreement under Section 14, the parties shall jointly request
and use their respective best efforts to obtain one or more extensions of the
effective periods of such grants. No party shall knowingly take, or fail to
take, any action the intent or reasonably anticipated consequence of which would
be to cause the FCC not to grant approval of the FCC Applications.
(b) Sellers shall publish the notices required by the FCC Rules and
Regulations relative to the filing of the FCC Applications. Copies of all
applications, documents and papers filed after the date hereof and prior to the
Closing, or filed after the Closing with respect to the transactions under this
Agreement, by Purchaser or Sellers with the FCC shall be mailed to the other
simultaneously with the filing of the same with the FCC. Each party shall bear
its own costs and expenses (including the fees and disbursements of its counsel)
in connection with the
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preparation of the portion of the application to be prepared by it and in
connection with the processing of that application. All filing and grant fees,
if any, paid to the FCC, shall be borne 50% by Purchaser and 50% by the Company.
None of the information contained in any filing made by Purchaser or Sellers
with the FCC with respect to the transactions contemplated by this Agreement
shall contain any untrue statement of a material fact.
9.6 Books and Records. Following the Closing, Purchaser shall permit
each Seller (a) to have reasonable access to the books and records of Purchaser
and those retained or maintained by the Companies relating to the operation of
the Business prior to the Closing or after the Closing to the extent related to
transactions or events occurring prior to the Closing, and (b) to have
reasonable access to employees of the Companies and Purchaser to obtain
information relating to such matters. Purchaser shall maintain such books and
records for a period of seven years following the Closing.
9.7 Employees and Employee Benefits.
(a) Purchaser acknowledges that the Companies are party to the
employment contracts identified on Schedule 9.7 hereto, which shall continue for
the benefit of the Companies following the Closing.
(b) Purchaser acknowledges that the employment contracts listed on
Schedule 9.7 contain severance obligations that will be the obligation of
Purchaser following the Closing. With regard to the employment contract with
Albert M. Holtz, Purchaser acknowledges that Mr, Holtz will be resigning from
Superior as of the Closing Date and that, under Section 13(b) of his employment
agreement, he is entitled to receive his base salary of $150,000 and current
benefits for one year. On the Closing Date, the Company will pay $150,000 less
applicable withholding to Mr. Holtz and will agree to maintain, at Superior's
expense, Mr, Holtz's existing healthcare and disability insurance for one year.
At or before the Closing, Superior will, if requested by Mr. Holtz, transfer to
Mr, Holtz, at no cost, any life insurance policy maintained by Superior on Mr.
Holtz's life, Perry A. Sook has a similar contract with Superior. In the event
that he decides to terminate the contract as a result of the change of control
of Superior, he will be entitled to be treated in the same manner as Mr. Holtz
under this section. Any payment by Superior under this section will not reduce
Cash on Hand.
(c) The Sellers may direct the Companies to pay bonuses to various
employees in connection with the transfer of the Stations, Any such amounts (and
related payroll taxes) shall reduce Cash on Hand, To the extent such amounts
cause Cash on Hand to become negative, they will reduce the Purchase Price.
9.8 Control of Stations. From the date hereof until the Closing Date,
subject to the express provisions of this Agreement, Purchaser shall not
directly or indirectly control, supervise or direct the operation of the
Stations.
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SECTION 10
INDEMNIFICATION
10.1 Indemnification of Purchaser by Sellers. (a) Subject to Section
10.3 hereof, each Seller, for itself or himself, as the case may be, and not
jointly, shall indemnify and hold Purchaser harmless from and against any and
all Loss, however incurred, which arises out of or results from any breach by
such Seller of any representation or warranty of such Seller as to itself or
himself, in Section 5.1 of this Agreement.
(b) Subject to Section 10.3 hereof, Sellers shall jointly and severally
indemnify and hold Purchaser harmless from and against any and all Loss,
howsoever incurred, which arises out of or results from:
(i) any breach by Sellers of any representation or warranty of
Sellers set forth in Section 5 of this Agreement other than any representation
or warranty of any Seller set forth in Section 5.1 of this Agreement; or
(ii) the material failure by Sellers to perform any covenant
of Sellers contained herein.
10.2 Indemnification of Sellers by Purchaser. Subject to Section 10.3
hereof, Purchaser shall indemnify and hold Sellers harmless from and against any
and all Loss, howsoever incurred, which arises out of or results from:
(a) any breach by Purchaser of any representation or warranty of
Purchaser set forth in Section 6 of this Agreement;
(b) the material failure by Purchaser t~o perform any covenant of
Purchaser contained herein;
(c) the assertion of any claim by any third party against Sellers or
any Affiliate thereof (other than the Companies) relating to any aspect of the
Business, including, without limitation, any past, present or future liabilities
or obligations of the Companies, whether actual or contingent other than any
claim constituting a breach of representation or warranty by Sellers in this
Agreement,
10.3 Limitations and Other Provisions Regarding Indemnification
Obligations.
(a) Notwithstanding the provisions of Section 10.1 hereof , Purchaser
shall not be entitled to receive indemnification payments with respect to any
Loss under Section 10.1 hereof except if and to the. extent that (i) the
aggregate amount of Losses incurred by Purchaser and its Affiliates to which it
or they would otherwise be entitled to indemnification under Section 10.1
hereof, exceeds $ 200,000, (ii) with respect to Tax Liabilities only, such Tax
Liability exceeds the Tax Reserve and (iii) with respect to Losses after the
first Loss for which Purchaser claims indemnification, such Loss exceeds
$50,000.
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(b) No party otherwise required to indemnify any other party with
respect to any Tax Liability shall have any obligation to indemnify such other
party until there has been a Final Determination with respect to any such Taxes,
at which time indemnification shall be promptly made.
(c) In case any event shall occur which would otherwise entitle
Purchaser to assert a claim for indemnification hereunder, no Loss shall be
deemed to have been sustained by Purchaser to the extent of (i) any tax savings
realized or realizable by Purchaser or its Affiliates with respect thereto, or
(ii) the failure by Purchaser to mitigate such Loss as provided in Section
10.3(f) hereof, or (iii) any proceeds received or otherwise recoverable by
Purchaser from any third party, including but not limited to any insurance
carrier.
(d) In addition to the other limitations set forth in this Section 10:
(i) Each Seller's liability for its indemnification
obligations in Section 10.1 (a) hereof shall not exceed its Pro Rata Share of
the aggregate payments required to be made by Sellers thereunder (each Seller's
Pro Rata Share being the percentage of the proceeds received by all Sellers
under this Agreement which is received by such Seller under this Agreement) ;
and
(ii) Sellers, liability for their indemnification obligations
in Section 10.1(b) hereof shall not exceed the amount of the indemnification
Escrow, and Purchaser's right to indemnification shall be limited to the monies
contained in the Indemnification Escrow.
(e) No claim for indemnification for a Loss shall be made after
expiration of the applicable period set forth in Section 7.1 hereof.
(f) Purchaser shall take or cause to be taken all such steps and
actions as are necessary or as Sellers may reasonably require in order to
mitigate any Loss otherwise indemnifiable under this Agreement. Nothing in this
Agreement shall, or shall be deemed to, relieve Purchaser of any common law or
other duty to mitigate any Loss incurred by it. In no event shall Sellers be
liable to Purchaser for any indirect, special, incidental or consequential loss
or damages.
(g) Indemnification pursuant to this Section 10 shall be the sole and
exclusive remedy of each party hereto with respect to any Loss as to which the
provisions of Sections 10.1 or 10.2 hereof, as the case may be, are applicable,
notwithstanding that indemnification may not be available.
(h) Any payments made by either party hereto pursuant to this Section
10 shall be treated as an adjustment to the Purchase Price.
10.4 Notice of Claim Defense of Action.
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(a) An indemnif ied party shall promptly give the indemnifying part
(ies) notice of any matter which an indemnified party has determined has given
or could give rise to a right of indemnification under this Agreement, stating
the nature and, if known, the amount of the Loss, and method of computation
thereof, all with reasonable particularity and containing a reference to the
provisions of this Agreement in respect of which such right to indemnification
is claimed or arises; provided that the failure of any party to give notice
promptly as required in this Section 10.4 shall not relieve any indemnifying
party of its indemnification obligations except to the extent that such failure
materially prejudices the rights of such indemnifying party. The indemnif ied
party shall give continuing notice promptly thereafter of all developments
coming to the indemnified party's attention materially affecting any matter
relating to any indemnification claims.
(b) The obligations and liabilities of an indemnifying party under this
Section 10 with respect to Losses arising from claims of any third party that
are subject to the indemnification provided for in this Section 10, shall be
governed by and contingent upon the following additional terms and conditions:
(i) With respect to third party claims, promptly after receipt
by an indemnified party of notice of the commencement of any action or the
presentation or other assertion of any claim which could result in any
indemnification claim pursuant to Section 10.1 or 10.2 hereof, such indemnified
party shall give prompt notice thereof to the indemnifying part(ies) and the
indemnifying part (ies) shall be entitled to participate therein or, to the
extent that it shall wish, assume the defense thereof with its own counsel.
(ii) If the indemnifying part(ies) elects to assume the
defense of any such action or claim, the indemnifying part (ies) shall not be
liable to the indemnified party for any fees of other counsel or any other
expenses, in each case incurred by such indemnified party in connection with the
defense thereof, unless representation of both parties by the same counsel would
be prohibited under the applicable Code of Professional Responsibility.
(iii) The indemnifying part(ies) shall be authorized, without
consent of the indemnified party being required, to settle or compromise any
such action or claim, provided that such settlement or compromise includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim.
(iv) Whether or not an indemnifying part(ies) elects to assume
the defense of any action or claim, the indemnifying part(ies) shall not be
liable for any compromise or settlement of any such action or claim effected
without its consent, such consent not to be unreasonably withheld.
(v) The parties agree to cooperate to the fullest extent
possible in connection with any claim for which indemnification is or may be
sought under this Agreement, including, without limitation, making available all
witnesses, pertinent records, materials and information
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in its possession or under its control relating thereto as is reasonably
requested by the other party.
SECTION 11
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PARTIES TO CLOSE
11.1 Conditions to the Obligation of Purchaser. The obligation of
Purchaser to consummate the Closing is subject to the fulfillment or waiver, on
or prior to the Closing Date, of each of the following conditions precedent:
(a) Sellers shall have complied in all material respects with their
agreements and covenants contained herein to be performed at or prior to the
Closing, and the representations and warranties of Sellers contained herein
shall be true and correct in all material respects on and as of the Closing Date
with the same effect as though made on and as of the Closing Date, except that
representations and warranties that were made as of a specified date shall
continue on the Closing Date to have been true as of the specified date, and
Purchaser shall have received a certificate of one of Sellers' Agents, dated as
of the Closing Date and signed by Sellers Agent, certifying as to the
fulfillment of the condition set forth in this Section 11.1(a) (Sellers' Bring-
Down Certificate").
(b) No statute, rule or regulation, or order of any court or
administrative agency shall be in effect which restrains or prohibits Purchaser
from consummating the transactions contemplated hereby.
(c) All applicable waiting periods under the H-S-R Act shall have
expired or been terminated.
(d) All consents identified on Schedule 5.17, if any, shall have been
received.
(e) The Initial Orders approving the applications for transfer of
control of the Companies holding the FCC Licenses shall have been obtained. All
the material conditions contained in the Initial Orders required to be satisfied
on or prior to the Closing Date shall have been duly satisfied and performed.
Notwithstanding the foregoing, if the consent of the FCC is conditional or
qualified in any manner (other than one relating to WSTR-TV) that has a Material
Adverse Effect on Purchaser, Purchaser may, nevertheless, in its sole
discretion, require the consummation of the transactions contemplated by this
Agreement, but shall not be required to do so. No reporting conditions,
admonitions or forfeitures shall be deemed to have such a Material Adverse
Effect.
(f) Sellers shall have delivered to Purchaser at the Closing each
document required by Section 12.1 hereof.
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(g) The Company shall have delivered to Purchaser a written statement
from Heller Financial, Inc., as to the amount of Funded Debt held by it on the
Closing Date.
11.2 Conditions Precedent to the Obligation of Sellers. The obligation
of Sellers to consummate the Closing is subject to the fulfillment or waiver, on
or prior to the Closing Date, of each of the following conditions precedent:
(a) Purchaser shall have complied in all material respects with its
agreements and covenants contained herein to be performed at or prior to the
Closing, and the representations and warranties of Purchaser contained herein
shall be true and correct in all material respects on and as of the Closing Date
with the same effect as though made on and as of the Closing Date, except that
representations and warranties that were made as of a specified date shall
continue on the Closing Date to have been true as of the specified date, and
Seller shall have received a certificate of Purchaser, dated as of the Closing
Date and signed by an officer of Purchaser, certifying as to the fulfillment of
the condition set forth in this Section 11.2(a) ("Purchaser's Bring-Down
Certificate") .
(b) No statute, rule, or regulation or order of any court or
administrative agency shall be in effect which restrains or prohibits Sellers
from consummating the transactions contemplated hereby.
(c) All applicable waiting periods under the H-S-R Act shall have
expired or been terminated.
(d) The issuance by the FCC of Initial Orders approving the
applications for transfer of control of the material FCC Licenses contemplated
by this Agreement shall have occurred. There shall have been duly satisfied and
performed on or prior to the Closing Date all the material conditions contained
in the Initial orders required to be so satisfied;
(e) Purchaser shall have delivered to Sellers at the Closing the
Purchase Price and each document required by Section 12.2 hereof.
SECTION 12
DELIVERIES AT THE CLOSING
12.1 Deliveries by Sellers. At the Closing, Sellers will deliver or
cause to be delivered at the Closing to Purchaser:
(a) Sellers' Bring-Down Certificate;
(b) a legal opinion of Kirkpatrick & Lockhart LLP, counsel to Sellers,
substantially in the form attached as Exhibit C hereto;
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(c) stock certificates evidencing the Stock, together with stock
powers, dated as of the Closing Date and executed by the respective Sellers,
transferring the Stock to Purchaser; and
(d) the original corporate minute books, stock registry and seal of
each of the Companies (to the extent available).
12.2 Deliveries by Purchaser. Purchaser will deliver or cause to be
delivered at the Closing to Sellers, the Disbursing Agent or the Indemnification
Escrow Agent, as the case may be:
(a) Purchaser's Bring-Down Certificate;
(b) a legal opinion of Thomas & Libowitz, P,A., counsel to Purchaser,
substantially in the form attached as Exhibit D hereto; and
(c) the Purchase Price as required pursuant to Section 3.1 hereof.
SECTION 13
EXPENSES
Except as provided in Sections 9.4 and 9.5, each party will pay its own
fees, expenses, and disbursements and those of its counsel in connection with
the subject matter of this Agreement (including the negotiations with respect
hereto and the preparation of any document(s) and all other costs and expenses
incurred by it in the performance and compliance with all conditions and
obligations to be performed by it pursuant to this Agreement or as contemplated
hereby.
SECTION 14
TERMINATION
(a) Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to Closing:
(i) by mutual written consent of Purchaser and Sellers; or (ii) by any party to
this Agreement, upon written notice to the other parties, at any time after 240
days following the date hereof, except that the right to terminate this
Agreement pursuant to this Section 14 shall not be available to (A) Sellers, if
the failure to consummate the Closing on or before such date was caused by or
resulted from Sellers' failure to fulfill any of their obligations under this
Agreement or (B) Purchaser, if the failure to consummate the Closing on or
before such date was caused by or resulted from Purchaser's failure to fulfill
any of its obligations under this Agreement. Upon such termination, all further
obligations of the parties hereto shall become null and void and no party shall
have any liability to any other party, unless the basis for such termination was
the failure by such party to fulfill its covenants and agreements set forth
herein. Notwithstanding anything to the contrary herein, the
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provisions of the Confidentiality Letter dated as of October 27, 1995 between
Purchaser's representative and the Company (the "Confidentiality Agreement"),
shall remain in effect either until the Closing, if it occurs, or for the stated
term thereof, if there is no Closing.
(b) Liquidated Damages, Notwithstanding anything to the
contrary contained in this Agreement, if Purchaser shall default in its
obligations to consummate this Agreement, then Sellers shall receive upon
demand, as liquidated damages for and in full settlement of all claims against
Purchaser in connection with this Agreement, the amount deposited by Purchaser
with the Escrow Agent, the nature of this transaction being such as will not
permit any exact determination of the damage that may be suffered by Sellers
under such circumstances.
SECTION 15
NOTICES
All notices, requests, consents, payments, demands, and other
communications required or contemplated under this Agreement shall be in writing
and (a) personally delivered or sent via telecopy (receipt confirmed). or (b)
sent by Federal Express or other reputable overnight delivery service (for next
Business Day delivery), shipping prepaid, as follows:
If to Purchaser to:
Mr. David Smith
Chief Executive Officer
Sinclair Broadcast Group, Inc,
2000 West 41st Street
Baltimore, MD 21211-1420
Fax: 410-467-5043
With a copy to:
Steven A, Thomas, Esq.
Thomas & Libowitz, P.A.
Suite 1100
100 Light Street
Baltimore, MD 21202-1053
Fax: 410-752-2046
If to Sellers to:
Albert M. Holtz
Chairman
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Superior Communications Group, Inc.
Manor Oak II
Suite 658
Pittsburgh, PA 15220
with a copy to:
John C. Rodney, Esquire
Kirkpatrick & Lockhart LLP
1500 Oliver Building
Pittsburgh, PA 15222
or to such other Persons or addresses as any Person may request by notice given
as aforesaid, Notices shall be deemed given and received at the time of personal
delivery or completed telecopying, or, if sent by Federal Express or such other
overnight delivery service one Business Day after such sending.
SECTION 16
SELLERS' AGENTS
16.1 Sellers' Agents. Each of the Sellers hereby irrevocably appoints
Albert M. Holtz, PNC Capital Corp and Primus Capital Fund II Limited Partnership
(herein called the "Sellers' Agents") as his or its agent and attorney-in-fact
to take any action required or permitted to be taken by such Seller under the
terms of this Agreement, including without limiting the generality of the
foregoing, the payment of expenses relating to the transactions contemplated by
the Agreement, and the right to waive modify or amend any of the terms of this
Agreement in any respect, whether or not material, and agrees to be bound by any
and all actions taken by the Sellers' Agents on his or its behalf. Any action to
be taken by the Sellers, Agents shall be unanimous. In the event of the death,
incapacity or liquidation of any of Sellers' Agents, such person or entity shall
not be replaced and the remaining Sellers' Agents shall continue in that
capacity. The Sellers agree jointly and severally to indemnify the Sellers'
Agents from and against and in respect of any and all liabilities, damages,
claims, costs, and expenses, including but not limited to attorneys' fees,
arising out of or due to any action by them as the Sellers, Agents and any and
all actions, proceedings, demands, assessments, or judgments, costs, and
expenses incidental thereto, except to the extent that the same result from bad
faith or gross negligence on the part of the Sellers' Agents, Purchaser shall be
entitled to rely exclusively upon any communications given by the Sellers'
Agents on behalf of any Seller, and shall not be liable for any action taken or
not taken in reliance upon the Sellers, Agents, Purchaser shall be entitled to
disregard any notices or communications given or made, by Sellers unless given
or made through the Sellers' Agents.
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<PAGE>
SECTION 17
MISCELLANEOUS
17.1 Headings. The headings contained in this Agreement (including but
not limited to the titles of the Schedules and Exhibits hereto) have been
inserted for the convenience of reference only, and neither such headings nor
the placement of any term hereof under any particular heading shall in any way
restrict or modify any of the terms or provisions hereof. Terms used in the
singular shall be read in the plural, and vice versa, and terms used in the
masculine gender shall be read in the feminine or neuter gender when the context
so requires.
17.2 Schedules and Exhibits. All Schedules and Exhibits attached to
this Agreement constitute an integral part of this Agreement as if fully
rewritten herein.
17.3 Execution in Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same document.
17.4 Entire Agreement. This Agreement, the Related Agreements and the
documents to be delivered hereunder and thereunder constitute the entire
understanding and agreement between the parties hereto concerning the subject
matter hereof. All negotiations and writings between the parties hereto are
merged into this Agreement, and there are no representations, warranties,
covenants, understandings, or agreements, oral or otherwise, in relation thereto
between the parties other than those incorporated herein or to be delivered
hereunder.
17.5 Governing Law. This Agreement is to be delivered in and should be
construed in accordance with and governed by the laws of the Commonwealth of
Pennsylvania without giving effect to conflict of laws principles.
17.6 Modification. This Agreement cannot be modified or amended except
in writing signed by each of the parties hereto.
17.7 Successors and Assigns. Neither this Agreement nor any of the
rights and obligations hereunder shall be assigned, delegated, sold,
transferred, sublicensed, or otherwise disposed of by operation of law or
otherwise, without the prior written consent of each of the other parties
hereto, provided, however, that Purchaser may assign its rights and obligations
hereunder to one or more subsidiaries so long as Purchaser is not relieved of
its obligations hereunder. In the event of such permitted assignment or other
transfer, all of the rights, obligations, liabilities, and other terms and
provisions of this Agreement shall be binding upon, inure to the benefit of, and
be enforceable by and against, the respective successors and assigns of the
parties hereto, whether so expressed or not.
17.8 Waiver. Any waiver of any provision hereof (or in any related
document or instrument) shall not be ef f ective unless made expressly and in a
writing executed in the name of the party sought to be charged. The failure of
any party to insist, in any one or more instances, on performance of any of the
terms or conditions of this Agreement shall not be
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<PAGE>
construed as a waiver or relinquishment of any rights granted hereunder or of
the future performance of any such term, covenant, or condition, but the
obligations of the parties with respect hereto shall continue in full force and
effect.
17.9 Severability. The provisions.of this Agreement shall be deemed
severable, and if any part of any provision is held to be illegal, void,
voidable, invalid, nonbinding or unenforceable in its entirety or partially or
as to any party, for any reason, such provision may be changed, consistent with
the intent of the parties hereto, to the extent reasonably necessary to make the
provision, as so changed, legal, valid, binding, and enforceable. If any
provision of this Agreement is held to be illegal, void, voidable, invalid,
nonbinding or unenforceable in its entirety or partially or as to any party, for
any reason, and if such provision cannot be changed consistent with the intent
of the parties hereto to make it fully legal, valid, binding and enforceable,
then such provisions shall be stricken from this Agreement, and the remaining
provisions of this Agreement shall not in any way be affected or impaired, but
shall remain in full force and effect.
17.10 Announcements. From the date of this Agreement, all further
public announcements relating to this Agreement or the transactions contemplated
hereby will be made only as agreed upon jointly by the parties hereto, except
that nothing herein shall prevent any Seller or any Affiliate thereof or
Purchaser from making any disclosure in connection with the transactions
contemplated by this Agreement if required by applicable law or otherwise as a
result of its, or its Affiliate's, being a public company, provided that prior
notice of such disclosure is given to the other party hereto.
17.11 Specific Performance. Sellers acknowledge that Purchaser will
have no adequate remedy at law if Sellers fail to perform their obligation to
consummate the sale of Stock contemplated under this Agreement. In such event,
Purchaser shall have the right, in addition to any other rights it may have, to
specific performance of this Agreement.
IN WITNESS WHEREFORE, the parties hereto have caused this Agreement to
be duly executed as of the date and year first written above.
PURCHASER: SELLERS:
SINCLAIR BROADCAST GROUP, INC. PNC CAPITAL CORP.
By:/s/ David Smith By:/s/ Gary J. Zentner
David Smith Gary J. Zentner
Title: Chief Executive Off icer Title: Presdient
PRIMUS CAPITAL FUND II
LIMITED PARTNERSHIP
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<PAGE>
By: Primus Management II,
General Partner
By: Primus Venture Partners,
General Partner
Title:/s/ Kevin J. McGinty
Kevin J. McGinty
General Partner
/s/ Albert M. Holtz
ALBERT M. HOLTZ
/s/ Perry A. Sook
PERRY A. SOOK
/s/ Richard J. Roberts
RICHARD J. ROBERTS
/s/ George F. Boggs
GEORGE F. BOGGS
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<PAGE>
ANNEX 1
DEFINITIONS
As used in the attached Stock Purchase Agreement, the
following terms shall have the corresponding meaning set forth below:
a. "Affiliate" of, or a Person "Affiliated" with, a
specified Person, means a Person who directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, the
Person specified.
b. "Agreement" has the meaning set forth in the preamble
to the attached Stock Purchase Agreement.
c. "Business" means the business of owning and operating
the Stations.
d. "Business Day" means any day on which banks in New
York City are open for business.
e. "Cash on Hand" means the amount of cash held on the
Closing Date by the Companies in bank accounts, money market funds and other
locations, provided, however, that Cash on Hand shall be reduced by any amounts
previously due as of the Closing Date under any programming contracts and not
yet paid.
f. "CERCLA" has the meaning set forth in Section 5.18 of
the Agreement.
g. "Closing" has the meaning set forth in Section 4 of
the Agreement.
h. "Closing Date" has the meaning set forth in Section 4
of the Agreement.
i. "Code" means the Internal Revenue Code of 1986, as
the same may be amended from time to time.
j. "Stock" has the meaning set forth in the recitals to
the Agreement.
k. "Company" has the meaning set forth in the recitals
to the Agreement.
l. "Companies" means the company and each of its
Subsidiaries.
m. "Companies" Knowledge" mean the actual knowledge,
after due inquiry, of Albert M. Holtz, Richard J. Roberts, Perry A.Sook or
George F. Boggs or any other individuals responsible for the day-to-day
operations of the Stations.
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<PAGE>
n. "Confidentiality Agreement" has the meaning set forth
in Section 14 of the Agreement.
o. "Deposit Escrow Agreement" has the meaning set forth
in Section 3.1 of the Agreement.
p. "Disbursing Agent" means Kirkpatrick & Lockhart LLP.
q. "Disbursement Agreement" means that certain
Disbursement Agreement dated as of March 1, 1996, among the Disbursing Agent and
the Sellers.
r. "Environment" means any surface or subsurface
physical medium or natural resource, including, air, land, soil (surface or
subsurface), surface waters, ground waters, wetlands, stream and river
sediments, rock and biota.
s. "Environmental Laws" means any federal, state, or
local law, legislation, rule, regulation, ordinance or code of the United States
or any subdivision thereof relating to the injury to, or the pollution or
protection of, human health and safety or the Environment.
t. "Environmental Liability" means any loss, liability,
damage, cost or expense arising under any Environmental Law.
u. "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
v. "FCC" has the meaning set forth in the recitals to
the Agreement.
w. "FCC Applications" has the meaning set forth in
Section 5.17 of the Agreement.
x. "FCC Licenses" has the meaning set forth in Section
5.8 of the Agreement.
y. "FCC Rules and Regulations" has the meaning set forth
in Section 5.8 of the Agreement.
z. "Final Determination" means, with respect to any
United States federal Tax liability (1) a final, unappealable decision by a
court of competent jurisdiction; (ii) the expiration of the statute of
limitations for claiming a refund or, if a refund claim has been timely filed,
the expiration of the time for instituting suit in respect of such refund claim;
(iii) the execution by or on behalf of the taxpayer and the Internal Revenue
Service of a closing agreement under Section 7121 of the Code; or (iv) any other
final and irrevocable determination of such Tax liability, including, without
limitation, execution of Form 870-AD (or its successor). In the
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<PAGE>
context of foreign, state or local Taxes, "Final Determination" shall mean any
event with similar final effect; provided, however, that if the meaning of this
term shall be unclear under foreign, state or local law, it shall mean any
final, unappealable and irrevocable determination of such Tax liability.
aa. "Financial Statements" means the consolidated balance
sheet of the Company as of December 31, 1994 and the consolidated income
statement and statement of changes in financial condition for the calendar year
1994.
ab "Funded Debt" means the principal amount of all
indebtedness of any Company for borrowed money or the deferred purchase price of
any property plus the amount required to be recorded as a liability on the
financial statements of any Company in accordance with GAAP with respect to any
capital lease.
ac. "GAAP" means generally accepted accounting
principles.
ad. "Hazardous Substances" means petroleum, petroleum
products, petroleum-derived substances, radioactive materials, hazardous wastes,
polychlorinated biphenyls , lead based paint, urea formaldehyde, asbestos or any
materials containing asbestos, and any materials or substances regulated or
defined as or included in the definition of "hazardous substances," "hazardous
materials," "hazardous constituents," "toxic substances," "pollutants,
"pollutants," "contaminants" or any similar denomination intended to classify
substances by reason of toxicity, carcinogenicity, ignitability, corrosivity or
reactivity under any Environmental Laws.
ae. "H-S-R Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
af. "Initial Order" means an action by the FCC granting
its consent to the transfer of control of the Companies holding the FCC Licenses
without regard to any period during which an appeal may be filed or any similar
action taken that might result in a reversal of the action. In the case of
WNTZ-600, and any other FCC auxiliary authorizations which cannot be transferred
on FCC form 315, "Initial order" shall include a Special Temporary
Authorization, or other comparable instrument, which permits the Purchaser to
operate the underlying facility pending receipt of FCC consent to its transfer.
ag. "Intellectual Property" means the patents, patent
applications, trademark registrations and applications therefor, service mark
registrations and applications therefor, copyright registrations and
applications therefor and trade names that are (i) owned by any of the Companies
and (ii) material to the continued operation of the Business.
ah. "IRS" means the Internal Revenue Service.
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<PAGE>
ai. "Indemnification Escrow Agreement" has the meaning
set forth in Section 3.1 of the Agreement.
aj. "Indemnification Escrow" has the meaning set forth in
Section 3.1 of the Agreement.
ak. "Knowing Party" has the meaning set forth in Section
7.3 of the Agreement.
al. "Loss" means any loss, liability, damage, cost or
expense (including, without limitation, reasonable attorneys' fees and
expenses).
am. "Material Adverse Effect" shall mean a material
adverse effect on the business or financial condition of the Companies taken as
a whole.
an. "Material Contract" means all agreements to which any
of the Companies is a party or by or to which it or its assets or properties are
bound, except: (i) agreements for the cash sale of advertising time with a term
of less than six months, (ii) agreements cancelable on no more than 90 days'
notice without material penalty, or (iii) agreements which are otherwise
immaterial to the Business and the Stations.
ao. "Other Party" has the meaning set forth in Section
7.3 of the Agreement.
ap. "Partnership" means Superior Communications of
Kentucky, L.P., the predecessor of Superior Communications of Kentucky, Inc,
aq. "Partnership Financial Statements" means the balance
sheet of the Partnership as of December 31, 1993 and the consolidated income
statement and statement of changes in financial condition of the Partnership for
the calendar year 1993.
ar. "Permitted Exceptions" means matters that (i) do not
render title to the Real Property unmarketable or (ii) do not prohibit or
materially adversely affect the continued existence and/or continued use (as
presently used) or maintenance of the material buildings, structures or
improvements presently located on the Real Property. Notwithstanding the
foregoing, any matter shown on Schedule 5.5 shall be considered a Permitted
Exception.
as. "Person" means a natural person, a governmental
entity, agency or representative (at any level of government), a corporation,
partnership, joint venture or other entity or association, as the context
requires.
at. "Plan" has the meaning set forth in Section 5.10 of
the Agreement.
au. "Purchase Price" has the meaning set forth in Section
3.1 of the Agreement.
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<PAGE>
av. "Purchaser" has the meaning set forth in the preamble
to the Agreement.
aw. "Purchaser's Bring-Down Certificate" has the meaning
set forth in Section 11.2 (a) of the Agreement.
ax. "Purchaser's Knowledge" means the actual knowledge,
af ter due inquiry, of the officers of Purchaser.
ay. "Real Property" means any real property owned or
leased by any of the Companies.
az. "Related Agreement" means any document delivered at
the Closing and any contract which is to be entered into at the Closing or
otherwise pursuant to this Agreement, including, without limitation the
Confidentiality Agreement and the Escrow Agreement.
aaa. "Returns" means all returns, reports, estimates,
information returns and statements (including any related or supporting
information) filed or to be filed with any Tax Authority in connection with the
determination, assessment, collection or administration of any Taxes.
aab. "Sellers" has the meaning set forth in the preamble
to the Agreement.
aac. "Sellers' Bring-Down Certificate" has the meaning set
forth in Section 10.1(a) of this Agreement.
aad. "Stations" has the meaning set forth in the recitals
to the Agreement.
aae. "Subsidiary", as it relates to any Person, means a
corporation of which such person or entity owns, directly or indirectly, more
than 50% of the common stock.
aaf. "Tax" or "Taxes" means all taxes, including, but not
limited to, income (whether net or gross) , excise, property sales, transfer,
gains, gross receipts, occupation, privilege, payroll, wage, unemployment,
workers' compensation, social security, occupation, use, value added, franchise,
license, severance, stamp, premium, windfall profits, environmental (including
taxes under Code Sec. 59A), capital stock, withholding, disability,
registration, alternative or add-on minimum, estimated or other tax of any kind
whatsoever (whether disputed or not) imposed by any Tax Authority, including any
related charges, fees, interest, penalties, additions to tax or other
assessments.
aag. "Tax Authority" means any federal, national foreign,
state, municipal or other local government, any subdivision, agency, commission
or authority thereof, or any quasi-governmental body or other authority
exercising any taxing or tax regulatory authority.
aah. "Tax Liability" means any liability for a Tax.
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<PAGE>
aai. "Tax Proceeding" means any audit, other
administrative proceeding or judicial proceeding involving Taxes.
aaj. "Tax Reserve" means the amount of deferred taxes
reflected as a liability on the Companies' December 31, 1995 balance sheet,.
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<PAGE>
ANNEX 2
Number of Shares
Stockholder Class A Class B
Common Common Preferred
PNC Capital Corp. -- 4,857.76 4,326.04
Primus Capital Fund
II Limited -- 3,791.23 3,356.87
Partnership
Albert M. Holtz 874 318.915 385.06
Perry A. Sook 362 28.5 --
Richard J. Roberts 120.7 28.5 --
George F. Boggs -- 28.5 --
Albert M. Holtz, 257 58 40
Trustee for the
Irrevocable Deed of
Trust for Tara
Ellen Holtz
Albert M. Holtz,
Trustee for the
Irrevocable Deed of
Trust for Meghan
Ellen Holtz 257 58 40
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Exhibit 10.12
ASSET PURCHASE AGREEMENT
THIS AGREEMENT FOR PURCHASE OF ASSETS ("this Agreement") is dated as of
January 16, 1996, and is by and between Bloomington Comco, Inc. duly organized
under the laws of the State of Illinois (referred to herein as "Seller" ), and
WYZZ, Inc., a corporation duly organized under the laws of the State of Maryland
("Buyer").
RECITALS
WHEREAS, Seller owns certain assets and is the licensee of certain
broadcast licenses issued by the Federal Communications Commission ("FCC") (the
"Station Assets") as described in more detail in Article I hereof and which are
used in connection with the business and operation of broadcast station WYZZ-TV
Channel 43, Peoria/Bloomington, Illinois, (the "Station").
WHEREAS, Seller desires to sell to Buyer the Station and the Station
Assets described in more detail below, and Buyer desires to acquire the Station
Assets all on the terms described herein.
WHEREAS, at the Closing (as defined in Section 2.2 herein) Seller will
transfer to Buyer all of the Station Assets described in this Agreement and
existing on the Closing Date.
NOW, THEREFORE, IN CONSIDERATION OF the foregoing and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
ARTICLE I
TRANSFER OF ASSETS
1.1 Transfer of Assets. Upon and subject to the terms and conditions
stated in this Agreement, on the Closing Date, Seller shall convey, transfer,
deliver, and, in the case of the FCC Authorizations (as defined below) , assign
to the Buyer, and the Buyer shall acquire, by assignment or otherwise, from
Seller, all of Seller's rights in, to and under the Station Assets described
below.
(a) FCC Authorizations. All FCC Authorizations issued to
Seller with respect to the Station, including, without limitation, those shown
on Schedule 1.1(a) to this Agreement, and all applications therefor, together
with any renewals, extensions, or modifications thereof and additions thereto.
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<PAGE>
(b) Tangible Personal Property. The equipment, vehicles,
furniture, fixtures, transmitting towers, transmitters, office materials and
supplies, spare parts and other tangible personal property of every kind and
description owned as of the date of this Agreement by Seller and used
in-connection with the business and operations of the Station, as more
particularly described on Schedule 1.1(b), and any additions, improvements,
replacements, and alterations thereto made between the date of this Agreement
and the Closing Date, but excluding: (I) all such property which is consumed,
retired, or disposed of by Seller in the ordinary course of their business
between the date of this Agreement and the Closing Date; or (ii) as otherwise
permitted by this Agreement.
(c) Real Property. The real property owned by Seller listed
and designated as such on Schedule 1.1(c) (the "Realty"), and all buildings,
structures, towers, and improvements thereon listed and designated as such on
Schedule 1.1(c) (the "Real Property Improvements") owned as of the date hereof
by Seller and used in the business and operations of the Station and all other
leaseholds and other interests in real property listed and designated as such on
Schedule 1.1(c) (the "Leasehold Interests").
(d) Agreements for Sale of Time. All orders and agreements now
existing or entered into in the Station's ordinary course of business between
the date hereof and the Closing Date for the sale of advertising time on the
Station to the extent unperformed as of the Closing Date.
(e) Program Contracts. All program licenses and contracts
listed on Schedule 1.1(e) under which Seller is authorized to broadcast film
product or programs on the Station, other than the Excluded Contracts (as
defined in Section 1.2(g)), together with all program licenses and contracts
that will have been entered into in the ordinary course of business of the
Station and which have been reviewed with and accented by the Buyer between the
date of this Agreement and the Closing Date and the making of which by Seller is
permitted by this Agreement, to the extent existing as of the Closing Date
(collectively, the "Program Contracts").
(f) Other Contracts. Any contracts (including all operating
lease arrangements, equipment operating leases, and other operating leases)
relating to the Station Assets, to which Seller and/or Station is a party (in
addition to any not included in those set forth in Sections 1.1(c), 1.1(d) and
1.1(e) hereof) (collectively, "Other Contracts") listed on Schedule 1.1(f),
together with all such contracts in any way related to the Station Assets that
will have been entered into in the ordinary course of business of the Station
between the date of this Agreement and the Closing Date and the making of which
by Seller is permitted by this Agreement, to the extent existing as of the
Closing Date. As used in this Agreement, "Contract" means any agreement, lease,
arrangement, commitment, or understanding, written or oral, expressed or
implied, to which the Station or Seller with respect to the Station are a party
or are bound.
(g) Trademarks, etc. The trademarks, service marks, patents,
trade names, jingles, slogans, and logotypes including, without limitation,
Seller's right to use the call letters
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"WYZZ" owned and used by Seller in connection with the business and operation of
the Station Assets by the Station and Seller as of the date hereof listed on
Schedule 1.1(g) to this Agreement ("Trademarks, etc.") as well as any others
acquired by Seller in connection with the business and operation of the Station
Assets by the Station and Seller between the date hereof and the Closing Date.
(h) Programming Copyrights. All program and programming
materials and elements of whatever form or nature owned by Seller and used
solely in connection with the business and operations of the Station as of the
date hereof, whether recorded on tape or any other substance or intended for
live performance, and whether completed or in production, and all related common
law and statutory copyrights owned by or licensed to Seller and used in
connection with the business and operations of the Station, together with all
such programs, materials, elements, and copyrights acquired between the date
hereof and the Closing date as set forth on Schedule 1.1(h) to this Agreement
(collectively, the "Programming Copyrights").
(I) Files and Records. All files and other records of Seller
relating solely to the business and operations of the Station other than account
books of original entry and other than duplicate copies of such files and
records, if any, that are maintained at the corporate offices of Seller or
Seller's parent corporation, if any, for tax accounting purposes.
(j) Goodwill. All of Seller's goodwill in and going concern
value of the Station.
(k) Other Assets. All other assets of Seller relating to the
business and operation of Station Assets by the Station and/or the Seller not
expressly excluded in Section 1.2 hereof.
(l) Prepaid Items. All deposits and prepaid expenses.
(m) Financial Statements, Books,, and Records. Copies of all
financial statements (whether internal, compilation, reviewed, or audited),
including all books, records, accounts, checks, payment records, tax records
(including payroll, unemployment, real estate, and other tax records), and other
such similar books and records of Seller with respect to the station for three
(3) fiscal years immediately preceding the date hereof and all interim periods
following the date hereof through and including the Closing.
(n) Network Affiliation Agreements. Any and all of the
Station's network affiliation agreements, including but not limited to Seller's
affiliation agreement with the Fox Broadcasting Company or Fox Inc.
(collectively "Fox") listed on Schedule 1.1(n) to this Agreement.
1. 2. Excluded Assets. There shall be excluded from the Station Assets
and retained by Seller, to the extent in existence on the Closing Date, the
following assets (the "Excluded Assets") :
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<PAGE>
(a) Cash. All cash, cash equivalents, and cash items of any
kind whatsoever, certificates of deposit, money market instruments, bank
balances, and rights in and to bank accounts, marketable and other securities of
either Seller.
(b) Personal Property Disposed Of. All tangible personal
property disposed of or consumed in the ordinary course of the business of the
Station between the date of this Agreement and the Closing.
(c) Insurance. All contracts of insurance and all insurance
plans and the assets thereof.
(d) Claims. Any and all claims of Seller with respect to
transactions occurring prior to the Closing Date, including, without limitation,
claims for tax refunds and claims of Seller under contracts with respect to
events occurring prior to the Closing Date.
(e) Name. Any right to use the name "Bloomington Comco, Inc.,"
or any logo or variation thereof.
(f) Pension Assets, Etc. Pension, profit sharing, retirement,
bonus, stock purchase, savings plans and trusts, 401(k) plans, health insurance
plans, and the assets thereof, and all other plans, agreements, or
understandings to provide employee benefits of any kind for employees of Seller.
(g) Certain Contracts. The agreements listed on Schedule
1.2(g) hereof (the "Excluded Contracts") and any contract which is not capable
of being transferred or assigned without the approval or consent of any party
thereto or any third party if such approval or consent has not been obtained,
subject, however, to Sections 1.3 and 8.5 hereof.
(h) Certain Books and Records. Seller's account books of
original entry with respect to the Station, and all books, records, accounts,
checks, payment records, tax records (including payroll, unemployment, real
estate, and other tax records), and other similar books, records, and
information of Seller relating to Seller's operation of the business of the
Station prior to Closing, with the proviso that Buyer shall be allowed to
maintain copies of all such records and/or upon a written request for same shall
be allowed further access to all excluded records at all reasonable times.
(I) Receivables. All notes and accounts receivable and other
receivables of seller relating to or arising out of the operation of the Station
prior to the Closing.
1.3. Liabilities. The Station Assets, including those subject to
capital lease arrangements, shall. be sold and conveyed to Buyer, as of the
Closing Date, free and clear of all liens, security interests, and encumbrances
except (a) those disclosed on Schedule 1.3 hereto as "continuing" and the leases
listed on Schedule 1.1(c); (b) encumbrances on the real property
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<PAGE>
included in the Station Assets that do not materially affect the value or the
current use and enjoyment thereof in the operation of the Station; and (c) the
Assumed Liabilities (as hereinafter defined) and the other obligations and
liabilities of Buyer assumed hereunder (all of the foregoing are sometimes
referred to herein collectively as "Permitted Encumbrances"). Buyer agrees that
on the Closing Date Buyer shall assume, undertake, and agree to pay, satisfy,
perform, and discharge only those liabilities and obligations of Seller which
have not yet accrued but which arise on or after the Closing Date under the
contracts assigned pursuant to Sections 1.1(d) and (e) and any contracts that
are entered into after the date hereof as permitted by this Agreement (all of
the foregoing are referred to herein collectively as the "Assumed Liabilities").
If any required approval of or consent to the transfer and assignment
of any contract included in the Station Assets is not obtained, Buyer shall
assume and shall pay, satisfy, perform, and discharge Seller's liabilities and
obligations which arise thereunder on and after the Closing Date unless Buyer's
enjoyment of the rights and benefits under any such contract is expressly
terminated by the other party thereto by affirmative action within six (6)
months after the Closing Date because of such failure to obtain approval or
consent and not because of any other default or nonperformance by Buyer or of a
failure of Buyer. The liabilities and obligations assumed pursuant to the
immediately preceding sentence shall also constitute "Assumed Liabilities" for
purposes of this Agreement.
Buyer shall not assume or be liable for (a) any liability or obligation
arising out of the business or operations of the Station or the Station Assets
prior to the Closing Date (except for the Assumed Liabilities and other
obligations and liabilities specifically assumed by Buyer hereunder) ; (b) any
liability or obligation under any contracts not specifically assumed by Buyer
hereunder; (c) any liability or obligation of Seller for any federal, state, or
local income or other taxes (subject, in the case of real estate or payroll
taxes, if any, to proration at Closing); (d) any liability or obligation with
respect to the Excluded Contracts; (e) any liability or obligation to any
employee or former employee of Seller or the Station attributable to any period
of time prior to the Closing Date including any liability for accrued vacation
and other benefits; (f) any liability or obligation of Seller arising out of any
litigation, proceeding, or claim by any person or entity relating to the
business or operations of the Station by Seller prior to the Closing Date,
whether or not such litigation, proceeding, or claim is pending, threatened, or
asserted before, on, or after the Closing Date; (g) any severance or other
liability arising out of the termination of any employee's employment with
Seller; or (h) any duty, obligation, or liability relating to any pension,
401(k) or other similar plan, agreement, or arrangement provided by Seller to
employees of Seller, and none of such plans shall be assumed by Buyer. The
foregoing paragraph shall act exclusively for the benefit of the parties to this
Agreement and not for the benefit of any other person or entity.
Seller shall not be held liable for by Buyer (a) any liability or
obligation arising out of the business or operations or the Station Assets by
the Buyer on or after the Closing Date; (b) any Assumed Liabilities or other
liabilities and obligations assumed by the Buyer under this Agreement; (c) any
liability or obligation of Buyer for any federal, state, or local income or
other taxes; (d) any liability or obligation incurred or assumed by Buyer with
respect to any of the
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Station Assets; (e) any liability or obligation to any employee or former
employee of Buyer or the Station attributable to any period of time after the
Closing Date; (f) any liability or obligation of Buyer arising out of any
litigation, proceeding, or claim by any person or entity relating to the
business or operation of the Station or the Station Assets by Buyer on or after
the Closing Date; or (g) any duty, obligation, or liability relating to any
pension, 401(k) or other similar plan, agreement, or arrangement provided by
Buyer to employees of Buyer.
ARTICLE 2
PAYMENTS AND CLOSING
2.1. Purchase Price.
(a) Payment of Purchase Price. In consideration of Seller's
performance of this Agreement, the transfer and delivery of the Station Assets,
and the assignment of the FCC Authorizations, on the Closing Date, Buyer will
pay to Seller an amount equal to ten (10) times the broadcast cash flow ("BCF")
of the Station as stated on or as calculated from the audited financial
statements (see Section 5.9 below) of Seller for the twelve (12) month period
beginning October 1, 1994 and ending September 30, 1995 minus the total of (I)
One Million Dollars ($1,000,000.00) , which has been paid into escrow in
accordance with Section 11.2 hereof and which is to be released to Sellers at
Closing and less an amount of $50,000.00 (the "Covenant Payment"), which will be
allocated to the Covenant Not to Compete (see Section 8.7 below) . As part of
the Purchase Price Buyer will assume the Assumed Liabilities and other
obligations and liabilities to be assumed by Buyer hereunder on the Closing
Date. The Purchase Price shall never exceed an amount equal to ten (10) times
the BCF of the Station in the aggregate in order for the Buyer to be obligated
to consummate the transactions contemplated by this Agreement and shall never be
less than Twenty Three Million Dollars and No Cents ($23,000,000.00), in the
aggregate, in order for the Seller to be obligated to consummate the
transactions contemplated by this Agreement. The Purchase Price shall be paid by
Buyer to Seller by wire transfer of immediately available funds to such bank
account(s) as Seller may designate on or prior to the Closing Date. For purposes
of calculating the Purchase Price, BCF shall be defined in accordance with
Generally Accepted Accounting Principals ("GAAP") applied on a consistent basis
without duplication as net income before Federal Income Tax and, to the extent
applicable to income, any Illinois Business Tax, plus (on an accrual basis to
the extent used in determining net income before taxes) (I) interest,
depreciation and amortization (including program amortization) and (ii)
corporate overhead allocations and management fees, and plus or minus any other
non-cash transactions (such as barter and trade), minus programming payments
made, or scheduled to be made in accordance with the original terms of each
program contract for such period. Additional adjustments to BCF shall be made in
accordance with Schedule 2.1 hereto. The Buyer and Seller shall within ninety
days of this date review and reach a final agreement as to the adjustments on
Schedule 2.1.
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(b) Allocation of Purchase Price. Buyer and Seller agree to
allocate the Purchase Price among the Covenant Not to Compete and the Station
Assets based on the appraisal to be performed by a mutually acceptable appraisal
service used generally in the television industry for such appraisals. The
parties shall undertake all reasonable efforts to complete this allocation
within sixty (60) days from this same date. Buyer and Seller agree to file all
relevant returns and reports and (including, without limitation, Forms 8594,
Asset Acquisition Statements, and all income and other tax returns) on the basis
of such allocations.
2.2. Closing. The closing of the purchase and sale of the Station
Assets (the "Closing") shall be held in the offices of Thomas & Libowitz, P.A.,
USF&G Tower at 10:00 a.m.., local time, on a regular business day, as should be
mutually agreed upon by the parties, which, accept as otherwise provided herein,
is not later than December 31, 1996 (the "Closing Expiration Date"). However, if
FCC approvals and consents to the transactions contemplated hereby shall have
become a "Final Grant" on a date prior to the Closing Expiration Date, Closing
shall occur in thirty (30) business days following "Final Grant", provided if
the FCC approvals and consents to the transactions contemplated hereby shall
become a "Final Grant" less than thirty (30) days prior to the closing
Expiration Date, the Closing Expiration Date shall be extended and the Closing
shall occur on the thirtieth business day after "Final Grant" which is a
business day. The term "Final Grant" is defined for purposes of this Agreement
to mean action by the FCC as to which no further steps (including those of
appeal or certiorari) can be taken with respect to any action or proceeding, to
review, modify, or set the determination aside, whether under Section 402 or 405
of the Communications Act of 1934 (the "Communications Act"), or otherwise. For
purposes of this Agreement the term "Closing Date" shall mean the day the
closing occurs.
2.3. Deliveries at Closing. All actions at the Closing shall be deemed
to occur simultaneously, and no document or payment shall be deemed to be
delivered or made until all documents and payments are delivered or made to the
reasonable satisfaction of Buyer, Seller, and their respective counsel.
(a) Deliveries by Seller. At the closing, Seller shall deliver
to Buyer such instruments of conveyance and other customary documentation as
shall in form and substance be reasonably satisfactory to Buyer and its counsel,
including, without limitation, the following:
(i) one or more bills of sale and affidavits of title
conveying the personal property and all leases, contracts, and other intangible
assets included in the Station Assets, and, with the consent of the FCC, one or
more assignments of the FCC Authorizations;
(ii) any mortgage discharges or releases of liens
that are necessary in order to transfer the Station Assets as contemplated by
Section 1.3;
(iii) certificates of Seller as required by Section
8.1(c) hereof;
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(iv) a certified copy of the resolutions or
proceedings of Seller authorizing the transactions contemplated at Closing by
this Agreement;
(v) a certificate as to the existence and good
standing of Seller, each issued by the Illinois Secretary dated shortly before
the Closing Date;
(vi) a receipt for the Purchase Price;
(vii) the opinions of counsel required by Section 8,3
hereof;
(viii) all consents received by Seller through the
Closing to the assignment to or assumption by Buyer of licenses, contracts, and
leases included in the Station Assets;
(ix) assignments of all Leasehold Interests and all
necessary consents thereto;
(x) special warranty deed(s) or other documents of
conveyance acceptable to Buyer evidencing the Transfer of the Real Property and
Real Property Improvements;
(xi) a list of cable systems which carry the
station's signal as of a date which is not prior to the seventh (7th) day prior
to the Closing Date, which list shall be certified by an officer of the Seller
as not being materially inaccurate to the best of Seller's knowledge;
(xii) the Covenant Not to Compete contemplated by
Section 8.7 hereof; and
(xiii) such other documents as Buyer shall reasonably
request.
(b) Deliveries by Buyer. At the Closing, Buyer shall deliver
to Seller the Purchase Price and such instruments of assumption and other
customary documentation as shall in form and substance be reasonably
satisfactory to Seller and its counsel, including, without limitation, the
following:
(i) the Purchase Price, which shall be delivered in
the manner set forth in Section 2.1 hereof;
(ii) an assumption of liabilities pursuant to which
Buyer will assume the Assumed Liabilities;
(iii) a certificate of Buyer as required by Section
7.1(c) hereof;
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(iv) a certified copy of the resolutions or
proceedings or Buyer authorizing the transactions contemplated by this
Agreement;
(v) a certificate as to the existence and good
standing of Buyer issued by the Department of Assessments and Taxation of
Maryland shortly before the Closing Date and a Certificate of the Illinois
Secretary of State as to Buyer's qualification to do business in the State of
Illinois;
(vi) the opinion of counsel required by Section 7.3
hereof;
(vii) the Covenant Not to Compete contemplated by
Section 8.7 hereof; and
(viii) such other documents as Seller shall
reasonably request.
2.4. Adjustments.
(a) Operation of the Station's Assets by the Seller and the
income, expenses, and liabilities attributable thereto through 11:59 p.m. on the
day preceding the Closing Date (the "Adjustment Date") shall be for the account
for the Seller and, thereafter, for the account of the Buyer, and shall be
prorated accordingly. Items including, but not limited to power and utility
charges, ad valorem, property taxes upon the basis of the most recent assessment
available, commissions, wages, payroll taxes, and accrued vacation pay of
employees of Seller who enter into employment of Buyer (all such vacation pay
accrued prior to the Closing Date is the responsibility of Seller), rents, and
similar prepaid and deferred items shall be prorated between Seller and Buyer,
the proration to be made as of the Adjustment Date. There shall be no prorations
and/or adjustments with respect to any sick leave, personal leave days, accrued
on or prior to the Closing Date by any employee of Seller, and Seller shall
assume and be responsible for all Liabilities in respect thereto. All special
assessments and similar charges or liens imposed against the Realty, Leasehold
Interest, and Real Property Improvements in respect of any period of time
through the Adjustment Date, whether payable in installments or otherwise, shall
be the responsibility of the Seller, and amounts payable with respect to such
special assessments, charges, or liens, with respect to any period of time after
the Adjustment Date shall be the responsibility of the Buyer and shall be
adjusted as required hereunder.
In the event the Buyer performs or causes to be performed a Phase 1 or
Phase 2 Environmental Audit (the "Environmental Audits") prior to or within
thirty (30) days after the Closing Date, Seller agrees to contribute up to
Thirty Thousand Dollars ($30,000.00) (the "Remediation Fee") to the cost of any
remediation advised by such Environmental Audits. Such Remediation Fee shall be
part of the adjustments contemplated by this Section 2.4.
Except for "Related Party Trades" addressed later in this paragraph,
all trade, barter, similar arrangements for the sale of advertising time, other
than for cash (with the exception of Film or Program Barter Agreements and Radio
Barter Agreements) ("Trades") shall be prorated
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as of the Adjustment Date. If, on the Closing Date, the aggregate value of the
Stations performance obligations on or after the Closing Date under all such
Trades, less the aggregate value of the goods, services, or other items to be
received thereunder, on or after the Closing Date, exceeds Fifty Thousand
Dollars ($50,000.00) then the Buyer shall receive a credit against the Purchase
Price for the amount of such excess and, if upon the Closing Date the aggregate
value of goods, services, or other items to be received under all Trades,
exceeds the Stations performance obligations on or after the Closing Date by
more than Fifty Thousand Dollars ($50,000.00) , then the Purchase Price shall be
increased by an amount of such excess. Trades shall be valued in accordance with
the evaluation method currently used by Buyer, which method shall be declared
and approved by the Seller, such approval not to be unreasonably withheld. There
shall be no other proration or adjustment with respect to Trades, and there
shall be no prorations or adjustment with respect to any film or program barter
agreements, radio barter agreements, or program contracts, Any related party
transactions involving Trades ("Related Party Trades") which result in a
liability on Seller's balance sheets as of the Adjustment Date shall be solely
Seller's responsibility, shall not be an assumed Liability, and shall not be
included in any proration of Trades hereunder.
(b) As of the Closing Date, to the extent practical, the
adjustments provided in Section 2.4 (a) shall be made on the basis of the then
most recently available financial statements and other information of the
Station (the "Preliminary Adjustments"). Within forty-five (45) days after the
Closing Date, the Buyer shall prepare a closing balance sheet (the "Closing
Balance Sheet") as of the closing of business on the Adjustment Date and submit
it to the Seller for review. Within seventy-five (75) days after the Closing
Date, final adjustment pursuant to Section 2.4 shall be determined, and any
required refund or payment shall be made on the basis of the Closing Balance
Sheet. if any dispute arises over the amount to be refunded or paid, such refund
or payment shall nonetheless be made to the extent such amount is not in
dispute.
If any such dispute can not be resolved by the parties or their
respective independent public accountants within ninety (90) days after Closing,
it shall be referred to a mutually satisfactory independent accounting firm of
national stature which has not been employed by any party hereto for the two (2)
years of the date of such referral. Any such referral shall be to an accounting
firm selected by the Seller's and Buyer's respective independent public
accountants, The determination of such firm shall be conclusive and bonding on
each party hereto. one half of the fees of such firm shall be paid by the Seller
and the other half shall be paid by the Buyer.
(c) To the extent that Buyer receives distributions from the
Fox Children's Network ("FCN Profits") after the Closing Date, Buyer shall
distribute and pay to the Seller, in an amount not to exceed $82,000 FCN Profits
received by it for calendar years 1993, 1994, and 1995, to the extent such FCN
Profits are distributed to the Station in calendar years 1996 and 1997;
provided, however, that the collection from Fox of any of the FCN Profits shall
be the sole responsibility of Seller and Buyer shall not be responsible for the
collection on Seller's behalf of any such profits.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1. Organization. Seller is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Illinois. Seller
has the requisite power and authority to carry on the business of the Station
now being conducted by it, to own and operate the Station Assets owned and
operated by it, and to enter into and consummate the transactions contemplated
by this Agreement.
3.2. Approval/Authority. All requisite actions and proceedings
necessary to be taken by Seller in connection with the execution and delivery of
this Agreement and the consummation of transactions contemplated hereby and
necessary to make the same effective have been, or with respect to the Closing
will be, duly and validly taken. This Agreement has been duly and validly
authorized, executed, and delivered by Seller and constitutes its valid and
binding agreement, enforceable in accordance with and subject to its terms,
except as limited by laws affecting the enforcement of creditors' rights or
contractual obligations generally.
3.3. No Defaults. Except as set forth on Schedule 3.3, as of the date
of this Agreement (after giving effect to all approvals and consents which have
been obtained), neither the execution and delivery by Seller of this Agreement,
nor the consummation by Seller of the transactions contemplated by this
Agreement to be consummated on, prior, or subsequent to the Closing Date, will
constitute, or, with the giving of notice or the passage of time or both, would
constitute, a material violation of or would conflict in any material respect
with or result in any material breach of or any material default under, any of
the terms, conditions, or provisions of the Communications Act, the rules,
regulations and public policies of the FCC or any other federal, state and local
laws, rules, regulations, ordinances, judgments, orders and/or decrees to which
either Seller is subject, or of Seller's Articles of Incorporation or By-laws,
or any material contract, agreement, or instrument to which Seller is a party or
by which Seller is bound.
3.4. Brokers. There is no broker or finder or other person or entity
who would have any valid claim against Buyer for a commission or broker's fee in
connection with this Agreement where the transactions contemplated hereby as a
result of any agreement or understanding of or action taken by Seller or any
affiliate of Seller.
3.5. Condition of Assets. All material tangible assets included in
Station Assets, including, without limitation, the Realty, the Leasehold
Interests, and the Real Property Improvements, are being maintained in
accordance with general industry practices and/or good operating condition and
repair, ordinary ware and tear excepted.
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3.6. Title.
(a) Seller has good and marketable title to the Real Property
listed on Schedule 1.1(c), free and clear of all mortgages, security interests,
liens, charges, and encumbrances of any nature whatsoever, except: (I) for
liens, for Real Property, taxes not yet due and payable and (ii) as disclosed in
Schedule 1.3 of this Agreement, and (iii) for encumbrances which do not
materially detract from the value of the Real Property or which do not
materially affect the current use and enjoyment thereof in the operation of the
Station. Seller is not in material default under any of the Leasehold Interests.
Except as set forth in this Section 3.6 or disclosed on a Certificate of Zoning
Classification and Legality of Use from the cities of Peoria and Bloomington,
Illinois, or the counties of McLean, Tazewell, Woodford, or Peoria, Illinois
(copies of which have been provided to the Buyer), the Realty, Leasehold
Interests, and the Real Property Improvements listed on Schedule 1.1(c) and
their present uses comply in all material respect with all applicable zoning
laws and ordinances; and to the Sellers knowledge, there exists no notice of any
violations of housing, building, safety, fire ordinances, with respect to the
Realty, Leasehold Interests, and Real Property Improvements listed on Schedule
1.1(c) . The zoning classifications for the Realty and Leasehold Interests
listed on Schedule 1.1(c) are set forth on Schedule 1.1(c). The Realty and real
property which is subject to the Leasehold Interests is currently serviced by a
community sewage system.
Seller has not received any notice and has no knowledge of any pending,
threatened, or contemplated condemnation proceedings affecting the Realty, the
Leasehold Interests, or the Real Property Improvements listed on Schedule 1.1(c)
or any part thereof or any sale or disposition of the real property which is the
subject of the Leasehold Interests or any portion thereof in lieu of
condemnation.
The Seller is not in material default under any of its Leasehold
Interests.
(b) Seller has good and marketable title to the tangible
assets and personal property included in the Station Assets and all such assets
and personal property will on the Closing Date be free and clear of all security
interests, mortgages, pledges, liens, encumbrances, or charges of any mature,
except for Permitted Encumbrances.
Seller has good and marketable title to the tangible assets and
personal property included in the Station Assets, and all such assets and
personal property of free and clear of all liens and encumbrances.
3.7. Insurance. The Station and the Station Assets are, as of the date
of this Agreement, adequately insured for their replacement costs by Seller
against loss or damage by fire and other hazards and risks of the character
usually insured against by persons operating similar properties and businesses
under policies issued by insurers of recognized responsibility and Seller agree
to keep the Station and Station Assets adequately insured for their replacement
costs naming the Buyer as a named insured as its interest appears from this same
date forward, through and including the Closing Date.
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3.8. Contracts. Schedules 1.1(d), 1.1(e). 1.1(f), 1.(g), 1.1(h),
1,1(n), and 3.10 to this Agreement contain a list of the following, as to which
the Station or Seller with respect to the Station is a party;
(a) any television network affiliation agreements;
(b) contracts evidencing time sales to advertisers or
advertising agencies which are "trade" or "barter" transactions which require
the furnishing of advertising time on the Station after the date of this
Agreement;
(c) sales agency or advertising representation contracts which
are not terminable by Seller without penalty upon notice of thirty (30) days or
less;
(d) employment contracts;
(e) licenses or agreements under which either Seller is
authorized to broadcast on the Station filmed or taped programming supplied by
others;
(f) leases of personal property which have a term, including
renewal options exercisable by any other party thereto, ending more than one
year after the date of this Agreement and/or which involve annual payments of
more than $10,000.00;
(g) contracts not made in the ordinary and usual course of
business; and
(h) any other contracts which are material to the business and
operation of the Station and the Station Assets.
3.9. Program Contracts. All information regarding the contracts listed
on Schedule 1.1(e) is correct and accurate, including, without limitation, the
contract price, number of exhibitions licensed or available, the number of
exhibitions aired and remaining, the amount of license fees paid and amount of
unpaid license fees, any information concerning additional episodes licensed
thereunder and the fees therefore, or any other information concerning
additional episodes licensed thereunder and the fees therefore, or any other
information regarding such contracts set forth in Schedule 1.1(e).
3.10. Employees. Schedule 3.10 lists all employees of the Seller as of
the date of this Agreement and their respective salaries and dates of hire and
includes information on the benefits provided to employees (including, without
limitation, pension, retirement, hospitalization, life, accident or medical
insurance, vacation, and other employee benefit plans, agreements, arrangements,
or understandings). Except as described on Schedule 3.10, Seller has no written
or oral contracts of employment with any employee. Except as disclosed on
Schedule 3.10, neither Seller is a party to or subject to any collective
bargaining agreements with respect to the Station, nor does either Seller have
any other contracts with any labor union or other labor organization with
respect to the Station. Seller is not a party to any pending or, to the best of
its
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knowledge and belief (after inquiry of the Station's management) , threatened
labor dispute affecting the Station.
3.11. Litigation. Except as set forth on Schedule 3.11 hereto: (I)
Seller, with respect to the Station, has not been operating under or subject to
or in default with respect to any order, writ, injunction, or decree of any
court or federal, state, municipal, or other governmental department,
commission, board, agency, or instrumentality which has had or could reasonably
be expected to have a material adverse effect on the operations of the Station;
(ii) there is no litigation pending by or against, or to the best of Seller's
knowledge and belief (after inquiry of the Station's management) threatened
against, Seller related to or affecting any of the Station Assets which
materially interferes or could reasonably be expected to materially interfere
with the operations of the Station or with Seller's ability to transfer the
Station Assets to Buyer. There are no attachments, executions, or assignments
for the benefit of creditors or voluntary or involuntary proceedings in
bankruptcy pending against or contemplated by Seller, and no such actions have
been threatened against Seller. There is no litigation or proceeding pending or,
to the best of Sellers knowledge and belief, threatened against or affecting
Seller that would affect Seller's ability to carry out the transactions
contemplated by this Agreement.
3.12. Compliance with Laws. Seller, with respect to the Station, is to
the best of its knowledge and belief in compliance in all material respects with
all applicable laws, regulations, and orders, and the present uses by Seller of
the Station Assets does not, to the best of Seller's knowledge and belief I
violate any such laws, regulations, or orders in any material respect.
3.13. Business since December 31, 1995. From December 31, 1995, to the
date of this Agreement there has been no material adverse change in the
Station's financial condition [as represented in the unaudited balance sheets
and related statements of income, operations and cash flows for the fiscal year
ended December 31, 1995 (the "1995 Financial Statements") previously delivered
by the Seller to the Buyer], business, or assets taken as a whole (provided that
the foregoing shall exclude any material adverse change attributable to facts
effecting the television industry generally or to the general economical
conditions or governmental or legislative laws, rules, regulations), and the
business of the Station, in all material respects has been conducted in the
ordinary course of business and in the same manner as it was before December 31,
1995.
3.14. Environmental. To the best of Seller's knowledge and belief and
except as stated in Schedule 3.14. neither Seller nor the Station are the
subject of any (I) "Superfund" evaluation; (ii) any investigation or proceeding
of any governmental authority evaluating whether any remedial action is
necessary to respond to release of "Hazardous Substances" as defined by the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CHURCHLY"), "Hazardous Waste" as defined by the Resource Conservation and
Recovery Act of 1976 ("RCRA"), or any substance regulated by the Toxic
Substances Control Act ("TSCA"); or (iii) any requirement to remove asbestos
material or polychlorinated bipheryls. Seller has complied with all applicable
federal, state and local environmental laws and regulations, except where the
failure to do so would not have a Material Adverse Effect. For
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purposes of this Section, "Material Adverse Effect" means any change in or
effect on the business currently conducted by the Station that is or is
reasonably likely to be materially adverse to the Station. Except as stated in
Schedule 3.14., to Seller's knowledge after due inquiry within its organization,
but without any independent environmental assessment, as of the Closing Date,
neither the Realty, Leasehold Interests, or Real Property Improvements contains
any condition or substance which under the aforesaid environmental laws and
regulations thereunder, as interpreted as of this date by judicial and
regulatory authorities, will result in recovery by any person of remedial or
removal costs, expenses or damages, or expenditures by Buyer for abatement or
remedial actions. Seller has no reason as of the date of this Agreement to
believe that an independent environmental assessment would lead to the discovery
of any such condition or substance, Absent any previous knowledge or beliefs by
Seller, Seller shall not be deemed in breach of this Article III, Section 3.14.
Environmental should any Phase I or Phase II environmental audit performed or
caused to be performed by Buyer reveal any such condition or substance.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
4.1. Incorporation. Buyer is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Maryland, and, as
of the Closing date, will be qualified to transact business in Illinois, and has
the corporate power and authority to enter into and consummate the transactions
contemplated by this Agreement.
4.2. Corporate Action. All corporate actions and proceedings necessary
to be taken by or on the part of Buyer in connection with the execution and
delivery of this Agreement and the consummation of transactions contemplated
hereby and necessary to make the same effective have been duly and validly
taken. This Agreement has been duly and validly authorized, executed, and
delivered by Buyer, and constitutes its valid and binding agreement, enforceable
in accordance with and subject to its terms, except as limited by laws affecting
the enforcement of creditors' rights or contractual obligations generally.
4.3. No Defaults. As of this Agreement or the Closing Date, the
execution and delivery by Buyer of this Agreement, or the consummation by Buyer
of the transactions contemplated hereby, do not or will not constitute or, with
the giving of notice or the passage of time or both, would not constitute a
violation of or would conflict with or result in any breach of or default under
any of the terms, conditions, or provisions of any judgment, law, or regulation,
or Buyer's certificate of incorporation or bylaws, or any contract, agreement,
or instrument to which Buyer is a party or by which it is or will be bound.
4.4. Brokers. To Buyer's knowledge there is no broker or finder or
other person who would have any valid claim against Seller for a commission or
brokerage in connection with this Agreement or the transactions contemplated
hereby as a result of any agreement or understanding of or action taken by
Buyer.
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4.5. Litigation. There is no litigation, proceeding, or investigation
of any nature pending or, to the best of Buyer's knowledge, threatened against
or affecting it that would affect Buyer's ability fully to carry out the
transactions contemplated by this Agreement. There are no attachments,
executions, or assignments for the benefit of creditors or voluntary or
involuntary proceedings in bankruptcy pending against or contemplated by Buyer,
and no such actions have been threatened against Buyer.
ARTICLE 5
COVENANTS OF SELLER PENDING THE CLOSING
5.1. Maintenance of Business until Closing. Until the Closing Date,
Seller shall, with respect to the Station Assets, continue to carry on its
business and operations and keep its books of account, records, and files
complete in the ordinary course of business. Seller shall operate the Station in
all material respects in accordance with the terms of and in compliance in all
material respects with all applicable laws and FCC rules and regulations.
Seller will maintain in full force and effect through the Closing Date
adequate property damage (at replacement cost), liability, and other insurance
with respect to the Station Assets.
Prior to the Closing Date, Seller will not, without the prior written
consent of Buyer (to the extent the following restrictions are permitted by the
FCC and all applicable law):
(a) sell, lease, transfer, or agree to sell, lease, or
transfer any Station Assets which are material to the operation of the station,
considered as a whole or which have individually or in the aggregate a value in
excess of $10,000.00 without replacement thereof with a substantially equivalent
asset of substantially equivalent kind, condition, and value;
(b) enter into any contract of employment or collective
bargaining agreement which will be binding on Buyer, permit any increases in the
compensation of any of the Station's employees; provided, however, that Seller
may pay bonuses to any of its employees;
(c) apply to the FCC for any construction permit that would
materially restrict the Station's present operations or make any material change
in the Station's Real Property, Real Property Improvements or Leasehold
Interests.
Seller shall be entitled to renew or extend the term of any contract
listed on Schedules 1.1(c), 1.1(d), 1.1(e), and 1.1(f) which, by its terms,
expires or will expire prior to December 31, 1996; provided, however, such
renewal or extension does not increase the amounts payable thereunder during
such renewal or extension term unless said increase is in accordance with the
Station's usual practices and which increase has been approved in advanced by
Buyer,
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5.2. Goodwill/Compliance with Agreements. Seller shall use all
reasonable efforts to preserve the business organization of the Station and
preserve the goodwill of the Station's suppliers, customers, and others having
business relations with it in accord with the provisions of this Agreement.
5.3. Reports; Access to Facilities, Files, and Records. From time to
time from the date hereof through the closing Date, at the request of Buyer,
Seller shall give or cause to be given to the officers, employees, agents, and
representatives of Buyer: (a) access (in the presence of any representative
designated by Seller) upon reasonable prior notice, during normal business
hours, to all facilities, properties, accounts, books, deeds, title papers,
insurance policies, licenses, agreements, contracts commitments, records,
equipment, machinery, fixtures, furniture, vehicles, accounts payable and
receivable, and inventories of Seller relating to the Station, and (b) all such
other information in Seller's possession concerning the affairs of the Station
as Buyer may reasonably request; provided, however, that the foregoing does not
unreasonably disrupt or interfere with the business and operations of Seller or
the Station.
5.4. Notice of Proceedings. Seller will promptly notify Buyer in
writing upon becoming aware of any order or decree or any complaint praying for
an order or decree restraining or enjoining the consummation of this Agreement
or the transactions contemplated hereunder, or upon receiving any notice from
any governmental department, court, agency, or commission of its intention to
institute an investigation into or institute a suit or proceeding to restrain or
enjoin the consummation of this Agreement or such transactions, or to nullify or
render ineffective this Agreement or such transactions if consummated.
5.5. Confidential Information. Seller shall not use or disclose to any
person or entity (except as may be required by law or in conducting the Audit
(as defined in Section 5.9), and then only with notice to Buyer) any
confidential information received from Buyer or its agents in the course of
investigating, negotiating, and completing the transactions contemplated by this
Agreement. Nothing shall be deemed confidential information that: (a) is or was
known to either Seller at the time of its initial disclosure to either Seller or
any representative of either Seller; (b) has become or becomes publicly known or
available other than through disclosure by either Seller; (c) is or was
rightfully received by Seller from any person or entity unrelated to either
Seller; or (d) is or was independently developed by either Seller.
5.6. Consummation of Closing. Seller shall use reasonable efforts to
fulfill and perform all conditions and obligations on their part to be fulfilled
and performed under this Agreement and to cause all terms and conditions set
forth herein to be fulfilled and cause the transactions contemplated by this
Agreement in connection with the Closing to be fully carried out.
5.7 Notice of Certain Developments. Seller shall give prompt written
notice to Buyer if prior to the Closing Date: (a) Station Assets shall have
suffered damage on account of fire, explosion, or other cause of any nature; (b)
the regular broadcast transmission of the Station in the normal and usual manner
in which it heretofore has been operating is interrupted in any
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material manner for a period of more than ten (10) consecutive days; or (c)
carrying the Station's signal of such market cable system's intention to delete
the Station from carriage or chan Station's channel position on such market
cable system.
5.8. Covenants of Sellers Prior to Closing. Seller covenants and agrees
that until the Closing occurs:
(a) Consents. Seller will use reasonable efforts (without
being required to make any payment not specifically required by the terms of any
licenses, leases, and other contracts) to obtain or cause to be obtained prior
to the Closing Date consents to the assignment to or assumption by Buyer of all
material licenses, leases, and other contracts included in the Station Assets
that require the consent of any third party by reason of the transactions
provided for in this Agreement. If any material necessary consent or approval is
not obtained prior to the Closing Date, then Seller will cooperate with Buyer in
any reasonable arrangement deemed necessary or desirable by Buyer to provide to
Buyer, after the Closing Date, the benefits under such contracts, including
enforcement for the benefit of Buyer of any and all rights of Seller against
third parties.
(b) Consummation of Agreement. Seller shall use their best
efforts to fulfill and perform all conditions and obligations on their part to
be fulfilled and performed under this Agreement and to cause the transactions
contemplated by this Agreement to be fully carried out.
(c ) Updated Information. Seller agrees to provide to Buyer on
or shortly prior to the Closing Date a list of any additional leases or
contracts which would have been required to be listed on Schedule 1.1(d),
1.1(e), 1.1(f), or 3.10.
(d) Hart-Scott-Rodino. As promptly as practicable Seller shall
prepare and file all documents with the Federal Trade Commission and the United
States Department of Justice, as is required to comply with the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 ("Hart-Scott-Rodino Act"),
and shall promptly furnish all materials thereafter requested by any of the
regulatory agencies having jurisdiction over such filings.
(e) Environmental Audit. Upon notification and request by the
Buyer, Seller agrees, as soon as practicable after said notification and request
by Buyer, to grant to Buyer and its Agents access to the Realty, Leasehold
interests, and Real Property Improvements, for the purpose of conducting, at
Buyer's Expense, the Environmental Audits. Any such Environmental Audits shall
be conducted by a reputable environmental investigatory firm of the Buyers
choice.
(f) Application for Commission Consent. As promptly as
practicable after the date of this Agreement and no event later than fifteen
(15) days after the date hereof, Seller will complete Seller's portion of
applications to the FCC requesting its written consent to the assignment of the
FCC Authorizations for the Station to Buyer, and upon receipt of Buyer's
applications pursuant to Article Six, Section 6.4 (c) , Application for
Commission Consent, will promptly file such applications with the FCC jointly
with Buyer. Seller will diligently take or
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cooperate in the taking of all steps that are necessary, proper, or desirable to
expedite the preparation of such applications and its prosecution to a "Final
Grant", as that term is defined in Article II, Section 2.2 Closing. Seller will
promptly provide Buyer with a copy of any pleading, order, or other document
served on it relating to such applications. The Seller shall make timely
application for any renewals or extensions of the FCC Licenses which may be
required by any applicable FCC rules, regulations or procedures.
5.9. Audit of Station. Immediately following the date hereof and within
ninety (90) days thereafter, the Buyer shall conduct an audit (the "Audit") the
financial operations of the Station for the twelve (12) month period beginning
October 1, 1994 and ending September 30, 1995. This Audit will be the basis for
determining the BCF and the Purchase Price. The Seller and the Seller's agents,
servants, and employees will cooperate with the Buyer and the Buyer"s agents,
servants and employees in conducting and completing the Audit within ninety (90)
days from the date hereof. It is anticipated that the Audit will be completed on
or prior to ninety (90) days from the date hereof, and copies of the Audit will
be delivered to the Seller as soon as practical after completion. The Audit will
be conducted by Arthur Andersen L.L.P., the Buyer's independent certified public
accounting firm, and the results thereof, along with the determination of BCF
and the Purchase Price, will be conclusive and binding on both parties hereto.
ARTICLE 6
COVENANTS OF BUYER PENDING THE CLOSING
6.1. Confidential Information. Buyer shall not use for its or any third
party's benefit and shall not disclose to third parties (except as may be
required by law or which is necessary in completing the Audit) any confidential
information (including, without limitation, financial information and
information regarding program contracts and revenue) received from Seller or
their agents in the course of investigating, negotiating, and performing the
transactions contemplated by this Agreement. Nothing shall be deemed to be
confidential information that: (a) is known to Buyer at the time of its
disclosure to it; (b) becomes publicly known or available other than through
disclosure by Buyer; (c) is rightfully received by Buyer from a third party; or
(d) is independently developed by Buyer.
6.2. Consummation of Agreement. Subject to the provisions of Section
11.1 of this Agreement, Buyer shall use its best efforts to fulfill and perform
all conditions and obligations on its part to be fulfilled and performed under
this Agreement and to cause the transactions contemplated by this Agreement to
be fully carried out. Buyer agrees to cooperate with Seller in connection with
obtaining consents to the assignment to or assumption by Buyer of licenses,
leases, and other contracts included in the Station Assets, and to execute such
assumption instruments as may be required in connection with obtaining such
consents.
6. 3. Notice of Proceeding. Buyer will promptly notify seller in
writing upon becoming aware of any order or decree or any complaint praying for
an order or decree
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restraining or enjoining the consummation of this Agreement or the transactions
contemplated hereunder, or upon receiving any notice from any governmental
department, court, agency, or commission of its intention to institute an
investigation into or institute a suit or proceeding to restrain or enjoin the
consummation of this Agreement or such transactions, or to nullify or render
ineffective this Agreement or such transactions if consummated.
6.4. Covenants of Buyer Prior to Closing. Buyer covenants and agrees
that until the closing occurs:
(a) Consents for Closing. Buyer will use reasonable efforts
jointly with Seller to obtain or cause to be obtained prior to the Closing Date
all necessary consents relating to the Station Assets for the Closing and to
execute such assumption instruments as may be required in connection with
obtaining any necessary consent, so long as such assumption instruments and/or
agreements do not alter the original terms and conditions of the contracts in
question in any material respect to the detriment of Buyer.
(b) Hart-Scott-Rodino. As promptly as practicable Buyer shall
prepare and file all documents with the Federal Trade Commission and the United
States Department of Justice, as is required to comply with the
Hart-Scott-Rodino, and shall promptly furnish all materials thereafter requested
by any of the regulatory agencies having jurisdiction over such filings.
(c) Application for Commission Consent. As promptly as
practicable after the date of this Agreement and in no event later than fifteen
(15) days from the date hereof, Buyer will complete and give to Seller a fully
executed copy of Buyer's portion of the application to the FCC requesting its
written consent to the assignment of the FCC Authorizations for the station (and
any extension or renewals thereof) to Buyer. Buyer will diligently take or
cooperate in the taking of all steps that are necessary, proper, or desirable to
expedite the preparation of such application and its prosecution to a Final
Grant as that term is defined in Article 2, Section 2.2 Closing. Buyer will
promptly provide Seller with a copy of any pleading, order, or other documents
served on it relating to such application.
6.5. Audit of Station. As soon as practical, but not later than forty
five (45) days after the date hereof , Buyer covenants to cause its accountants,
Arthur Andersen L.L.P., to conduct and complete the Audit at Buyer's expense for
the purposes of preparing audited financial statements of the Seller and the
Station for the purposes of establishing the Station's BCF and the Purchase
Price.
ARTICLE 7
CONDITIONS TO THE OBLIGATIONS OF SELLER
The obligations of Seller to consummate the transactions contemplated
by this Agreement are, at their option, subject to the fulfillment of the
following conditions prior to or at the Closing Date:
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7.1. Representations Warranties, Covenants.
(a) each of the representations and warranties of Buyer
contained in this Agreement shall have been true and accurate in all material
respects as of the date when made and shall be deemed to be made again on and as
of the Closing Date and shall then be true and accurate in all material respects
except to the extent changes are permitted or contemplated pursuant to this
Agreement;
(b) Buyer shall have performed and complied in all material
respects with each and every covenant and agreement required by this Agreement
to be performed or complied with by it prior to or at the Closing Date; and
(c) Buyer shall have delivered to Seller a certificate of an
officer of Buyer dated as of the Closing Date certifying to the fulfillment of
the conditions set forth in Sections 7.1(a) and 7.1(b).
7.2. Proceedings.
(a) As of the Closing Date, no action or proceeding shall have
been instituted and be pending before any court or governmental body to restrain
or prohibit, or to obtain substantial damages in respect of, the consummation of
this Agreement that, in the reasonable opinion of Seller, may reasonably be
expected to result in a preliminary or permanent injunction against such
consummation or, if the transactions contemplated hereby were consummated, an
order to nullify or render ineffective this Agreement or such transactions or
the recovery against Seller of substantial damages; and
(b) As of the Closing Date, none of the parties to this
Agreement shall have received written notice from any governmental body of (I)
its intention to institute any action or proceeding to restrain or enjoin or
nullify this Agreement or the transactions contemplated hereby, or to commence
any investigation (other than a routine letter of inquiry, including a routine
civil investigative demand) into the consummation of this Agreement, or (ii)the
actual commencement of such an investigation.
7.3 Opinion of Counsel. Seller shall have received opinions of Buyer's
counsel and Buyer's special FCC counsel, each dated as of the Closing Date, in
the forms attached to this Agreement as Schedule 7.3.
7.4. Hart-Scott-Rodino. The waiting period under the Hart-Scott-Rodino
Act shall have expired, and there shall not be outstanding any order of a court
restraining the transactions contemplated hereby.
7.5. Other Instruments. Buyer shall have delivered to Seller such
instruments, documents, and certificates as are contemplated by Section 2.3(b)
to be delivered on the Closing Date.
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7.6. The Audit. Buyer shall have delivered the Audit to the Seller and
the determination of Seller's BCF for fiscal year ended September 30, 1995 on or
before ninety (90) days from the date hereof.
7.7. Allocations. Buyer shall have entered into an agreement with
Seller as to the allocation of the Purchase Price.
7.8. BCF. The BCF of the Station for the twelve (12) month period
beginning October 1, 1995 and ending September 3, 1995, as calculated pursuant
to Section 2.1(b) hereof, shall be no less than Two Million Three Hundred
Thousand Dollars and No Cents ($2,300,000.00).
7.9. Covenants Not to Compete. The Seller shall have received the
Covenant Not to Compete from Buyer in the form attached as Schedule 8.7 to this
Agreement along with the Covenant Payments.
ARTICLE 8
CONDITIONS TO THE OBLIGATIONS OF BUYER
The obligations of Buyer under this Agreement are, at its option,
subject to the fulfillment of the following conditions prior to the Closing
Date.
8.1. Representations, Warranties, Covenants.
(a) Each of the representations and warranties of Seller
contained in this Agreement shall have been true and accurate in all material
respects as of the date when made and shall be deemed to be made again on and as
of the Closing Date and shall then be true and accurate in all material respects
except to the extent changes are permitted or contemplated pursuant to this
Agreement.
(b) Seller shall have performed and complied in all material
respects with each and every covenant and agreement required by this Agreement
to be performed or complied with by it prior to or at the Closing Date,
including the delivery to Buyer of the instruments conveying the Station Assets
to Buyer.
(c) Seller shall have delivered to Buyer a certificate of an
officer of Seller dated the Closing Date certifying to the fulfillment of the
conditions set forth in Sections 8.1(a) and 8.1(b).
8.2. Proceedings.
As of the Closing Date, (a) no action or proceeding shall have been
instituted and be pending before any court or governmental body to restrain, or
prohibit or to obtain substantial
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damages in respect of, the consummation of this Agreement that, in the
reasonable opinion of Buyer, may reasonably be expected to result in a
preliminary or permanent injunction against such consummation or, if the
transactions contemplated hereby were consummated, an order to nullify or render
ineffective this Agreement or such transactions or the recovery against Seller
of substantial damages; and (b) none of the parties to this Agreement shall have
received written notice from any governmental body of (I) its intention to
institute any action or proceeding to restrain or enjoin or nullify this
Agreement or the transactions contemplated hereby, or to commence any
investigation (other than a routine letter of inquiry, including a routine civil
investigative demand) into the consummation of this Agreement, or (ii) the
actual commencement of such an investigation.
8.3 Opinion of Counsel. Buyer shall have received an opinion of
Seller's counsel dated as of the Closing Date in the form attached to this
Agreement as Schedule 8.3(I), and an opinion of Seller's special FCC counsel
dated, as of the Closing Date in substantially the form attached to this
Agreement as Schedule 8.3(ii).
8.4. Hart-Scott-Rodino. The waiting period under the Hart-Scott-Rodino
Act shall have expired, and there shall not be outstanding any order of a court
restraining the transactions contemplated hereby.
8.5. Consents. Sellers shall have obtained prior to the Closing Date
any necessary consents from third parties with respect to Station's network
affiliation in agreements and to the contracts included in the Station Assets as
are listed as "material" on Schedule 8.5 to this Agreement.
8.6. Leases/Subleases. The Buyer shall have received from the Seller,
certain leases (the "Leases" or the "Subleases") for the Realty, Leasehold
Interests and/or Real Property Improvements, fully executed by the Seller which
will enable the Buyer to continue to operate the Station Assets consistent with:
previous operating expenses and practices, (ii) Stations current FCC
Authorizations, and (iii) all FCC Rules, Regulations and Procedures, The
Leases/Subleases to be delivered hereunder and which are contemplated hereby
shall be reasonably acceptable to the Buyer and shall be consistent in all
material terms with the material terms of the existing Leases/Subleases for the
Leasehold Interests and Real Property Improvements.
8.7. Covenant Not to Compete. Buyer shall have received a Covenant Not
to Compete from Seller in the form of Schedule 8.7 to this Agreement.
8.8. Other Instruments. Seller shall have delivered to Buyer such
instruments, documents, and certificates as are contemplated by Section 2.3(a)
and Section 11.14 hereof.
8. 9. Allocations. The Seller shall have entered into an agreement with
the Buyer as to the allocation of the Purchase Price.
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ARTICLE 9
INDEMNIFICATION
9.1. Survival. All statements of any party contained in this Agreement
(including the Schedules hereto) or in any certificate delivered by it pursuant
to this Agreement shall be deemed to be representations and warranties made
pursuant to this Agreement. The representations, warranties, covenants, and
agreements of Seller and Buyer contained in or made pursuant to this Agreement
shall be deemed to have been made as of the date of this Agreement and, to the
extent applicable, on the Closing Date, shall survive the Closing Date, and
shall remain operative and in full force and effect for a period of one (1) year
after the Closing Date regardless of any investigation or statement as to the
results thereof made by or on behalf of any party; provided, however, that: (I)
Buyer's obligation to pay, perform, and discharge the Assumed Liabilities shall
survive until such Assumed Liabilities have been paid, performed, or discharged
in full; (ii) Seller's obligations with respect to all obligations and
liabilities not assumed by Buyer pursuant to this Agreement shall survive until
such obligations and liabilities have been paid, performed, or discharged in
full; (iii) the covenants and agreements contained in this Article 9 shall
continue in full force and effect until fully discharged; (iv) the
representations and warranties contained in Sections 3.4 and 4.4 (Brokers) shall
continue in full force and effect in perpetuity; and (v) any covenants or
agreements contained herein or made pursuant hereto which by their terms are to
be performed after the Closing shall survive until fully performed and
discharged in full.
9.2. Indemnification of Buyer. Seller agrees that, after the Closing,
it shall indemnify and hold Buyer harmless from and against any and all damages,
claims, losses, expenses, costs, obligations, and liabilities including, without
limiting the generality of the foregoing, liabilities for reasonable attorneys'
fees and expenses ("Loss and Expense") suffered directly or indirectly by Buyer
by reason of or arising out of (I) any material breach of a representation or
warranty made by Seller pursuant to this Agreement; (ii) any material failure by
Seller to perform or fulfill any of its covenants or agreements set forth in
this Agreement; (iii) any failure by Seller to pay, perform, or discharge any
liabilities or obligations not specifically assumed by Buyer pursuant to this
Agreement; or (iv) any litigation, proceeding, or claim by any third party
arising from the business or operations of the Station by Seller prior to the
Closing Date, except to the extent arising from obligations or liabilities of or
assumed by Buyer pursuant to this Agreement.
9.3. Indemnification of Seller. Buyer agrees that, after the closing,
it shall indemnify and hold Seller harmless from and against any and all Loss
and Expense suffered directly or indirectly by Seller by reason of or arising
out of (I) any material breach of representation or warranty made by Buyer
pursuant to this Agreement; (ii) any material failure by Buyer to perform or
fulfill any of its covenants or agreements set forth in this Agreement; (iii)
any failure by Buyer to pay, perform, or discharge any Assumed Liabilities or
any other obligations or liabilities of or assumed by Buyer under this
Agreement; or (iv) any litigation, proceeding, or
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claim by any third party arising from the business or operations of the Station
on or after the Closing Date.
9.4. Limitation of Liability. Notwithstanding Sections 9.1, 9.2 and 9.
3 hereof , after the Closing, Seller shall not indemnify or otherwise be liable
to Buyer, and Buyer shall not indemnify or otherwise be liable to Seller unless
the aggregate amount of Buyer's or Seller's, as applicable, Loss and Expense
exceeds Ten Thousand Dollars ($10,000.00), in which event the indemnified party
shall be entitled to recover its aggregate Loss and Expense inclusive of such
Ten Thousand Dollars ($10,000.00) threshold; provided, however, that the
foregoing limitation shall not be applicable to the obligation of Buyer to pay
and discharge any Assumed Liabilities or any other obligations or liabilities of
Buyer under this Agreement or the obligation of Seller to pay and discharge
liabilities to third parties not assumed by Buyer hereunder.
9.5. Bulk Sales Indemnity. Buyer hereby waives compliance with the
provisions of any applicable bulk transfer laws, and Seller covenants to pay and
discharge when due all debts, obligations, and liabilities incurred prior to the
Closing Date relating to the Station and/or the Station Assets except the
Assumed Liabilities and other obligations assumed by Buyer under this Agreement.
Seller further agrees to indemnify and hold Buyer harmless from and indemnify
Buyer against any and all Loss and Expense, including, without limitation, any
claims made by creditors, with respect to non-compliance with any bulk transfer
law, except to the extent that such claims result from the Assumed Liabilities
and other obligations or liabilities to be paid or discharged by Buyer as
provided in this Agreement and/or Buyer's failure to pay the same when due.
9.6. Notice of Claims. If Buyer or Seller believe that it has suffered
or incurred any Loss and Expense, such party shall notify the other promptly in
writing and, in any event, within the applicable time period specified in
Section 9.1, describing such Loss and Expense, the amount thereof, if known, and
the method of computation of such Loss and Expense, all with reasonable
particularity and containing a reference to the provisions of this Agreement in
respect of which such Loss and Expense shall have occurred. If any action at law
or suit in equity is instituted by a third party with respect to which any of
the parties 'intends to claim any liability or expense as Loss and Expense under
this Article 9, such party shall promptly notify the indemnifying party of such
action or suit.
9.7. Defense of Third Party Claims. The indemnifying party under this
Article 9 shall have the right to conduct and control through counsel of its own
choosing any third party claim, action, or suit, but the indemnified party may,
at its election, participate in the defense of any such claim, action, or suit
at its sole cost and expense provided that, if the indemnifying party shall fail
to defend any such claim, action, or suit, then the indemnified party may defend
through counsel of its own choosing such claim, action, or suit, and (so long as
it gives the indemnifying party at least fifteen (15) days' notice of the terms
of the proposed settlement thereof and permits the indemnifying party to then
undertake the defense thereof) settle such claim, action, or suit, and to
recover from the indemnifying party the amount of such settlement or of any
judgment and the costs and expenses of such defense. The indemnifying party
shall
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not compromise or settle any third party claim, action, or suit without the
prior written consent of the indemnified party, which consent will not be
unreasonably withheld or delayed.
ARTICLE 10
POST-CLOSING MATTERS
10.1 Employee Matters. Buyer shall have no obligation to hire or retain
any employees of Seller subsequent to the Closing Date. Buyer does not agree to
pay and/or reimburse Seller for and/or to indemnify Seller from and against any
severance, sick leave, personal days, accrued vacation, or other liabilities
arising out of Seller's termination of the employment of any of its employees in
connection with the sale of the Station to Buyer (including, without limitation,
any liabilities under the so-called WARN Act or any applicable state laws
regarding termination of employees), This Section 10.1 shall operate exclusively
for the benefit of the parties to this Agreement and not for the benefit of any
other person or entity.
10.2. Corporate Name. Promptly after the Closing Date, Seller shall
take such action as is necessary to change or abandon the use of the name of
WYZZ-TV except as may be required by applicable law or regulation.
Notwithstanding anything in this Agreement to the contrary, Seller shall be
entitled to continue to use the name WYZZ-TV in connection with the collection
of any disputed receivables not collected by Buyer as provided herein.
10.3. Receivables. For a period of ninety (90) days after the Closing
Date, Buyer, as agent for Seller, agrees to use reasonable efforts in accordance
with normal business practices (but not including resorting to litigation or
threat thereof) to collect on behalf of Seller all accounts receivable of the
Station accrued through the Closing Date. All payments received from account
debtors shall be applied on a "first in, first out" basis, except to the extent:
(a) any account debtor may have specified otherwise, in which case, the account
debtor's instructions shall govern; or (b) an account is disputed by the account
debtor as properly d
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from account debtors shall be applied on a "first in, first out" basis, except
to the extent: (a) any account debtor may have specified otherwise, in which
case, the account debtor's instructions shall govern; or (b) an account is
disputed by the account debtor as properly due, and the account debtor has so
notified Buyer in writing, in which case, all payments received shall be applied
as provided above, except to the extent of such dispute. Buyer will promptly
give Seller written notice of any such dispute with respect to which Buyer has
received notice from the account debtor. The full amount of all payments
collected by Buyer monthly shall be remitted to Seller within fifteen (15) days
after the end of each calendar month during such ninety (90) day period. So
long as Buyer is in compliance with this Section 10.3 neither Seller, nor its
agents, shall make any direct solicitation of the account debtors for collection
purposes or other direct attempts to collect from account debtors during such
ninety (90) period except as may be agreed to by Buyer, except with respect to
those accounts which may be or become more than ninety (90) days past due, and
except those accounts from which Buyer has received written notice of a dispute
from the account debtor. Immediately following such ninety (90) day period,
Buyer shall furnish Seller with all files concerning any uncollected
receivables, and Buyer shall have no further responsibilities hereunder except
to remit promptly to Seller any amounts subsequently received by it on account
of such receivables.
ARTICLE 11
TERMINATION/MISCELLANEOUS
11.11. Termination of Agreement Prior to the closing Date. This Agrement
may be terminated at any time on or prior to the closing Date as follows:
(a) By Seller:
(1) if any of the conditions provided in Article 7 hereof have
not been met by the time required and have not been waived provided that the
failure to meet such conditions is not due to Seller's breach of the Agreement;
or
(ii) if Buyer fails to deliver any payment as required by
Sections 2. 1 (a) by or at the time such payment is due hereunder.
(b) By Buyer:
(1) if any of the conditions or deliveries provided in Article
8 and required by Section 11. 14 hereof have not been met or delivered by the
time required and have not been waived provided that the failure to meet such
conditions is not due to Buyer's breach o the Agreement; or
(c) By Either Buyer or Seller as Follows:
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(I) by mutual consent of all parties; or
(ii) if the Closing shall not have been completed by the dates set
forth in Article II, Section 2.2.
The parties hereto agree that 'time is of the essence with respect to the
provisions of this Section 11.1.
11.2. Liabilities upon Termination.
---------------------------
(a) Simultaneous with the execution and delivery of this Agreement,
Buyer and Seller are entering into an escrow agreement (the "Escrow Agreement")
with First Mariner Bank, a Maryland banking corporation, as escrow agent (the
"Escrow Agent"), substantially in the form of Schedule 11.2(a) hereto; and in
connection therewith, Buyer is depositing with Escrow Agent the amount of One
Million Dollars $1,000,000.00 (the "Escrow Deposit") by check or by wire
transfer of immediately available funds, and any interest thereon will be held
for the account of Buyer in accordance with the Escrow Agreement. Seller and
Buyer each agree to give notice to the Escrow Agent only in accordance with the
Escrow Agreement and this Section 11.2.
(b) The full amount of the Escrow Deposit shall be payable to Seller
if the Agreement is terminated by Seller pursuant to Article 11, Section 11.1
Termination of Agreement, Subsection (a) By Seller.
(c) The full amount of the Escrow Deposit shall be payable to Buyer
if: (i) the Agreement is terminated by Buyer pursuant to Article 11, Section
11.1 Termination of Agreement, Subsection (b) By Buyer; or (ii) the Agreement is
terminated by either party pursuant to Article 11, Section 11.1 Termination of
Agreement, Subsection (c) By Either Buyer or Seller as Follows.
(d) Seller's sole and exclusive remedy for any termination of this
Agreement or any failure of performance or compliance by Buyer with any covenant
or agreement contained in this Agreement prior to the Closing shall be its right
to receive the Escrow Deposit as provided in this Section 11.2. Buyer's sole and
exclusive remedies for any wrongful failure of performance or compliance by
Seller with any covenant, warranty, or agreement contained in this Agreement
shall be (i) its right to the return of the Escrow Deposit as provided in this
Agreement, and (ii) its right to seek specific enforcement of this Agreement
against Seller subject to FCC approval and other required approvals; provided,
however, Buyer shall not be entitled to specific performance unless it shall
have complied with and shall not be in breach of the terms and conditions of
this Agreement.
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11.3. Expenses. Each party hereto shall bear all of its expenses incurred
in connection with the transactions contemplated by this Agreement, including,
without limitation, accounting and legal fees incurred in connection herewith
provided that Seller and Buyer each shall pay one-half (1/2) of the FCC filing
fees, the Hart-Scott-Rodino Act filing fee, and any sales or transfer taxes
arising from transfer of the Station Assets.
11.4. Assignments. This Agreement shall not be assigned by any party hereto
without the prior written consent of the other party except that Buyer may
assign its rights and interests hereunder to any third party provided that Buyer
gives seller written notice thereof and that such assignment shall not relieve
Buyer of any of its obligations or liabilities hereunder without Seller's
consent. Any attempt to assign this Agreement without the required consent shall
be void. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
11.5. Further Assurances. From time to time prior to, at, and after the
Closing Date, each party hereto will execute all such instruments and take all
such actions as another party being advised by counsel shall reasonably request
in connection with carrying out and effectuating the intent and purpose hereof,
and all transactions and things contemplated by this Agreement, including,
without limitation, the execution and delivery of any and all confirmatory and
other instruments, in addition to those to be delivered on the Closing Date, and
any and all actions which may reasonably be necessary to complete the
transactions contemplated hereby.
11.6. Notices. All notices, demands, and other communications which nay or
are required to be given hereunder or with respect hereto shall be in writing,
shall be delivered personally or sent by nationally recognized overnight
delivery service, charges prepaid, or by registered or certified mail,
retum-receipt requested, and shall be deemed to have been given or made when
personally delivered, the next business day after delivery to such overnight
delivery service, five (5) days after deposited in the mail, first class postage
prepaid, addressed as follows:
(a) If to Seller:
Bloomington Comco, Inc.
2250 Seymour Avenue
Cincinnati, Ohio 45212
Attn: Gerald J. Robinson
With Copy to:
or to such other address as Seller may from time to time designate.
29
<PAGE>
( b) If to Buyer:
Sinclair Broadcast Group, Inc.
2000 W. 41st Street
Baltimore, Maryland 21211
Attn: Mr. David D. Smith
With Copy to:
Steven A. Thomas, Esquire
Thomas & Libowitz, P.A.
The USF&G Tower
100 Light Street
Suite 1100
Baltimore, Maryland 21202-1053
or to such other address as Buyer may from time to time designate.
11.7. Captions. The captions of Articles and Sections of this Agreement are
for convenience only, and shall not control or affect the meaning or
construction of any of the provisions of this Agreement.
11 .8. Law Governing. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF MARYLAND WITHOUT REFERENCE TO ITS
PRINCIPLES OF CONFLICT OF LAWS, EXCEPT TO THE EXTENT THAT THE FEDERAL LAW OF THE
UNITED STATES GOVERNS THE TRANSACTIONS CONTEMPLATED HEREBY.
11.9. Consent to Jurisdiction, Etc. IN THE EVENT OF ANY ACTION OR
PROCEEDING WITH RESPECT TO ANY MATTER PERTAINING TO THIS AGREEMENT, THE PARTIES
HERETO HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY, THE PARTIES HERETO HEREBY
IRREVOCABLY CONSENT TO THE NONEXCLUSIVE JURISDICTION AND VENUE OF THE COURTS OF
ILLINOIS LOCATED IN THE CITY OF BLOOMINGTON AND OF ANY FEDERAL COURT LOCATED IN
THE CENTRAL DISTRICT OF ILLINOIS IN CONNECTION WITH ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT THE PARTIES HERETO HEREBY WAIVE
PERSONAL SERVICE OF ANY PROCESS IN CONNECTION WITH ANY SUCH ACTION OR PROCEEDING
AND AGREE THAT THE SERVICE THEREOF MAY BE MADE BY CERTIFIED OR REGISTERED MAIL
ADDRESSED TO OR BY PERSONAL DELIVERY TO THE OTHER PARTY AT SUCH OTHER PARTY'S'S
ADDRESS SET FORTH PURSUANT TO PARAGRAPH 11*6 HEREOF* IN THE ALTERNATIVE, IN ITS
DISCRETION, ANY OF THE PARTIES
30
<PAGE>
HERETO MAY EFFECT SERVICE UPON ANY OTHER PARTY IN ANY OTHER FORM OR MANNER
PERMITTED BY LAW,
11.10. Waiver of Provisions. The terms, covenants, representations,
warranties, and conditions of this Agreement may be waived only by a written
instrument executed by the party waiving compliance. The failure of any party at
any time or times to require performance of any provision of this Agreement
shall in no manner affect the right at a later date to enforce the same. No
waiver by any party of any condition or the breach of any provision, term,
covenant, representation, or warranty contained in this Agreement, whether by
conduct or otherwise, in any one or more instances shall be deemed to be or
construed as a further or continuing waiver of any such condition or of the
breach of any other provision, term, covenant, representation, or warranty of
this Agreement.
11.11. Counterparts. This Agreement may be executed in two (2) or more
counterparts, and all counterparts so executed shall constitute one (1)
agreement binding on all of the parties hereto, notwithstanding that all the
parties are not signatory to the same counterpart.
11.12. Entire Agreement/Amendments. This Agreement (including the Schedules
hereto), constitute the entire Agreement among the parties pertaining to the
subject matter hereof and supersede any and all prior and contemporaneous
agreements, understandings, negotiations, and discussions, whether oral or
written, between them relating to the subject matter hereof. No amendment or
waiver of any provision of this Agreement shall be binding unless executed in
writing by the party to be bound thereby.
11.13. Access to Books and Records. Buyer shall preserve for at least three
(3) years after the Closing Date all books and records included in the Station
Assets. At the request of Seller, Buyer agrees from time to time to give to the
officers, employees, accountants, and counsel of Seller access, upon reasonable
prior notice during normal business hours, to the property, accounts, books,
contracts, records, accounts payable and receivable, records of employees of
Seller and other information concerning the affairs of the Station and to the
employees of Buyer as Seller may reasonably request in connection with any audit
by State of Federal Agencies of the Seller or the Station for any period prior
to the Closing Date and Seller's preparation of tax returns and reports. At the
request of Buyer, Seller agrees from time to time to give the officers,
employees, accountants, and counsel of Buyer access, upon reasonably prior
notice during normal business hours, to the books, records, and files retained
by Seller with respect to the business and operation of the Station by Seller as
Buyer may reasonable request in connection with an audit of the Station. Both
the Buyer and Seller shall be permitted at their own expense to make extracts
from or copies of the foregoing books, records, and files of the other party.
11.14. Delivery of Schedules: This Agreement has been executed by the
parties hereto prior to the attachment of the Schedules to be supplied by
Seller. The Seller has agreed that all Schedules shall be completed within
forty-five (45) days from this same date and shall be
31
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supplied by Seller to Buyer within Sixty (60) days of this same date, at which
time all Schedules shall be attached hereto and shall be a part hereof. If the
Schedules have not been completed and delivered in accordance with this Section
11,14, the Seller shall have breached its obligations hereunder.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their duly authorized officers, all as of the day and year first
above written.
WITNESS/ATTEST: SELLER
BLOOMINGTON COMCO, INC.
- ---------------------------------- By:_________________________(SEAL)
BUYER:
WYZZ, INC.
- ---------------------------------- By:_________________________(SEAL)
32
ASSET PURCHASE AGREEMENT
(LICENSE ASSETS)
BY AND BETWEEN
WTTE, CHANNEL 28, INC.
AND
WTTE, CHANNEL 28 LICENSEE, INC.
(COLLECTIVELY, "SELLER")
AND
GLENCAIRN, LTD.
("BUYER")
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 TRANSFER OF LICENSE ASSETS........................................ 1
1.1. Transfer of License Assets....................................... 1
1.2. Excluded Assets.................................................. 2
1.3. Liabilities...................................................... 3
ARTICLE 2 PURCHASE/CLOSING.................................................. 5
2.1. Purchase Price................................................... 5
2.2. Adjustments...................................................... 5
2.3. The Closing...................................................... 6
2.4. Deliveries at Closing............................................ 6
2.5. Effect of Laws or Proceedings.................................... 8
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER.......................... 9
3.1. Organization..................................................... 9
3.2. Authority........................................................ 9
3.3. FCC Licenses..................................................... 9
3.4. Condition of Assets..............................................10
3.5. Title, Etc.......................................................10
3.6. Call Letters, Trademarks, Etc....................................10
3.7. Insurance........................................................10
3.8. Contracts........................................................10
3.9. Employees........................................................11
3.10. Litigation ......................................................11
3.11. Compliance with Laws.............................................11
3.12. No Defaults......................................................11
3.13. Brokers..........................................................12
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER...........................12
4.1. Incorporation....................................................12
4.2. Corporate Action.................................................12
4.3. No Defaults......................................................12
4.4. Brokers..........................................................12
4.5. Qualification as a Broadcast Licensee............................12
4.6. Litigation.......................................................12
ARTICLE 5 COVENANTS OF SELLER PENDING THE CLOSING DATE......................13
5.1. Maintenance of Business..........................................13
5.2. Organization/Goodwill............................................14
5.3. Reports; Access to Facilities, Files, and Records................14
BALT:4686/2
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5.4. Application for Commission Consent...............................14
5.5. Consents.........................................................14
5.6. Notice of Proceedings............................................14
5.7. Confidential Information.........................................15
5.8. Consummation of Agreement........................................15
5.9. Notice of Certain Developments...................................15
5.10. Updated Information..............................................15
ARTICLE 6 COVENANTS OF BUYER PENDING THE CLOSING DATE.......................15
6.1. Application for Commission Consent...............................15
6.2. Confidential Information.........................................16
6.3. Consummation of Agreement........................................16
6.4. Notice of Proceedings............................................16
ARTICLE 7 CONDITIONS TO THE OBLIGATIONS OF SELLER...........................16
7.1. Representations, Warranties, and Covenants.......................16
7.2. Proceedings......................................................17
7.3. Opinion of Counsel...............................................17
7.4. FCC Authorization................................................17
7.5. Other Instruments................................................17
ARTICLE 8 CONDITIONS TO THE OBLIGATIONS OF BUYER............................17
8.1. Representations, Warranties, Covenants...........................18
8.2. Proceedings......................................................18
8.3. Opinion of Counsel...............................................18
8.4. Damage to the Assets.............................................18
8.5. FCC Licenses.....................................................18
8.6. Consents.........................................................19
8.7. Other Instruments................................................19
ARTICLE 9 INDEMNIFICATION...................................................19
9.1. Survival.........................................................19
9.2. Indemnification of Buyer.........................................19
9.3. Indemnification of Seller........................................20
9.4 Limitation of Liability..........................................20
9.5. Bulk Sales Indemnity.............................................20
9.6. Notice of Claims.................................................20
9.7. Defense of Third Party Claims....................................20
ARTICLE 10 POST-CLOSING MATTERS.............................................21
10.1. Employee Matters................................................21
10.2. Call Letters....................................................21
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ARTICLE 11 TERMINATION/MISCELLANEOUS........................................21
11.1. Termination of Agreement........................................21
11.2. Expenses........................................................22
11.3. Assignments.....................................................22
11.4. Further Assurances..............................................23
11.5. Notices.........................................................23
11.6. Captions........................................................24
11.7. Governing Law and Remedies......................................24
11.8. Consent To Jurisdiction, Etc....................................24
11.9. Waiver of Provisions............................................24
11.10. Counterparts....................................................25
11.11. Entire Agreement/Amendments.....................................25
11.12. Access to Books and Records.....................................25
11.13. Public Announcements............................................25
SCHEDULES
1.1(a) FCC Licenses and Renewal Dates
1.1(b) Tangible Personal Property
1.1(c) Contracts
1.1(d) Intellectual Property
1.3 Continuing Liabilities
2.1(b) Allocation of Purchase Price to Assets Acquired
2.4(a)(ii) Form of Local Marketing Agreement
3.8 Material Contracts
3.9 Employees Related to License Assets
3.10 Litigation Related to License Assets
Note: Any Schedules not delivered by Seller at the time of execution
of this Agreement shall be delivered within 15 days of
execution and must be acceptable to Buyer in its reasonable
judgment.
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is dated as of June 10, 1996, and is by
and between WTTE, CHANNEL 28, INC. a Maryland corporation and WTTE, CHANNEL 28
LICENSEE, INC., a Delaware corporation (collectively, "Seller") and GLENCAIRN,
LTD., a Maryland corporation, or its designee ("Buyer").
RECITALS
WHEREAS, Seller is the licensee of broadcast station WTTE-TV in
Columbus, Ohio (the "Station") pursuant to certain licenses, permits and other
authorizations (the "Licenses") issued by the Federal Communications Commission
(the "FCC Authorization").
WHEREAS, Seller desires to sell, assign, and transfer the Licenses,
including the FCC Authorization, and other Station assets related thereto
(collectively the "License Assets"), and Buyer desires to acquire the License
Assets, on the terms described herein.
NOW, THEREFORE, IN CONSIDERATION OF the foregoing and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
ARTICLE 1
TRANSFER OF LICENSE ASSETS
1.1. Transfer of License Assets. Upon and subject to the terms and
conditions stated in this Agreement, on the Closing Date (as hereinafter
defined) Seller shall convey, transfer, and deliver to Buyer, and Buyer shall
acquire from Seller all of the License Assets of Seller, real and personal,
tangible and intangible, of every kind and description which are owned and used
by Seller in connection with the business and operations of the Station, as a
going concern, free and clear of all liabilities, other than the Assumed
Liabilities (as hereinafter defined), and Liens, other than Permitted
Encumbrances (as hereinafter defined).
The License Assets include the following:
(a) FCC Licenses. All FCC Licenses issued with respect to the
Station, including, without limitation, those shown on Schedule 1.1(a) to this
Agreement, and all applications therefor, together with any renewals,
extensions, or modifications thereof and additions thereto.
(b) Tangible Personal Property. All equipment, vehicles,
furniture, fixtures, transmitting towers, transmitters, office materials and
supplies, spare parts and other tangible
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personal property of every kind and description owned as of the date of this
Agreement by Seller and used in connection with the business and operations of
the Station, including, without limitation, those shown on Schedule 1.1(b) to
this Agreement, and any additions, improvements, replacements, and alterations
thereto made between the date of this Agreement and the Closing Date, but
excluding all such property which is consumed, retired, or disposed of by Seller
in the ordinary course of their business between the date of this Agreement and
the Closing Date or as otherwise permitted by this Agreement.
(c) Contracts. All contracts relating to the License Assets to
which the Seller is a party, including all agreements, equipment and other
leases listed in Schedule 1.1(c) to this Agreement, together with all such
contracts that will have been entered into in the ordinary course of business of
the Station between the date of this Agreement and the Closing Date which are
related to the License Assets and the making of which by Seller is permitted by
this Agreement, to the extent existing as of the Closing Date. As used in this
Agreement, "Contract" means any agreement, lease, arrangement, commitment, or
understanding, written or oral, expressed or implied, to which the Station or
Seller with respect to the License Assets are a party or are bound.
(d) Intellectual Property. All trademarks, service marks,
patents, trade names, jingles, slogans, and logotypes owned and used by Seller
in connection with the business and operations of the Station as of the date
hereof, including, without limitation, Seller's rights to use the call letters
"WTTE" and any related names and phrases and those shown on Schedule 1.1(d) to
this Agreement and those acquired between the date hereof and the Closing Date
and all goodwill associated therewith.
(e) License Books and Records. All books and records of the
Seller relating to the employment of any employee of the Seller who becomes an
employee of the Buyer after the Closing and all other books and records of the
Seller relating primarily to one or more of the License Assets, including, but
not limited to, the FCC logs.
1.2. Excluded Assets.
The Excluded Assets shall include all of the asset of the Seller not
specifically included in the License Assets. The Excluded Assets shall include
but not be limited to the following:
(a) Cash. All cash, cash equivalents, and cash items of any
kind whatsoever, certificates of deposit, money market instruments, bank
balances, and rights in and to bank accounts, marketable and other securities of
Seller.
(b) Receivables. All notes and accounts receivable and other
receivables of Seller relating to or arising out of the operation of the Station
prior to Closing.
(c) Personal Property Disposed Of. All tangible personal
property disposed
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of or consumed in the ordinary course of the business of the Station.
(d) Insurance. All contracts of insurance and all insurance
plans and the assets thereof.
(e) Claims. Any and all claims of Seller with respect to
transactions prior to the Closing Date, including, without limitation, claims
for tax refunds and claims of Seller under contracts with respect to events
prior to the Closing Date.
(f) Pension Assets, Etc. Pension, profit sharing, retirement,
bonus, stock purchase, savings plans and trusts, 401(k) plans, health insurance
plans, and the assets thereof, and all other plans, agreements, or
understandings to provide employee benefits of any kind for employees of Seller.
(g) Certain Contracts. Seller's agreements, including all
program contracts not listed on Schedule 1.1(c) hereof (the "Excluded
Contracts") and any contract which is not capable of being transferred or
assigned without the approval or consent of any party thereto or any third party
if such approval or consent has not been obtained, subject, however, to Section
1.3 hereof.
(h) Certain Books and Records. Seller's account books of
original entry with respect to the Station, and all books, records, accounts,
checks, payment records, tax records (including payroll, unemployment, real
estate, and other tax records), and other similar books, records, and
information of Seller relating to Seller's operation of the business of the
Station prior to Closing, excluding those referred to in Section 1.1(e) above,
with the proviso that Buyer shall be allowed to maintain copies of all such
records and/or upon a written request for same shall be allowed further access
to all excluded records at all reasonable times.
1.3. Liabilities. The License Assets shall be sold and conveyed to
Buyer free and clear of all liens, security interests, and encumbrances except
(a) those disclosed on Schedule 1.3 hereto as "continuing," and the leases
listed on Schedule 1.1(c), if any; and (b) the Assumed Liabilities (as
hereinafter defined) and the other obligations and liabilities of Buyer assumed
hereunder (all of the foregoing are sometimes referred to herein collectively as
"Permitted Encumbrances"). Buyer agrees that on the Closing Date, Buyer shall
assume, undertake, and agree to pay, satisfy, perform, and discharge only those
liabilities and obligations of Seller which have not yet accrued, but which
arise on or after the Closing Date under the Contracts assigned pursuant to
Section 1.1(c) and any contracts that are entered into after the date hereof as
permitted by this Agreement and those liabilities and obligations referred to in
Section 10.1 hereof (all of the foregoing are referred to herein collectively as
the "Assumed Liabilities").
Notwithstanding any provision of this Agreement to the contrary, if any
required approval of or consent to the transfer and assignment of any contract
included in the License Assets is not obtained, Buyer shall assume and shall
pay, satisfy, perform, and discharge Seller's liabilities
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<PAGE>
and obligations which arise thereunder on and after the Closing Date unless
Buyer's enjoyment of the rights and benefits under any such contract is
expressly terminated by the other party thereto by affirmative action within six
(6) months after the Closing Date because of such failure to obtain approval or
consent and not because of any other default or nonperformance by Buyer. The
liabilities and obligations assumed pursuant to the immediately preceding
sentence shall also constitute "Assumed Liabilities" for purposes of this
Agreement.
Buyer shall not assume or be liable for (a) any liability or obligation
arising out of the License Assets prior to the Closing Date (except for the
Assumed Liabilities and other obligations and liabilities specifically assumed
by Buyer hereunder); (b) any liability or obligation under any contracts not
specifically assumed by Buyer hereunder; (c) any liability or obligation of
Seller for any federal, state, or local income or other taxes; (d) any liability
or obligation to any employee or former employee of Seller or the Station
attributable to any period of time prior to the Closing Date (including
liability for accrued vacation and other benefits adjusted pursuant to Section
2.2 hereof); (e) any liability or obligation of Seller arising out of any
litigation, proceeding, or claim by any person or entity relating to the License
Assets prior to the Closing Date, whether or not such litigation, proceeding, or
claim is pending, threatened, or asserted before, on, or after the Closing Date;
(f) any severance or other liability arising out of the termination of any
employee's employment with Seller; or (g) any duty, obligation, or liability
relating to any pension, 401(k) or other similar plan, agreement, or arrangement
provided by Seller to employees of Seller, and none of such plans shall be
assumed by Buyer.
Notwithstanding any provision of this Agreement to the contrary, to the
extent, if any, Seller makes payment to Buyer as a result of any proration and
adjustment pursuant to Section 2.2 hereof, Buyer assumes and shall be obligated
to pay the special assessments, accrued vacation, and other obligations and
liabilities for which adjustment was made pursuant to Section 2.2.
Seller shall not be liable for: (a) any liability or obligation arising
out of the business or operations of the License Assets on or after the Closing
Date; (b) any Assumed Liabilities or other liabilities and obligations assumed
by the Buyer under this Agreement; (c) any liability or obligation of Buyer for
any federal, state, or local income or other taxes; (d) any liability or
obligation incurred or assumed by Buyer with respect to any License Assets; (e)
any liability or obligation to any employee or former employee of Buyer or the
Station attributable to any period of time on or after the Closing Date or, to
the extent of any proration pursuant to Section 2.2(a) hereof, to any former
employee of Seller attributable to any period of time prior to the Closing Date;
(f) any liability or obligation of Buyer arising out of any litigation,
proceeding, or claim by any person or entity relating to the License Assets on
or after the Closing Date; or (g) any duty, obligation, or liability relating to
any person, 401(k) or other similar plan, agreement, or arrangement provided by
Buyer to employees of Buyer.
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ARTICLE 2
PURCHASE/CLOSING
2.1. Purchase Price.
(a) In consideration of Seller's performance of this Agreement
and the transfer and delivery of the License Assets to Buyer at the Closing,
Buyer will pay to Seller an amount equal to the fair market value of the License
Assets as determined by a recognized appraisal firm regularly performing
appraisals of broadcasting assets and selected by Seller and approved by Buyer,
such approval not to be unreasonably withheld, and set forth in a written report
delivered to Buyer no later than fifteen (15) days prior to the Closing (the
"Purchase Price"), plus or minus the amount of any adjustments made pursuant to
Section 2.2 below, and Buyer will assume the Assumed Liabilities and the other
obligations and liabilities to be assumed by Buyer hereunder. The Purchase Price
shall be paid by Buyer to Seller on the Closing Date by wire transfer of
immediately available funds to such bank accounts as are designated by Seller on
or prior to the Closing Date.
(b) Buyer and Seller agree to allocate the Purchase Price
among the License Assets as designated on Schedule 2.1(b) and, Buyer and Seller
agree to file returns and reports (including income tax returns) on the basis of
such allocations.
2.2. Adjustments.
(a) Use of the License Assets and any income, expenses, and
liabilities attributable thereto through 11:59 p.m. on the day preceding the
Closing Date (the "Adjustment Date") shall be for the account of Seller and,
thereafter, for the account of Buyer, and shall be prorated accordingly. Items
including, but not limited to, power and utilities charges, ad valorem property
taxes upon the basis of the most recent assessment available, commissions,
wages, payroll taxes, and accrued vacation pay of employees of Seller who enter
the employment of Buyer (all such vacation pay accrued prior to the Closing Date
to be the responsibility of Seller), rents, and similar prepaid or deferred
items which are directly related to the License Assets, shall be prorated
between Seller and Buyer; the proration to be made as of the Adjustment Date.
There shall be prorations and/or adjustments with respect to any sick leave and
personal days accrued on or prior to the Closing Date by any employees of Seller
whose employment is directly related to the License Assets, and Seller shall
assume and be responsible for all liabilities in respect thereof. All special
assessments and similar charges or liens imposed against the License Assets in
respect of any period of time through the Adjustment Date, whether payable in
installments or otherwise, shall be the responsibility of Seller, and amounts
payable with respect to such special assessments, charges, or liens imposed
against the License Assets in respect of any period of time after the Adjustment
Date, shall be the responsibility of Buyer and shall be adjusted as required
hereunder.
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(b) On the Closing Date, to the extent practicable, the
adjustments provided in Section 2.2(a) shall be made on the basis of the then
most recently available financial statements and other information of the
Station (the "Preliminary Adjustments"). Within forty-five (45) days after the
Closing Date, the Buyer shall prepare a closing balance sheet (the "Closing
Balance Sheet") as of the close of business on the Adjustment Date and submit it
to Seller for review. Within seventy-five (75) days after the Closing Date,
final adjustments pursuant to Section 2.2 shall be determined, and any required
refund or payment shall be made on the basis of the Closing Balance Sheet. If
any dispute arises over the amount to be refunded or paid, such refund or
payment shall nonetheless be made to the extent such amount is not in dispute.
If any such dispute cannot be resolved by the parties or their
respective independent public accountants within one hundred eighty (180) days
after the Closing Date, the dispute shall be referred to a mutually satisfactory
independent public accounting firm of national stature which has not been
employed by any party hereto for the two (2) years preceding the date of such
referral; such referral to be selected by Seller's and Buyer's respective
independent public accountants. The determination of such firm shall be
conclusive and binding on each party. One half of the fees of such firm shall be
paid by Seller, and one half shall be paid by Buyer.
2.3. The Closing. The closing of the transactions provided for in this
Agreement (the "Closing") shall be held in the offices of Buyer's legal counsel,
or at such other place that the Buyer may direct, at 10:00 a.m. on a date (which
shall be the first day of a calendar month) (the "Closing Date") as shall be
mutually agreed upon by the parties which is not later than thirty (30) days
after the FCC approvals and consents to the transactions contemplated hereby
shall have become a "Final Grant," but in no event later than December 31, 1998.
The term "Final Grant" is defined in Section 8.5 hereof.
Buyer agrees to use its best efforts to close the transactions as soon
as practicable after the FCC consents and approvals to the transactions
contemplated hereby have become a "Final Grant". However, the Seller agrees that
the Buyer shall have the option, but not the obligation, to waive the necessity
of a "Final Grant" by the FCC and elect to close upon an "Initial Grant" (as
that term is defined in Section 7.4 hereof).
2.4. Deliveries at Closing. All actions at the Closing shall be deemed
to occur simultaneously, and no document or payment shall be deemed to be
delivered or made until all documents and payments are delivered or made to the
reasonable satisfaction of Buyer, Seller, and their respective counsel.
(a) Deliveries by Seller. At the Closing, Seller shall deliver
to Buyer such instruments of conveyance and other customary documentation as
shall in form and substance be reasonably satisfactory to Buyer and its counsel,
including, without limitation, the following:
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(i) one or more bills of sale conveying the personal
property included in the License Assets;
(ii) a local marketing agreement executed by Seller
substantially in the form attached hereto as Schedule 2.4(a)(ii);
(iii) one or more assignments conveying the FCC Licenses
and all leases, contracts, and other intangible assets included in the License
Assets;
(iv) any releases of liens that are necessary in order to
transfer the License Assets as contemplated by Section 1.3;
(v) certificates of Seller as required by Section 8.1(c)
hereof;
(vi) a certified copy of the resolutions or proceedings
of Seller authorizing the transactions contemplated by this Agreement;
(vii) certificates as to the existence and good standing
of each corporation comprising the Seller issued by the Maryland State
Department of Assessments and Taxation and Secretary of State of Delaware dated
shortly before the Closing Date;
(viii) a receipt for the Purchase Price;
(ix) the opinions of counsel required by Section 8.3
hereof;
(x) all consents received by Seller through the Closing
Date to the assignment to or assumption by Buyer of licenses, contracts, and
leases included in the License Assets; and
(xi) such other documents as Buyer shall reasonably
request.
(b) Deliveries by Buyer. At the Closing, Buyer shall deliver
to Seller the Purchase Price and such instruments of assumption and other
customary documentation as shall in form and substance be reasonably
satisfactory to Seller and its counsel, including, without limitation, the
following:
(i) the Purchase Price which shall be delivered in the
manner set forth in Section 2.1 hereof;
(ii) a local marketing agreement executed by Buyer
substantially in the form attached hereto as Schedule 2.4(a)(ii);
(iii) an assumption of liabilities pursuant to which
Buyer will assume the
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Assumed Liabilities;
(iv) a certificate of Buyer as required by Section 7.1(c)
hereof;
(v) a certified copy of the resolutions or proceedings of
Buyer authorizing the transactions contemplated by this Agreement;
(vi) a certificate as to the existence and good standing
of Buyer issued by the Maryland State Department of Assessments and Taxation
shortly before the Closing Date;
(vii) the opinion of counsel required by Section 7.3
hereof; and
(viii) such other documents as Seller shall reasonably
request.
2.5. Effect of Laws or Proceedings. The parties hereto acknowledge and
agree that, notwithstanding anything in this Agreement or any other documents
related hereto to the contrary (including, without limitation, any
representations or warranties made by Seller, covenants of the Seller made
herein, any condition precedent to the obligations of Buyer set forth in this
Agreement, or any provisions relating to indemnification to be made by Seller
hereunder), matters relating to, in connection with or resulting or arising
from: (a) the effect, for purposes of any laws, statutes, ordinances, rules,
regulations, orders or other actions, whenever promulgated or enacted, including
any communications or communications-related laws, statutes, ordinances, rules,
regulations, orders or other actions, whenever promulgated or enacted, and any
licenses, permits or authorizations issued by any governmental authority
(including, without limitation, the FCC) (collectively, "Laws") or any contract
or agreement to be conveyed to or assumed, directly or indirectly, by Buyer
pursuant hereto(collectively, "Conveyed Contracts"), of (1) the transfer of the
License Assets to Buyer and the retention by Seller of the Excluded Assets or
(2) the consummation of the other transactions contemplated hereby; (b) any
conflict with, violation of, termination of or breach or default under any Laws
or Conveyed Contracts as a result of the consummation of any of the transactions
contemplated hereby; or (c) any claims, actions, suits or other proceedings of
any nature whatsoever ("Proceedings"), by any person or entity (including,
without limitation, any governmental entity) by or before any court,
administrative agency or otherwise, alleging a conflict, violation of, breach or
default under, termination of, or other inconsistency with Laws or Conveyed
Contracts as a result of the consummation of any of the transactions
contemplated hereby shall not:
(i) cause or constitute, directly or indirectly, a breach by Seller of
any of its representations, warranties, covenants or agreements set forth in
this Agreement or any other document related hereto (and such representations,
warranties, covenants and agreements shall hereby be deemed to be modified
appropriately to reflect and permit the impact and existence of such Laws,
Conveyed Contracts and Proceedings and to permit any action by Seller to comply
with or attempt in good faith to comply with such Laws, Conveyed Contracts and
Proceedings);
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(ii) otherwise cause or constitute, directly or indirectly, a default
or breach by Seller under this Agreement or any other documents related hereto;
(iii) result in the failure of any condition precedent to the
obligations of Buyer under this Agreement or any other document related hereto
to be satisfied;
(iv) otherwise excuse Buyer's performance of its obligations under this
Agreement or any other document related hereto; or
(v) give rise to any claim for indemnification or other compensation by
Buyer or any adjustment of the Purchase Price.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Each Seller represents and warrants to Buyer as follows:
3.1. Organization. Each corporation comprising the Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of the state of its incorporation. Each Seller has the corporate power and
authority to carry on the business of the Station now being conducted by it, to
own and operate the License Assets owned and operated by it, and to enter into
and consummate the transactions contemplated by this Agreement.
3.2. Authority. All corporate actions and proceedings necessary to be
taken by or on the part of Seller in connection with the execution and delivery
of this Agreement and the consummation of transactions contemplated hereby and
necessary to make the same effective have been duly and validly taken. This
Agreement has been duly and validly authorized, executed, and delivered by each
Seller and constitutes its valid and binding agreement, enforceable in
accordance with and subject to its terms, except as limited by laws affecting
the enforcement of creditors' rights or contractual obligations generally.
3.3. FCC Licenses. WTTE, Channel 28 Licensee, Inc. is the holder of the
FCC Licenses listed in Schedule 1.1(a) to this Agreement. Such FCC Licenses
constitute all of the licenses and authorizations required under the
Communications Act of 1934, as amended (the "Communications Act"), or the
current rules, regulations, and policies of the FCC for and/or used in the
operation of the Station as now operated by Seller. The FCC Licenses are validly
issued and in full force and effect and will not be subject to or scheduled for
renewal until at least October 1, 1997. Except as set forth in Schedule 3.3,
there is not pending, or to the knowledge of Seller, threatened any action by or
before the FCC to revoke, cancel, rescind, modify, or refuse to renew in the
ordinary course any of the FCC Licenses, and there is not now pending, or to the
actual knowledge of Seller, threatened, issued, or outstanding by or before
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the FCC, any investigation, order to show cause, notice of violation, notice of
apparent liability, or notice of forfeiture or complaint against Seller with
respect to the Station. The Station is operating in compliance, in all material
respects, with the FCC Licenses, the Communications Act, and the current rules
and regulations of the FCC. The renewal dates for all FCC Licenses are disclosed
on Schedule 1.1(a) to this Agreement.
3.4. Condition of Assets. The material tangible assets included in the
License Assets are being maintained in accordance with general industry
practices in good operating condition and repair, wear and tear in ordinary
usage excepted.
3.5. Title, Etc. Seller has good and marketable title to the tangible
assets and personal property included in the License Assets, and all such assets
and personal property will on the Closing Date be free and clear of all security
interests, mortgages, pledges, liens, encumbrances, or charges of any nature
whatsoever except for Permitted Encumbrances.
3.6. Call Letters, Trademarks, Etc. Seller possesses adequate rights,
licenses, or other authority to use all call letters, trademarks, and trade
names necessary to conduct the business of the Station as presently conducted or
presently proposed to be conducted by Seller. Seller has not received any notice
with respect to any alleged infringement or unlawful or improper use of any
copyright, trademark, trade name, or other intangible property right owned or
alleged to be owned by others and used in connection with the Station. Seller
represents and warrants that all trademarks listed on Schedule 1.1(d) hereto are
duly registered and validly issued to Seller.
3.7. Insurance. The License Assets are, as of the date of this
Agreement, adequately insured by Seller against loss or damage by fire and other
hazards and risks of the character usually insured against by persons operating
similar properties and businesses under policies issued by insurers of
recognized responsibility.
3.8. Contracts. Schedules 1.1(c) and 3.8 to this Agreement contain a
complete list of the following, as to which the Station or Seller with respect
to the Station is a party, as of the date of this Agreement:
(a) employment contracts;
(b) licenses or agreements under which Seller is authorized to
broadcast on the Station filed or taped programming supplied by others;
(c) leases of personal property which have a term, including
renewal options exercisable by any other party thereto, ending more than one
year after the date of this Agreement and/or which involve annual payments of
more than $10,000.00;
(d) contracts not made in the ordinary and usual course of
business; and
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(e) any other contracts which are material to the use of the
License Assets.
3.9. Employees. Schedules 3.9 lists all employees of the Seller whose
employment is directly related to the License Assets, as of the date of this
Agreement, and their respective salaries and dates of hire and includes
information on the benefits provided to employees (including, without
limitation, pension, retirement, hospitalization, life, accident or medical
insurance, vacation, and other employee benefit plans, agreements, arrangements,
or understandings). Except as described on Schedule 3.9, Seller has no written
or oral contracts of employment with any employee. Seller is not a party to or
subject to any collective bargaining agreements with respect to the Station, nor
does Seller have any other contracts with any labor union or other labor
organization with respect to the Station. Seller is not a party to any pending
or, to its actual knowledge (after inquiry of the Station's management),
threatened labor dispute affecting the Station.
3.10. Litigation. Except as set forth on Schedule 3.10 hereto, (i)
Seller, with respect to the License Assets, has not been operating under or
subject to or in default with respect to any order, writ, injunction, or decree
of any court or federal, state, municipal, or other governmental department,
commission, board, agency, or instrumentality which has had or could reasonably
be expected to have a material adverse effect on the use of the License Assets;
(ii) there is no litigation pending by or against, or to Seller's actual
knowledge (after inquiry of the Station's management) threatened against, Seller
related to or affecting any of the License Assets which materially interferes or
could reasonably be expected to materially interfere with Seller's ability to
transfer the License Assets to Buyer. There are no attachments, executions, or
assignments for the benefit of creditors or voluntary or involuntary proceedings
in the bankruptcy pending against or contemplated by Seller, and no such actions
have been threatened against Seller. There is no litigation or proceeding
pending or, to the best of Seller's knowledge, threatened against or affecting
Seller that would affect Seller's ability to carry out the transactions
contemplated by this Agreement.
3.11. Compliance with Laws. Seller, with respect to the License Assets,
is to its knowledge in compliance in all material respects with all applicable
laws, regulations, and orders, and the present uses by Seller of the License
Assets do not, to Seller's actual knowledge (after inquiry of the Station's
management), violate any such laws, regulations, or orders in any material
respect.
3.12. No Defaults. On the Closing Date, neither the execution and
delivery by Seller of this Agreement, nor the consummation by Seller of the
transactions contemplated hereby would constitute or, with the giving of notice
or the passage of time or both, would constitute a violation of or would
conflict with or result in any breach of or any default under, any of the terms,
conditions, or provisions of any law or regulation to which Seller is subject,
or of Seller's Charter or By-Laws, or of any material contract, agreement, or
instrument to which Seller is a party or by which Seller is bound, except to the
extent any necessary consents to assignment of the program contracts and
consents to assignment of the leases and other contracts included
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in the License Assets are required and have not been obtained.
3.13. Brokers. There is no broker or finder or other person who would
have any valid claim against any of the parties to this Agreement for a
commission or brokerage in connection with this Agreement or the transactions
contemplated hereby as a result of any agreement or understanding of or action
taken by Seller.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
4.1. Incorporation. Buyer is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Maryland, and has
the corporate power and authority to enter into and consummate the transactions
contemplated by this Agreement.
4.2. Corporate Action. All corporate actions and proceedings necessary
to be taken by or on the part of Buyer in connection with the execution and
delivery of this Agreement and the consummation of transactions contemplated
hereby and necessary to make the same effective have been duly and validly
taken. This Agreement has been duly and validly authorized, executed, and
delivered by Buyer, and constitutes its valid and binding agreement, enforceable
in accordance with and subject to its term, except as limited by laws affecting
the enforcement of creditors' rights or contractual obligations generally.
4.3. No Defaults. On the Closing Date, neither the execution and
delivery by Buyer of this Agreement, nor the consummation by Buyer of the
transactions contemplated hereby, will constitute or, with the giving of notice
or the passage of time or both, would constitute a violation of or would
conflict with or result in any breach of or default under any of the terms,
conditions, or provisions of any judgment, law, or regulation, or Buyer's
Charter or By-Laws, or any contract, agreement, or instrument to which Buyer is
a party or by which it is bound.
4.4. Brokers. There is no broker or finder or other person who would
have any valid claim against any of the parties to this Agreement for a
commission or brokerage in connection with this Agreement or for the
transactions contemplated hereby as a result of any agreement or understanding
of or action taken by Buyer.
4.5. Qualification as a Broadcast Licensee. Buyer knows of no fact that
would under existing law and the existing rules, regulations, policies, and
practices of the FCC, disqualify Buyer as an assignee of the FCC Licenses or as
owner and operator of the License Assets.
4.6. Litigation. There is no litigation, proceeding, or investigation
of any nature pending or, to the best of Buyer's knowledge, threatened against
or affecting it that would affect Buyer's ability fully to carry out the
transactions contemplated by this Agreement. There are no attachments,
executions, or assignments for the benefit of creditors or voluntary or
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involuntary proceedings in bankruptcy pending against or contemplated by Buyer,
and no such actions have been threatened against Buyer.
ARTICLE 5
COVENANTS OF SELLER PENDING THE CLOSING DATE
Seller covenants and agrees that from the date hereof to and including
the Closing Date:
5.1. Maintenance of Business. Seller shall, with respect to the License
Assets, continue to carry on its business and operations and keep its books of
account, records, and files in the ordinary and usual course of business. Seller
shall continue to operate the Station in all material respects in accordance
with the terms of the FCC Licenses and in compliance in all material respects
with all applicable laws and FCC rules and regulations. Seller will promptly
execute any necessary applications for renewal of the FCC Licenses.
Seller will maintain in full force and effect through the Closing Date
adequate property damage, liability, and other insurance with respect to the
License Assets.
Nothing contained in this Agreement shall give Buyer any right to
control the programming, operations, or any other matter relating to the Station
prior to the Closing Date, and Seller shall have complete control of the
programming, operations, and all other matters relating to the Station up to the
Closing Date.
Prior to the Closing Date, except as otherwise permitted by the last
paragraph of this Section 5.1, Seller will not without the prior written consent
of Buyer (to the extent the following restrictions are permitted by the FCC and
all applicable law):
(a) sell, lease, transfer, or agree to sell, lease, or
transfer any License Assets which are material to the operation of the Station,
considered as a whole or which have individually or in the aggregate a value in
excess of $25,000.00 without replacement thereof with a substantially equivalent
asset of substantially equivalent kind, condition, and value; or
(b) enter into any contract of employment or collective
bargaining agreement which will be binding on Buyer, permit any increases in the
compensation of any of the Station's employees whose employment is related to
the License Assets, except to the extent consistent with past practices.
Notwithstanding anything to this Agreement to the contrary, Seller
shall be entitled to renew or extend the term of any contract listed on Schedule
1.1(c) which, by its terms, expires or will expire prior to December 31, 1996
and, in connection therewith, agree to increase the amounts payable thereunder
during any such renewal term in accordance with the Station's usual practices.
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5.2. Organization/Goodwill. Seller shall use best efforts to preserve
the business organization of the Station and preserve the goodwill of the
Station's suppliers, customers, and others having business relations with it.
5.3. Reports; Access to Facilities, Files, and Records. At the request
of Buyer, Seller shall from time to time give or cause to be given to the
officers, employees, accountants, counsel, and representatives of Buyer (i)
access, upon reasonable prior notice, during normal business hours to all
facilities, property, accounts, books, deeds, title papers, insurance policies,
licenses, agreements, contracts, commitments, records, equipment, machinery,
fixtures, furniture, vehicles, accounts payable and receivable, and inventories
related to the Station, and (ii) all such other information concerning the
affairs of the Station as Buyer may reasonably request provided that the
foregoing does not materially disrupt or interfere with the business and
operations of the Station.
5.4. Application for Commission Consent. As promptly as practicable
after the date of this Agreement and in no event later than fifteen (15) days
after the date hereof, Seller will complete Seller's portion of applications to
the FCC requesting its written consent to the assignment of the FCC Licenses for
the Station (and any extension or renewals thereof) to Buyer, and upon receipt
of Buyer's applications pursuant to Section 6.1 hereof, will promptly file such
applications with the FCC jointly with Buyer. Seller will diligently take or
cooperate in the taking of all steps that are necessary, proper, or desirable to
expedite the preparation of such applications and its prosecution to a Final
Grant. Seller will promptly provide Buyer with a copy of any pleading, order, or
other document served on it relating to such applications.
5.5. Consents. Seller will use best efforts to obtain or cause to be
obtained prior to the Closing Date consents to the assignment to or assumption
by Buyer of all material Licenses or Contracts included in the License Assets
that require the consent of any third party by reason of the transactions
provided for in this Agreement. If any material necessary consent or approval is
not obtained prior to the Closing Date, then Seller will cooperate with Buyer in
any reasonable arrangement deemed necessary or desirable by Buyer to provide to
Buyer, after the Closing Date, the benefits under such Contracts, including
enforcement for the benefit of Buyer of any and all rights of Seller against
third parties.
5.6. Notice of Proceedings. Seller will promptly notify Buyer in
writing upon becoming aware of any order or decree or any complaint praying for
an order or decree restraining or enjoining the consummation of this Agreement
or the transactions contemplated hereunder, or upon receiving any notice from
any governmental department, court, agency, or commission of its intention to
institute an investigation into or institute a suit or proceeding to restrain or
enjoin the consummation of this Agreement or such transactions, or to nullify or
render ineffective this Agreement or such transactions if consumed.
5.7. Confidential Information. If for any reason the transactions
contemplated in this Agreement are not consummated, Seller shall not use or
disclose to third parties (except as may
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be required by law) any confidential information received from Buyer or its
agents in the course of investigating, negotiating, and completing the
transactions contemplated by this Agreement. Nothing shall be deemed to be
confidential information that (a) is known to Seller at the time of its
disclosure to it; (b) becomes publicly known or available other than through
disclosure by Seller; (c) is rightfully received by Seller from a third party;
or (d) is independently developed by Seller.
5.8. Consummation of Agreement. Subject to the provisions of Section
11.1 of this Agreement, Seller shall use its best efforts to fulfill and perform
all conditions and obligations on its part to be fulfilled and performed under
this Agreement and to cause the transactions contemplated by this Agreement to
be fully carried out.
5.9. Notice of Certain Developments. Seller shall give prompt written
notice to Buyer (a) if the License Assets have suffered damage on account of
fire, explosion, or other cause of any nature which is sufficient to prevent
operation of Station for more than four (4) days, and (b) if the regular
broadcast transmission of Station in the normal and usual manner in which it
heretofore has been operating is interrupted for a period of four (4) days or
more.
5.10. Updated Information. Seller agrees to provide to Buyer on or
shortly prior to the Closing Date a list of any additional leases or contracts
which would have been required to be listed on Schedule 1.1(c) hereto pursuant
to Article 3 hereof if such leases or contracts existed on the date of this
Agreement.
ARTICLE 6
COVENANTS OF BUYER PENDING THE CLOSING DATE
Buyer covenants and agrees that from the date hereof to and including
the Closing Date:
6.1. Application for Commission Consent. As promptly as practicable
after the date of this Agreement, and in no event later than fifteen (15) days
from the date hereof, Buyer will complete and give to Seller a fully executed
copy of Buyer's portion of applications to the FCC requesting its written
consent to the assignment of the FCC requesting its written consent to the
assignment of the FCC Licenses (and any extension or renewals thereof) to Buyer.
Buyer will diligently take or cooperate in the taking of all steps that are
necessary, proper, or desirable to expedite the preparation of such application
and its prosecution to a Final Grant. Buyer will promptly provide Seller with a
copy of any pleading, order, or other document served on it relating to such
application.
6.2. Confidential Information. If for any reason the transactions
contemplated in this Agreement are not consummated, Buyer shall not use for its
or any third party's benefit and shall not disclose to third parties (except as
may be required by law) any confidential information (including, without
limitation, financial information) received from Seller or its agents in the
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course of investigating, negotiating, and performing the transactions
contemplated by this Agreement. Nothing shall be deemed to be confidential
information that (a) is known to Buyer at the time of its disclosure to it; (b)
becomes publicly known or available other than through disclosure by Buyer; (c)
is rightfully received by Buyer from a third party; or (d) is independently
developed by Buyer.
6.3. Consummation of Agreement. Subject to the provisions of Section
11.1 of this Agreement, Buyer shall use its best efforts to fulfill and perform
all conditions and obligations on its part to be fulfilled and performed under
this Agreement and to cause the transactions contemplated by this Agreement to
be fully carried out. Buyer agrees to cooperate with Seller in connection with
obtaining consents to the assignment to or assumption by Buyer of any Licenses
or Contracts included in the License Assets, and to execute such assumption
instruments as may be required in connection with obtaining such consents.
6.4. Notice of Proceedings. Buyer will promptly notify Seller in
writing upon becoming aware of any order or decree or any complaint praying for
an order or decree restraining or enjoining the consummation of this Agreement
or the transactions contemplated hereunder, or upon receiving any notice from
any governmental department, court, agency, or commission of its intention to
institute an investigation into or institute a suit or proceeding to restrain or
enjoin the consummation of this Agreement or such transactions, or to nullify or
render ineffective this Agreement or such transactions if consummated.
ARTICLE 7
CONDITIONS TO THE OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement are, at its option,
subject to the fulfillment of the following conditions prior to or at the
Closing Date:
7.1. Representations, Warranties, and Covenants.
(a) Each of the representations and warranties of Buyer
contained in this Agreement shall have been true and accurate in all material
respects as of the date when made and shall be deemed to be made again on and as
of the Closing Date and shall then be true and accurate except to the extent
changes are permitted or contemplated pursuant to this Agreement.
(b) Buyer shall have performed and complied with each and
every covenant and agreement required by this Agreement to be performed or
complied with by it prior to or at the Closing Date.
(c) Buyer shall have delivered to Seller a certificate of an
officer of Buyer dated the Closing Date certifying to the fulfillment of the
conditions set forth in Sections 7.1(a) and 7.1(b).
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7.2. Proceedings. As of the Closing Date, (a) no action or proceeding
shall have been instituted before any court or governmental body to restrain or
prohibit, or to obtain substantial damages in respect of, the consummation of
this Agreement that, in the reasonable opinion of Seller, may reasonably be
expected to result in a preliminary or permanent injunction against such
consummation or, if the transactions contemplated hereby were consummated, an
order to nullify or render ineffective this Agreement or such transactions or
the recovery against Seller of substantial damages; and (b) none of the parties
to this Agreement shall have received written notice from any governmental body
of (i) its intention to institute any action or proceeding to restrain or enjoin
or nullify this Agreement or the transactions contemplated hereby, or to
commence any investigation (other than a routine letter of inquiry) into the
consummation of this Agreement, or (ii) the actual commencement of such an
investigation.
7.3. Opinion of Counsel. Seller shall have received opinions of Buyer's
counsel and Buyer's special FCC counsel, each dated the Closing Date, in forms
reasonably satisfactory to counsel to Seller.
7.4. FCC Authorization. All FCC approvals and consents to the
transactions contemplated by this Agreement shall have been granted by an
Initial Grant. "Initial Grant" shall be defined for the purposes of this
Agreement as the publication of the FCC "Public Notice" announcing the grant of
the "Assignment Application(s)" for the FCC License(s) to be transferred
hereunder, there being no necessity for a Final Grant (as that term is defined
in Section 8.5 hereof). The terms "Public Notice" and "Assignment
Application(s)" shall have the same meaning herein as in existing FCC rules,
regulations and procedures.
7.5. Other Instruments. Buyer shall have delivered to Seller such
instruments, documents, and certificates as are contemplated by Section 2.4
hereof.
ARTICLE 8
CONDITIONS TO THE OBLIGATIONS OF BUYER
The obligations of Buyer under this Agreement are, at its option,
subject to the fulfillment of the following conditions prior to or at the
Closing Date.
8.1. Representations, Warranties, Covenants.
(a) Each of the representations and warranties of Seller
contained in this Agreement shall have been true and accurate in all material
respects as of the date when made and shall be deemed to be made again on and as
of the Closing Date and shall then be true and accurate except to the extent
changes are permitted or contemplated pursuant to this Agreement.
(b) Seller shall have performed and complied with each and
every covenant and agreement required by this Agreement to be performed or
complied with by it prior to or
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at the Closing Date.
(c) Seller shall have delivered to Buyer a certificate of an
officer of Seller dated the Closing Date certifying to the fulfillment of the
conditions set forth in Sections 8.1(a) and 8.1(b).
8.2. Proceedings. As of the Closing Date, (a) no action or proceeding
shall have been instituted before any court or governmental body to restrain, or
prohibit or to obtain substantial damages in respect of, the consummation of
this Agreement that, in the reasonable opinion of Buyer, may reasonably be
expected to result in a preliminary or permanent injunction against such
consummation or, if the transactions contemplated hereby were consummated, an
order to nullify or render ineffective this Agreement or such transactions or
the recovery against Seller of substantial damages; and (b) none of the parties
to this Agreement shall have received written notice from any governmental body
of (i) its intention to institute any action or proceeding to restrain or enjoin
or nullify this Agreement or the transactions contemplated hereby, or to
commence any investigation (other than a routine letter of inquiry) into the
consummation of this Agreement, or (ii) the actual commencement of such an
investigation.
8.3. Opinion of Counsel. Buyer shall have received opinions of Seller's
counsel and Seller's special FCC counsel, each dated the Closing Date, in forms
reasonably satisfactory to counsel to Buyer.
8.4. Damage to the Assets. The License Assets shall not have suffered
damage on account of fire, explosion, or other similar cause of any nature that
is sufficient to prevent operation of the Station or the transmission of its
normal and usual signal for a period of at least ten (10) consecutive days;
provided that on or prior to five (5) business days after Seller shall have
notified Buyer of such damage or event, Buyer shall have notified Seller that
Buyer is terminating this Agreement on account of such damage or event pursuant
to Section 11.1(b)(iii) hereof.
8.5. FCC Licenses. All FCC consents and approvals to the transactions
contemplated by this Agreement shall have become a Final Grant without any
condition or qualification materially adverse to Buyer or the operation of the
Station. For the purposes of this Agreement, "Final Grant" shall mean action by
the FCC as to which no further steps (including those of appeal or certiorari)
can be taken in any action or proceeding to review, modify, or set the
determination aside, whether under Section 402 of 405 of the Communications Act,
or otherwise. Buyer shall have the right to waive the foregoing condition and
proceed to Closing when all such FCC consents and approvals shall have been
granted by an Initial Grant.
8.6. Consents. Seller shall have obtained, prior to the Closing Date,
any necessary consents from third parties with respect to the Contracts included
in the License Assets which are listed as "material" on Schedule 3.8 hereto.
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8.7. Other Instruments. Seller shall have delivered to Buyer such
instruments, documents, and certificates as are contemplated by Section 2.4
hereof.
ARTICLE 9
INDEMNIFICATION
9.1. Survival. All statements of any party contained in this Agreement
(including the Schedules hereto) or in any certificate delivered by it pursuant
to this Agreement shall be deemed to be representations and warranties made
pursuant to this Agreement. The representations, warranties, covenants, and
agreements of Seller and Buyer contained in or made pursuant to this Agreement
shall be deemed to have been made on the Closing Date, shall survive the Closing
Date for a period of two (2) years after the Closing Date, and shall remain
operative and in full force and effect after the Closing Date for a period of
two (2) years after the Closing Date regardless of any investigation or
statement as to the results thereof made by or on behalf of any party provided,
however, that (i) Buyer's obligation to pay, perform, and discharge the Assumed
Liabilities shall survive until such Assumed Liabilities have been paid,
performed, or discharged in full; and (ii) Seller's obligations with respect to
all obligations and liabilities not assumed by Buyer pursuant to this Agreement
shall survive until such obligations and liabilities have been paid, performed,
or discharged in full.
9.2. Indemnification of Buyer. Seller agrees that, after the Closing,
it shall indemnify and hold Buyer harmless from and against any and all damages,
claims, losses, expenses, costs, obligations, and liabilities, including,
without limiting the generality of the foregoing, liabilities for reasonable
attorneys' fees and expenses ("Loss and Expense") suffered directly or
indirectly by Buyer by reason of or arising out of (i) any material breach of
representation or warranty made by Seller pursuant to this Agreement; (ii) any
material failure by Seller to perform or fulfill any of their covenants or
agreements set forth in this Agreement; (iii) any failure by Seller to pay,
perform, or discharge any liabilities or obligations not specifically assumed by
Buyer pursuant to this Agreement; or (iv) any litigation, proceeding, or claim
by any third party arising from the use of the License Assets by Seller prior to
the Closing Date, except to the extent arising from obligations or liabilities
of or assumed by Buyer pursuant to this Agreement.
9.3. Indemnification of Seller. Buyer agrees that, after the Closing,
it shall indemnify and hold Seller harmless from and against any and all Loss
and Expense suffered directly or indirectly by Seller by reason of or arising
out of (i) any material breach of representation or warranty made by Buyer
pursuant to this Agreement; (ii) any material failure by Buyer to perform or
fulfill any of its covenants or agreements set forth in this Agreement; (iii)
any failure by Buyer to pay, perform, or discharge any Assumed Liabilities or
any other obligations or liabilities of or assumed by Buyer under this Agreement
(including, without limitation, those set forth in Section 10.2 hereof); or (iv)
any litigation, proceeding, or claim by any third party arising from the use of
the License Assets on or after the Closing Date.
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9.4 Limitation of Liability. Notwithstanding Sections 9.1, 9.2 and 9.3
hereof, after the Closing, Seller shall not indemnify or otherwise be liable to
Buyer, and Buyer shall not indemnify or otherwise be liable to Seller unless the
aggregate amount of Buyer's or Seller's, as applicable, Loss and Expense exceeds
$25,000, in which event the indemnified party shall be entitled to recover its
aggregate Loss and Expense inclusive of such $25,000 threshold; provided,
however, that the foregoing limitation shall not be applicable to the
obligations of either party under Section 2.2 or to the obligation of Buyer to
pay and discharge any Assumed Liabilities or any other obligations or
liabilities of Buyer under this Agreement or the obligation of Seller to pay and
discharge liabilities to third parties not assumed by Buyer hereunder.
9.5. Bulk Sales Indemnity. Buyer hereby waives compliance with the
provisions of any applicable bulk transfer laws, and Seller covenants to pay and
discharge when due all debts, obligations, and liabilities incurred prior to the
Closing Date relating to the License Assets, except the Assumed Liabilities and
other obligations or liabilities to be paid or discharged by Buyer as provided
in this Agreement. Seller further agrees to indemnify and hold Buyer harmless
from and indemnify Buyer against any and all Loss and Expense, including,
without limitation, any claims made by creditors, with respect to non-compliance
with any bulk transfer law, except to the extent that such claims result from
the Assumed Liabilities and other obligations or liabilities to be paid or
discharged by Buyer as provided in this Agreement and/or Buyer's failure to pay
the same when due.
9.6. Notice of Claims. If Buyer or Seller believes that it has suffered
or incurred any Loss and Expense, such party shall notify the other promptly in
writing describing such Loss and Expense, the amount thereof, if known, and the
method of computation of such Loss and Expense, all with reasonable
particularity and containing a reference to the provisions of this Agreement in
respect of which such Loss and Expense shall have occurred. If any action at law
or suit in equity is instituted by a third party with respect to which any of
the parties intends to claim any liability or expense as Loss and Expense under
this Article 9, such party shall promptly notify the indemnifying party of such
action or suit.
9.7. Defense of Third Party Claims. The indemnifying party under this
Article 9 shall have the right to conduct and control through counsel of its own
choosing any third party claim, action, or suit, but the indemnified party may,
at its election, participate in the defense of any such claim, action, or suit
at its sole cost and expense provided that, if the indemnifying party shall fail
to defend any such claim, action, or suit, then the indemnified party may defend
through counsel of its own choosing such claim, action, or suit, and (so long as
it gives the indemnifying party at least fifteen (15) days' notice of the terms
of the proposed settlement thereof and permits the indemnifying party to then
undertake the defense thereof) settle such claim, action, or suit, and to
recover from the indemnifying party the amount of such settlement or of any
judgment and the costs and expenses of such defense. The indemnifying party
shall not compromise or settle any third party claim, action, or suit without
the prior written consent
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of the indemnified party, which consent will not be unreasonably withheld or
delayed.
ARTICLE 10
POST-CLOSING MATTERS
10.1. Employee Matters. Buyer is not obligated by this Agreement to
offer employment to any of the employees of Seller whether or not such employee
is employed in connection with the License Assets. At its election, after the
Closing, the Buyer may solicit for employment by Buyer any individual who is an
employee of the Seller who is employed in connection with the License Assets.
Buyer shall not assume and shall not be responsible for any liabilities with
respect to sick leave and personal days accrued by any employees of Seller who
enter the employment of Buyer or for any accrued vacation of any such employees
unless specifically provided for in the adjustment made pursuant to Section 2.2.
Buyer agrees that Seller may inform its employees that Buyer may agree to offer
employment, as provided in this Section 10.1. Buyer does not agree to pay and/or
reimburse Seller for and to indemnify Seller from and against any and all
severance or other liabilities arising out of Seller's termination of the
employment of any of its employees in connection with the sale of the License
Assets to Buyer (including, without limitation, any liabilities under the
so-called "WARN Act" or any applicable state laws regarding termination of
employees). This Section 10.1 shall operate exclusively for the benefit of the
parties to this Agreement and not for the benefit of any other person or entity.
10.2. Call Letters. After the Closing Date, Seller shall take such
action as may be reasonably requested by Buyer to evidence this assignment to
Buyer of the right to the use of the name and call letters "WTTE."
ARTICLE 11
TERMINATION/MISCELLANEOUS
11.1. Termination of Agreement. This Agreement may be terminated at any
time on or prior to the Closing Date as follows:
(a) By Seller:
(i) if Buyer fails to comply with Sections 6.1 hereof
within ten (10) days after Seller notifies Buyer that Buyer has not complied
with such section, provided that Seller shall have used its best efforts to
cooperate in the preparation of its portion of the application for FCC consents
as provided in Section 5.4; or
(ii) if any of the conditions provided in Article 7
hereof have not been met
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by the time required and have not been waived, provided that the failure to meet
such conditions is not due to Seller's breach of the Agreement; or
(b) By Buyer:
(i) if Seller fails to comply with Sections 5.4
hereof within ten (10) days after Buyer notifies Seller that Seller has not
complied with any such section, provided that Buyer shall have used its best
efforts to cooperate in the preparation of its portion of the application for
FCC consents as provided in Section 6.1; or
(ii) if any of the conditions provided in Article 8
hereof have not been met by the time required and have not been waived, provided
that the failure to meet such conditions is not due to Buyer's breach of the
Agreement; or
(iii) no later than fifteen (15) business days after
Seller has notified Buyer pursuant to Section 8.4 of the occurrence of any
damage or event as described in Section 8.4.
(c) By Either Buyer or Seller as follows:
(i) by mutual consent of all parties; or
(ii) if the Closing shall not have been completed by
the date set forth in Section 2.3 hereof.
No party hereto shall have any liability to any other for costs,
expenses, damages, loss of anticipated profits, or otherwise as a result of a
termination pursuant to this Section 11.1.
11.2. Expenses. Each party hereto shall bear all of its expenses
incurred in connection with the transactions contemplated by this Agreement,
including, without limitation, accounting, and legal fees incurred in connection
herewith, provided that Seller shall pay the FCC filing fees, and any sales, use
or transfer taxes arising from transfer of the License Assets.
11.3. Assignments. This Agreement shall not be assigned by any party
hereto without the prior written consent of the other party, except that Buyer
may assign its rights and interests to: (i) a wholly-owned subsidiary; or (ii) a
wholly-owned subsidiary of a subsidiary; provided that Buyer gives Seller
written notice thereof and that such assignment will not delay receipt of the
FCC consents or the finality thereof and provided further that any such
assignment shall not relieve Buyer of any of its obligations or liabilities
hereunder. Any attempt to assign this Agreement without any required consent
shall be void. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
11.4. Further Assurances. From time to time prior to, at, and after the
Closing Date,
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each party hereto will execute all such instruments and take all such actions as
another party being advised by counsel shall reasonably request in connection
with carrying out and effectuating the intent and purpose hereof, and all
transactions and things contemplated by this Agreement, including, without
limitation, the execution and delivery of any and all confirmatory and other
instruments, in addition to those to be delivered on the Closing Date, and any
and all actions which may reasonably be necessary to complete the transactions
contemplated hereby.
11.5. Notices. All notices, demands, and other communications which may
or are required to be given hereunder or with respect hereto shall be in
writing, shall be delivered personally or sent by nationally recognized
overnight delivery service, charges prepared, or by registered or certified
mail, return-receipt requested, or facsimile transmission and shall be deemed to
have been given or made when personally delivered or received, the next business
day after delivery to such overnight delivery service, five (5) days after
deposited in the mail, first class postage prepaid, addressed as follows:
(a) If to Seller: WTTE, Channel 28, Inc.
WTTE, Channel 28 Licensee, Inc.
c/o Sinclair Broadcast Group, Inc.
2000 W. 41st Street
Baltimore, Maryland 21211
Attn: David B. Amy
Fax: (410) 467-5043
with a copy to: Thomas & Libowitz, P.A.
100 Light Street, Suite 1100
Baltimore, Maryland 21202-1053
Attn: Steven A. Thomas and
Clinton R. Black
Fax: (410) 752-2046
or to such other address as Seller may from time to time designate.
(b) If to Buyer: Glencairn, Ltd.
500 Seco Road
Pittsburgh, Pennsylvania 15146
Attn: Mr. Edwin L. Edwards, Sr.
Fax: (412) 856-0633
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with a copy to: Wilmer, Cutler & Pickering
100 Light Street
Baltimore, Maryland 21202
Attn: John B. Watkins
Fax: (410) 986-2828
or to such other address as Buyer may from time to time designate.
11.6. Captions. The captions of Articles and Sections of this Agreement
are for convenience only, and shall not control or affect the meaning or
construction of any of the provisions of this Agreement.
11.7. Governing Law and Remedies. This Agreement shall be governed by,
construed, and enforced in accordance with the laws of Maryland without
reference to its principles of conflict of laws, except to the extent that the
federal law of the United States governs the transactions contemplated hereby.
Buyer and Seller will have and retain all rights and remedies existing in its
favor at law or equity. Without limiting the foregoing, if Seller refuses or
fails to perform any of its covenants or other obligations under this Agreement,
then Buyer will have the right to specific performance of such covenant or
obligation under this Agreement, subject to applicable FCC rules, regulations
and policies. In the event of any action to enforce this Agreement specifically,
Seller hereby waives the defense that Buyer has an adequate remedy at law.
11.8. Consent To Jurisdiction, Etc. In the event of any action or
proceeding with respect to any matter pertaining to this Agreement, the parties
hereto hereby waive the right to a trial by jury. The parties hereto hereby
irrevocably consent to the nonexclusive jurisdiction and venue of the state
courts of Maryland and of any federal court located in the State of Maryland in
connection with any action or proceeding arising out of or relating to this
Agreement. The parties hereby waive personal service of any process in
connection with any such action or proceeding and agree that the service thereof
may be made by certified or registered mail addressed to or by personal delivery
to the other party at such other party's address set forth pursuant to paragraph
11.5 hereof. In the alternative, in its discretion, any of the parties hereto
may effect service upon any other party in any other form or manner permitted by
law.
11.9. Waiver of Provisions. The terms, covenants, representations,
warranties, and conditions of this Agreement may be waived only by a written
instrument executed by the party waiving compliance. The failure of any party at
any time or times to require performance of any provision of this Agreement
shall in no manner affect the right at a later date to enforce the same. No
waiver by any party of any condition or the breach of any provision, term,
covenant, representation, or warranty contained in this Agreement, whether by
conduct or otherwise, in any one or more instances shall be deemed to be or
construed as a further or continuing waiver of any such condition or of the
breach of any other provision, term, covenant, representation,
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or warranty of this Agreement.
11.10. Counterparts. This Agreement may be executed in two (2) or more
counterparts, and all counterparts so executed shall constitute one (1)
agreement binding on all of the parties hereto, notwithstanding that all the
parties are not signatory to the same counterpart.
11.11. Entire Agreement/Amendments. This Agreement (including the
Schedules hereto), constitutes the entire Agreement among the parties pertaining
to the subject matter hereof and supersedes any and all prior and
contemporaneous agreements, understandings, negotiations, and discussions,
whether oral or written, between them relating to the subject matter hereof. No
amendment or waiver of any provision of this Agreement shall be binding unless
executed in writing by the party to be bound thereby.
11.12. Access to Books and Records. Buyer shall preserve for at least
three (3) years after the Closing Date all books and records included in the
License Assets. At the request of Seller, Buyer agrees from time to time to give
to the officers, employees, accountants, and counsel of Seller access, upon
reasonable prior notice during normal business hours, to the property, accounts,
books, contracts, records, accounts payable and receivable, records of employees
of Seller, and other information concerning the License Assets and to the
employees of Buyer as Seller may reasonably request in connection with an audit
by Seller of the Station as of the Closing Date and Seller's preparation of tax
returns and reports. At the request of Buyer, Seller agrees from time to time to
give the officers, employees, accountants, and counsel of Buyer access, upon
reasonable prior notice during normal business hours, to the books, records, and
files retained by Seller with respect to the License Assets as Buyer may
reasonably request in connection with its preparation of tax returns and
reports. Each of Buyer and Seller shall be permitted, at their expense, to make
extracts from or copies of the foregoing books, records, and files of the other
party.
11.13. Public Announcements. Prior to the Closing Date, neither Seller
nor Buyer shall, except by mutual agreement, make any press release or other
public announcement concerning the transactions contemplated by this Agreement,
except as may be required by any law, rule, or regulation (including, without
limitation, filings, and reports required to be made with or pursuant to the
rules of the Securities and Exchange Commission) or by any existing contract,
license, or agreement to which it is a party.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by the hands and seals of their duly authorized officers, all as of the
day and year first above written.
WITNESS/ATTEST: WTTE, CHANNEL 28, INC.
_________________________ By: /s/ David B. Amy (SEAL)
Name: Name: David B. Amy
Title: Title: Secretary/Treasurer
WTTE, CHANNEL 28 LICENSEE, INC.
_________________________ By: /s/ David B. Amy (SEAL)
Name: Name: David B. Amy
Title: Title: Secretary/Treasurer
GLENCAIRN, LTD.
_________________________ By: /s/ Edwin L. Edwards (SEAL)
Name: Name: Edwin L. Edwards, Sr.
Title: Title: President
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